Is $1,000,000 Enough To Retire In Australia? | ETFs & Australian Real Estate
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- Опубликовано: 23 июл 2024
- How much is actually enough to retire comfortably in Australia? People suggest using an ETF DCA strategy and others believe Property is better investment. In this video, we will take a look at inflation and how to outperform inflation over the next 30 years to be financially free. Let's dive in!
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I look at how much I actually spend now without my kids and it worked out to be $2000 without mortgage. Use different calculator and it cost $3800 per month in 15 year time factoring the 4%+ inflation yearly when I due to retire. Super projected to be $850k when I retire. I then use a different retirement calculator to see how long $850k last if it yield 4.5% at a cost of living at $3800 with inflation of 4.4%. It will last till I am 88. Average live expectancy for a male like me is 85. I have diabetes, high blood pressure and other health issue and likely resulting in my life even shorter. Also, at some point I will qualify for age pension so no, I am not terrify like you and will choose to live a little.
I wish you a healthy life ahead, both physically and financially. Glad that you plan things.
One million invested now in an asx index fund will deliver 4.5% dividends (live off this) and 4.5% growth over time (matches inflation). There’s your problem solved. Why make it complicated? Real estate will deliver similar returns but you’ll have a lot of headaches with realestate.
Have to turn a one sentance concept into an 8+ minute video to get the views.
Real estate is a massive headache.
Thanks Ravi. Where did you click to change to the manual rate? It's ineditable on the original link.
A bit of self serving fearmongering to drum up property business or am I just cynical?
Nah mate you're spot on
As per the comments below, the calculation with 1 mill and 4.88% inflation and landing at 250K is assuming the 1 mill is not invested for growth
What about etf share price itself going up while keeping dividned income?
Cool Video, Thanks Ravi
I thought the 4% rule covered inflation? Ie you take out 4% on average but the capital growth of say 7% (3% nett) is the inflation component. Only time you will lose is by being in cash….. and of course the usual market volatility.
You need to read up on the Trinity study on 4% withdrawal rate as you don't understand it unfortunately.
Being 29 and still investing in super until i retire, wont it go up with inflation and be at 4million ?
Very insightful and great motivation 👍 cash 💸 is trash!!
Great video one again Ravi! I suppose its not as scary if you break it down instead of thinking about how am I going to have $4m!!! Think okay in 2023 if I have $1m in assets growing then I will get there based off the same probability of inflation rising. The goal is to work towards holding growing assets worth what you could retire on today (hypothetically being 65). I can see a self managed super fund with investment properties being a pretty sure fire way.
Depends where your living. 0n gold cost or centre of Sydney, with expensive tastes, no. Every where else yes.
I always leave lots of safety margin for errors so I never think that 1m is the goal. Therefore I just let it roll inside the super to something much higher whilst in accumulation phase.
What’s the turnaround time to reply to emails ?
CPI and inflation are 2 different things. The ABS CPI under reads significantly.
50K / year in 2003 allowed an OK standard of living. 100K / year today, not so much in my view.
Definatley need to look at future value
I know you already received this request but I just want to remind you :) Can you do an analysis on the book barefoot investor, specifically the chapter on real state.
it's hard to comprehend this ravi. it's like a frog siting in water as it heats up until the water is boiling. you don't even notice the changes in prices until you look back over 10-20 years.
Can anyone please advise how it is determined if a dividend is to be paid or not for an ETF? Sometimes they just don’t pay a dividend and don’t appear to give an explanation.
Pretty much all ETFs pay "dividends" (NB it's called "distributions" not "dividends" when it's an ETF) if they're invested in a company. Although some pays out once a year (annually), twice a year (biannually), or 4x a year (quarterly). If you look up the website of the ETF it'll tell you, as well as give you its distribution history. If it's something like a Gold ETF then no they don't pay distributions cuz gold doesn't make anything. A few random companies don't pay dividends but I've yet to see an ETF not pay if it's a basket of companies. Good luck!
I'm a real beginner when it comes to this stuff, if some financial wizards can chime in here and explain the root cause of this current transitory inflationary situation then it would be very much appreciated
You're assuming that $1m stays static so if inflation is say 4% and your super is returning 5 or 6% then you're staying ahead of inflation.
Correct. He seems to have deliberately left out some details.
Don't forget about the 15% tax
@@darrenthorne1finally someone with a common sense question that no one talks about….
I don't agree at all, take the same money and put it in super versus a home will deliver more than the rise in the home value
As long as you don't get a market crash. If you are at the near end of working life. And close to retirement...super is like russian roulette or playing black jack. It's a big gamble. That's when you need property investment.
Most of the super calculators adjust for inflation
Using the average pre early 90s is inaccurate as monetary policy changed since then. 2-3% is a better long term average to assume.
Enjoy your posts. Keep going 👍
Great video again Ravi! My take is
$1,000,000 / 25yrs = $40,000
$40,000 / 52weeks = $769
AUS Minimum wage as of March/2023 = $812 per week
1. We have to think could I live off the minimum wage if I was 65 now and retire today? Maybe, maybe not.
2. I look at my budget see how much a conformable life costs now and then reverse the above to prepare for retirement in 30 years.
If you’re dollar cost averaging over 40 years and investing a percentage of your earnings, which also goes up over time, it’s really not scary. Also, using 3.45% inflation makes it even less scary 😂
If you own your own home outright and plan to retire at 65 and die by 85, I would say yes. But why stop at 1 million? Then again I'm 52 so it's not that far away for me personally, age wise.
Good Video but he is biased with property. People who can't afford property they can invest some portion of savings in Gold by dollar cost average to protect against inflation. Gold preserves purchasing power. Cryptos are more volatile and don't know which one going to last for next 50 years. So allocate some portion of savings into GOLD.
1000000 is still way out of reach for a majority of Australians. 500-600k is even a big number for most to reach at retirement.
So your investments don’t accumulate any income 😳
1. $40,000p.a is not a reasonable amount to retire on.
2. Your graph has a caption that says real estate is a hedge against inflation because the value is tied to replacement cost.
This is an over simplification and I say incorrect. This is a pretty graph but it is nonsense.
If you own your own home, $40,000 is more than enough to cover council rates, food, utilities etc.
I think the key word here is "reasonable". Sure you can get by on $40,000 p.a. but your going to be living week to week and have to be very careful with your expenditure. Rates, insurance, power and water - would cost minumun $4,500 p.a..
@@Anonymous-md2qp you can't afford nice looking escort girls
@@waynev5097 Plus Health cover- $3500 a year plus increases every year
@@Anonymous-md2qp I own my own home and recieving about 35k a year income and I'm struggling hard. I'm in poverty. I think you need 50 to 60k minimum and own the principle property outright imo.
A million? Pffft u need 5 million in assets or savings to even consider retiring in aus do you know how much my council rates are annually!!!
That's right which is why I made this video. $1M won't be enough.
Not true
1m is not much this days. Today in 2024 minimum you need 10m.