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I so agree,
No one method is better or worse. I can show you different people who have gotten a method to work. It all depends on what you’re comfortable with. I mean reno’s didn’t work for Steve but they certainly did for others.
It can even work for lotto numbers based on the stars……… althogh not too often.
Josh
Hi fudge,
I do like your plan of attack as it is probably the one i will end up going for. There is merit to both ways, you do just have to find a way that suits you.
With the first plan someone mentioned that there were higher returns on investment made as opposed to paying down the loan. Whilst this is true it is due simply to the fact that you are more highly geared thus increasing your returns, however should something go wrong you are also looking at bigger loses… ie more risk.
I like the pay down the loan idea as it generally allows you to go for more captial growth oriented properties. (Usually neg gear to start with) You have to remember as the house price increases faster the rent growth should also be faster eventually catching and surpassing those that initially had a higher yield but lower potential for growth.
I think it is more suitable for those who are willing to continue working for a while longer and not looking for the initial quick income.
Josh
Thanks for the info Bryce.
I figured that as with most things there is a place for each in the portfolio.
One question though is that in the long term if the high capital growth property will eventualy have higher rental yields than the initialy high yielding property, is that desirable? I mean you might struggle a bit more initially but later on a small yield on a high price is more than a high yield on a little.
Thanks Josh
20-30% sounds nice but you really have to remember that the higher the return the higher the risk. If it was that safe every one would stop starting businesses and in vest in 2nd mortgages.
You have to remember that most people with smsf now are doing better because most people are a bit more conservative, with generally more cash assets than growth like shares. REmember that most of the poor performances are due to shares and they will come back one day.
Josh
Having read a few posts and a few more books, I am starting to question + cf IPs. I think like everything else there is a time a place for it but it’s not the only solution, you just have to find the method that works for tomorrow.
Josh
Hi chris,
There are some good tips here but not to put a damper on anything you do have to work hard at starting a small business. As they say a lot of small business colapse early on. I was just looking to do the same although my startup costs may be quite a bit higher than some of the ideas given. Just having a look makes you realise how little I know. I do believe a business is the way to go and the best way to mitigate risk is knowledge. Make sure you do keep reading and don’t let people stop you.
That babylon book isn’t bad but your best bet is go down to your library, books are free there. Make use of the tax you pay.
Personally I believe a balance is good but currently I’m all in the stock market. You do have to find an investment method with which you are happy with. I don’t really believe that the stock market as a long term buy and hold stategy works too well. (I’m talking decades) A lot of shares that were blue chip 20 years ago aren’t there now.
Managed funds are generally a better buy and hold, let the managers do the buying and selling. I think one of the most important things in the stock market is capital preservation. You must cut your losses. If you lose 50% you need 100% to break even, and thats tough, especially with little money.
I liked the trading method and money management plan thats done by colin nicholson on http://www.bwts.com.au but you do have to find something that your comfortable with. Keep up the knowledge and put together a plan.
Hope that helps Josh
