Forum Replies Created
good on ya crashy
always nice discussing things with youcheers-
Minithanks insider – very interesting
retire by 40,
“In this instance, especially related to this boring Shares Vs Properties agrument, rather than wasting time to shot down the opponent position, why don’t each side do a favour to themselve to see the possibility to learn more on the other asset class and have it integrated into your overall strategy”I’m sorry you find this thread boring (I don’t!! I’m loving the debate!!!) and there are hundreds of other threads that you might find more interesting, but seeing as you were interested enough to reply, thanks!!
As far as seeing the possibility to learn more, I’m all for that. I immersed myself in studying shares in general for at least six months (while thinking i didn’t have enough capital to get into property) and the more i read, the more daunting it all was.
fundamental? technical? indexes? Mututal funds? commodities? Stagging? options? Futures? hedged? margins?? sheesh!!!it just didn’t seem as ‘easy to get my head around’ as property was. i can’t say why that is, and it could have been because of the teachers. or I’m dumb. (actually, I’m not!!!!) Who knows why. But that’s my story. Then, I did a property investing course or two together with books and tapes – lots of different ‘gurus’ – and suddenly i turned from someone who didn’t get the numbers into someone that did. With that knowledge and a calculator i started to look and I found a mother-lode of deals out there with fabulous returns. All within the budget. Which admittedly wouldn’t have got me much RE in the current Australian property market, but that’s not where I’m investing.
OK. So. I now have extra cash from my properties which I can invest all over again. So this is where I have the choice – more properties, or shares? I know that many are doing both, and I *am* interested, or i wouldn’t be here, but so far I can’t find the a) security and b) returns in the right combination to make me proceed into shares. With the exception of comshares.com which I am looking at if anyone cares to comment. i don’t have the knowledge to go and find those deals in shares, and without it wouldn’t like my chances. And to *get* and maintain all that knowledge seems onerous, to say the least.
And to trust a fund to invest it for me seems stupid, given their performance! So I *am* a person who might be willing to be convinced into shares, but so far hasn’t been. I suppose I am limited by my time and interest in the subject. Investing in a top-500 fund would be the kind of shares foray that would suit me, but so far, I can do better with property.
I have been fortunate enough to have never come across Henry Kaye but I have certainly read a lot of posts that say he is a scammer. do a search on this forum. He’s even been exposed on telly I hear. Why don’t you spend 30 bucks and get Steve’s book. Or Dolf De Roos’s, to show I’m not just being sycophantic!!. It will give you the know-how to do the numbers on deals yourself so that you can figure out good deals from bad.
John Burley’s book ‘money secrets of the rich’ decribes many different types of investor and one of them is the one that says things like ‘I’m bad with numbers. I leave it to the experts. we have a financial advisor and he/she’s a great guy/gal.”
those are the kind of people that Henry Kaye preys on – the ones who would rather hand over responsibility to someone else – too hard/whatever to learn themselves. So much easier to bamboozle someone like that with bullsh#$%T.
I think Steve and Dolf and Burley and Kiyosaki are all coming from the point of ‘teaching a man to fish’ so to speak, so that people can become responsible for their own wealth.
I’m not saying there aren’t investment schemes that you can just stick a sum of money in and get a decent and guaranteed return. there are.
But knowing the numbers and principles yourself will enable you to distinguish the wheat from the chaff.crashy, just checked your web-site.
good luck to you.
but like battz said if you are so critical or property, what are you doing on a propertyinvesting.com forum??
As far as this goes,
“There are many false guru’s out there. The recent property boom has seen a flood of would-be ‘experts’ charging thousands of dollars to attend a seminar. These people have no formal qualifications, and usually everything they say is a lie. They try to impress you with pictures of flash cars and stories of untold wealth built in record time, and “you can do it too if you just follow my secret techniques.” They give references from people who don’t exist, like “Peter S, Melbourne.” It’s a pathetic attempt to sound more credible. You won’t get any of that from me. I hold a Diploma of Financial Advising from the Securities Institute of Australia,”…….
look. I know heaps of people with diplomas just like yours who have been charging people to *lose* them money by investing for them on the sharemarket. Diploma Schmoma. It’s a bit like music. the ones with the diplomas go off and teach, but they aren’t the musical geniuses of the world.
As far as that top bit goes, I am always really nervous of people trying to jack themselves up by pressing others down.
I think you should really wonder how that makes you look.
I know you want to market yourself as a guru – you will probably even end up getting customers that will give you testimonials ! – maybe the only reason you hate testimonials now might be because you don’t have any yet??? Once you have some ‘crashy changed my life’ stories I am sure you will see the benefit of them.Basically, you are using fear and lack to sell. Of course you don’t ‘get’ testimonials – they are an ‘Abundance’ technique and a form of leverage.
the more negative and angry you are *against* everyone else, the more off-putting you become. it’s like you can huff and puff and the crowd you began to draw just all walked away.
“Oh no! another ‘losing money is a good thing cos you get some money back from tax’ argument. “
I didn’t say that!!! My properties make money! What I meant was that I don’t have to pay tax on the full amount, because of depreciation and other things. My ‘income’ as assessed by the tax department might even be zero!!! My tax bill might be ‘zero tax to pay’ even though I ‘made’ money. it’s a bit hard to describe because it’s what my accountant does and it always amazes me anyway. But take my word for it that it can be done.
hi crashy –
“Try making money from property in a flat market and see how far you get.”that’s where you would be buying for cashflow yields. In fact generally the areas where cap gains are lesser is where yields are more.
“Shares have greater liquidity. You can sell a few or all of your shares in minutes, and wont have to suffer a loss on a desperate sale.”
ahm,,,,,,*giggles* are shares people more likely to be desperate due to a few margin calls – so they’d *need* their stuff to be liquid?
no seriously – anyone that lives that close to the edge who has built a sand castle may be caught short, not matter what they invested in. the thing that got them was that they were overcommitted.
“3. Leverage. Shares can be leveraged MORE than property. The highest LVR on shares is 99%, in property it is 95%.”
Bogus, you can get 105 percent on property right now. However an extra 5 or 10 percent shouldn’t be the deciding factor i don’t think!!
“Rental income suffers from erosion due to”….
yeah but depreciation write-offs etc make it pop back up“5. Franking credits. Dividends are a tax-paid investment (assuming average wage). Rental income is taxed.”
Not necessarily – you can fang profits and losses every which way to suit you and your family, with property and the right structures
” There are at least 45 seperate things you can do to improve the return from shares. “
and at least 101 things to add value to a property in DDR’s book. OK we’re quibbling here.
…..“Visit my website” – sure will!!!
“. History shows shares return 13% while property returns 9%. Compound that!”
Hmmm….I am not planning on buying anything that will return me less than 14 percent. after all costs. At the moment I am sitting on three yielding 20 percent and that’s not counting capital gain which could be ?????.
Once I pull money out to buy more houses, my returns will go up and up. The cash on cash return will just go crazy.!!“95% of traders go broke”
you see why the average person (i.e. me) gets the impression that shares are just a weeee bit risky? Because even the proponents of them tell us things like that.
“share trading is not share investing”
but then we (the average people) might not be sure of the exact difference?
cheers-
MiniHi Wayne,
look you obviously know a lot about property AND shares.
More than I know about the latter, or care to.!!And I am not doubting that you could make great returns – better returns – on your shares than on your property. I also believe that I am going to make better returns on my property. I don’t just think so, I know so.
A freehold house returning 20 percent PA (after costs!) and growing in capital gain at 5 percent makes 25 percent a year. Freehold. Let’s mortgage that at 8 percent. My cash on cash return has now gone up to – oh man!! I would need to put some actual figures through a calaculator and i can’t be bothered! but going on previous houses I’ve done numbers on, it shoots into the stratospheres fairly quickly – like you get instant over 100 percent returns, which become 600 percent returns over a few years!! it’s almost unbelievable until you do the numbers yourself.
And we have all known loads of people who have been burned on the stockmarket. But hardly any burned in real estate – why? because it’s so much more forgiving of mistakes.
waybne – “1) Shares are more risky because they can go down to almost nothing.
One company may go broke but ever heard of diversification? “yeah – Robert Kiyosaki calls it ‘de-worsification’. If you have bad investments that lose you money, or that could (like shares) of course you need de-worsification!!!
“Imagine if your house was destoyed and the insurance company reneged. “
Is that a real issue? I have never heard of it. Is it a real reason why I should not invest in property? what are the chances of that happening to me???
>You can also insure(via hedging) your portfolio. Shares even >have a huge advantage in this regard. If the company is on >the slippery slope towards bankrupcy you can short sell that >sucker and make a killing while the share price is going down
you’ll have to explain hedging to me, because i don’t really get it. If hedging with shares is the same as insurance with houses, then i geddit. You have different hedging policies available at different prices? kinda???
“Companies provide infrastucture for the houses. Ever heard of Telstra or AGL? If global economy crashes, buy gold shares”
Yep, I have heard of thos companies – Telstra does those telephone thingies and AGL is the gas, right?Yup yup. Look, I am not doubting the blue chip-ness of these shares etc but if they were so foolproof, then why would you be then saying in the same sentence “If global economy crashes, buy gold shares”?? Do you buy after a crash? With what do you buy? (if your blue chip shares crashed – and if your paper assets are worthless?
“Shares on an unleveraged basis has outperformed property in the same period. “
That might be true, because most of the property market is owner-occupiers, not investors. But it won’t be true for my investments!
you disagreed that “Shares are boor-r-r-rrrr-innnnggg”
OK do an experiment. not that scientific, but do it anyway!
when asked ‘whay do you do?’ at a dinner party, speak about shares. and at another dinner party speak about property investing. for shares I bet at least half – to all – the people will switch off!!! the other one, you’ll have a captive audience!!!!“Dividend share can have excellent growth”
really? Let’s say I want dividend shares for cashflow, cause now I am retired. How much do I need to invest to get, say 1000 bucks a week? Will I hedge them or what? Could you do me a sample thingie based on what’s for sale today so I can see how it works?“Ever heard of margin lending?”
Yes, I have.
but then ez said “Margin loans are dangerous and I do not use them.”This is the over-riding sense that I get, – that being mortgaged to the hilt with property is quite normal, but being margined to the hilt with shares could go horribly wrong.
“You can insure your portfolio with put options or index futures. And there is no danger of your claim being refused.”
Is this what share trading? That’s all that stuff you have to do which involves watching the investments lik a hawk. SOOOo time consuming. I just have better things to do with my time. that stuff is not FUN to me.!!!
“10)There are more millionaires from real estate than there are from any other form of investment.
Dolf’s favourite assertion, I personally would like to see proof of that cause if you remove the value of your PPOR. I don’t believe it.”Why would I do that? PPOR is real estate so therefore it counts. BTW did you know that only 1 percent of Australians are millionaires? 5 percent of yanks are, though….
“11)You can unlock the equity in your house if it goes up in capital gain without selling it.
Same with shares through margin lending. Exactly the same! Except the process is one hell of a lot easier with shares.”that margin lending thing again *eek*
oh – BTW capital gains tax – there’s gonna be none if I sell my properties
There is so much depreciation and so on I can do with the income on my houses, too, that my tax situation will be much minimised too. So you have to take that into account too when comparing both investment types“12) capital growth is compounding, so it’s actually a lot faster than the annual figure – and gets faster and faster the longer you hold onto it (in terms of ‘how much your property went up’ in a year)
(sigh) Same with shares if you are leveraged with margin lending.”that blasted margin thing again. Can we have a discussion on the merits of that? Basically a lot your arguments as to why shares are as good as property hinge on margin thingies being the duck’s nuts. But others say *eek*. Why????
Transaction costs – the whole point to me is that shares is buying and selling all the time. So you’d WANT low transaction costs. Property is more long-term, so I hope i won’t have to be selling every five minutes as you would with shares if say your margin just got called and you don’t have the money….
No stamp duty or CGT where I buy.“I suspect most of these erroneous assertions come from somebodies property investing course; like dolf de roos; but as you can see most of it is simply rubbish”
Well where SHOULD I be getting my information? Where does anybody get their information? Who do you trust? Real Estate Seminars do tend to start with ‘why property investing is such a good investment’ and I am sure that I have heard some of these points before. Complete with matching slides with the statistics on them. but i can’t remember exactly who said what. However a lot of it is in Dolf’s book, on his CDs, and in Steve’s notes, as well as on the richmastery videos. They’re all (all the gurus) saying the same thing. it makes perfect sense to me.
if what they are saying *doesn’t* make perfect sense to you, then challenge it by all means. But I think it is bad form to say that “most of it is simply rubbish”. Those dudes and dudesses could be going out saying rubbish, their reputations are on the line.
“The only thing you have to do with shares is learn how to value them and buy a stock while its down.”
This is what I have heard about fundamental analysis, which I think is the buffet way, the ‘good’ way, the not risky way to buy shares. (rather than riding the spikes in the $5000 US software.) This is what I mean about having to have a comprehensive knowlege of the economy etc etc which is really time consuming and for most people – pretty bloody boring .write soon everyone
cheers-
miniAs you can gather, I don’t really trust the banks – especially if they have my money. if i have theirs, though, that’s OK – because I’m good for it!!
Although that was rather a dark post (for me) it meant to reassure that I think that residential real estate is (and is considered to be) one of the most safest investments there is.
I think that there are a lot of things that could change the world’s ecomonic future. But will it be a negative thing (the US going broke-!) or a positive thing? (millions of millionaires creating their own abundance, and giving back a share of profits to the community?)
I have long thought that if everyone in the world lived in service to others instead of themselves, then we would have no more problems, ever…
if you *are* worried about the global economy – I can’t see it changing much until oil runs out, at which time the US will crash – then don’t buy anything which only has a paper value. Buy stuff which has an intrinsic value. Like houses ! and gold (maybe?)
I think gold always goes up in times of economic uncertainty.Banks have this low fractional reserve thing which means that only a small percent of their ‘money’ is gold backed, like between 1.5 percent – 2.5 percent for the NZ banks. Banks obviously don’t publicise this fact, but you can find it out. Actually, ask a teller ‘what’s your fractional reserve rate?’ They won’t know. Neither will the branch manager. You have to go right to the top. it’s really a bit of a conspiracy actually because it’s so embarassingly low. In NZ it used to be regulated at 10 percent, but they changes the laws so that now banks set their own rates, and it’s dropped right down -they don’t want you to know!
Swiss banks have the highest fractional reserve rate which is why they are supposed to be the safest/best for cash deposits.
Oh yeah. I just remembered Dolf de Roos saying that property has averaged 7 percent growth in the western world every year including the depression!. I don’t know how he massaged the figures (added up every yearly average and averaged them?) but that’s what he said, anyway.
Hi there
I have had good luck with one place bought for 27.3 and rented for 110 pw the whole time. Town of 1500. However the town is only 30K from a town of 40K people. never saw it and had it fully inspected – builder’s, electrical, plumbing.
Great rental agent.My other two are in towns of 3500. So far have stayed away from towns under 1000, as rental agents have said too hard to get good tenants. (although different areas to where you are looking. ) But you need to ask the question.
main things to check are a) rental demand in area? Ask more than one agent including one who is not selling you the property!
b) maybe you wanna get landlord insurance just to be extra careful. c) what will lenders think of that town??? d) make sure there is no (i.e.) gang members living in the street (from personal experience, hehe, this puts prospective tenants off!!!!) dodgy neighbours that could otherwise make your prospective purchase hard to rent. e) allow double the vacancy rate than for city properties, when doing your calculation.
f) can you handle it if it doesn’t get a tenant for a few weeks?if all good then go for it, I did!!
cheers-
MiniHi Wayne!!
i look forward to ‘being addressed’!!!!when you’re ready!!!
cheers-
Miniwho’s going? apart from meeeeeee?
*skips happily down the road*
1) Shares are more risky because they can go down to almost nothing.
2) Shares have no ‘use’ if you can’t sell them. Houses have an intrinsic function. Like if global ecomony crashes, a house is still a house worth living in.
3) Shares fluctuate wildly compared to property the spikes are fast and sharp. Property has more gentle lines and has trended upwards for 100 years. Western world’s average growth 7 percent per year, including the depression !
4) Shares are boor-r-r-rrrr-innnnggg and you have to keep an eye on the market at all times and maintain an encyclopaedic knowledge of the market at all times.
5) Share trading is stressful and traders have a high burnout not to mention suicide rate
6) you can’t ‘set and forget’ like you can with properties. OK if you can (dividend shares) you won’t get the returns.
7)The bank loves lending money to you secured against properties to buy more properties. They don’t have the same feelings about lending you money to buy shares.
8)Your ‘shares’ are really just a ‘virtual’ ledger entry somewhere, as is a so-called ‘cash deposit’ in a bank. Computers can be wiped, destroyed, alterered, hacked..a house cannot.
9)You can insure houses against things happening – right down to the tenant not paying.
10)There are more millionaires from real estate than there are from any other form of investment.
11)You can unlock the equity in your house if it goes up in capital gain without selling it.
12) capital growth is compounding, so it’s actually a lot faster than the annual figure – and gets faster and faster the longer you hold onto it (in terms of ‘how much your property went up’ in a year)Stev has a one day event coming up soon. You could go to that, and buy Dolf set of tapes, and come out having spent less than half of what Dolf 2 day event costs. However his one night event is fun and worth the price.
e-kiwi
hehehe
hee heee heeeeeehahahahahahahh!!!!!!
keep it up!!!
hoooo hoo ho ho ho!!
Hi Pinky,
it is a bit daunting at first especially if you haven’t done Math for what seems a very very long time and you didn’t particularly like it then.
but honestly it comes back really really quickly. The maths is so important to get your head around (take it slow and take breaks! Don’t try it for bedtime reading…!) because otherwise how will you know a good deal from a bad one?????
At first I had to ask my (medical and math super-brain) boyfriend ‘baby how do you calculate percent again???’ like a real dumb blonde. but now i can do the numbers on a property in my head almost instantly!!!
cheers-
Mini
(still blonde, though!!)Hi there,
i think Dolf is a perfect ‘beginner investor’ speaker.
I went to see him first before I did Steve’s seminar. I think I bought the book there afterwards. if it wasn’t for Dolf i would not have realised it was even possible for me to buy property.
I also bought a 10-CD recording of his three day seminar which I also found awesome. Cause i couldn’t justify the price of attending live, at that stage. However I was still hungry for more and still keen to go to a seminar and wondered if there was a local cheaper option – there was. Steve’s seminar. in comparison to the DDR recording Steve’s seminar was up about a zillion notches – in so many ways!! (and Steve shows you how to work out the numbers without trying to sell you his expensive software in the process!!!) I’d say most of Dolf’s audience were people that weren’t investors yet but wanted to be. But Steve’s seminar was full of people who already had several houses. i think if I hadn’t gone to Dolf first i would have been a lot more out of my dept at the APIM (Steve’s.)cheers-
Minihi again kasey,
thanks kasey for the compliment, but let me tell you I’m only about 1 year beyond totally clueless…that’s when I started learning about all this stuff!!!!
> some risk’s are too risky and therefore I will back out.
well I agree with you, and I guess the reason I am attracted to property is that almost everyone seems to make money with it – even if they do it ‘wrong’. Sure there is the odd story of people who lost, but nearly everyone I know who has bought a home either as an investment or residence has done well out of it or would do if they sold.>But down here the out of town investors have brought more >than 50% of the property here, I would say mostly -ive >geared.
I guess that if you bought _ve geared, you’d want to have a job. Jobs are more common in cities. but you might not have enough to afford a -ve geared property in the city. I know people who have bought in Tasmania just so they can have a patch of earth to call their own in the future, because it’s beautiful, and as a weekender.
>Mini some of the info on these boards is some what hard to >read, and you would need to think out of the square to get it!!!
I guess so, but once you know the jargon (LOC, PPOR, etc) it all starts to make sense!battz, slats, I agree with both of you.
As far as property going up – yeah – it does!!! a year ago when i was still dithering around figuring out where to buy, I could have bought for under 100K in an area that has gone up 127 percent in that time. No bull!!! That area has gone up three times as much as the next best capital gain spot in the entire country!!
So i think that people will be always wishing they had bought ‘then’ – but all we can do is buy ‘now’ and in the future we will be glad we did!!
wicked neill – thanks!
