Parents Of Five Secure Dream Retirement
Empty nesters achieve a great retirement with the right investment planning, writes Stevie Waring.
2 July 2023
Parents Josh and Jodie have centred their entire lives around their five children. Even though the two of them struggled with debt and living pay cheque to pay cheque, their kids wanted for nothing.
But now their grown-up family has whittled down to just the two of them, Josh and Jodie have decided it’s time for a change. Here’s how these middle-aged parents became first-time property investors.
With all their children grown up, Jodie was able to switch her focus. She started researching how to improve her and her husband’s life financially. And, to her dismay, she learned how illiterate they had been. Together they decided enough was enough. It was time for a change.
The first thing they did was improve their incomes. Josh jumped from earning $80,000 to $92,000 a year by taking on more responsibility in his emergency services roles. Jodie’s income leapt from $70,000 to $95,000 after asking for a pay rise. She also started a side hustle, earning her about $15,000 a year.
All up they had increased their household income from $150,000 to $202,000 a year.
On top of this turbo boost in money, they managed to wipe out most of their “bubblegum” debt, thanks to an intense budgeting regime, initiated by Jodie’s new-found education.
But she didn’t stop there. In her studies she’d come across the Property Academy Podcast, which led her to make an appointment with me at Opes Partners.
How Much Money
Josh and Jodie didn’t want a lavish retirement. They were not particularly interested in travelling, or a bunch of fancy toys. All they wanted was the ability to stop working in 20 years to look after their (future) grandchildren.
But to make a plan you need to figure out what you’re investing for. In other words, you figure out: “How much money you need to make your goal a reality?”
Together they agreed on a $75,000 passive income a year in 20 years’ time. As it stood, Josh and Jodie owned their own home, worth $615,000, with a $225,000 mortgage. They also had reasonable KiwiSaver accounts of $115,000 and $36,000.
But it was far from enough. I worked out they were only 53.7 per cent of the way there and they had a big wealth gap.
How Many Properties
It’s a myth that investors need 10 houses to live their dream retirement.
Even though Josh and Jodie were only halfway towards their goal, all they needed was two properties to get them to the finish line.
The first property was a two-bed, two-bath with car park in Christchurch. They bought this property shortly after their first meeting at Opes Partners.
The second property will be another growth property in four years’ time.
With these two properties secured, Josh and Jodie will be at 111 per cent of their goal, which blows well past their original target.
For them, this extra money could mean an earlier retirement. But because they both love their jobs, they plan to stick to the original goal and enjoy the extra cash when they retire.
Josh and Jodie’s experience might resonate with a lot of busy, working parents. Remember, even if you’ve got a large family at home to support, you can still achieve the retirement you deserve.
If you want the same service as Josh and Jodie, your next step is to book a Portfolio Planning Session with us here at Opes Partners.
Disclaimer: Just remember this is a column in a magazine, going out to thousands of people. It’s not personal financial advice. But, it is an example of what can be achieved with personalised financial advice. If you are wanting to book a consultation, email us through the website at https://www.opespartners.co.nz