Hi Everyone, im just seeking some advice.
I currently own my own unit, on land which can build another 2 units, which i also own. This is my current ownership with no debt owing on it.I want to invest in real estate but i don’t want to create too much risk for myself or for my family.
These are my ideas and current status.
I currently owe $10,000 to one credit card, which i now never use and am slowly paying off, when i get a bonus later this year it will be halved.
Thats my only debt apart from normal house bills.
I currently work in a low paid job. about $30,000 a year. which fluctuates depending on how many shifts i get. I have to work shift work and i hate my job, but im stuck in it. This is why i want to aim for financial independance. I once used to work with a female that owned a million in property with no real positive cashflow system, just figured it out for herself. She lives in a mini mansion and works a few shifts a week just to help pay the bills otherwise all her properties pay themselves off and have good tenants. This was back in 2000.
Anyway, continuing i am trying to decide whether or not i should build 2 units on my currently owned property getting financed secured to the property, which is a ‘risk’. or should i just start fresh and go and buy some rural property which i have found to be ‘positive cashflow’ ideal properties.
What are your thoughts on my situation to starting off my financial freedom quest. I do rotating roster shift work, but i get at least 3 days off a week to pursue other income generating activities, this would give me the time to invest in property and manage properties.
I also have a nagging wife that wants to buy a car, later this year but id rather have our money’s spent buying property to eventually give us financial independence.Any idea’s where i should start? …..i don’t have a clue….its like the scales of justice i can’t decide which way to lean towards…..bottom line is if i do nothing ill be working till im 60 and ive calculated i will retire with no more than $150,000 in superannuation money which is CRAP.
Im currently experiencing health problems associated with the stresses of my job, doing rotating shift work and my doctor reccommends a change of jobs.
Hi,
on your wage a $10,000 credit card bill must feel huge. I think that right now you’ve got to concentrate on a strategy to reduce this debt, before you can even think about property investment. Maybe you can pick up another shift or two in your three days off to help reduce the debt.
Only then should you really think about getting into property.
I hope this is helpful.
Landt.Yes thanks for the advice, i forgot to highlight my current priority is getting the damn credit card paid off, and getting rid of it forever, i hate them, been trapped by them for 10 years, enough is enough. Everyone i know who is financially well off ‘doesnt have a credit card’ but learned of how bad they are in the past.
I intend to pay it off, combine my wives income with mine to start investing in real estate. I can’t work extra shifts without making more impact on my health but i am looking for a new job all the time.
Thanks and im looking forward to any further replies.
S2ss, you need to consult a professional to rearrange your debt. Given you have equity, paying out your credit card with a much lower interest loan is a priority. Do it now! Good luck, Geoff.
You would pay off that credit card debt sooner if the interest rate were lower, yes?
Credit card interest rates are still approx 3 times that of a home mortgage. Credit card finance is for those that either fall into their grasp through spending more than they can repay at the end of the month (sorry to be blunt but I suspect this is what happened to you), or they are for people who need fast finance or can’t get traditional finance elsewhere soon enough.
My advice is for you to do one of the following (depending on which best suits your circumstances).
1. take out an unsecured personal loan with a bank or credit union. The interest rate is still reasonably high (because the lender has no security) but is still cheaper than the interest of a credit card.
2. a secured personal loan – interest rate a little higher than standard home finance but still less than half that of the credit card.
3. a home loan of $10,000 over a suitable repayment period. Since you plan to repay a large part of the capital from the upcomming bonus, make sure you can repay amounts of principal WITHOUT penalty. Don’t be tempted to take the loan over a long term just to reduce your repayments. The interest rate on these loans will be approx 1/3rd of the credit card rates.
4. you might want to consider a ‘line of credit’ style borrowing either for the $10,000 or a higher amount. That higher amount could go towards your property investing/developing – whichever you decide to do. Make sure though that you have seperate loan accounts for the investment and non-investment portions. (keeps your tax affairs suitably quarantined.)I agree with Landt – get rid of the credit card debt asap (which you said yourself anyway).
The above strategies will save you heaps of interest on your extremely expensive credit card finance.
Good luck with your investing future
Not that you’ll need it though – knowing to get rid of the credit card debt and destroying the card (at least till you can develop a system to use them better) tells me that you have ‘your head screwed on right’. And that’s why I know you’re now on the right path.
Credit card finance traps many people – that’s why the bank’s (etc) make a helluva lotter profit from that source. Credit cards are like ANY form of finance (including the above refinancing options I’ve outlined), ANY of them can be dangerous if misued. Perhaps that’s why you recognised the ‘risks’ in moving forward with an investment strategy.
Personally I have large amounts available to me on credit cards. Yes it COULD be dangerous but to me it isn’t. It is a source of finance available to me to use ONLY when I consider the circumstances appropriate.
As for the wife and her need for a new car – well, I’ll leave that one for you to handle.
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