Mortgage-free parents dreamed of a retirement spent driving their caravan around New Zealand. And maybe Australia.

Here’s how the pair used their hard-worked-for assets, to fuel their vagabond dream.

The Investors

Married couple Bobby and Lee, 53 and 52, had a blended family of four children.

They still paid child support for the youngest, but that was due to finish in six months. As the baby of the family became an adult.

Retirement was looming.

The couple thought they were doing pretty well, for their early 50s. Sure, she was a bit more conservative than he was, but they’d managed to work around it.

They’d diligently paid their mortgage and were finally mortgage free. They were earning $90,000 and $56,000 a year, and had reasonable savings.

There was $65,000 in their collective KiwiSavers, as well as $17,000 in the savings account. Their $19,000 credit card was paid off in full every month. But they did have a $7,000 car loan lingering over their head.

How Much Money?

Retirement was still a way away, but the couple already knew how they wanted to spend it. In their caravan, living and travelling around New Zealand.

They wanted to dedicate most of their time to doing outdoorsy stuff, things like biking, kayaking and hiking – which is what they loved to do. They did want to take at least one trip to Australia. And take the caravan with them.

So, the couple came to see me at Opes Property Partners.

But to make a plan, you need to know what you’re investing for. In other words, you figure out: “How much money do you need to make your goal a reality?”

Bobby and Lee thought a $75,000 a year passive income would be enough to achieve their dream retirement. And they gave themselves 14 years to build it.

I worked the numbers. Right now, they are on track for an annual income of $40,722.

This would be funded by pooling their KiwiSaver, with superannuation for one person, and the total property assets of $808,612.

However, they still had a wealth gap of $680,662. This meant they needed $1.4m worth of assets to get them to their goal.

How Many Properties?

The first thing they needed to do was wipe away their personal loan with their cash savings.

No mortgage debt was an extremely savvy place to be, financially, and they needed to capitalise on it.

To a bank, it’s not just about how much you earn. It’s equally about how much debt you have, and the two bat off against each other. The more debt you have, the more income you need.

Newly debt free, the couple were approved for another mortgage. This time it was for an investment property. A standalone house worth $789,000 in Christchurch.

After we discussed the best way forward, the couple are going to pay off the 20 per cent deposit as principal and interest. They will keep the rest on interest only for now.

If they paid interest only, Bobby and Lee would get to 89 per cent of their goal ($67,250 pa).

But on their current debt-free strategy, paying principal and interest will get to 101 per cent of their goal ($76,133 pa).

Enough to keep the car’s tank full, and their retirement dreams alive.

Next Steps

Bobby and Lee’s experience might resonate with a lot of homeowners. Maybe you have a very specific vision of what your retirement will look like.

You just need some advice to create the income to make it a reality.

There are always options for you.

If you want the same service as Bobby and Lee, your next step is to book a Portfolio Planning Session with us here at Opes Partners. See below for details on how to contact us.

Disclaimer: Just remember this is a column in a magazine, going out to thousands of people. It’s not personal financial advice. But, it is an example of what can be achieved with personalised financial advice. If you are wanting to book a consultation, email us through the website at https://www.opespartners.co.nz