So how many of you have given up fulltime work through IP and how many properties, how long did it take, etc.
I gave up work a few years ago. I started investing in Bris in 2001 (100% borrowed using PPOR equity), made $1M+ within 3 yrs, drew down the equity, put it all into shares, got a conservative margin loan against them, have since made another $1M+.
Remaining IPs are roughly c/f neutral. Shares are v. c/f +ve. I also use a bit of LOE.
If I relied on IP yields to retire I'd be working for at least another 2 economic cycles (15 yrs?). Shares are currently yielding roughly double rental yields.
I did intend to use solely LOE when I stopped the job, and to reduce volatility I invested in shares. However, dividends from those shares have increased so much over the past 4 years that I have to much dividend income and only use a tiny fraction of the portfolio growth for LOE. NB. I was still 30-something, so I was young enough to go back to work if it all went pear shaped.
I'd suggest you put a spreadsheet together & see how long it takes to retire on rental income alone, even if you sell enough IP to make yourself debt free. Then do a spreadsheet using LPTs or shares - they can both yield more than IP
AND the dividend growth can be significantly higher. The growth rate in the yield is significant - rents usually grow at a little above CPI, dividends usually grow a lot faster.
I'm a firm believer in being v. overweight in the right asset class at the right time. IP will be the right asset class in a couple of years. Quality shares are currently still a good value asset class.
Y-man said:
One interesting thing you might find when you get there pompey (and yes, the grass is much greener on this side of the fence), is that you suddenly don't feel the need to retire in order to get a better quality of life.
I'd agree partly. I stopped turning up to my job, but I doubt if I'll ever stop working. Someone who is motivated enough to be able to retire early will always need challenges. The difference is that
I get to decide what the challenges are.