Author Topic: Some things sussed, but what about the rest  (Read 3292 times)

Jannie

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Some things sussed, but what about the rest
« on: December 16, 2012, 08:31:03 PM »
Hi I am trying to get a grip on this attitude towards money to see if it will help me take our lifestyle to the next level.

Married 25 years, we own our home mortgage-free.  No debts.  This enables us and one child (12yo) still at home to live on our combined income of approx $NZ55k (part time employment for my dh, part time self employment for both of us).

We have two cars, one about to be written off by insurers I think. Not very happy about this, but thinking it could be an opportunity in disguise.  Tentatively suggested we try going back to one-car family and was not laughed out of the room by my dh.  However, we both remember the mighty inconvenience of those days.

I feel like the frugal measures we have taken - paying off the mortage before having children, not going into debt, not having TV, dryer, dishwasher, etc have helped us live well on limited income.  But I also sense there is more to learn and that we are kind of stuck here without a plan for greater financial freedom. 

I am reading around on this site and finding some gems of information, but still trying to get an overview of a good strategy from here on in.

Any comments or feedback welcome.


gooki

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Re: Some things sussed, but what about the rest
« Reply #1 on: December 17, 2012, 12:24:00 AM »
The cars.

You may as well try living with just one car again. Worst case scenario is it doesn't work out and you go buy a second one. Best case scenario you save a few thousand in purchase price and a couple of grand a year in fuel, maintenance, insurance, licensing of the second car.

The bigger picture.

Based you your description of your employment it sounds like your already living a financially independent lifestyle. So the big decisions I'd be looking at making a plan for are.

1. How much financial support to you intend to provide your child.

2. How much income will you require when you both stop working.

And finally I'll assume you have an accountant and are making the most of being self employed (expense write offs), and taking advantage of any government tax rebates (working for families tax credits etc). But if your not, start making enquiries now.

nz

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Re: Some things sussed, but what about the rest
« Reply #2 on: December 17, 2012, 12:41:17 AM »
I agree with Gooki, you've got nothing to lose by becoming a one car family.If it works,great. If it doesn't you'll be a bit wiser and maybe find a compromise,scooter?electric bike?

 I'm guessing you're a similar age to me and that you're thinking about the second half of your life. A few more details about location, work situation and current finances would allow some more precise advice.

Well done on blowing that mortgage away.....you're WAY, WAY ahead of most people your (my) age!!

Jannie

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Re: Some things sussed, but what about the rest
« Reply #3 on: December 17, 2012, 01:46:30 AM »
Thanks to you both.  Yes I am thinking about seeing how we get on with one car (or how I will get on without a car, seeing as it's the one I drive that is in trouble). 

The next thing of course would be to put the money saved - likely to be several thousand right? - to good productive use.  Interest  rates are not the greatest and shares also don't seem to be returning well.  Those commercial investments sound like they have been very successful but I wouldn't know how to get into something like that or even how much would be needed to make the initial investment.  What can one do with $5 or $10k?

As for setting a practical target for retirement, we haven't really gone there other than to dream that if we had $1m in the bank returning 5% that would be $50,000 a year or more than enough for us to live on.  But how to generate that $1m nest egg in dribs and drabs from our unspectacular income remains the question.

nz

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Re: Some things sussed, but what about the rest
« Reply #4 on: December 17, 2012, 12:23:09 PM »
With $5-$10k I would look closely at some of the listed property companies. GMT and KIP for example pay a pretty tidy dividend (7-8% from memory) or some key infrastructure company like Auckland Airport.
Not get rich quick schemes but they seem to plod along year after year.

arebelspy

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Re: Some things sussed, but what about the rest
« Reply #5 on: December 17, 2012, 12:24:16 PM »
But how to generate that $1m nest egg in dribs and drabs from our unspectacular income remains the question.

Wealth building is a marathon, not a sprint.  Save as much as you can, consistently.  You'll get there.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Jannie

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Re: Some things sussed, but what about the rest
« Reply #6 on: December 17, 2012, 03:38:49 PM »
Thanks nz, I had considered this in the past but got a bit shy.  I will look into it again.

Arebelspy, you are right.   I think once we have grown a bit lazy and stopped saving as much as possible.  Well, there were years when that was almost impossible but now it's time to wake up and persevere with the marathon.