Show notes – Property Plan Case Study #9 – Can We Scale Back Work With a Sea Change at Age 50? Navigating Work, Wealth, and Waterfront Dreams! (Ep. 255)

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

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Episode Highlights

1.15 – Cate introduces Rachel and Marcus’s amazing property planning case study

6.09 – Cate shares the financial snapshot of our case study couple

11.30 – Mike sheds light on why people are prepared to make big decisions without appropriate due diligence

13.40 – The Trio challenge Rachel and Marcus’s self-diagnosis of their risk profiles

27.12 – Teaser for next week’s show

29.43 – Dave shares the three progressive scenarios with our listeners

47.40 – Gold Nuggets


Show notes


Cate kicks off the episode and invites Dave to share a bit of information about our exciting case study couple and their quest to move to Venus Bay to enjoy a simpler life. They asked Dave’s team to help them work out how they can achieve their goals, including the generation of a passive income and retaining their Melbourne home as an investment. Is it realistic? Is it achievable? The Trio delve into the emotions that can run when setting these types of goals. They also congratulate our case study couple for having a firm goal and setting about constructing a plan.

“Not having a plan is like chipping away at a piece of marble without knowing what the statue is going to be”, says Mike.

Rachel and Marcus have a very solid financial outlook. Cate gives a fiscal snapshot of their debt, income and equity position for context and Dave runs through the critical questions that are asked in order to determine their property plan.

Our case study couple rated themselves on the risk profile meter as 4-4.5 out of 5, however the Trio challenge this and discuss their rationale for down-scaling our couple to lesser risk score.

Dave steps through the assumptions and inputs, and Cate weaves through each of the three scenarios that were presented to the couple.

What is a prudent capital growth forecast rate? And when should consumers be wary? Mike expands on the reasons why some claims can be dangerous and Cate warns about the risks of buying brand new.

The three scenarios show a progression of outcomes, and with small tweaks and changes, each scenario is quite different from the last option. But what are some of the most stunning outcomes, and what are the powerful tweaks that could surprise many of us? Tune in to find out….

Cate touches on the risks of buying a future home, and the Trio share some of the mitigants others who find themselves in a similar situation to consider.

One of the three scenarios not only gets our hard working duo to their goals, but enables them to enjoy an even higher passive income. What are some of the tips, tricks and counter-intuitive moves that they had to consider?


Their Main Goal is that by the age 50 in 15 years time around 2039 they are in a position where they can scale back work hours or perhaps pursue a new career, more aligned with their passions, and make the move to the coastal location of Venus Bay which has a median value of $622,500 

Marcus and Rachel have said that they appreciate this may not be completely realistic and they are flexible on their goals, so if this was the case, they would be willing to continue full time work for an additional 2-5 years if it meant they’d be financially secure when they make the move. Additionally, if they could scale back work earlier, that would be great! 

They plan to keep their Parkdale property as an investment and believe this should help cover their reduced incomes, as it will likely be their most expensive asset at the time.  

  • Aim: based on their existing living expenses and anticipated increased lifestyle spend in retirement, they believe passive income of $50k should be sufficient to support them in semi-retirement, and then between $80k and $100k in full retirement.  

They’re not sure whether this is realistic, or achievable, and this is a big driver for wanting to complete their own personalised Property Plan.  

It’s worth noting that often people are almost apologetic when sharing their dreams and lofty retirement or scaling back goals for the flexibility stage of life. I think we really should congratulate all our clients for having the courage to set goals and actually then take action to do something about setting up a concreate plan to try and achieve them. 

Financial Overview

Income –  

  • Marcus: $160,000 
  • Rachel: $132,000 
  • Passive Income: $0 

Cashflow, Savings and Equity –  

  • Living expenses: $$5,500 p/m)   
  • Monthly savings: $7,000 p/m 
  • Total Available Savings: $265,000   
  • Equity in home: $752,000
  • Super: $146,000 combined 
  • Investments (Shares/crypto): $0   

Principal Place of Residence  

  • Location: Parkdale, VIC 
  • Year Purchased: 2015 
  • Value Now: $1,145,000 
  • Debt: $393,000 
  • Long-Term home? Yes.  

Property Portfolio LVR 

  • Number of properties – 1 
  • Number of homes – 1 
  • Number of investments – 0 
  • Total property value = $1,145,000  
  • Total debt = $393,000  
  • Total LVR = 34%  


Scenario 3

2024: Purchase first Investment property 

  • 2027: Purchase second Investment property
  • 2030: We add in Parkdale PPOR refinanced and loan moved to Interest Only 6 years down the track.
  • We have given a three year gap between the second Investment purchase and this change to I/O to help the Borrowing Capacity to build back up following that purchase at 105% LVR. 
  • Move to I/O to help with cash flow via using an offset account to reduce I/O repayment, and to maintain greater levels of future deductible debt on Parkdale.

2039: Make the move down the Coast, move into the 2024 investment and rent out the PPOR 

  • Interest only on the Parkdale property (existing PPOR) and commence renting it out at 3% yield. 
  • Move into the 2024 purchase, so that rental income stops.
  • Reduce income by 40% for both Marcus & Rachel

Outcomes & Commentary 

  • Net Passive Income of $54,000 in 2039 achieved, against a target of $78,000. So, they would achieve a net income of $35,000 in today’s dollars against the goal to hit $50k in today’s dollars. 
  • Final Passive Income of $201,000 in 2054, against a target of $121,000, which would mean they hit $83,000 net passive income in today’s dollars.
  • Cash flow surplus recovers well from the drop in 2039 and continues to build steadily year on year, reaching $16,000 per month in 2054 which is $6,606 in today’s dollars.
  • Market Value of properties at $12m and equity of $9.9m, meaning $2.1m of debt remains. 
  • Given their strong cash flow throughout the 30 year plan, they have been able to build considerable savings and in 2054 would have about $3.1m of savings, meaning they could retire all their debt if they chose and still have $1m in the bank.
  • In addition to this, their super is projected to be at $4.3m, so this would provide a healthy pension of $215k p.a. in future dollars assuming a 5% pension was drawn

This would amount to approx. $88,780 in today’s dollars. In 2054 they will both be 65 years of age, so the timing is right to draw a tax-free pension.


Gold Nuggets

Cate Bakos’s gold nugget: The tiny little decisions that can be made from one scenario to another may not seem significant, but can be very conservative in the long run. The counter-intuitive suggestions can make a huge difference.

Dave Johnston’s gold nugget: This is a great example of the benefit of creating a property plan. “For anyone who’s interested in creating wealth through property, setting a plan will set you a step ahead.”

Mike Mortlock’s gold nugget: Make sure you have income protection insurance and other risk-mitigating insurances. Congrats to our case study couple!







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