Forum Replies Created
Aussierogue,
I’ve got to agree that Peter Spann’s books are a little bit simplistic??? I posted a concern that I’d like to read some more mechanics and not mantra and was directed to Peter Spann so I’m a little surprised to find it so fluffy. His books do read a little bit like Kiyosaki which was a bit hard to take for me. They’re all a little bit patronising and condescending with fake characters invented to make the message more palatable. I actually don’t want to read about other people’s success or personal life-journey anecdotes. Just give me the facts! I’d like a step by step how-to guide with a few case studies and no mythical mentors.
But, I don’t disregard the message just because I don’t like the style of the messenger.
I haven’t read Steve’s books but a flick through shows they look really solid. But, my personal approach is more aligned to neutral/-ve gearing.
Why do these guys always have to wrap their information in so much cotton wool and feel-good rubbish? If I want fiction I’ll read Tolkien, this is business and I want a text book.
Cheers,
Michael.Phil,
I think this is a similar question to the “How do people live” thread, in that some people seem very comfortable labouring under a helluva lot of bad debt. I personally couldn’t stomach it. My personal debt for my PPOR sees it paid off in two years time and then I’ll be bad debt free. I also pay my CR card off monthly in full.
Now, if its good debt and you have contingencies built in then you should probably pass the “sleep at night” test. I personally couldn’t live under the burden of a lot of bad debt, it would kill me.
Our foreign debt is staggering now on a per head of population basis. But the PM seems to be able to sleep at night [biggrin]
Cheers,
Michael.Aussierogue,
Good points. There is obviously a lot of risk in a highly leveraged position. And to be honest, I’m holding off for now until I feel the market dynamics are more in my favour so my leverage can realise real growth. Then I am in a strong position with real equity when I ride the cycle and have a fallback position of consolidating my investments. If you’re leveraged to the hilt with little or no prospect of growth then that is a VERY risky position to take and one I wouldn’t advocate.
I think I left the point of “timing” out of my post and emphasized too much the “time in” positive aspect of leverage.
Cheers,
Michael.All,
For me its quite simple, cash flow equals servicability and capital gain equals profit. A mix of +ve and -ve such that you’re pretty neutral sounds like a good mix. So, nicely leveraged as highly as your comfortable and make your money on capital gain.
If you’re +ve geared then that’s more tax to pay, if you’re -ve geared then that’s less tax to pay. I’m in the top bracket with more than half my salary so servicing is not an issue and leverage is king.
But that’s me. As always, this is a question of horses for courses. But, my vote goes with Yack on this one.
Deck of cards only becomes an issue if you can’t service the loans and have to sell, otherwise its all just paper profit/loss and we all know that in the long term the market rises, so leverage away!!
Cheers,
Michael.When I was at high school I had a sign on my desk which read:
“I’ll never lose incentive, you can’t lose something you never had”
I’ve replaced it with my presonal mantra of:
“You’re only ever as good as you allow yourself to be”
I also like:
“To err is human, to forgive divine”; and
“When you’re reaching for the stars there’s a long way to fall”; and
“Opinions are like a***holes, everybody’s got one but nobody wants to hear anybody else’s” [biggrin]
And a whole raft more…
Cheers,
Michael.Nobleone,
Nice post! No one size fits all eh?
I know where Yack is coming from though, a concern that ill-informed noobies will pick up a book and become an instant expert only to invest in the market in a poorly judged manner and be burnt for life.
But, to assume that all noobies are created equal would be a mistake. [biggrin]
Not putting myself on a pedestal at all, I still consider myself a novice. But, I know enough to know that different strategies suit different investors in different market conditions. I just hope most noobies know that much at least.
Cheers,
Michael.AussieRogue,
Good point. I’m reading Spann’s book right now and haven’t got to that chapter but I get what you’re saying anyway.
I guess it only becomes a house of cards if it comes crashing down. And for that to happen you would have had to over extend yourself. I think good valuations allow you to free equity for further investments, but if you don’t apply the basic principles when choosing those investments then you create risk.
I guess, so long as the bank buys the argument that its worth that much then that’s all I need to become wealthy. If, however, you intend to sell properties then the market realisable value becomes important. If you’re not selling then valuation (equity), yield (servicability) and potential CG (growth) are the factors you should worry about.
But I’m just a newbie [biggrin], I’ll let a guru answer this one.
Cheers,
Michael.WA Princess,
Good for you! (Love the mnemonic by the way)…
I think the debt avoidance is probably the biggest key to your success. Couple this with your ability to minimise tax on your income, then you’re well positioned to service your mortgage.
I am an employee of a large firm and as such “work for the man”. But, I too minimise my tax wherever legally possible. This doesn’t mean I invest in Emu farms or any other one of those tax dodge kind of investments as these are a mugs game. But, I do minimise wherever possible.
If you can keep the outgoings down (consumerism) and the incomings up (tax minimisation) then you’re on your way. You’ve now got good cash flow to service investments or the procurement of your PPOR.
Sometimes the simple answers are the best ones. [biggrin]
Cheers,
Michael.9. Host XMas at your place for the family this year and get THEM to bring all the food this time. Saves on petrol too.
10. You know the padded felt fairy picture frame your mad Aunty gave you last year? Re-gift it back to her this year, she’s mad so she won’t notice anyway.
I like where your heads at Phil [biggrin]
Cheers,
Michael.Tim,
Good point on how my statements on life stages could come across wrongly. I’ve actually also read Steven Covey’s “7 Habits of Highly Effective People” and I agree with a lot of what he has to say. I personally live a principle-centred life and agree that everything should be in balance. This means that I am not now dropping my focus on my wife or on my education, but will continue to consider them an integral part of my life and will “invest” in them as much as I “invest” in my REI future.
I was just trying to illustrate my thoughts on the “principal” focus of each stage in my life to date. Not to the detriment of all other aspects, just as the area where I invested the lion’s share of my efforts above and beyond other areas. My wife is by far the single most important part of my life and investing in my relationship will always take priority over financial concerns. Fortunately, we have a wonderful relationship now that does not require 24-7 effort to maintain. With my spare time I am now “focussing” on REI and other investment strategies to grow my financial future.
Good point though, it certainly made me think some more about what I’d posted and the risk you take if you focus too much on one area. And thanks for the afirmation. I know there are a lot of supportive people on this site, they’ve helped me heaps already. And I include yack in that number even though he started this thread. I think he was really playing devil’s advocate when he posted. [biggrin]
My personal mantra is “You’re only ever as good as you allow yourself to be”, and ain’t nobody on this forum or anywhere else can stop me once I get my teeth in to something.
Cheers,
Michael.Yack and others,
I dodged this thread for a while, but thought I might venture an opinion given I fit in the newbie demographic and might be viewed as a lemming.
My first post on this forum posed the question on whether this was the right time to invest in the current market cycle, so I hope that shows that not all newbies are lemmings. The outcome of that dialogue is my plan to pay off my PPOR at present and continue to look for good value investment opportunities in a depressed market. If I do buy it will be recognising that interest rates could rise to potentially double digits and that capital gain will potentially be stagnant until 2008+.
But isn’t that what investing is all about anyway? Look at an investment, allow for worst case, build a contingency, and if it still looks OK, invest!
Just because you’re a newbie doesn’t mean you’re ill informed or illogical. Nor does it mean that you’re impetuous and just want to jump in and follow the herd. I’ve read Somers, McKnight, Kiyosaki, Burley and now Spann. I’ve also lurked on half a dozen REI forums and know for a fact that I don’t know everything there is to know on the topic. I am not over-analysing, its just that my financial position has brought me to the point that I am now ready to invest, not some hype over REI or the market cycle.
Given my financial position, my education and my willingness to invest I am now analysing the market for opportunities. I didn’t get to this point by reading newspapers and books over the last few years. I read Somers in around 1985 and have never stopped learning.
At the risk of posting too long a response I might add the following observation…
People are like the market in that they have life cycles. I’ve already lived an education cycle (Uni under-grad) then a career cycle (focussed on developing my career to where I am now). In there is also a family cycle where relationships were all that mattered and I got married as well as my braun years when I joined the army reserves and studied TaeKwonDo to 2nd Dan black belt. But I’ve now reached my investment cycle. I’ve got these lifestages behind me and now have both the financial and emotional maturity to become a good investor. If I put even half the drive into investing as I’ve put in to my other life stages then I’m certain I will be successful.
To suggest that it is the market that has created the rush of newbies would be wrong in my case at least. I made myself in to who I am and am not following the herd. It just so happens that my evolution has timed my entry in to the market at a peak point. I now have to deal with that as best I can and profit from it.
My 2c,
Michael.Resiwealth,
Thanks for pitching in and for the advice. BTW, checked out your wbesite and the books etc. All looks pretty good, you’re definately on your way. Well done!
To be honest, I know very little about the land at Bundaberg other than it exists and we own it. My wife bought it a decade ago, before we met. From her description its got permanent surface water in the form of a river across the property. Is basically rolling hills and cleared. It now has all the amenities past the gate, i.e. electricity, water and bitumen roads.
As for zoning? Don’t know… But I’ll find out. I think its not actually in Bundaberg proper, but a little satellite town nearby. But, I’ll find out the details and post them here.
I think I’m still a fair way off being a player in “your world” but thanks for the welcome anyway. [biggrin] Its certainly the world I see myself in at some point in the future. Just got to build the bridge…
Cheers,
Michael.Phil,
I’m certainly with you on this. Just threw the post in for info…
I personally am getting all my ducks in a row and waiting eagerly for the market to start turning up the sorts of opportunities I’m looking for. I’m certainly not going to sit on my hands for 3 years. But as a relative newbie, I’m not going to jump before I’m ready either. I’m certainly not panicking, the more articles like this I read the better I feel [biggrin].
Good to know that QLD land is appreciating so quickly, I’ve got 40 acres at Bundaberg so it doesn’t sound like too bad a position to be in.
Hope my first post didn’t come across all negative, it was just a FYI for the forumites.
Cheers,
Michael.Richmond,
I think I’ve discovered a subset of this disorder called “Real Estate Oniomania”, where you just can’t wait for that next “hit”. [biggrin]
Otherwise, I’m symptom free…
Cheers,
Michael.Greg,
That lack of colour must really have been bugging you for you to go all “new topic” on it. [biggrin]
Well, at least now problem solved!
Cheers,
Michael.[biggrin][biggrin][biggrin]
Well, started on my “To do list”, bought Peter Spann’s $10 mill in 10 years yesterday and have started reading it already. (Would have read more last night but my wife says I need to be “with her” when I’m at home and not engrossed in some book, so its lunch times only for a while).
Greg, I like the Rural Residential take on the acreage. 40 acres is a pretty sizeable parcel and that would make 8 nice little 5 acre blocks. Better check demand for these in the area first though… As I’ve said, infrastructure is catching up with that block and Bundaberg is definately on the rise so holding until demand catches up and agisting in the interim might be a good long term strategy.
Derek, that ATO test is a bummer. Trying to figure a way around it at present but coming up stumps. Maybe I can say the money was to “live” and then incrementally seep the “spare” bits off the mortgage with my monthly payments…
Thanks all,
Michael.Scremin,
Congratulations on the first IP! That’s one more than me. [blink] You’re on your way now, well done.
Inez, thanks… [blush2] and welcome!
Cheers,
Michael.Thanks everyone,
And as always its all sound advice…
LifeX, I stated my goal (albeit a very conservative one) in the first post of this thread. I am now in the process of formulating the specific plan of action I need to take to deliver that goal. I hope, once I start executing and learning, to revise that goal to something a lot closer to the one you hypothesised. But, thanks for the guidance nonetheless, I agree I need a plan and to take action. Also, the refinance of the acreage seems so obvious I feel like a goose for missing it. I’ll need a valuation to start with and then a loan, but that should be no drama. Thanks for the heads up!
DD, don’t worry the thought has already crossed my mind. If you could PM me with a breakdown of what you offer I’d appreciate it and add it in to the mix of options I’m considering.
Greg F, can’t wait to see colour in your replies [biggrin] and thanks for the PM, back to ya soon…
I assure you all that I am not your standard paralysed analyst. I am just a very careful investor who has a bare bones plan and is fleshing out the details. I really (and I mean REALLY) appreciate all of your assistance in helping me achive that end.
Thanks again,
Michael.Bruham,
I guess we live pretty well on $45K because we are debt free other than the mortgage on our PPOR which is serviced entirely by my salary. Oh, and we don’t have any kids either…
Things have got a little tighter lately though. My wife recently took a pay cut from $65K to $45K in order to follow her heart in to Environmental Law. She had been working as Justice Finnane’s associated in the District Court. She topped both Environmental Law and Local Government Law at Uni and wants to practice in these areas. BTW, in 2-3 years she should be earning heaps more than me!! (And how good is her skill set going to be to our REI plans [biggrin])
Managed funds, I hear you! I was in to managed funds and only advocated it to the guy who came in to an inheritance because the equity markets are on the up and even a mug can make a poultry return there now. I was concerned he’d do his dough on some get-rich-quick dodgy. I personally am out of managed funds now and am putting all of my disposable income in to paying off my PPOR. That is, until I can find some informed alternative to invest in, hence my extensive reading and active participation on this forum.
As to living it up on $45K, well I guess that’s a little exageration. Lets just say we have a great quality of life living in a large house with ocean views, driving nice cars and eating out quite regularly. Here’s a tip though, when we eat out we use the “Entertainment Club” books for a buy-one-get-one-free main course. We invariably only buy two main courses and a bottle of wine and thereby have a magnificent meal for only around $60-$70 for the two of us. I also work only 18km from home so my petrol is $40 a fortnight, and Kay busses in to town for $40 a week. She’s interviewing for new jobs in Environmental Law right now for around the $100K mark so if one of these comes off we’ll be back in mega happy ville.
Best Regards,
Michael.LifeX,
Way to go, and to think that I had valued your contributions before you hit 300??? Particularly those odd Zen moments [biggrin]
At least I’m no longer still finding my forum feet…
Cheers,
Michael.
