WITH A REAL CLIENT NUMBER 1 - STEVE (Age 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
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 income producting assets on which he received a passive income
of $3000 / month (that was nearly as much as his
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 income producing assets for a further $3000/ month passive income.
AFTER 58 MONTHS - Purchased a business
for $280,000 which was completely and fully managed
which gives $280,000 / YEAR PASSIVE INCOME (That's
almost what the Prime Minister earns)
When I met Steve he owned a house
but much of it was debt. His only income was his
Four years and 10 months later, Steve fully
owned his home, had $460,000 equity in 3 investment
properties, $200,000 worth of income producing assets ($6000/ month
passive income) and a business that gives significant
passive income (he has no contact or role in the
He doesn't go to work anymore.
Steve is still only 39 years old.
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:
| Innes Street
| Redland Bay
| Kinchega Cres
| Kinchega Cres
| Daintree Cres
| Lillydale Place
| Lenton Place
| Kelvin Grove
||Total Equity: $936,000
Additionally Thomas now has $1.2M cash earning passive income and another 2 properties in a self managed super fund. He could now sell the passive investments and halve the property loans, but would lose the benefit of holding the investments.
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 now averages tax free gains of about $540,000 per annum or $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.