[size=3]My husband loves property and investing but at the moment does not own any. He thinks that we can retire in 10 years if we start buying properties now. Has he gone raving mad? or should I be listening to him?
What do you think?[/size=3]
Where is the love?
SunshineMy dearest Peace-love-sunshine,
How much do you need to live on? Let’s say $100,000 per year. If you buy $400,000 worth of house/s now, they might go up or down in value for a bit, but over the long-term (say 7-10 years) they will double in worth! Why? Because that’s the rule. Howz that for love?
You can then retire, drawing on some of your $400k profit for living expenses. Over the next 7-10 years you will automatically have another $800k of ‘equity’ added to your house value to draw down on. By this point you will be able to spend OVER $100k per year, as your house/s will also double in value to 3.2 million dollars.
Yay! Now how ’bout giving me a little preesh for setting you and your husband free from the shackes of the 9 to 5? Why don’t you go and tell everyone you know about this retirement strategy! You’ll get all the love you need, my good dear.
All the very best,Positive Light and Bunnykins, F.[cowboy2]
Oh dear! What on earth is happenning to me? I’m talking like a happyclappycamperitis victim! Help me! Dmichie – where are you?
Peace, I think you should be listening to him. Make sure you get some appropriate advice regarding various strategies.For example, I am not a fan of ‘living off equity’ as a ‘strategy’ for the not so wealthy. Be patient and things will happen.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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Essential LinksGreetings Piece- Sunshine,
No your husband is not mad.
Yes wives should always listen to their husbands [wink]Seriously, definitely possible to retire in 10 years.
Spend the rest of the day educating your self.
Then tonight sit down with your husband and ask lots of questions.
Together work out what you want in retirement.
Formulate an action plan together.
Failing to plan = planning to fail.There are lots of ways to invest into property.
So if you have any questions than don’t hesitate to ask.
I am sure that there is at least one person for every type of property investment on this list.Foundation is correct, property prices generally double every 7 to 10 years.
Rents also double every decade or so as well, so more income goodies.
Investing in property can reduce your income tax, the government actually tries to reward investors.Wish you all the best Colin.
“What you want will pull like a magnet. Here’s the other part. What for? Purpose is stronger than object. It’s the ‘What for?’ that’s even more powerful than the object. And the more you can describe in detail to stir the emotion and the intellect and the spirit and the soul, then the more powerful the ‘what for’ is.” –Jim RohnEmail [email protected].
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For all your CLEANING and GARDENING work.Here’s the other amazing thing, and why I am so completely positive about the future of our wonderful, happy country – According to Treasury figures, the total private net wealth in this country is equal to an average $250,000 per man, woman and child[1], of which 63% is real estate! That’s $157k per person! Even more amazing is that only 69% of Australians own their own home[2]. You do the math, that means the average Aussie home owner has $228,000 worth of real estate!
Now comes the exciting bit… because house prices double every 7-10 years, every one of these people will be able to retire on $50,000 equity withdrawal per year within the next decade! Are you excited yet? I know I am!!! Within 20 years their properties will be worth so much and be doubling so fast that more than 2/3rds of all Australians will be just pottering around in their early retirement spending the spoils of this ongoing infinite amazing real estate investment machine to the tune of hundreds of thousands of dollars per year! We’ll all be so rich that nobody will want to work and we’ll have to bring in immigrants to do all the cleaning up after us. The world truly will be our oyster!
Still, I only have 2 houses, and I still want to be rich and everything and leave my job before I turn 35, so just to be sure (in case prices don’t go up straight away), I want to buy just one more house. I don’t want to be greedy, just certain.Join me in my happy yellow-submarine-house. We’ll all clap together and be joyous.
Cheers, F.[cowboy2][2]ABS Link
Over the next 7-10 years you will automatically have another $800k of ‘equity’ added to your house value to draw down on.This is most likly true if you do your research and invest in the right areas/type of property. I wouldn’t say automatically though, as there are always exceptions.
Peace-Sunshine, you could consider “What is the alternative?”. If, like most people, you and your husband have normal jobs, are you putting enough money away each year in savings and investments to sustain you for both your current and future needs?
It’s expected that modern generations are likely to live into our 90s and 100s, barring accidents. Meanwhile most people retire by 65. That’s 30 to 40 years of living without a paypacket!
Most Superannuation funds are a joke, so when you retire you will at most have a half a dozen years before you’ll need to go on the pension… if there is one by the time we retire (aging population means less tax money for such things).
So, what are we going to do? We need to invest somewhere, so that “your money works for you” and multiplies to a level you need. Some people find shares are for them, but property provides more solid growth and is far easier to understand.
Obviously we think it’s a good idea, or we wouldn’t be here. Like any investment, research is crucial – and if you want to acquire a lot in a relatively short period of time (10 years) then you will need to apply yourself hard the sooner the better.
Good luck.
Always good for a laugh F…
On the last line of your last post, I believe after the word ‘all’, you need to insert the words “have the”.
[biggrin][biggrin]
…took me a minute tho’!
[blink]Accidently posted my reply as new thread.
https://www.propertyinvesting.com/forum/topic/17812.html
See Change[cigar][confused2][confused2]
Sarcasm is the predominant tool of the uneducated.
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksNo sarcasm here Rob. No need for education either. Welcome to a whole new me.
Y’see I was a bit bored last night and my mind was full of happy thoughts after watching all the up-and-coming brilliant minds on Big Brother (the only TV show worth watching) so I downloaded and read a few ebooks. I am a changed person.
First I got stuck into a book by a girl called Kyo-Saki, something like “The Millionaire with a Crappy Car”. I was hooked. It was clear that my nice car was holding me back from my full wealth potential. It took me about 3 hours this morning with a bunch of keys, a piece of sandpaper and a large rubber mallet, but this obstacle to riches and happiness has been reduced to a beat-up old banger. Hooray, first step complete!
Once I’d devoured my first book I skimmed through Rob Gallon’s masterpiece “How to get Really Really (seriously filthy-stinking) Rich YESTERDAY”. The ‘A-HAH-HA!’ moment embraced me with all the warmth of the Titanic carressing a large lump of supercooled water. I have the power! If I think success, I will BE success! Here I’d been debating whether to sell my holiday house by the sea upon completion to cash in before some mythical house price crash removes a third of its worth or to hold onto it as a long term investment and lifestyle expense… What a joke!
If I think it will double in worth by 2012, I will be rewarded with all that and more! Gad, it’s that simple! I jumped onto PI.com and checked over my old posts. Yep, they’d all predicted falling house prices. I felt sick to my stomach, yet there was worse still to come. I looked at statistics on house price transactions and median sale prices. Sure enough, down, falling, slumping, stagnating. It hit me like a cricket ball to the testes – THIS IS MY SICK LEGACY! My negative words are the cause of all this deflation!
All those emails I’ve sent to FTBers and FTPIers who have come to this site seeking advice have been eating away the value of my future. Perhaps it’s too late to stop the rot, but I must try to turn this tanker around. From this point on I will dole out spittoonfuls of positive advice to the newbies. I will make my mark on the world by making sure house prices double every 5 years! That’s right, I’m going to be so positive I’ll break the old rules. Seven to Ten be gone! From this point, by my decree (backed up by positive thought and karma to burn) making money will be easy.Love & kittens, F.[cowboy2]
Whatever!!! <—- A very intelligent response!!!
The Mortgage Adviser
http://www.themortgageadviser.com.au
[email protected]
Essential LinksIf at first you don’t succeed …
What I said on the now deleted link ( I think ) was that you need to listen to him , just make sure you’re not smoking the stuff that Foundation seems to be smoking at the moment (Care of the Qantas baggage handlers)[buz2][buz2][cigar]
There are lots of way to invest in property and you can read about most of them here , though they will receive different degrees of enthusiasm.
The important thing is to really ” Know ” what your doing before you start doing it grasshopper.
See Change
Kool in a Kaftan , Love and Peace Man … B.A.Robertson circa 1979
Okay….who kidnapped foundation and hijacked his log in ????????????????????????????
Quote:Originally posted by foundation:because house prices double every 7-10 years, [cowboy2]
yeah this is my favourite piece of trueism from the last boom.
This ignores that the statistics its drawn from are from an era of high inflation.
I can remember my boss saying just add 10% to last years bill. Wage growth was 10%+ per year, wages doubled …..every 7 years.
Did that have anything to do with property doubling in the same period nahhh it was a coincidence.
Now my receptionists wage over 12 years has gone up only 50%, as we are now in a low inflation environment.
Ave wage was how much 12 years ago 30K ???
From this you could buy middle class suburbia for 200K. (if you both worked.)
Now their wages are 40K and the same house is 500K. (note that is is 12 years not 7 ) and they cannot buy into middle class suburbia.
In 7 years their wages will be 50K each and the house will be 1 Mill, but the really exciting thing is that in 14 years from now they will both be earning 61.5K and the house will be worth 2M, and then in another 7 years their kids will then be earning 75K trying to buy that same house for 4M.Any brokers here interested in that one ?????
PS bring foundation back !!!!!!
Now that is an interesting concept.
Houses double every 7 to 10 years.
Household income for my staff has taken just over 10 years.Their pay is above the average but I can’t see it doubling as fast as houses.
I do my best to help increase their incomes with opportunities but being realistic the average income growth will not match house growth.Perhaps this is why the banking sector has changed so much over the years?
On the other hand as an investor I aim to double my investment value every 3 to 5 years.
That’s between 12.5 and 26% pa less than 12.5 not interested and over 26 most likely too risky.
There is no problem with this and many of my staff has followed me into investments also earning simular results.
However I just keep compounding and many of them take some income out.My conclusion to this is that in the future homeowners will require more than one income stream and a proven investment record instead of a savings record, which is required today.
I may not be able to increase staff pay with out pushing prices up to clients.
But as a good responsible employer I do my best to help staff invest wisely.
Ideas and education should be shared.Does anyone have actual figures for a proper comparison of incomes compared to house growth?
“The basic rule of free enterprise: You must give in order to get.” Scott Alexander
“Get a good idea and stay with it. Dog it, and work at it until it’s done right. – Walt DisneyEmail [email protected].
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For all your CLEANING and GARDENING work.Originally posted by Colin Gowan:Does anyone have actual figures for a proper comparison of incomes compared to house growth?How about David Rees Commsec Presentation for the graph of house prices to wages on page 13 (extends to -100 years). Don’t forget to add a bit more of a hike onto the end to account for 2002-2005.
This proves conclusively that buying a couple of IPs now and quiting work will be more profitable than continuing to work until 55/60 years.Glad to help,
F-H.[cowboy2]Originally posted by Colin Gowan:Does anyone have actual figures for a proper comparison of incomes compared to house growth?
Thanks foundation it was actual numbers I was after graphs can be distorted thanks anyway.
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For all your CLEANING and GARDENING work.Love to oblige:
Year Sydney Melbourne AveWage
1974 31,800 25,500 6916
1975 34,300 28,700 8070
1976 36,800 32,900 9120
1977 39,200 37,000 10378
1978 43,200 37,600 11364
1979 50,700 38,000 12296
1980 68,850 39,500 13550
1981 78,900 44,000 14824
1982 79,425 46,750 16366
1983 81,425 52,500 18248
1984 85,900 65,000 19507
1985 88,350 75,200 20346
1986 98,325 82,000 22055
1987 120,025 89,500 24106
1988 141,000 109,000 25866
1989 170,850 132,000 27755
1990 194,000 131,000 29975
1991 182,000 127,000 31564
1992 183,300 125,000 32163
1993 188,000 126,000 32485
1994 192,375 130,000 34216
1995 196,750 129,000 35310
1996 211,125 131,000 36793
1997 233,250 142,000 35812
1998 248,750 155,000 37273
1999 272,500 175,000 38620
2000 287,000 191,000 39993
2001 322,500 225,000 42047
2002 387,500 258,000 44376
2003 454,250 276,000 45841Numbers are from the ABS. For REI figures, add 10% for sydney and 25% for Melbourne
Cheers, F.[cowboy2]I thought I’d better add – divide median house price by avewage for a nice graph.
Oh what the hey, here it is:
Sydney Melbourne
4.59 3.68
4.25 3.55
4.03 3.60
3.77 3.56
3.80 3.30
4.12 3.09
5.08 2.91
5.32 2.96
4.85 2.85
4.46 2.87
4.40 3.33
4.34 3.69
4.45 3.71
4.97 3.71
5.45 4.21
6.15 4.75
6.47 4.37
5.76 4.02
5.69 3.88
5.78 3.87
5.62 3.79
5.57 3.65
5.73 3.56
6.51 3.96
6.67 4.15
7.05 4.53
7.17 4.77
7.66 5.35
8.73 5.81
9.90 6.02Unfortunately, the really interesting bit is long term trend which is a bit lost from the mid 80s on. Refer my earlier link.
F.[cowboy2]I’m one of the believers in house prices doubling every 7 to 10 years. I remember when I was about 17 (1977) my parents went overseas for 10 weeks. They had just sold my grantparents house for $29,000. They advised an English family who were looking to move to Brisbane that for the value of their house, they could emigrate and buy a house to live in and one to rent. In the ten weeks they were gone, house prices moved substantially and they had to very quickly phone these people to tell them to hold everything because prices were on the move, FAST. Very similar to what we have just had again in Brisbane. Estimated the house they had sold for $29K would have sold two months later for $45K.
This boom is not the first time. My parents have had IPs for 30 years and I have had IPs for 25 years and the prices in that time have certainly doubled about each 7 to 10 years. Of course I can only speak personally for houses in inner south Brisbane suburbs where we have our IPs. Maybe the last 30 years is a “glitch” but I don’t think so.
I don’t know if things will keep going as they have for the past 30 years but I have made some very good returns on property, and I understand my local area very well. I also think that it is hard for each past generation to get into their first home. I suspect our need to live in a “better” house first, rather than settle for a dump or tiny house as a starter is one of the problems people are complaining they cannot afford a first home. My first home had two bedrooms and was 7 squares. I certainly could not afford a 4 bedroom, ensuited house, but that is what my son will be looking for when he wants to buy (I suspect), until the dollars pull him back to reality.
Anyway, to each their own. I am a buy and hold person, but have bought and sold a couple as well. I have sold for lifestyle reasons and have regretted it for a while, but ultimately, we like a nice place to live in and at least we won’t pay CGT on our own home. I really admire those on this forum who rent their PPOR and put all their funds to investment houses. Personally, I like the stability and permanancy of my own house, but if I was single or without children, I’d do the same (I think).
Just my thoughts. Wylie.
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