5M50

I won’t be updating this post on our financials. Instead, it would be a “How To”, or “What If” type of post. Let’s start with our Purpose.

// Purpose //

Purpose. Financial Freedom.

Purpose. Kathy chooses to work.

Purpose: Brandon attends school normally, and we'll teach him how to be self-sufficient.

Purpose. We'll ensure that our household expenses are covered without relying on Kathy's job income.

Purpose. We will not rely solely on the performance of the stock market to build our wealth.

// How To //

Without taking too much risk or relying on YOLO or FOMO, I will also not trade with the gambling mentality. I will not trade on the herd mentality and I will not follow the hype. I will only make trades based on due diligence with DCA strategy. If you hear the terms AI or Crypto or Bitcoin, you know exactly what I mean. I’m a disciplined investor focused on building wealth.

Kathy has a solid income, so we’ll consider Investment Property. There’s still a risk as the mortgage interest rate is at 6.79%, and the property prices are quite high especially in the main cities, so we’ll keep this in mind during our due diligence. Most likely we won’t be concentrating in either capital growth or rental, so we’ll consider hybrid and mix in both.

We won’t be hitting a target number to work off of then work backwards, instead, we’ll use the a different approach. Whatever schools we decide for Brandon, we purchase, and rent out the other. Our initial target was about 3: 1 to live in, 1 to sell, 1 to rent out for income. We can try for 5 and it might look like this: 1 to live in, 1 to sell, 3 to rent out. If Brandon, then he can have one that we rent out. However, I told Kathy I won’t be including this into our financial planning model as Brandon might not want to be locked into Australia, or at the specified location/suburb, so we’ll invest so long as it meets our goals.

For Super, we will continue to focus on maxing out Kathy’s Super based on the ATO annual contribution concessional limits. For 2025, the limit is 30K. Assuming Kathy works for another 10 more years until B’s in College, or of age to attend, then that’s another 30Kx10=+300K (excluding MR compounding returns). Currently Kathy has about 200K in KSuper, so she’ll have a minimum of 500K when she’s 50-55.

My Super isn’t important as I’m on the non-concessional side. However, we’ll continue with the Spousal Contribution of 3K/annually for free money. To ensure that my Super isn’t too far off from Kathy’s, we’ll target 60%/40% allocation. Kathy’s currently at 200K, so technically my Super should be at 120K. When she’s at the 500K mark, using 60%/40%, my Super should be close to 300K. Depending on how the market does, I’ll true-up my Super as necessary. Otherwise, our salary contributions will be focused on mortgage to minimize mortgage interest payables.

For Property, target is to purchase an investment property every 2-3 years. Kathy has about 10 years in corporate left, so that leaves 10/2=5, or 10/3=3. One thing we need to consider is the mortgage loan terms. Using Age 65 to fully pay off any mortgage, that leaves 20 years left terms wise. Either we shorten the mortgage loan terms, or we put a higher down payment %.

For EFI, goal is to invest in Income Funds for Dividends. Currently, I’m trading on market volatility and reinvesting the returns back to Property.

In terms of Cash Flow Priorities:

1) Max out Super Contributions

2) Pay down mortgage to save on mortgage interest

3) Save for down payment for next investment property

4) Contribute to EFI

// What If //

Pending..