Hi All,
A member of my family has recently received a significant inheritance – about $200,000.
She is within 10 years of retirement, and has no other assets, except super. It seems to me that her priority should be to build a stream of passive income for retirement, and that positively geared property would be an ideal way to do this.
Does anyone have any views on the subject? I have looked at the usual options….cash, shares, negative gearing, and a mortgage, but PGP seems the best.
Cheers..
Hi there,
Whilst I’m no financial advisor or the like, positive cash flow properties that will hold their own and then give her something to live off, it’s a fantastic option. Perhaps with that amount you might be able to get into commercial property and then she wouldn’t have to worry about outgoings on the property, just enjoy long term leases and cash flow.
As I mentioned earlier, I am not an advisor, so might I suggest you go to someone who specializes in wealth creation, with credentials, such as an accountant. Hmmm… Dale Guthrum-Goss’s name just popped into my head as a good contact for you. I’m totally unbiased suggesting him, as I don’t go to Dale for my accounting (yet!) He has just been highly recommended for a long time now.Let us know how you go.. it’s an interesting question you pose…
Cheers
Soosh [
]When a problem is created the solution is created simultaneously
Hi Logues,
I too am not a financial advisor but if it was a family member of mine and they knew very little about investing I’d suggest that they get rid of all short term personal debt and see an accountant and get their cash into a flexible cash management trust like ING earning about 4.75%, then depending on their overall position (ie 100% of super in shares or combo shares/prop, intention to take lump or pension etc), start educating themselves thoroughly on property with a plan to invest with no more than 20-25% of their equity per POSITIVE cash flow deal, preferably at <80%LVR lend if possible. If shares are their preference, no more than 10% of their equity per share seems to be the risk guideline.
I wouldn’t recommend commercial property to a beginner, and don’t even need to go into the perils of investing in negative cash flow property unless they have a really high disposable income and can convert it into positive cash flow in under 5 years ignoring any potential capital gains.
My two cents [
] – hope it goes well for them and remember: fools and their money are soon parted. So keep clear of the risky stuff, play with investment income in that arena not equity.[
]
Mel
[email protected]hi logues,
it depends on what that member likes to do.. if i have a family member that has that sum of inheritance, i would sorta coerced him/her into investing.. I could propose a JV if she doesn’t has the time or knows the ways to go about doing investing or is just too old to bother with it. A Good Money Partner and if that interest her in the long run, u have more than just a money partner, but a thinking partner too.. that would be great
well that’s what i’ll do
Good LUck
Kev
Reminds me of the story about lotto winners and how when they revisited them years later most were broke again.
or
The story about a NBA star in the USA who many years later was washing cars at a drive thru car wash, blaming his manager and friends for squandering his money.SO as Sooshie and Melanie said you need to go and see someone well versed in looking after OPM, paying off any personal debt is a great place to start, saving you $ in interest. Then speak to a recommended accountant, preferably one whose views are along the same lines as your own.
Cash, Property and Shares are the main financial areas. And educate yourself about +geared properties and such before you jump in.. reading from 0-130 properties and other books (see old post re: books i have read) is a great start.
Melanie says ‘a fool and his money are soon parted’ i wonder.. how a fool and his money got together in the first place[:0)]
REMEMBER
financial winners borrow money at a tax deductible 7% to purchase quality property and shares, financial losers borrow at a non-deductible 20% to ‘invest’ in stuff like appliances and furniture that tumble in value once they leave the showroom- Noel Whittaker
REDWING
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
]
] – hope it goes well for them and remember: fools and their money are soon parted. So keep clear of the risky stuff, play with investment income in that arena not equity.
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