THE POOR RICH….IS THIS YOU?
THE POOR RICH… Is This YOU?
“Rich” couples argue about money because while at least one partner is often academic, neither party has any financial literacy.
Doctors are the worst.
Down-to-earth followers will be staggered at the below scenario but it is typical, in one version or another, of our Poor Rich neighbours just a suburb or two away.
And I have sincere empathy for them because when an upset comes, their world disappears like a departing freight train. It’s impossible to stop.
Watch Out…
SCENARIO:
- COMBINED INCOMES: $1 million
(After tax: $700,000) - Arney Rd Residence: $6 million
(Mortgage: $3 million) - Omaha “Bach”: $2 million
(Mortgage: $1 million) - 2 x Audis: $200,000
(Financed) - Credit Cards: 20% on $100,000
- TOTAL ASSETS: $8 million
- TOTAL DEBT: $4.3 million
- NET WORTH: $3.7 million
Interest on debt: $4.3m x 6% = $250,000
Cash surplus: $700,000 – $250,000 = $450,000
Is this a safe scenario for the family?
SEPARATION!
We don’t like to talk about it but this is reality and neither party is in great shape to cope…..
Incomes drop or even fail because of the emotional trauma, often weighted against one party.
Sell up under pressure and acrimoney……
- Arney Rd: $5.2 million
- Omaha: $1.5 million
- TOTAL ASSETS AFTER SALE: $6.7 million
(Net debt still $4.3 million, costing $20,000/month, and both Audis are still completely geared with little value left. - NET WORTH NOW: $2.4 million
(HALF EACH = $1.2 million + ongoing costs for cars and credit cards.)
$1.2 million will not buy you a house you’d even consider living in?
And you’re 60 years old.
SORRY EVERYONE, but this is what I’m working with every day.
BUT…
SOLUTION: Lets Start With One
A portfolio of Brick & Tile units (let’s start with just ONE) will largely self-service with very little cash input. It’s not glamorous, so just don’t tell your friends. And I have Barfoot & Thompson managing them with my constant supervision.
Now that Covid’s over if these $550,000 units (yes South Auckland or to your preference) revert to doubling every 8 to 9 years (maybe 7y) and the capital gains tax Brightline threshold is back to two years (ask your accountant) each investment might produce over half a million dollars…for you or the kids.
Would four be a big deal? Looks like $2m to me. That would even cover Kings.
Call me: Martin Dunn 0274-984.097
At worst, you’ll get educated.
