Paleez, give us some credit, we vacillate around the low teens, 13th being the last I heard and we were as high as 6th somewhere in the 50’s-60’s.

We are an extremely wealthly nation and if you divide latent natural resources by population we are the potentially the wealthiest.

I’ve been meaning to add something to this for a few days now, but been too lazy [blush2].

My recommendation: buy exchange traded index funds
STW which tracks S&P 200
SLF which tracks S&P 200 Listed Property
for info http://www.streettracks.com.au/

The basic premise is that you’re not likely to beat the market, so why risk being flogged by it?…[Read more]

abugslife,
I strongly disagree with your REIT shorting assertion. REIT’s are not, in fact, proxies for residential real estate and with an average yield of 7% how could they be? Holdings usually include hotels, retail, infrastructure, commercial, etc. Shorting such certainly would not be the bet you intend, given you have stated above that…[Read more]

So ian’s point is that it is possible and foundation’s, that it is unlikely. No problem.

If you rule out high inflation (i.e. above 3%), I would add, that it would be “exceedingly unlikely” because such a scenario would result in 2015 prices being 1.5 times more expensive than today, in real terms. More than 10 times the average salary!!! Surely…[Read more]

Seems the optimistic view is that appreciation will equal inflation. Lets, again optimistically (for property), put this at 3%. So the real cost of ownership over the next decade, assuming 7% loans and 1% rates, maintenance, etc. is 5%.

I.e. if you are paying 5% of the value you would purchase in rent, you are breaking even. E.g. my requirements…[Read more]

Retirement for the working class is only a 20th century concept. For most of history it was ‘work until you drop’. Then age pensions and superannuation plans (incl. 401k etc.) were introduced and initially, based on average life expectancy, one could only expect a few years of retirement.

Now it is an assumed right that one enjoys a good 15 years…[Read more]

Only means that the savings are reduced for the time being, since the government has taken no steps toward protecting this latest cut against inflation. Hell HECS and fuel excise tax are inflation adjusted, what about income tax?

I think the super surcharge elimination could have a more profound effect, as baby boomers close to retirement might…[Read more]

Originally posted by The Mortgage Adviser:
and I am not influenced by the media like it seems can so easily influence you.

Cough, paleez

Originally posted by The Mortgage Adviser:
The ‘Northern Beaches’ is but a pimple on Sydney’s butt and I don’t think dmichie’s attendance at one or two auctions resulting in a 7% auction clearance rate could…[Read more]

US: top rate of 35% starting at $315K

I need to jump in here and explain how useless this statistic is, as it is often quoted. Fact is US pays FAR more tax than Australia. California holds closer to 1/4 than 1/5 of the US population and has state tax capping at over 10%. NY is > 7% above 100k.

Then there is the social security tax of 6.2%. A…[Read more]

“Assume 10% per annum growth in property value, 2.5% inflation per annum”

So it is exceeding inflation by 7.5% pa. And seems to be roughly neutrally geared. Even with 5% cost in and 3% out, it’s a truly inflation beating proposition. Unless I totally missed something [eh]

Hahahahaha this is great slapstick [biggrin]

One point… there are bulls and there are bears. Do you think a property investment forum should only have bulls? The topics would be rather banal don’t you think? And a bear forum would be worse than dull, it would be down right depressing. So stop questioning peoples motives for posting, they have…[Read more]

“Assume 10% per annum growth in property value”

If you make this assumption then the rest of the numbers barely matter (within sensible ranges) and the answer is yes.

An exceptional investor could possibly achieve this, with luck on their side. But why not use sensible numbers that the average investor will achieve.

Rough math: (capital…[Read more]

Yeh yeh, I’ve got a sharp tongue, my bad, again, my wife keeps me in check [biggrin]. Now as for this investment, if you’re in the top tax bracket (let me run with 50% this time would ya [wink]) then the depreciation tax benefit equals the true capital loss. So the return becomes purely the gross 20%.

Now since this is gross, this value means…[Read more]

Oh I just saw it was a private message so I have it now. But it still sounds like 2% per month is the upper limit and this only compounds at 12.72% NET on the assumption of 47%.

I am not overly familiar with these instruments, so I really cannot pick at your numbers without my own research [biggrin]. However I strongly doubt they are low risk. If…[Read more]

Actually I do appologize, I have been a little rude. [mellow] But I am enjoying the discourse and I’ll try reign myself in a little. [cap] N.B. ~ is generally accepted to mean roughly. So I don’t think it was terribly irresponsible of me to approximate 47% (+ medicare) to 50%.

Now, the reason I focus on NET returns, is that you cannot compound…[Read more]

“You only have to account for tax.” Only!!? Top marginal rate is ~50%, there goes half your return. 12% takes 6.1 years to double as opposed to 3.2 at 24%. I think it is valid to assume all +ve cash income is taxed at this rate given the savings potential of Majoh.

Secondly, you say the “investment you have outlined” exhibits the phenomenal…[Read more]

Hehehe, np man, hey you’re up late [blink]. It’s 10:45am here.

Back on topic. 3k gross is not 3k earnings. Earnings are after costs. +ve cash must be post-costs. If you’re talking pre-costs, everything is positive, by taking interest as a cost.

The discussion point is whether majoh’s returns are realistic. We have established that your return,…[Read more]

You paid 650k for assets that currently return >150k? Or you have assets currently valued at 650k returning >150k? There is a big difference.

If you paid 650k pre-boom, for assets now valued at twice that, then this is half the return.

But if you have assets at today’s value worth 650k, i.e. anyone here could pick them up for 650k (+ expenses)…[Read more]

Actually my previous calculation was based on 20k per year. My fopar, but here is the “in a vacuum” math, corrected for 25k pa.

0.28*(30000*1.28^8 + 25000*(1.28^7-1)/0.28)
= $176k

So the exclusion of taxes and expenses and the fact that this assumes no difference between rent and capital appreciation makes this the most conservative scenario I…[Read more]

I feel compelled to point this out. [blush2] Are you aware that your goal passive income requires ~28% per year compounding on your money? I think you will need to leverage your first born to pull this off. I say why stop there, if you leave your money compounding, you needn’t even contribute beyond the 8 years and you’ll break 10 BILLION ~40…[Read more]