17 – The New Addition and a Change in Circumstances

I’ve been a little quiet on the blog front as of late—for good reason: our second child arrived on Sunday morning, a little boy! If it were a previous age, I’d have extra reason to be excited, now having a male heir to who I can leave my vast riches and estates*… in our time, we’ll divide our assets in two between the kids but I’ll write more about wills another time. In brief, having a second child has highlighted the need to buttress our finances and ensure their well-being. 

Benjamin’s arrival also means his mother is now on maternity for the next twelve months, which, not coincidentally, means we’re now a zero-income family. In other words, time for me to hang up my apron and get back to work.

My original plan on this front was to return to the world of IT contracting but the current market situation in Perth isn’t as hot as it was a few years ago, on the back of the resources sector, and there aren’t as many options as I’d hoped for. In truth, I’ve always been pretty lousy at timing these things!

I could continue at home and enjoy this period with my wife and children. I’m sure we’d scrape by. I could also leave it for a while and revisit in three to six months. But the idea of having no income between the two of us, the fact we’ll be needing to support our first investment property financially—at least in part—from around August/September/October, and our plans for an overseas trip which will cost thousands in flights alone, leaves me wanting for some pocket money. What a pain, this working stuff!

I’m also considering whether I want to take on a job with less responsibility and a correspondingly low rate of pay or do something a little more stressful but that will generate a higher return on my time invested. It’s tricky this one: do I make it home for dinner every night or just push hard and maximise the limited time I’ll have back in the workforce?

On a related note, I spoke with our mortgage broker about the possibilities of a taking on a second IP sooner rather than later—presumably once I’m working full time again but while the wife’s still on maternity leave. We still have plenty of equity in our PPOR and the sooner we get one or more investment properties built, the sooner we can leverage the equity in those properties to duplicate.

Nathan at Mortgage Choice noted many lenders are wary of considering potential future income from a woman on maternity leave because—in percentages—many women do not return to work. He noted a letter from the wife’s employer would be required at a minimum. We left it there for now but decided to reconvene on the subject in August once I’ve hopefully been back at work for a little while.

In the meantime, I’ve lined up a second call with Michael Beresford at Open Wealth to discuss our options for IP #2. No reason not to at least have a chat!

I suppose a disclaimer is also worth posting: I'm just a guy, I'm not an accountant, lawyer, solicitor, tax agent, mortgage broker, banker, financial adviser, insurance agent, land developer, builder, government agent, or anything else so I disclaim your application of anything I write here is to be applied at your own risk. What I write may be incorrect and you are best to seek your own professional advice (tax, legal, financial, and otherwise) before entering into contracts or spending your money. Your situation is unique to you and what I write here reflects my experience only. This content is not professional advice and is not tailored to your situation. I'm learning too and expect to make many, many mistakes along the way.

Enjoy,

Michael