Time Poor, Planning for Third Child and a Career Change

 

Hi. Ben Kingsley here. Managing director of Empower Wealth. We’re looking at the September Story Behind the Numbers. I’m delighted to be sharing with you several stories of some of the great outcomes that we believe we’re going to get for our clients moving forward.

Now, top line numbers for our Property Wealth Planning team — they had a very, very busy September, delivering 47 new plans. That’s new clients coming to us, who we’re going to take on their property investment journey. That’s in addition to reviewing, and servicing a lot of our existing clients; in terms of helping them buy their second, third, and fourth property, especially in this great market.

When others are fearful, it’s a great time to see great opportunity in this market.

In terms of our Buyers Agency side of our business, we did 25 purchases, in a lot of competition too — there was actually 14 properties that we actually missed out on. So the markets that we’re buying in at the moment are all around the country, and we’re buying in some areas under pretty fierce competition. We bought $14.5 million worth of property for our clients as they go on their journey. Let’s get into the details of just a handful of clients who our advisors helped over their month. Let’s share their stories….

 

Our first story comes from Stuart Bartram, who’s one of our Qualified Property investment Advisors up in our Sydney office. I like this story for a couple of reasons. When we talk about doing strategies for clients, we often talk about the four levers to build wealth, which is income, expenditure, time, and target. The two that we’re about to talk about here are mostly around income and expenditure. How are we going to play those out? Let me explain, I’ll set the scene.

Our couple are in their early 40s. They have significant equity. Lots and lots of equity in their family home. They have no investment properties to speak of. They currently have two children with plans for one more, living in the greater Sydney metropolitan area. One of them is an Executive Chef. The challenge with that is, they’re never home. They’re working very hard, seven days a week, to maintain obviously a very high end restaurant. Also, the challenge you have with this is finding the time to see your family. Once they sat down and had a chat with Stuart, it was really important that they understand they couldn’t live like this any longer. The particular chef was burning himself out, working really, really hard. So we couldn’t leave it any further in terms of taking action to build a portfolio out. His partner was a teacher and she had stable income. But the challenge we had was, we were going from a really, really good income — an executive chef in a high end restaurant working so many hours came with a nice paycheck—  and this would become a new income and a new change of career.

A change in income is always challenging because effectively we go from high income down to what we would call an average income, until they build their skillsets up and move through that, as well as juggling, having the third child. This was very much a story around when do we do this, what’s the right decision and how this impacts the cash flow. Ultimately, it was also a story about getting back your time. Okay.

One thing in life, is that Money buys you time. Okay. It doesn’t buy you happiness, but it buys you time.

What I love about this story of Stuart was able to deliver is we focused in on those cash flows. Okay. We really looked at getting that timing right. We had to work with a good loan to value ratio, but we also needed to make sure that we were preparing for these lower incomes, as the gentleman was about to expand on his career and build this out over time. So, what have we got? No existing investment properties. So we buy the first investment property this year. We get really active, really quickly, before we have to pause, because of the change of job career and we also need to pause because we’ve got the third child coming along. We transition, get confident around that working environment, and when we do that, we then execute on that second property in 2025. You can see the importance that we don’t want to wait too long, because we’re going to miss the bus. If we go now, when we can afford to go now, we’ve got a good cash reserve, we’ve got a very, very low mortgage, and an incredible amount of equity there. We get that first property under way.

Understand we have a nice safe buffer, execute on the third child. Execute on making sure we’ve got that job security, and building up our skills, so we can get a higher income. Those two properties. Now, because we’ve done that and we’re in our early 40s, it also means that our retirement date is pushed out to around 65. Income, expenditure, time and target. We understand that. This couple were happy with that. The target that they’re also looking for is $120,000 dollars in passive income.

For me, the transition for these clients is really about getting back your time, and making sure you make every move the right move. It’s pretty clear that they’d never invested before. They went and sought professional advice to line up their ducks in a row, and make sure they execute sensibly, and if the job career doesn’t work out, he can always go back to being a chef, potentially on a higher income. It is about getting that balance right. We’re not going to execute on that second property because we don’t want to put too much pressure on too early, until we know we’ve got that income coming through. So, great job Stu! Excellent story there. I really look forward to seeing how this progresses for these two clients of ours.

 

There’s obviously a lot more activity that’s happening. We bought 25 properties this month. We did 47 plans. There’s a lot more buying that’s going to go on in marketplaces when other people are fearful. If this is of interest to you, and you want to learn more about the services that we offer here, please feel free. We do an initial free consultation with no obligation at all. You can learn about our services and how we can help you get on the property ladder, but most importantly make sure that you retire wealthier tomorrow.

Thanks for watching.