Aiming To Be Financially Free By 40

Like many, 30-year-old Matt* aspires to be financially free so he can retire early and “enjoy life to the full”. The difference is, Matt’s taking big steps towards achieving his goals, building wealth through property investment.

Matt’s plan is to build a portfolio of properties to realise this aspiration in 10 years’ time, at the age of 40. He currently has a $2.3 million-plus portfolio consisting of four properties in Perth.

Since he’s bought the majority of these in the past few years he’s seen very little growth in his portfolio so far, but he’s confident capital growth will come with time in the market and he’ll also look to manufacture equity by developing.

Matt took his first steps towards financial freedom with his first property purchase in Kalgoorlie during the mining boom in the mid-2000s. He sold it for a small profit a year later, going on to buy another property in Viveash, northeast of Perth.

“After making some mistakes early, missing some opportunities and not starting early enough, I purchased a property to live in close to where I grew up,” he says. “I didn’t live in that house long before renting it out and moving overseas for work. “This is where I changed strategies, engaged a buyers’ agent due to being time-poor, and decided to invest.”

While Matt has a small amount of money in shares, he’s focused on property as his wealth creation vehicle and has achieved his goal of acquiring three properties before 30. “Discussions with friends, advice from family, a visit to a financial planner, lots of hard work to accumulate funds, plus an appetite for risk while being young led me to embark on this property investment journey,” he says.

Matt works in the mining industry, currently managing a team of more than 300 people at the largest mine in Tanzania, Africa. He’s a qualified mining engineer, metallurgist and is two-thirds of the way through an MBA. “I work long, hard hours in remote areas and difficult conditions but am fortunate to do this with a good company and receive a comfortable income, which assists with achieving my goals,” he says.

While Matt’s current strategy is buy and hold, he looks for properties with development potential to boost capital growth, so he can then access the equity and buy again. This strategy suits him, he says, because he works overseas and doesn’t have the time required for a renovate and sell strategy, for instance.

Matt is currently in the early stages of developing one property into four townhouses in Hillarys to retain and rent with the aim to do a second and third development within the next five years. While he’s happy with the progress of his portfolio and believes he’s well on the way to achieving his goal of retiring early, Matt intends to expand his portfolio with further purchases.

When it comes time to retire, he intends to pay down the loans on his investment properties – selling some if necessary to reduce his debt levels – with the positive cash flow from rent providing an income to live off. Matt hasn’t determined what his annual income will need to be in retirement, or what his portfolio will need to look like to achieve it, but he’s looking for a balanced portfolio that will give him enough money to be “comfortable”. That means it will have varied properties (both residential and commercial), providing capital growth and cash flow across different states.

He’ll also look at investing through syndicates. So, what does retirement look like for Matt? He hasn’t quite decided yet, but he envisages it’ll be a combination of spending time with friends and family, travelling and property investing, as well as pursuing more volunteer and philanthropic opportunities. He’ll likely do some part-time work, but not because he has to – rather because he chooses to.