Hi all
I’ve been lurking and reading MMM from when the site first launched. I’m from Australia which is relevant due to the high property prices here. I’ve finally registered and hoping the forum can help me get some clarity on next steps.
I work in the corporate world and have always wanted to escape however I earn well and value financial independence so continue in my career. I have taken time off to travel and live overseas, at times up to a year, but then always returned to what I know. If I was FI, I would stop working right now.
I always lived within my means and saved. In the last 5 years, I have committed to working and saving to reach FI as soon as possible.
Goal:
I have defined Financial Independence as:
1. Home that I love living in
2. $30k pa investment income to cover my expenses and one-off purchases
Note: My expenses have been less than $25k pa over the last few years so I know this is enough.
Assets: Edited to remove numbers for privacy
Liabilities: None
Current Strategy:
• Saving 75-80% of income and investing into share portfolio till December 2015 when I expect it to be ~$X00k.
• The apartment I am living in was always meant to be an investment and I hoped to rent it out and buy a house. If I do this, between the rent from the apartment and the dividends from my shares, I should receive ~$30k pa (goal 2 achieved).
• To live on $30k pa, I do need to own my home so my next goal was to buy a home I want to live in long-term.
Dilemma:
My dilemma is that I would like to buy a house as my ideal home. I live in Australia and property is expensive here. To stay close to family and friends and live in an area I would like to live in, a house would cost me $800-850k.
I know homes are much cheaper in the US and other parts of the world but high property prices are the reality in Australia.
I do earn well but buying and paying off a house would be another 10-15 working years which is a long time. I could live in a cheaper part of the country but then would be more isolated from family and friends.
I could stay in my apartment but even then would have to work, save and invest for another 5-6 years to reach FI.
My questions are:
1. How could I meet my goal in the fastest way possible?
2. Would you work for another 10 years to pay off a house? Would you consider it worthwhile?
3. For Aussies – what % of your assets do you have tied up in your own home?
Edit: updated the post to remove exact numbers for privacy reasons