Interview: Ben Luong – Borrow 1 million vs Earn 1 million – Property is Cash Flow!

Introduction

I finally twisted Ben’s arm and got a full quality FIRE interview out of him to share with you. I have a lot of time for Ben who is constantly challenging existing and limiting belief systems everywhere he goes and a lot of fun and laughs on the way.

Ben has helped me with a leg up on Fire Dave a number of times and given his stellar track record when it comes to web SEO, PPC, Web Design and of course, Analytics it has been amazing to have a pro in my corner!

I cannot recommend Ben enough to anyone interested in the online space, so if your interested do check out his services at Ben Luong.

Back to the Financial Independence and Early Retirement Interview from an Irish and UK perspective, Ben shares some background to himself, how he is future planning for his children and explains why property (real estate) is the asset class of choice for anyone looking to get ahead.

I cracked open a beer for this one..

The usual Q&A follows, enjoy:

Who are you, and how did you discover fire?

I am Ben, originally from the UK, I now live in Limerick with my wife and 2 young children. I work in online marketing and have been a full-time affiliate for the last 10 years but now branching out into client work by doing websites and analytics. I don’t know when I discovered FIRE. I read a lot of Reddit and the internet so would have picked up the concept over the years.

I met Michael Houghton at the Limerick FI meet up at the Bank of Ireland a couple of years ago now. I’ve been an active member in the Limerick Whatsapp group but like to keep a low profile in general. There is a hell of a lot of groupthink in the FIRE community and as very few people ever change their minds once set, no point in arguing things.

Like post tax ETFs in Ireland are horrendous investments but because in other countries recommend them, a lot of people in Ireland still recommend them. Exit tax and deemed disposal just make them terrible investments.

What is the backbone of your fire strategy?

Property is the way to go. Just borrow as much as you can and buy property. I’ve found it impossible to borrow in Ireland so haven’t been able to buy any property over here. I have some property in the UK that just ticks over and I’ll be fine once the capital has been paid down.

The problem with property is cash flow but as an investment class, its unbeatable. Being able to borrow and write the interest off is like getting free money.

“If you borrow €1 million then you pay maybe 4% interest that you can deduct from income. If you earn €1 million then you pay 52% in deductions.”

Its so wrong but while the loophole is there, I’d recommend everyone take advantage of it.

As I can’t borrow over here, I’m concentrating more on tax efficient investments. As I said earlier, post tax ETFs are horrendous and should be avoided at all costs. I’m personally spread betting on shares. Its not gone great due to picking the wrong ones but gains are tax free.

It’s a loophole they will no doubt close one day if too many people do it but most people as soon as they hear the words betting, walk away. Logically, there is no different between buying a share and betting on a share.

You want the share to rise and get paid if it does. The only difference is that there is a spread cost when spread betting, but the gains are tax free and should compensate for the extra spread.

I also have a SIPP in the UK and a non standard PRSA in Ireland. Pensions are good long term investments too but there is a balance between living for today and saving for your future self. I am pretty sure a lot of people in the FIRE community over save. Its great for their kids who will inherit it all but people really need to look at what they want their estate to look like when they die.

What do you plan to do once you reach Financial Independence (FI)?

I have a lot of movies I want to watch, books I want to read and video games to play. I also want to trade Betfair professionally for the intellectual challenge more than anything. I do like sports betting now and do OK now at it. I am limited at most bookmakers so do all my betting on Betfair or via an Asian bet broker. I think with more time in retirement, I could beat Betfair and the Asian Bookies too.

Fun Fact about you?

I can eat and drink a lot. I used to run a site called eatingchalleges.co.uk and back in the day it got a lot of traffic. Unfortunately, I wasn’t good enough to tackle the big challenges, so I passed it on to someone else who was better at eating.

What are some books, podcasts or YouTube channels you recommend?

For investing, I recommend the pensioncraft youtube channel.
Podcasts, I like the moneyweek ones, they usually interview investment managers so you get a good idea on what the market is like from real professionals.
Books, depends on what you are in to. If you want to expand your mind by reading, you probably are better off reading the frontpage of reddit. You’ll get a lot more breadth of information and if something takes your fancy, you can always get a book on it later.

Contact info:

My website is benluong.com you can also find me in the Limerick Whatsapp Group