Pin,
Speak and I will listen,
Every time i learn something i find there is more to learn. I am always happy to learn.
Lucky Phil, I agree with everything you’ve said.
go get em!
shaunHi Mini,
Thanks for editing your post. I wasn’t going to reply, because I didn’t want to start a bickering. (Quite frankly there is enough of that on the forum as it is). However you make a valid point and I want to aplogise to anyone that was “annoyed” by my post.
It really wasn’t meant that way, let me explain …
When I first read DinoWeb’s post I wanted to answer him directly and say: “Ask you questions I will try and answer them.”
Basically I JUST wanted to answer him, without getting involved with all the other discussions that were going on, that is why I said:
I started reading this thread … Some posts were way too long … I skipped others etc…However I think I got the general feel for things.
But you are right. I should read everything before posting! Or otherwise clearly state who I was addressing.
I will be starting a new thread in “General Investing” called “People and information” and would love for you all to contribute.
Cheers,
Pin
pin – hi! peace!
mini
Hi,
You can tell I am a “Newbie” Made this incredible contribution to humanity only to find I lost it and sent you your own message lol!
I’ll have another go….It’s about the right loan and mortgage management.
If you are in a fixed interest loan – you won’t be able to do much – you’re st…..! (stuck!)
The best loan is an “evergreen” loan or loc with no term with free “splits” Its transportable and you never need to answer to a bank manager again.
I am biased as a broker and mortgage manager and wealth creator who had to contend with making money for others after an unfortunate total loss of my own created by someone I trusted and loved.
However I have surrounded myself with all the correct information and am on my way up to the top!Its important to work out your budget (get one on line if you can). Don’t scrimp, just write down your normal expenses and try to stick to them.
If you have two splits, deposit all you money, I mean all your money salary crediting, aunty marthas birthday money, kids birthday money tab wins into your home loan (the one you live in!)
Get a credit card and clock up all expenses (with reserve) including BPay supermarket etc on the card. Before the interest is debited to your credit card, organise a “draw down” on your home loan to pay your credit card in full each month to avoid interest . Then start again clocking up your payments and purchases on your credit card to maximise your payments on your home loan, in order to reduce the term.Interest on Home loans is calculated daily and debited montly every loan is the same. So it makes sense to “park” every cent you have in your home loan. You can reduce a 25year term to as little as 5-9years regardless of the interest rate.
LOC interest is usually higher say…7% so if your child has a school savings book at zilch interest rate and you throw that away and fill the amounts in for them in an exercise book where mummy and daddy becomes their bank managers. They will effectively earn 7% interest as that is what you pay on your loan. This is the highest savings rate possible — they will love you for this.
Furthermore, if you have any investment accounts or savings or shares earning less than7% get rid of them and deposit all of this into your home loan. Its wild to think of having multiple accounts (for rainy days) earning less than what you are paying on your home loans — stupidity!If you have a second “split on your “all-in-one” loc loan, for an investment property, make sure the rent goes into your No.1 account (home loan) and your home loan has a draw down to pay the no.2 account “Interest only” keep this investment account at its maximum as it is a business and a tax deduction, whereas your home loan isn’t (you live in it)
Be vigilant, constantly check on the equity of your home loan to see when you can “go again” on another property. Don’t be shy to pay a couple of hundred dollars from time to time to re-value your property – its a worthwhile investment, becoz as soon as you have enough equity you can increase your property portfolio.
Also don’t be afraid to pay mortgage insurance, its a small price to pay to maximise your “borrowing” to maximise your investment portfolio. Besides its better to pay it than wait to save the money and find the property prices have risen.
Also consider Lo Doc loans after all the Banks don’t have to know your whole life history in order to advance you some investment capital — they DO have the property as security, what more do they want?
When you have 2-3 properties or more, consider protecting your assets with “Trusts”
Furthermore, with rental properties, make sure you pay a small price ($200+-p.a.) and insure yourself for 6months loss of rent (due to damages from tenants from hell) and it also covers you for $30000damages caused by the tenants from hell.
Don’t forget to put aside (and this is easy with an evergreen loan) 2 X 2weeks rent as between 6months lease agreements. The property can be left vacant due to cleaning, repairing or lack of interest in renting and you still have to pay the mortgage. Its sometimes better to give a $5.-p.w. incentive to get the tenants to sign a 12month contract then there is less risk of the losses of 6month contracts.Hope this helped
Best of luck
JennyHere I am again,
(never at a loss for something to say!)When you arrange a Split account, don’t attach a cheque account, as you will have to pay Govt Fees on every transaction on that account whether you use one cheque or 100, everytime you use eftpos, or credit cards you cheque accounts counts that as a cheque transaction. If you need a cheque account get one at another bank or pay by BPay or card. But don’t attach a cheque account to your split account.
The idea of using a Split account is that you see it as four sectors . First is your home loan, which is the account you try to pay off first. Second is say…your investment property which you keep at a premium interest only. Third split may be for managed funds or share portfolio and fourth split may be another investment property.
Keep the “circle of life” going when your home loan is paid off, then attempt to pay off the investment loan (first one) and keep the newest loan at interest only at all times.If you need to buy a new car….firstly buy a “new” second hand car — as soon as a new car is driven out of the driveway at the motor dealers it becomes depreciated so its better to buy a good second hand car. Secondly buy your car from your equity in your home loan at 7% interest instead of A.. who charge sometimes as much as 24%
Also never trade in your old car, sell it privately, you can generally get $2000 more for it than a trade in.Buy food in bulk from warehouses on special then you will have plenty of money for the finer things in life – like fresh coffee beans, smoked salmon etc.
Always walk away from something that “you simply must have” and wait for a week, you will find that you have forgotten about it or decided against it. Teach your kids this too – you owe it to them to teach them good wealth creation habits.
Kids often reflect their parents or their parents unwillingness to discipline them!!!!Every time you spend ask yourself, “Is this purchase getting me closer to my goals”.
Join a MLM business and you will often get “Free Motivational training” and be around positive thinking goal orientated people. Quite honestly, I read Anthony Robbins, but refuse to go to his seminars, as quite often I feel that its the person who is sitting next to me who is totally inexperienced to is “revving me up” not him, so I read his books instead and rev myself up. Kiyosaki on the other hand I am a big fan of – he is very popular amongst all MLM business so you get a good dose of him at free MLM meetings. Use MLM as a smorgasbord, don’t critisize them take the good info and leave the rest behind.
Then last of all take a check on your spiritual life — remember good Karma attracts good Karma
If you are a tight wad money wont flow your way!
If you are foolish with money- it will slip through your fingers. Respect money you work hard for it and each day when you wake up give thanks for what you do have and don’t focus on what you don’t have.
If you buy a pen for $2.00 – It actually costs you 42% more ($2.82)$50.00 purchase becomes $71.00!!!!!) if that is your taxable income. I always like to do this to make me think.(or 30% if that is your tax rate) and that is often the tool one needs to stop them making the purchase. We seem to forget that our hard earned money is taxed so please take that into consideration.I might never have anything to say on this forum ever again??
best of luck
(luck is spelled w.o.r.k!)
Jenny.G’day Jenny…
In many ways I feel happy for you that you fully understand the MCP. What you have described is my original Mortgage Control Program of November 1993.
I arranged for a computer guy to set up the program with my input. Originally the Advance Bank was sceptical but within a year referred their customers to me…Fantastic!
Then their Head Office stopped it from continuing.
The State Bank was the first to copy my Proram, then MLC followed by Citibank…after all the biz I gave Citibank I was pretty p****d off I can tell you.For 10 years I have watched the program do the rounds and my Irish mate “Seamus” has taken it to London. Working like a dream for him. Only recently, an Irish Bank has made LOC available and he is cleaning up in his home town.He has no opposition as yet in Ireland.
So now you can say you know who started the Mortgage Reduction Programs in Aussie, London and Ireland. Shoulda been paid Millions for it[
!]
Yeah I know it’s old hat now… but in 1993/94/95
it was a gold mine and my clients mortgages went in 4-8 years.Good luck with it Jenny
Bill
Bill O’Mara
Real Estate,Mortgages,Share Market Strategies.
[email protected]Hi,
I’ve enjoyed reading this thread.
I used to lecture auditing at RMIT, a university here in Melbourne. As I was (and still am!) a registered company auditior, I was well qualified to take the topic.
Anyway, I took the part-time class, which was full of people who worked during the day and were studying at night. I’d regularly get up to lecture, only to be sidetracked and move on to the topic of application of the theory in an audit, business and investing context.
I quickly became disillusioned when the vast majority of students just wanted to know what was one the exam, and then to get home asap.
In fact, that’s the reason I stopped lecturing, I only wanted to teach people with ears to listen!
Lesson to me: you can’t keep everyone happy all of the time, no matter how hard you try.
Lesson to me: put a price on information that means that people have to respect it. What you sell it for is the value that you attribute it to!
Lesson to you: it’s not theory alone, but the application of the theory that will be the essence of your success.
Oh, and, if you pay peanuts, you’ll be buying from a monkey!
[:0)]
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi Wealthy
Sounds like you hae alot of knowledge with these LOC loans.
I would be interested to communicate with you
if its ok. You can email me at [email protected].regards
alfHi wealthy,
You just answered my question that I posted on the general forum. Would be interested in talking with you in detail if you are interested.
DEborah
mini you are a fricken genius
A bit like guitar lessons. Yes, it’s possible – totally possible – to learn guitar from a book. A $30 book. It might not tell you how to get the Kylie Minogue gig in a year, even if the author did. And yes, you can teach yourself guitar all buy yourself, just by figuring it out. ‘live’ lessons are the best. it’s possible to get quite good fairly quickly.
you summed up wat i thought about dinos post beautifully
keep it upsimon
Hi Daniel,
I know that you said that you didn’t want to get FHOG as you didn’t want to live in the property and understand you were looking for private finance for the deposit. However, if you seriously want to get started you may have to change your mind and do something differantly, to get started. I have a few clients who were adamant about not living in their property also, but changed their mind and were prepared to live in the property for 12months – small sacrifice to pay to get closer to your goals.
At present if you are a PAYG employee and have been in your job at least 6months and willing and are prepared to be an owner occupier for 3years (you can always rent out rooms to create cash flow) You can get a 100% home loan as long as you have enough to pay stamp duty, legals etc – If you applied for FHOG this could cover these costs (if the property is the right price) Furthermore the stamp duty is lower on owner occupied properties than on Investment properties.Another way of getting a deposit together is “Rent to buy” Quite often a Developer who has funds lying around, needs to invest in something short term to avoid paying max tax on funds in call accounts. What they generally can do for you, is advise you to find a suitable property, if they don’t have one to offer you. They will then take a look at it to make sure it is of sound construction and will buy it for you. You enter into a contract with them where you will rent it from them for a maximum of 8months (enough time for them to reduce their tax)The contract also stipulates that you will buy the property from them after 8months at the same price that they bought it for and that they will return the rent you paid them for 8months to you to be used as a deposit when you apply for your own mortgage. They can’t lose. If your Loan is not approved for some reason, they own the property and you would have had a fair deal as the tenant who exchanged rent for accomodation.
Furthermore, I suggest that you go for a 95%or 100% lend and pay mortgage insurance ~ Here you will get the benefit of paying the current home prices ~ if you wait too long (depending on where you buy) you may find that the time wasted on saving up for a deposit, will put you behind the 8ball, as the property prices could rise once again. You would be better off paying the M.I. and enjoying the capital gain yourself.
But seriously, its better all round to get the FHOG, pay the Mortgage Insurance and either go for a 95 OR 100%lend. Don’t get locked into a a Fixed rate loan, then you will be able to refinance into a LOC and with the correct salary crediting and mortgage management you will be buying that 2nd investment property in no time.
JennyHi Bill,
Yes! Steves comment about putting a value on your knowledge and on your time is so important, not only for yourself, but for other person involved.
I remember years ago when joining an MLM company, I was surprised to find I had to pay for brochures as they weren’t given to us for free.
My upline explained that as this business was based on the law of effort and reward, if they were free most people would order dozens of them, never pass them out and end up throwing them away.
The MLM company would have wasted money and would pay the people who had made the effort, less reward to cover the cost of the waste. Whereas if there were a price put on each brochure, more respect would be give to the brochure and would probably be handed out to expand the persons biz.
This explained THE LAW OF EFFORT AND REWARD to me at the time and I have never forgotten it.I would like to thank you for introducing this system to Australia Yes I use it all the time and try to teach as many of my clients to use it ~ especially when you read that a certain Bank has just made almost 4Billion Dollars profit for this financial year!!!!! Its time some of this profit ended up back in property owners hands. At present the only property owners who are enjoying the spoils of this type of profit, are the ones who are also playing the share market (Such as you!!lol ~ hopefully you are finally getting a return on your initial investment into Mortgage Management by means of Shares.
rgds Jenny
G’day Jenny…
As I said, a gold mine in the mid-nineties. I made more than $500k with it. I discussed, patents with the Legal Eagles but to no avail.
The best Mortgage Reduction Tool then and now.
Cheers
Bill
ps. Investigate the split loans with Interest capitalised on the Investment Property.Bill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]thanks simon!
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