How Kris and Leanne created a retirement plan
Being mortgage-free is excellent. But Kris and Leanne also wanted to plan for their retirement.
This became more urgent, as the Taupo property was a big part of their plan. So, after Kathy, their financial adviser from Opes, helped them sell their property, it was time to look at the retirement plan.
Step #1 – How Much Money would Kris and Leanne need in retirement?
To create a property investment plan you need to figure out what you’re investing for (your goals).
Once you have your goals figured out, you can create an investment plan to meet them.
Kris and Leanne decided they wanted:
- And to have financial independence in retirement
They were already mortgage-free, and they would achieve financial independence by building their $100k in passive income.
So, they decided to create a plan to build a $100k passive income within the next 25 years – by the time Kris turns 62.
The pair decided to use the Golden Goose strategy. This is where investors build their assets. And in the end, own high-yielding properties with very low mortgages.
They then live off the rental income from the properties.
To get a $100k passive income, you need $2.5 million of net assets. That’s because, here at Opes Partners, we assume you can get a 4% net yield on your assets.
So Kris and Leanne knew they needed to create $2.5 million of assets within the next 25 years.
Step #2 – How many properties would Kris and Leanne need?
To hit this level of assets, Kathy calculated that Kris and Leanne would need to purchase 4 investment properties over the next 13 years.
They’ll start with a growth property, then another growth property. After this, they’ll purchase a yield property. They’ll then round this out with another growth property.
Over the 25-year period it’s projected this will create $2.9 million of equity (even after paying real estate agent and lawyer fees). This is then expected to create a passive income of $116,000.