Hi Cam,

Your friend is partially right in a couple of areas as follows;

Negatively geared property will need an income to sustain it up until the income is sufficient to sustain the property. But.............that assumes you continue to hold the property in retirement. Don't forget though that the proeprty can be sold (assuming it has increased in value)at some stage in the future. The capital realised from this will provide a valuable supplement to any other investments held by the individual.

Some cashflow properties are in localities which some would consider risky. Others can be sourced in more secure localities with good economic fundamentals underpinning the property and community the property is located in.

Another point to consider is that the strategies your friend is referring to are basically buy and do nothing strategies. Some people use value adding strategies to fast track their investments so that they can accelerate either the value gain or the rental income. THis can be achieved with creative thinking, experience, a couple of misfires, and time.

While funding for our future does carry some risks - there is also a risk of doing nothing.

And speaking with first hand knowledge (my parents) doing nothing is a very, very risky proposition too.

Hope this helps.