I decided to do a quick review of my overall budget, to see if anything needs adjusting.
My overall expenditure breakdown is as shown below:
Another 37.4% of my total income is used to cover the investment property holding costs (mortgage interest payments, rates, insurance etc.)
The overall income tax is lowered by the investment property being negatively geared - with the property expenses and depreciation exceeding the rental income.
Around 21.4% of total expenditure is on "needs" - consisting of 9.9% going towards food, 8.7% towards housing and 2.8% towards healthcare. The housing costs are the rates, insurance, electricity and water and any repairs etc. for our home and the lake house. It is fairly low as we don't have a mortgage on our home or the lake house. The healthcare costs are my gym membership and any fitness equipment purchases, medicines, and medical expenses not reimbursed by Medicare. I haven't included the cost of our private health cover as the premiums are paid by my employer.
Spending on "wants" is only 4% of the total budget, with 1.6% being 'transport' (the running costs (insurance, registration, servicing and petrol) for my Jaguar) and 2.4% being spent on 'entertainment' (internet and mobile phone plans, Amazon Prime, gifts, eating takeaway etc.).
Everything is quite 'steady state' at the moment, so I expect this to remain pretty much the same expenditure pattern as long as I continue working full-time (another 5-10 years or so). When I turn 65 I will move my super into 'pension phase' and the tax-free pension payments will go into the investment property mortgage offset account, so I should have enough there to clear the investment property mortgage when I retire (if things go according to plan).
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2 comments:
I suspect you are missing some spending here, by comparison with my breakdown: https://moominhouse.blogspot.com/2024/07/spending-2023-24.html But given low spending, your children grown up, your net worth above $4 million not including your wife's net worth, you could sell your Sydney house and retire to the Lake House. So, why are you still working?
I'm working until I don't feel like it anymore. One morning I might wake up and decide to send in my retirement notice, but for the moment I'm content to continuing doing a tedious by easy job that pays the bills while I watch my NW accumulate. complete my PT PhD and dabble in whatever of my hobbies catches my attention. There isn't anything I want to do that I'd need to be retired to do. There isn't anything I even need to take annual or long service leave to do.
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