In the 1980s, Jeff and his wife Fay began attending some seminars on self-improvement and wealth creation. It was at Fay’s urging that Jeff begrudgingly tagged along: “I’d been content in my comfort zone,” he admits.

Then, Fay fell seriously ill. Jeff had to stop working to care for her and they were forced to live off their savings. When their bank account ran dry, Fay began receiving a disability pension while Jeff received a carer’s pension.

“We found out the hard way that we couldn’t live on such a small income,” Jeff says. “It was a real wake-up call and it got us thinking: how are we going to afford to live in retirement?”

“I realised that to fund our retirement, we didn’t necessarily have to accumulate a lot of money – but we did have to establish a ‘Tim Tam supply’, or a never-ending stream of money that keeps coming in, even if we no longer worked,” Jeff explains.

The second thing that Jeff realised was that they needed to invest to increase their financial position.

“At the time, we didn’t know that the greatest asset that we could use to invest was the equity we had in our home,” he says.

“Once we figured that out, that was really the key to our success.”

The investment journey begins

After selling their home in Sydney in early 2003, they had enough money to purchase a property for cash in the Newcastle suburb of Medowie.

 “We used the equity in our home to acquire loans so we could invest more. When we realised we could do this with almost no risk, that’s when we started on our road to wealthy retirement.”

Their first investment was a townhouse in Carindale, Queensland, purchased for $176,000 in July 2003. It immediately rented for $170 per week.

They followed this up with a villa in Midland, WA, bought for $191,000 in 2004. Later that year, they paid $195,000 for another property in Loganholme, Queensland. Property purchase number five was settled for $215,000 at Reedy Creek on the Gold Coast in 2005.

“The last three properties at Midland, Loganholme and Reedy Creek were purchased within an 18-month time frame,” Jeff says. “We had to refinance some of these properties to harvest the extra equity in order to keep purchasing.”


The bank says no more

The next investment was a house and land package in Edmonton, Cairns, priced at $272,500.

The land on this property was 990sqm, so it has the capacity for a second dwelling to be built on the land at some time in the future. Jeff crunched the numbers and decided that it represented a great investment.

However, the bank wasn’t keen to trump up the funds this time around.

“My age did present a problem when I applied for this loan,” Jeff says. “I was given five days to get independent financial advice or the loan would be declined. After all, I was over 60 and classified as ‘old’, and therefore there was the chance I was a bit senile!”

Jeff quickly browsed the yellow pages and booked an appointment with a financial advisor. After a 90-minute consultation, the advisor made a note on Jeff’s file describing him as a “Professional Investor”.

“I received a letter from the financial advisor and that satisfied the bank,” Jeff says. “It convinced them that I was a ‘good risk’, so they provided the loan and the property settled in January 2006.”

An unexpected loss

After sharing life’s up and downs for more than two decades, Jeff lost his wife in November 2007, when Fay passed away at the age of 68.

“We had started too late for Fay to enjoy the benefits of what we had planned,” Jeff says.

“I urge you not to wait. Time is needed for property values to grow, so leave yourself enough time for this to happen.”

Following Fay’s passing, Jeff took a step back from investing as he endured a “messy” two-year process of settling Fay’s estate.

Then, “an interesting thing happened in early 2008”.

“I had day surgery on my hand, and the nurse was very concerned that I was going home alone,” Jeff says.

“She said that some people did crazy things after anaesthetic, such as spending large sums of money. She was right! When I went home, I started looking for another property.”

Jeff found his latest investment online: a house and land package in Doreen, VIC, priced at $355,455. “By spreading the portfolio across several states, I avoid land tax and it ensures that at any given time, my portfolio is working for me in terms of capital growth,” he says.

Moving closer to family

In 2010, Jeff made to the move to Queensland to be closer to his two daughters and six grandchildren.

“Because I am semi-retired and due to the current strict policies of banks, I had reached my limit of borrowing,” Jeff says.

“So, even though I have a policy of never selling, I had to sell my home at Medowie to purchase my new family home in Queensland.”

“My new home was more expensive at $465,000, so I had to chip in some of my savings, but it’s been worth it to be near my family,” he says.

“I started at age 61 and I’m now 68. I won’t need a pension and I’ll be able to help my children and grandchildren to do what I have done. I’ll also be able to continue to give to charities at a greater level than I’ve given in the past. I’m now in a position to pay my own way for the rest of my life; it’s a great feeling.”

*First published in Your Investment Property magazine October 2011