Retirement Strategies 1 June 2010

The standard investment product that I share with my private clients - four bedrooms + ensuite, air conditioned, double garage, on its own block in a family suburb (right)



MOVE FROM VAGUE TO CONCRETE PLANS

The last one third of your life is getting closer, day by day.

What will you be doing? And how much money will you need to enjoy your lifestyle?

I can give you some guidance about how to develop a broad-brush mud map, so if you feel that you won’t have enough for 20-25 years of comfortable retirement, contact me – Bernard Kelly – anytime. My mobile is 0414 778 518 or email me admin@retirelaughing.com


ALL PROPERTY SET TO RISE

The National Housing Supply Council forecasts that we'll be 300,000 houses short by 2014, so virtually every property will move ahead.

But only when you think about the ideal tenant, and what they want (which turns out to be a four bedroom family house, on its own block, double garage, air conditioned etc) will you be in a position to make a meaningful investment decision.

Then, and only then, do you research which (of the 35+ regional markets across Australia) will provide you with the best financial outcome.

And as you know, based on proximity to jobs, modest entry levels, higher rents and lowest land tax, my conclusion is that the best location is the south west suburbs of Brisbane.

That product and location comprises 70% of a successful outcome.

The other 30% depends on the packaging.

If you feel that you won’t have enough for 20-25 years of comfortable retirement, contact me – Bernard Kelly – anytime. My mobile is 0414 778 518 or email me admin@retirelaughing.com


THE QUESTION IS “HOW MUCH INCOME WILL I NEED”

Don’t ask "How much do I need to retire?" because to answer that question you would have to know some unknowable things, such as:

• How long will I live?
• How much will health care cost in later years?
• What will happen to inflation?
• Will I always qualify for the government pension?
• What if they introduce a tax on my superannuation pension?

So the correct question is, "How much income will I need?"

For most people, you'll need just as much income in retirement as you do now, if not more.

You will still need to pay for groceries, your telephone bill, subscriptions for pay TV, your gas and electricity bill, your health care costs, petrol and car maintenance, holidays, grandchildren; and maybe even a mortgage.

And of course, over time the cost of living always increases.

So you need to replace your active income with a passive income. That's right - your retirement goal is to build a passive residual income which is equal or greater than your active income (your job).

All you need to do is acquire enough assets to produce a sizable passive income.

If it’s too late for you to achieve this via superannuation, you are really only left with investment property, plus a profitable hobby.

Contact me – Bernard Kelly – anytime if you would like me to help you explore your options.

BONANZA TIME FOR INVESTORS

When interest rates increase – as they have just done – that’s good news for investors.

Why? you ask.

Well for two reasons – firstly you get a bigger tax deduction.

Secondly the pool of tenants gets bigger (because more people can’t afford to purchase) so you have greater security.

And with vacancy rates at historic lows, coupled with values likely to continue dramatically increasing around that economic zone in the south west of Brisbane (our recommended location) our private clients continue to add to their retirement funds.


THE MURRAY-DARLING ISSUE & YOUR RETIREMENT


For many years now we have known that there have been too many agencies drawing water from both the Murray River and the Darling River. And now, with climate change and far less rain, their plans for a long term water security system is in chaos.

“We should have acted years ago” they say.

For many years now we have known that there will not be enough in our super funds for 15-20 years of a dignified retirement. And now, as baby boomers move towards their Renaissance years, their plans for long term financial security are in chaos.

Fortunately, for many, there is still time.

Don’t get to your retirement date and say “we should have acted years ago”.

The time to act is NOW.

We can assist you with a free, no obligation, consultation – either by phone, email or in person.

Phone me – Bernard Kelly – anytime. My mobile 0414 778 518

LAND TAX

Occasionally I am asked about the impact on property investors of Land Tax.

It’s something that I don’t personally worry about – its just another (and relatively minor – except in the ACT) expense in maintaining a property portfolio.

Land Tax varies from state to state, by if you have three investment properties (houses in a growth corridor adjacent to a major economic zone) each with a land content of $166,000 your total land tax bill is based on the value of your asset pool - $500,000.

In Queensland you would pay $0, in WA $855 (plus the Metropolitan Region Improvement Tax), in Victoria $800, in NSW $2616, it’s $1770 in SA, $7000 in the ACT (ouch!) $4837 in Tasmania and nil in the Northern Territory.

But remember, most of us will be travelling quite comfortably before Land Tax ever becomes an issue.


Q. HOW DOES PROPERTY INVESTING REALLY WORK?

A. This is how property investing really works:

Just think that it’s now 2025 (i.e.15 years from now) and you’re sitting on the balcony of your beach house and it’s breakfast time.

The sun is warm, the view is exceptional, and you’re just about to have a glass of mango juice before you have a fruit salad breakfast.

And as you look out over the shimmering ocean, you say to your partner “Hasn’t life been good to us?”

And then, almost in the same breath, you ask - rhetorically – “But I wonder what our life would have been like today, had we not put that first investment property in place back then in 2010?”

And that’s how property investing works.

THOUGHT FOR THE DAY

Our parents used to worry about debt.

However property investors know that more debt = more assets.

And of course, assets = wealth.

Do you think like your parents or like an investor?



I’M LOOKING FOR REFERRALS

I’m are grateful that, one day, you will be using our services.

If we prove to be exceptional, would you refer us to three of your contacts?

I’m Bernard Kelly 0414 778 518
Australia's Retirement Strategiest™


HOST A WORKPLACE SEMINAR

You probably know many people who need my experience and expertise right now.

Here’s the deal – you invite a few people to a lunch or after-work seminar, and I’ll present Retirement Strategies for Employees.

I’ll pay you $150 for your expenses, and a further $1000 for every participant who has me share an investment property with them.

About Bernard Kelly:

Bernard Kelly BEcon MBA CRPC Australia’s Retirement Strategist®, is a highly sought-after advisor, retirement authority, thought-leader, author and radio commentator because he makes the complicated and mundane topics of investing and retirement fun! Bernard has over 20 years experience providing families with financial thought. He is the author of Live Your Dreams in Retirement, Property Investing for Couples, Goolwa by Breakfast and Raising Decent Kids into Substantial Wealth and publishes a fortnightly newsletter that reaches thousands of subscribers worldwide.

19 Prospect Street, Box Hill 3128 Australia. Tel 61-3-9899 8577 mobile 0414 778 518