Jack Chen, at 32, has acquired a $5.2 million-worth property portfolio over the course of 10 years, and he’s now laying out the strategy that could allow him and his wife to retire as soon as possible.
He started building his portfolio in 2007 by buying his first property in Marrickville and following it up with another purchase every other year once he’s able to save up enough deposit.
Today, his nine-property strong portfolio is valued at $5.2 million with around $2.7 million in debt against it, and the property investor already has a strategy planned out to fast-forward his retirement using the income generated from his investments.
“I do have a strategy in place that could allow me to, in theory, retire today if I wanted to. If I wanted to execute a purely ‘live off of rent’ strategy, I would have to wait for another one or two property cycles to have enough equity there to sell down, and to basically hold $2 million, $3 million, $4 million in unencumbered property to allow a passive income stream,” he told Smart Property Investment.
“But, if I wanted to, I could take the equity position that I have today, convert that into dividend income, [or to] fully-franked dividend paying shares.
“If I converted that equity, I could generate roughly $75,000 in dividend income today—that [equity] far exceeds my living expenses. So I could, in theory, declare myself retired today but I choose not to.”
According to him, he started building this strategy in 2012 when he had around $3 million-worth of properties.
“I started to get a little bit impatient, I think. I actually wanted the option to retire early if I wanted to. So I started actually looking at shares but not [at] trading shares. I was looking at shares for the dividend income that it provides,” he shared.
“If you just ignore the price volatility of shares for a moment and just focus on the dividend income, which historically grows way in excess of inflation, it can be a very dependable source of income in retirement.”
While he has his “early retirement” strategy all figured out, Jack has yet to declare himself retired because of his desire to continue being productive.
Right now, he’s looking forward to learning more from other successful investors and move his own investment journey further forward.
“I actually took some time off work about two years ago. I actually quit my job and went traveling for about seven months, and in that time, I wanted to explore what early retirement might look like,” he said.
“It was great for the first few months but towards the end of it, I was like, ‘Man, I kind of miss being productive. I miss making a difference in the world.’ So funnily enough, I can’t actually see myself retired. I’m just going to keep pushing myself. I want to keep growing as a person and keep contributing more.”
In the end, like most property investors, Jack’s goal is to have the financial freedom to make decisions on his own terms—to be able to retire at the exact moment he wants to without having to jump hurdles.
“When I study successful people, what it takes to be successful, these people they’re not looking for an early retirement. They don’t want to lie on the beach all day, they actually want to make a difference for themselves, for their family, for the community, and the world at large, so I want to learn from them. I want to emulate their success and I just want to keep pushing myself,” Jack concluded.
Tune in to Jack Chen’s episode in The Smart Property Investment Show to find out how he overcame his debt-adverse mindset to build a nine-strong property portfolio, the sacrifices he’s made to further his wealth creation efforts, and why he believes working with a team of professionals has been critical to achieving his goals.