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Game plan:
The players
Ages: 33 & 31
Occupations: Part-time
bookkeeper & diesel mechanic
Income: $58,825
PPOR: $300,000
74
Equity: $261,000
Mortgage: $39,000
Super: $98,300
Savings/shares: $7,800
Dependents: Two children
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$$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$
Strategy | real life investors
Property advisor:
Cate Bakos
Money and wealth advisor:
Michael Pope
Finance advisor:
Cameron Morgan
Empower Wealth founder:
Ben Kingsley
The Empower Wealth team consists
of highly qualified and successful
professionals with years of experience
and proven track records in offering
specialised advice to their clients, within
their qualified disciplines. Empower
Wealth offers professional advisory and
fulfilment services in residential property
investing, mortgage broking, financial
planning, money and wealth planning
and wealth education.
Visit www.empowerwealth.com.au
Liability
Asset
PPOR
$300,000
Super
$98,300
Contents
$70,000
Vehicle
$18,000
Shares
$2,400
Mortgage
$39,000
Credit card
$2,000
Total
$41,000
Net worth
$488,700
$447,700
Monthly budget
Description
Cash
Credit
$1,100
$13,200
$1,420
$17,040
$100
$1,200
Bills
$1,302
$15,628
Fixed payments
$498
$5,980
Total
$3,118
$1,302
$53,048
Variation
Frequency
Start
End
$5,000
Once off
06/11
Christmas visit to WA
$4,000
Once off
12/11
$4,000
Yearly
01/15
Disneyland holiday
$20,000
Once off
01/20
School fees
$500
Yearly
02/12
01/19
School fees
$2,000
Yearly
02/19
01/25
School fees
$500
Yearly
02/14
01/21
School fees
$2,000
Yearly
02/21
01/27
$$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$
Strategy | real life investors
Investment goals
Retire within 10 years if
possible on a passive income
of $52,000 pa
Spend more time with
the children
Go on some family holidays,
including a trip to Disneyland
To live day-to-day without
worrying about money
Equity
$1,200,000
Super
$1,000,000
Debt
$800,000
$600,000
$400,000
$200,000
0
12
20
24
28
32
36
40
Wealth projection
Monthly
Total income
$58,825
$4,902
Total expenses
$47,068
$3,922
$4,934
$366
$7,364
$614
Assumes an expenses inflation rate of 3%; a salary indexation rate of 3%; a loan
variable interest rate of 7.95%; and ongoing bank fees of $180 annually
76
16
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$$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$
Strategy | real life investors
Success at last
Moving parts
Property selection
$14,000,000
Super
$12,000,000
Debt
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
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12
16
20
24
28
Property one
$18,000,000
$16,000,000
32
36
40
$$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$ HOW TO BUILD A MILLION DOLLAR PORTFOLIO $$$
Strategy | real life investors
We cant believe
that its possible to
invest now, rather
than a few years
down the track
the main hub for Victorias historical
goldfields region. Recent infrastructure
improvements include a high-speed rail
link to Melbourne (making the state
capital reachable in 64 minutes on an
express train), and the completion of the
Western Highway between Melbourne
and Ballarat (making just over an hours
drive between the two). The local airport
is also planned to be upgraded within
the decade.
Most compelling, however, is the
sustained population growth that
the area has been experiencing, says
Cate, who cites ABS figures showing
that Ballarat saw an increase of 2,100
residents in the year to June 2009.
With infrastructure upgrades,
reduced commuter times and lower
affordability, the township has increasing
appeal to those who wish to upgrade
their home and leave the capital city to
move into the area, says Cate.
She sets a maximum purchase price of
$200,000, which is eminently achievable
Property two
Final summary
78
Current
situation
After restructuring
finances
With property
investment
$1,163,590
$1,473,656
$2,428,519
-$734,540
$1,009,405
$16,528,683
The verdict
Jo and Chris have the capacity to start
investing right away, but theyre unlikely
to be able to retire on their target passive
income for another 15 years. This is a
significant increase on their original
ambitious goal of retiring within 10
years, so what do they think?
Its going to push retiring back from
10 years to 15 years, but Chris is actually
happier with that because he said he
wouldnt know what to do with himself
if he retired in 10 years! explains Jo. So
its worked out for the best.
Were very happy, and cant believe
that its possible to invest now, rather
than a few years down the track. Well
definitely be buying our first property as
soon as we can get the ball rolling.
Getting the ball rolling will involve a
fair bit of financial restructuring, but Jos
delighted that, with a bit of tinkering,
they can improve their budget situation
and get that first investment on the go.
Weve been battling to put our
money together. But when we spoke to
the team, they said this is what you do:
you put all your money in this account
and just take out the bits that you need to
live off. Its just made it so much easier
for us.
Emboldened by her game plan, Jos
confident that theyll have that first
investment property under their belts
this year, bringing them that much closer
to their dream retirement.
Disclaimer: The information and strategies
contained in this article are for illustration
purposes only and as such should not be taken
as financial advice. Readers should seek advice
from qualified professionals before investing
Your turn...
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