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Folks, we’ve always said that property is a game of finance rather than of bricks and mortar, and today’s massive Q&A episode explores this fundamental concept.
Tune in to hear us break down our strategy of $2k a week in retirement, which leaves you with $104,000 per year in DISCRETIONARY spending (yep, this doesn’t include ongoing costs!).
We’ll cover the calculations behind it, why we came to this golden number and how it accounts for ongoing costs.
Plus, we explore:
↔️ How to maximise your liquidity from offsets to amortisation
❌ Why retiring debt shouldn’t be your #1 priority
🏢 Why some investors choose commercial over residential every time
⚖️ The biggest pros and cons of commercial
🔍 Bryce’s #1 biggest caution around commercial investing
It’s an episode that will have you listening to it on repeat, give it a listen now folks 😊
Free Stuff Mentioned
- Free Book: The Armchair Guide for Property Investing
Includes 6 case studies that show the calculations and assumptions from the strategy in Q1. - (Not Free): Case Studies Unpacked
See these 6 Case Studies Unpacked, plus one bonus one, with a 365-day money-back guarantee. - Free Book: Make Money Simple Again
- Free Money Management Platform: Moorr
Knowing how to make a budget is different from living within one. Let Moorr do the math for you and make managing your money easy. - Leave us a Q for our next Q&A Day! Reach out to Bryce on Instagram or through our SpeakPipe. (And get a free Start & Build course if your Q is featured!)
- Free Article: Earn $2500 a Week at Retirement (Money Magazine’s #2 highest-selling cover story)
- Articles from Ben’s “What’s Making Property News”:
- Guests & Episodes Mentioned:
- Effie Zahos
- 230 | From Residential to Commercial Investing: How this guy quit his Day Job at 28 – Chat with Scott O’Neill
- 285 | “Catching a Falling Knife” Is investing in Commercial Real Estate a good idea right now? – Chat with Scott O’Neill
- 370 | Financial Harmony – THIS is what it looks like – Chat with Amber and Dan
- 486 | “Stuff This!”: How to Tackle Financial Anxiety
Questions We Answer…
Q1) Tax on Passive Income in Retirement from Chantelle
“Good Morning Bryce
I just wanted to say a MASSIVE thank you for all the amazing work you do! I’ve learned so much listening to you. I was just listening to your latest podcast about Billy and the other case studies.
I just had a quick question getting my head around retirement phase. If Billy is retiring on $2k per week, i.e. $104,000 per year, he’s going to be earning money for the rest of his life which is incredible but your also still having to pay tax for the rest of your life, so i’m just wondering once your in pension phase once the strategy for earning income – cos the property is in his name – so I’m just trying to get my head around the long term goal and the strategies behind that.
I don’t know if you’ve explained that before, if you have please point me to your podcast and I’ll have a listen to it. Any info would be fantastic and keep up the great work!”
Q2) What happens when our primary account matches the value of the loan on our PPR? From Amber
“Hi Ben and Bryce, my name is Amber.
Love the podcast and have been listening for many years now. My husband and I currently have one investment property and our PPR and we’re looking at buying a 2nd investment property next year.
We use the MoneySMARTS system and the Moorr app and we have a property investment plan which Joel prepared for us. We’re currently filling up our primary account with our surplus income which offsets the loans on our PPR.
My question is what happens when our primary account matches the value of the loan on our PPR?
For us that’s likely to happen in the next few years. Does the bank continue to deduct monthly amounts paying down the principal of the loan?
I’m just a bit confused at this point because I want to give effect to the principles you talked about in your books and podcast but I’m also nervous that the buffer that we build up will slowly get eaten away as we pay down the loan on our PPR.
Thanks so much.”
Q3) Your thoughts on commercial properties? From Stephanie
“Bryce and Ben,
long time fan of you both in the value you add to this community.
My question is around commercial property.
So I understand the importance of residential property in building the foundation to a property portfolio, but I’ve never heard your thoughts on a podcast around commercial property and whether you believe this has a place in investors portfolio.
Now I understand the risk is higher here.
You know, there’s larger vacancy periods, more onus on a business or the business leasing, the building to perform as well as higher entry price points, though despite this, I do believe there is some investors to start suit and would love to hear a segment about your thoughts and any personal experiences you’ve had with commercial property in the past.
Thanks so much.
Keep it up.”
Timestamps
- 0:00 – $2k A Week in Retirement – Is That Before Tax or Cash in Hand?
- 1:44 – A supportive message from Darren? 😉
- 6:50 – Mindset Minute: “Personal finance is 80% behaviour, 20% head knowledge.”
- 10:54 – Free Resources!
- 13:42 – Q1) Tax on Passive Income in Retirement
- 18:20 – The $2K weekly passive income is DISCRETIONARY
- 23:54 – The Nirvana Plan
- 25:33 – Where this number came from & where to find case studies
- 27:58 – Q2) What happens when our primary account matches the value of the loan on our PPR?
- 29:50 – How do I maximise my liquidity?
- 31:41 – Why retiring your mortgage shouldn’t be your #1 goal!
- 32:21 – The options available for Amber
- 34:50 – The Checkmate Move
- 35:36 – “Property is just a game of finance”
- 38:43 – Folks, ALWAYS have an offset against your highest-costing property
- 39:43 – Q3) Your thoughts on commercial properties?
- 40:55 – THIS is the heart of the question
- 42:03 – Why some investors choose Commercial over Residential
- 43:43 – Pros and Cons of Commerical
- 47:07 – The ironic perception of Greedy Fat Cats
- 48:22 – Comparing Commerical vs. Residential
- 49:25 – Bryce’s #1 big caution for commercial
- 51:55 – Beware of future trends!
And…
- 55:38 – Lifehack: Recycle your easter egg wrappings
- 57:00 – WMPN: New solutions for the housing affordability crisis
