Hi MMMers -
Any feedback on my broad strategy as outlined below would be very welcome.
Firstly - some of the basics:
* Married with one small child (possibly one more to come); I'm in my late 40's. Wife is stay-at-home mum.
* Live in house in Sydney with remaining mortgage of around $180k (value about $1.5M); another $200k in borrowings against mortgage for investment purposes (more on this below)
* Work full-time in a well-paying but demanding role, great job but want to do something totally different in the future - hence aim to FIRE
* Current savings rate (including mortgage payments - around 70%)
* Am keeping living costs reasonably low while still allowing a good holiday each year.
* 1 investment property - an apartment which has been growing in value at around 6%pa (mortgage is interest only, around 4.3%, balance of $560k, value $730k)
Current arrangements:
* 50% of monthly savings gets paid to mortgage on residence (current rate around 4.3%); expect to pay out this portion of mortgage in about 3.5 years
* Other 50% gets invested into ETFs and direct equities; all dividends either DRP or cash reinvested
* Maximising salary sacrificing to super to limit
* All rental income paid into investment property loan - property is close to neutrally geared
* Have a small unlisted property trust holding ($50k) funded by mortgage (separate account) - distributions go into this account and interest debited to account - loan balance being reduced over time. Continue holding trust until end of term (5 years to go) and then decide what to do based on options provided by trust.
Strategy:
1. Continue arrangements as above until I hit target FIRE sometime in 2021 (target balance of $500k) - I propose to draw on this for 5 years until I hit preservation age (60 at present) and then able to access super and move into pension phase. Start a small home/internet business of some kind with a target income of around $10-15k pa
2. Once FIRED - Sell residence in capital city and purchase in a rural area or perhaps even overseas - expect to met a net gain of around $300k on the transaction after paying off any residual loan amounts (may roll this into super or other investments depending on situation at the time)
3. When I hit preservation age - start receiving super pension and then sell investment property (aim to minimise capital gains tax payable). Balance of proceeds after paying off mortgage goes into investments (super or outside of super depending on situation at time)
Any thoughts/comments very welcome!