  SCENARIO
WITH A REAL CLIENT NUMBER 1 - STEVE (34
years at the beginning)
• STARTED year 2000 - With a net worth of
the $80,000 equity in his house and a job at the
Post Office.
• AFTER 19 MONTHS - Owned his home outright
and had good equity in 2 investment properties.
Net worth of $360,000.
• AFTER 24 MONTHS - Acquired $100,000 worth
of shares on which he received a passive income
of $3000 / month (that was nearly as much as his
wage)
• AFTER 36 MONTHS - Acquired a 3rd investment
property for well under market value (which later
doubled in value while other areas stayed flat).
• AFTER 50 MONTHS - Acquired another $100,000
of shares for a further $3000/ month passive income.
• AFTER 58 MONTHS - Purchased a business
for $280,000 which was completely and fully managed
which gives $250,000 / YEAR PASSIVE INCOME (That's
about what the Prime Minister earns)
The summary
is:
• When I met Steve he owned a house
but much of it was debt. His only income was his
job.
• Four years and 10 months later, Steve fully
owned his home, had $460,000 equity in 3 investment
properties, $200,000 worth of shares ($6000/ month
passive income) and a business that gives significant
passive income (he has no contact or role in the
business)
• He doesn't go to work anymore.
• Steve is still only 39 years old.
See what Steve says
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SCENARIO WITH A REAL CLIENT
NUMBER 2 - THOMAS (Age early forties at the beginning)
• Despite a good income, as at 9th April 2003, Thomas didn't have any assets - no real estate, no shares, no other assets.
• We lent the required deposit on the first two investment properties.
• We won't go into the step by step details of what happened each year. You probably have the idea by now. Five years after starting, as at 9th April 2008, Thomas has 9 investment properties and $1.2M equity in shares.
• Thomas has a net worth of $2.5M to $3M five years after starting. Recently he looked at stopping work, he could stop now, but eventually decided to work for just two more years.
• This is his present financial position:
| HOME |
VALUE |
LOAN |
| Innes Street |
$360,000 |
$115,000 |
| Redland Bay |
$440,000 |
$240,000 |
| Kinchega Cres |
$400,000 |
$345,000 |
| Kinchega Cres |
$405,000 |
$390,000 |
| Daintree Cres |
$415,000 |
$390,000 |
| Lillydale Place |
$480,000 |
$221,000 |
| Lenton Place |
$480,000 |
$358,000 |
| Kelvin Grove |
$440,000 |
$425,000 |
|
Total: $3,420,000 |
Total: $2,484,000 |
|
Total Equity: $936,000 |
• Thomas now has $1.2M cash invested in the sharemarket and another property in a self managed super fund. He could now sell the shares and halve the property loans, but would lose the benefit of holding the shares.
• All of these assets have been acquired over a 5 year period, without the benefit of catching the last boom. Imagine what will happen to this "empire" when the next boom hits.
• The summary is that from a standing start, Thomas has made a tax free gains of about $540,000 per annum of $45,000 per month, just for owning assets the way we like to do it. This is money you can spend and use for lifestyle - it's not just for looking at. And it's exponential - it gets faster and faster as you go along.
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