The Live, Laugh And Legacy Dream
With the right investment planning a couple in their 50s have mapped out a rewarding retirement, writes Stevie Waring.
2 October 2023
Grandparents Arron and Karen waited until their 50s to become property investors.
Up till then, Arron figured investing was something only rich people do. Here’s how the pair worked together to achieve their retirement goals.
What got them into investment? It wasn’t only the wealth aspect that attracted Arron to property investment … there was a social value too, and that can get lost on some people.
“There’s a dual benefit there. Not just for us, but for the community too,” he says.
The property investor gets the benefit at the end of the journey when the house is eventually sold after 15 to 20 years, and the person in that house gets the benefit of somewhere to live during that time.
That said, the pair were in their 50s. So, the reality of retirement was looming.
As parents of three, and grandparents to six, the pair didn’t want to be a financial burden to their family. They also still wanted to be able to provide for them. As Arron puts it: “We wanted to continue to be useful, even in our old age.”
The couple were living in good times. They were debt-free, could treat their grandkids, and enjoy going away on holiday once a year. But in 12 or so years, it was going to be a different story, and they didn’t want to retire with only a house as an asset. So, they arranged a meeting with me, an Opes Property Partner.
What had you been doing to prepare for retirement? Up until this point, Arron and Karen had been doing everything they thought was right.
- diligently paying down their mortgage
- contributing 10 per cent into KiwiSaver
- growing a healthy savings account.
But none of these things were enough to close the wealth gap. The numbers showed it wasn’t going to be this sunny forever and, because they were both in their 50s, if they didn’t take that opportunity now it might not have been there later.
To create a property investment 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.
So, the pair totalled up their ambition. This is what Arron calls their “Live, laugh and legacy.”
How many investment properties did they need? Many people think you need 10 investment properties to be successful. You don’t, but you can, of course, if you want to.
The Wealth Plan gives you the least amount of houses you need to make your dreams a reality. Arron and Karen worked out they only needed two to reach their live, laugh and legacy retirement dream.
The first property was a four-bedroom home in Halswell, Christchurch. After it settled, it was tenanted within five working days. The second property was a three-bedroom townhouse in Mangere, South Auckland. This property is due to settle in 2024.
How did they work through the challenges? Arron says he’s struggled at times with how much the goalposts have changed in the last 18 months. “It’s been hard. I try to be analytical but in this game, you can’t control this.”
When they put the Halswell property under contract, interest rates were 2-3 per cent. Over the last 18 months they’ve tripled, and it’s been terrifying.
Arron sees it two ways. On the one hand, the pair have committed to it and they’re all in. But on the other hand, the journey is really challenging. And in these difficult moments, Arron is glad he has his wife to talk to.
Ironically, Karen wasn’t keen on investing at the start of the journey, it was Arron’s idea, and she just went along for the ride. Now that Karen is onboard, she’s probably the more comfortable of the two. “Trust the process. Trust the team,” is the advice she often gives to Arron, particularly on bad days.
Arron and Karen’s experience might resonate with a lot of parents.
It’s not only about wanting to be financially independent, but also about wanting to continue helping your family. As Arron and Karen’s journey shows, you don’t need to have a portfolio of 10-plus properties to still help your kids in retirement. You’ve just got to tally up the numbers.
If you want the same service Arron and Karen received, 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...