A month or so ago I posted about discussing with my GF the thought of investing in property. The post is here:
https://www.propertyinvesting.com/forum/topic/25065.html?SearchTerms=girlfriendSince then she has warmed up to the idea and we frequently have conversations adjusting and perfecting our plans.
In July her grandma passed away, and my GF’s father inherited the house, to which they are going to sell. My GFs sisters BF(yes I know this may get confusing) was saying how about they move in together into the house and pay rent. So the property will turn essentially in an IP. But the father said no to this, he would rather invest the money in shares as in his opinion “shares have a much better return”.
He was saying tonight at dinner that the property that he inherited would go for 270K(if an obsessed buyer bought it). An investor would buy the same for 220K. He said you would get 250 rent a week. He doesn’t know about the taxman and other strategies.
He also stated that the market is going no where, no investors are in the market.After he said all of this I was almost about the jump and cut down every word he said. But no I didn’t. He is the kind of father that is easy going. Ive never had a bad word or anything bad with him and he is a great guy. But this is the first thing ever that I have disagreed with him(even if it was silently).
I don’t know what to do. Should I speak next time the issue is raised and end up in an argument which I know i’ll win(the only way I would lose is if i wanted the arguement to go no further) and then stop the effect that this could have on my GF about property investing.
Or should I ignore his statements and talk to my GF more privately first about this so that she does not build up doubts that will be created by an uneducated(in property) onlooker.I’m sorry about the long post but its just something that has been bothering me for about a week now and I needed to get it off my chest and ask for some advice.
As it is not your money, I would keep quiet but talk privately with your girlfriend about your own plans. Could you get her to read some of the posts on this forum and Somersoft to help her to understand the way property works.
What her father does with his money is his business and I don’t think you should place yourself in a position where you have an argument with the other most important man in her life. He may think you have some knowledge or he might think you are a prat. In my opinion it is not worth rocking the boat.
My father-in-law never lost an argument, even about things someone else knew lots about and that he knew nothing about. I soon learnt not to waste my breath trying to convince him about anything, even when it was something that I knew to be right.
For example, he argued until he was blue in the face one night that if you insure your $200K house for $100K and it burns down, the insurance company will pay out the full $100K. I tried to explain about under-insurance but HE KNEW BEST. I worked for a bank at the time and my brother was in the insurance area of the bank, but what did I know? You get the picture….. He knew everything.
Just keep your girlfriend interested in your ideas but don’t alienate her or her father if possible. Who knows, one day he may be your father-in-law.
Wylie
Originally posted by DraconisV:Or should I ignore his statements and talk to my GF more privately first about this so that she does not build up doubts that will be created by an uneducated(in property) onlooker.
Ahhh, the infinite wisdom of youth! [biggrin]
Hey, remember back in 1990 when… oh, I guess not. Did you consider that his investment strategy might in fact be the best, wisest, most informed and ultimately rewarding financial decision that he ever makes? Or do you seriously believe there is only one path to riches?
I’m selling my house later this year (actively ‘shorting’ the market), because I believe my capital gains could be better invested elsewhere, and that I will be able to purchase a better house in the same beachside town for a cheaper price in the not-so-distant future. Am I an “uneducated (in property) onlooker”?
F. [cowboy2]
Casey Serin is becoming famous for having just such infinite wisdom:
I’m a 24-year-old aspiring real estate investor from Sacramento CA. After going to few seminars I bought 8 houses in 8 months across 4 states with no money down. I fixed and sold 2 and then ran out of cash. I am now facing foreclosure on 6 5 houses. I’m learning my lessons, finding solutions and blogging about it.Recent Blog topics include:
* Need Stable Income… Get a Job? 10.16
* Crazy Real Estate Accounting Mess 10.14
* Commenting on Facing Foreclosure 10.14
* Borrowed $3000 to launch a come back 10.13
* What’s Next? How can I help YOU? 10.12
* Facing Foreclosure As Seen on TV and San Francisco Chronicle 10.12
* Motley Fool: Greed Makes You Stupid 10.10
* Attracting Credit-Challenged Buyers 10.8All part of a well-rounded education, Drac! [biggrin]
F.[cowboy2]
Hey Wylie
For example, he argued until he was blue in the face one night that if you insure your $200K house for $100K and it burns down, the insurance company will pay out the full $100K.That concept of insurance must be an oldies thing [ohno] as my father in law thinks the same way. I also tried to get him to understand thats not how it works. Still he has his $300k house insured fro $40k.[ohno]
Celeste
For example, he argued until he was blue in the face one night that if you insure your $200K house for $100K and it burns down, the insurance company will pay out the full $100K. I tried to explain about under-insurance but HE KNEW BEST.Hi Wylie,
what is the deal with “Under-Insurance”.
could someone clarify the issue.Thanks
KattanFor example, he argued until he was blue in the face one night that if you insure your $200K house for $100K and it burns down, the insurance company will pay out the full $100K. I tried to explain about under-insurance but HE KNEW BEST.Hi Wylie,
what is the deal with “Under-Insurance”.
could someone clarify the issue.
Checked it up on the net. seems like if he had his house insured for 100k he will get 100k when it burns down.http://app01.ica.com.au/help/homecontentsguide.jspInsurance Council of Australia Limited
What can I do to minimise my risk of under-insurance?
Under-insurance is a serious problem in Australia, with many people not realising they are under-insured until a significant loss occurs. Many policyholders gamble with their property for the sake of saving a few premium dollars. In most cases, doubling the amount insured will not necessarily double the insurance premium.
In the case of under-insurance, most companies will pay up to the sum that the policyholder has insured (eg if a $200,000 house has been insured for $100,000 the insurer will only pay $100,000 if the house is destroyed). A small number of policies may involve “averaging” or “co-insurance” clauses. (Check with your insurer for further details).
Thanks
KattanHey DraconisV. Sounds like you’re making some great progress….good on you. You asked, so I’ll give you my 3 cents worth. It is encouraging to know your girlfriend has some interest now, so why not make it your little project to work towards doing something together, and forget about the father in law’s plans. Other than a couple of suggestions, or ‘general’ info you could share, I would not be pushing anything on him with the thought of both maintaining family harmony, and the fact that it is ‘his baby’ as it were to do with as he sees fit. Sometimes, you can get a passion for something, and learn heaps and desire to share it with others, however well meaning, and it comes as a bit of a shock to find out they think differently, or have different aspirations. Wylies comments are pretty spot on. Keep the peace, and enjoy using what you have learnt to benefit yourselves, and as you have already done, gently try and help otheres when it is within your means to do so, and you think they will respond well. Keep us posted how you go with your property goals too! [thumbsup2] As for shares……….if he chooses carefully at the moment, he may just do ok….
Hey Drac,
I enjoy your enthusiasm in all your posts & honestly believe you will succeed in your chosen field of investing. In saying this, I also believe Foundy had some valid points (although I would have sugar coated them a little!) in his posts. Currently I have a few houses and a few dollars in the stock market, and I believe there are endless possibilities for investing, so don’t be afraid to listen to others about their investments of choice. As they say ‘you never stop learning’
I sincerely wish you well, & keep up the enthusiasm.
[cigar][cigar]David
Draconis
considering you have absolutely no investing experience whatsoever, have not been interested in property through a single property cycle, have in all likelihood absolutely no idea about the share market (or even any experiential idea about the property market), are not that widely read, have only been reading a few investment books for a couple of months, have no solid foundation on which to build any sort of argument about what anyone should do with their money, have absolutely no idea on market prices at all (i.e. “would go for 270K(if an obsessed buyer bought it). An investor would buy the same for 220K” – what basis do you have for saying this??), maybe you should keep quiet and not say a word to him?
Maybe give him a book you found informative, and ask him if he would mind reading it and giving you HIS opinion on it.
Maybe you are not really in the best position to be selling an investment strategy to your girlfriend either. First of all, at your age it is highly unlikely (though not impossible) that you will even be together in 12 months time. Second, I am sure she is just as intelligent as you are (maybe more so) and perfectly capable of drawing her own conclusions and judgments about what is best for her future. Again, give her a book, ask her if she would mind reading it, then discuss it with her (not coming across as the expert you clearly consider yourself to be).
On that note, perhaps you should take a bit of a reality check – enthusiasim is great, but either decide you are going to invest in the very near future, or stop asking ridiculous questions about whether you should buy in the mountains or whether you should put a rainwater tank into a property you are intended to buy 3, 4, or 5 years into the future when the market will likely be completely different, as will your own plans, maturity, understanding, and logic.
These questions are completely and utterly useless unless you are considering a propective purchase in the very near future (ie months). No one can hope to predict a market of any sort 12 months into the future, much less whenever you finish doing hairdressing at tafe and can buy a property.
Some advice: decide if you are going to do any investing immediately. If you are, make a plan and do it. if no, no worries, read a LOT of books by a lot of different people, and actually start to get some understanding of what you are talking about. Then, when you finally decide to do something, you will have lots of knowledge to draw on in making your decisions, you will be able to do it, and maybe make some money. Then you might be in a position to put forward your point of view to your father in law (notice i said “put forward your position” not argue or advise, you are a long way off that).
Thanks very much for your time and informative questions and replys.It is possible some insurance companies may take the view that if your house is worth $200K and you insure it for half its value, they can decide to pay you only a percentage of the insured figure. I suppose they assume you are prepared to carry some of the risk yourself. You may only get $50K.
I don’t know how many companies do this, but I do know that it is a real risk with under-insuring your properties. Not a risk we are prepared to take so we make sure we fully insure our properties, even to the point of slightly over-insuring them to be on the safe side.
Don’t forget to add into your insurance calculations the fact that clearing a burned house costs money and you need to add that on as well.
Wylie
Originally posted by Wylie:It is possible some insurance companies may take the view that if your house is worth $200K and you insure it for half its value, they can decide to pay you only a percentage of the insured figure. I suppose they assume you are prepared to carry some of the risk yourself. You may only get $50K.
I don’t know how many companies do this, but I do know that it is a real risk with under-insuring your properties. Not a risk we are prepared to take so we make sure we fully insure our properties, even to the point of slightly over-insuring them to be on the safe side.
Don’t forget to add into your insurance calculations the fact that clearing a burned house costs money and you need to add that on as well.
Wylie
Wylie
An irrelevant post to an irrelevant topic. Well done!Woodrow –
Can you actually read? I was asked to clarify an earlier post. I am simply providing an answer.
Read the whole thing before you put your mouth in gear.
Wylie
Thanks woodrow for that long and very hurtful post.
Let me give you a reality check when you said
“First of all, at your age it is highly unlikely (though not impossible) that you will even be together in 12 months time.”
What right do you have to make that statement. Generalisations.
Yes I do know most couples won’t last long. I look around and see break ups all the time. My GF and I are deeply in love and you don’t have the right to say that just cause we are young that we have an highly unlikely chance of sucess together in a relationship over 12 months.Also I would like to thank you for crushing all the enthusiam, confidence and hope that I had. I have developed all of that over the past few months, you seem to think it is worthless. Thanks alot!.
Thanks to everyone else, I will not talk to him at all. Ill discuss it with her and thats that. Maybe from my crushed spirit that I might not even talk to her and slowly let the property investing part of me dye out.
Yes I know i’m only 18 Woodrow and that I have no real investing experience, what do you expect me to have tones of properties or to have lived through it all.
I ask these questions because I ask for assistance and not ridicule. Some of these questions may seem silly to you but the only silly question is one not asked.
So in future Woodrow if your not going to say anything positive or helpful or atleast not having an serious attack on me than please just stay out of any of the threads I make or the posts I reply to.I just re-read the post, hairdressing at tafe, what is that a direct insult. Do you even know me, do you even think i would do hairdressing. Woodrow, ive had it with you just dont post here again ok.
Thanks to the others yours posts were helpful.
Yours now hopelessly Christopher.DraconisV,
Firsty, Please try and ignore the hurtfull comments in the previous posts. Its obvious the poster was in a similar situation to your Girlfriends Dad – and someone like you came along who was young and enthusiastic and made him feel like an idiot.
Don’t take it personally, chin up bro!
My 2 cents – on the original topic
I would have to agree with previous posters. If I were in your situation (which I was a year or so ago, when I had a gf) don’t say anything. Talk to your girlfriend.
If you feel the oppurtunity is badly wasted and you MUST say something, I would suggest asking him to read a book, and give you advice/opinion on it.
I have used this technique with my father. He had a unit for sale, sitting doing nothing, but wouldn’t listen to any advice from anyone. I gave him Steve’s book and 2 months later he has managed to furnish it and rent it on a short term lease while its for sale. Suggestively giving people ideas, and letting them take credit for it works wonders with the baby boomers.Good Luck
Dave
Thanks dave. To be in this business I have to be strong. I will just ignore what he said, “huh who’s woodrow, wha?”.
Time to move on.
Well as my HSC starts on friday, ahhh!, nah its alright im all prepared. It will finish around the middle of nov, so when its over I will give Steve’s first book which I am now about halfway through to her and see what she thinks.I would like to just say that I will be asking many more questions on these forums whether they be huge or even as tiny as what colour socks should I wear. I’m going to ask and learn and nothing or no-one with any view is going to stop me.
So either join me or get the hell outta my way.
Christopher “fired up like hell” Fife.
Hello again Drac,
I first red Steve’s first book about 5 years ago, & it took me a further 3 years to buy my first I.P. At that time I didn’t have a computer & was unable to ask the so called “stupid questions†in a forum such as this. I had to ask my more experienced investing associates (that was at times difficult). Some 6 months ago I found this forum and I only wished I found it many years ago. Although my investing experience is limited, I feel comfortable asking any of the more seasoned investors on this site for advice and assistance on any aspects of investing. I would never claim to be an expert in property (I aint, not by a long way!), although I do have confidence in my ability to source and acquire attractive property deals. This is only due to my willingness to learn from others, and read everything available regarding P.I.
In closing, don’t get mad, just continue to learn, & grow as a future investor. What you do with your knowledge & wisdom will be up to you.
Good luck brother.
[cigar]David
ok here we go:
“you don’t have the right to say that just cause we are young that we have an highly unlikely chance of sucess together in a relationship over 12 months”
It is not me that is saying it is highly unlikely you will be together, it is statistics. As I said, it is not impossible that you will, but highly unlikely.“Yes I know i’m only 18 Woodrow and that I have no real investing experience, what do you expect me to have tones of properties or to have lived through it all.”
No, no one expects you to have “tones” of properties or have lived through it all – unless of course you decide to give your girlfriends father, who probably has lived through a fair bit, advice about where to invest his money when you have no experience of your own to draw from. If you dont know what you are talking about (and lets be honest, you dont) then it is completely arrogant to think you have any right whatsoever to give this man financial advice without any knowledge or experience yourself.“Its obvious the poster was in a similar situation to your Girlfriends Dad – and someone like you came along who was young and enthusiastic and made him feel like an idiot. “
Yes, that much is obvious from my post. I feel like a complete idiot. It couldnt be that I am simply annoyed at the complete and utter arrogance of the question. To paraphrase ‘wahoo, I am in high school and have read a book or two about property investing, and all of a sudden I think I am in a good position to be dishing out financial advice to someone far more experienced than myself.’
Another poster (sarcastically for the slower among you) referred to it as “the infinite wisdom of youth”. Seems a fairly apt phrase in this instance.“I would like to just say that I will be asking many more questions on these forums whether they be huge or even as tiny as what colour socks should I wear. I’m going to ask and learn and nothing or no-one with any view is going to stop me. “
And that is why this particular property investment forum is a pile.
Yes, post about what colour socks you would wear. It would be as relevant as “should I put a rain water tank on my rental property that I am going to buy for $200,000 (but will actually be worth $900,000 because I will buy in the mountains and put a rainwater tank in it, and put a carport on it, and these figures are actually conservative given my vast knowledge of the property market, great experience in buying below market value, tremendous renovation expertise, and psychic ability to know what the property market will be like in 10 years when I buy a property).”Sure this post is about as nice as my first one. Perhaps it is not “sugarcoated” like some other posters like. You just get upset because you got offended by it, not because there is anything particularly offensive about it but because it hits close to home.
The fact is, I never once crushed your hopes and dreams. I basically said stop thinking you are so crash hot as to give someone advice when you know nothing, and spend time on actually learning for yourself. I challenge you to go speak to your girlfriends father about it. Tell him how much you know about property, how much you know about shares, why he should invest in property, how it can help him reach his financial goals. Then when he slaps you down for being an insolent, you can come on the forum and ask what is the best treatment for facial cuts and bruises.Hi again Drac,
Good luck with the looming HSC / end of school – one of the defining moments in life, though not usually for the reasons indoctrinated by the schooling system. I hope it goes well, and if it doesn’t it really isn’t the end of the world. Trust me, I know what I’m talking about. [blink]
As for your money-making plans, don’t forget that one of the easiest, most reliable ways to make money is by working 9-to-5. This should be, at this point in your life, your goal. Financial stability. While you won’t get mega-rich overnight, it will pay the bills, give you independence, allow you to save, and hopefully leave some spare cash for toys, trinkets and holidays. The savings that you tuck away will grow to provide you with a good base to jump off into other investments.
Working for somebody else is always a good way to start, be it a trade or in business. You get to work regular hours, you get a regular income and you get to know the ropes on somebody else’s time / money. It’s less stressful than trying to make it on your own, and the limited hours will leave plenty of free time for studying or making investments. And you get to take more risks with your investments, knowing you’ll still get a fortnightly cheque.
So what is your plan? Where are you going from here? Work-force or TAFE/uni (IMO this could easily be described as ‘money or debt’)? What general field or stream do you intend to pursue? Do you have a solid plan to get into that field?
These are the sort of things you should really be concentrating on right now not worrying about whether somebody else is making a good or bad investment decision. It’s not too early to be networking, researching or chasing employment prospects if you’re headed for the workforce. Even if you’ve decided to hit the books for another few years, consider whether short-term or summer employment exists in your field. If you can get a job over the
holidayssummer, it could lead to employment next year, study can be delayed or completed part-time.So again, what is your plan? Who knows, somebody here might be able to advise or help… perhaps somebody needs a young chap with heaps of enthusiasm and the rare ability to read books [biggrin]
F. [cowboy2]
Hey Drac
I am an older investor who had high hopes and dreams about property when I was your age but all I ever encountered was people who told me that I couldnt do it. It took me a long time and a lot of books, research, seminars and talking to other investors till I had the confidence to do it myself. This forum and site have been invaluable to me and although I dont post often I am always there in the background reading and gleaning information. Dont let anyone crush your enthusiasm, always look for any information available to seive through. Ask stupid questions because once you get the answer you dont need to ask anymore and your wisdom on the subject will have grown. If older investors arent willing to pass on what they know and have the patience to deal with the impatience of youth then they are cutting themselves off from one of lifes greatest rules. Pass on what you know and it will come back to you tenfold.
Keep asking ok
Oh and by the way – I think blue socks today lol
Eden
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