Property Planning Case Study #8 – Do We Buy a Home Now & Convert Into an Investment? Can We Retire at 50 & How Many Properties Will We Need? (Ep. 238)

Previously known as “The Property Planner, Buyer and Professor”

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Episode Highlights

0.00 – Dave, Cate and Mike wish our listeners a happy new year!

2.50 – Mike introduces the case study: James and Lisa

7.20 – Cate chats about the scenario, and how it compares to some of the other client goals she discusses with clients

10.23 – Dave steps our listeners through the decision matrix associated with timing the next purchase, buffers, and their ultimate property plan

21.40 – A teaser from next week’s episode: Ben asks about PPOR offset versus investment offset. How can he better control his cashflow?

31.28 – Cate shines a spotlight on the positive changes that often strike in life that can amplify wealth and investing success in a typical work life timeline

44.14. – And our gold nuggets!

Show notes

Mike introduces James and Lisa’s case study. They are both 36 and have a goal of attaining $80,000 of passive income per year into retirement, and scaling back work to 50% by the age of 50 (in 14 years) remains an ideal. Their annual combined incomes are $144,000 and they have $90,000 in savings. Can it be done? And what do they need to compromise on to reach their goal?

Cate ponders their plans and discusses the cost disparity between life in the major capitals versus the regions. She also touches on ‘overshooting the runway’; a common pleasant surprise for those who make firm plans early in life.

Dave explains how he and his team would typically tackle the determination of subsequent property purchases, timing, budget and buffers. How did James and Lisa’s property plan compare to other plans? Tune in to find out what scenario Dave’s team recommended to this duo.

Do they purchase an investment first? Do they move to their ideal future home location? How many properties do they ultimately need? The alternative options for James and Lisa are an interesting surprise!

Mike and Cate tackle the investment-future use conundrum; a common investor challenge that the Trio see often. And Dave makes a valid point about the differential in post-retirement outcomes when sensible financial decisions are made at the start of an investor’s journey. It’s little wonder that compound interest is considered the eighth wonder of the world.


  • James: $82,000
  • Lisa: $42,000
  • Passive Income: $0

Cashflow & Savings –

  • Living expenses: $56,400 p/a ($4,700 p/m)  
  • Monthly savings: $2,300 p/mth 
  • Total Savings: $90,000  
  • Super: $175,000 combined
  • Investments (Shares/crypto): $0  

Principal Place of Residence

  • Year Purchased: 2017
  • Value Now: $990,000
  • Debt: $242,000
  • Long-Term home? No. In the process of selling.

Property Portfolio LVR

  • Number of properties – 1
  • Number of homes – 1
  • Number of investments – 0
  • Total property value = $990,000 
  • Total debt = $242,000 
  • Total LVR = 24% 

Money Goals post purchasing

  1. Cash flow – $1,000 p/mth surplus
  2. Available Funds – $30,000 (roughly 6 months worth of expenses)

Their Questions to answer

When we consider the questions asked when we began the modelling, it becomes clear the outcomes are really strong, and James & Lisa should be excited for the path they are on.

  1. Do we purchase an investment now to live at for 12 months before moving to Mackay?
    1. It would appear the best option is to remain living at your current place and sell in 12 months time when you purchase the new home rather than purchase a second in-between home for a short period, that may not be the place to purchase your first investment. This then opens up the entire country for the best place for your first investment which is especially important given it is the one that will have the longest time of ownership to provide you with the greatest financial return.
  2. Can we achieve our passive income goal of $80k to reduce working hours?
    1. Yes, the goal is achieved
  3. When could we reach this goal?
    1. The $80k goal is reached in 2048 with the “PPR-1st” scenario (2nd scenario)
  4. How many properties will we need?
    1. The PPOR plus three investment properties gets you to your passive income target.
  5. Can we scale back our work and income by 50% when we are 50 years of age in 2036?
    1. You can do this, however, will be running down the savings each year, wont offset your debt and wont hit your passive income goal.
    2. It would appear 2039 is best case to ensure your financial position remains strong, while waiting to 2040 or later may be the responsible decision.


Their age goal to scale back to 50% work in 2036 was 50, however you could wait until you are age 54 in 2040, alternatively, you could gradually scale back which is probably the best approach. For example cut back to 4 days in 2036, then 3 days and 60% after that, and so on and so forth.

Ultimately, as we know this is all modelling and we are able to make decisions in real life based on comfortable and happy we are with our current situation.

Their passive income will continue to build throughout retirement, and they can choose when they access their super and start receiving an income from their super balances.  

Whatever happens, they will have many choices around the age they hope to scale back employment and when they retire. More than most people if they can follow through on this plan. Usually the hardest part is managing spending habits.

Gold Nuggets

Cate Bakos’s gold nugget – Retirement is not what it used to be. We don’t just stop. We have much longer retirements these days and we do have to think about how we wish to enjoy our segments of retirement, well before the ‘golden years’.

Dave Johnston’s gold nugget – When modelling out a property plan, setting pathways and determining if a goal is achievable is critical. Decision-making often has to face adjustment as life changes.






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