Agreed. And the best part is that when you sell, the buyer always thinks he can do better than you and pay top dollars even if the business is at it’s peak [biggrin]
May God prosper you always.[biggrin]
MarcGreat story Derek.
Originally posted by Derek:Hi all,
Some food for thought.
http://www.theaustralian.news.com.au/common/story_page/0,5744,11058143%255E601,00.html
Derek
[email protected]Property Investment Support Available. Ongoing and never stopping. PM welcome.
“Mr GOODE will clear his desk by Wednesdayâ€
From newspaper..
City of South perth chief executive Stephen goode’s contract has been terminated because he failed to tell councile before becoming involved in a telecommunications business that is under ‘investigation’ to determine if it is a pyramid scheme.
Mayor Hopkins said following meeting an agreement was reached and mr goodewould clear desk by Wednesday.
Mr Gode , who earns $175 000 a year as council chief executive, denied the “Australian Communications Network†ACNwas a pyramid scheme, saying he checked with Consumer Protection.
Although he took calls about the business during working hours Mr Goode said he tried to keep theroles separate.
Mr Goode has been in council for18 months..
Hmm, Network Marketers..Tread carefully I say
Y
Hi All,[biggrin]
To summarize so far.
It is important to realize the difference between a budget designed for wealth creation and one designed because of financial hardship.
Up to now I have concentrated my discussions on the idea of creating money for investing by the use of budgeting for increased cash flow, and using goal setting as the motivator
Impulse spending using a credit card is a major drawback to success in wealth creation and without a budget or goal setting there is little or no incentive or reason to curb it. Once this is realized we have the focus and self commitment to use products such as Line of Credit, Credit Card, Debit Card and others to their best advantage.
Also together as a group we touched on ways to minimize spending by smarter shopping in order to save money, without reducing our present standards of living.
I briefly discussed Network Marketing as a way to reduce CC debt and this evolved into a discussion on the pros and cons of NM as a source of additional income. Other ways of increasing income by taking on a second job, overtime etc are not discussed by me as each person’s circumstances differ and the discussion is more about the work smarter not harder philosophy.BankWest is supporting a website that is worth looking at http://www.getsaving.com.au this was after a lifestyle survey conducted by them found that Australians on average only spend an average 4.3 hours per month managing finances (compared to4.6 hours gardening). It also found 41% spend less than 2 hrs per month on finances, 30% of Australians save by stashing money under a mattress or sock drawer, and australians are saving about a fifth of what they need to secure an independent retirement.
On my next post I hope to go on to the subject to different investment strategies, including discussion on the background and economic reasoning behind their uses. This will briefly include investments which are not property related in order to paint a more holistic picture, prior to a concentration on positive geared techniques more in line with the spirit of this forum.
Regards
Bryce Inglis
Investment Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS175.An appropriate professional should be consulted for specific advice
Great comments Noodles however, how do you stop Australians spending instead of saving, in my experience the majority of people at the end of the day will tell you to jack off.
Credit card debt in Aus is 27 billion dollars (the highest in the world per head of population).
100% home loans were taboo in the 1990’s only 4 years ago.
over 40% of the average income goes to meeting the mortgage committment.
86% of people who take out interest free (store accounts)finance , refinance and the end of the term and pay over 40% interest to catch up.
Divorce rate is up due to financial pressures and lack of knowledge.
And, i am sure you can go on from here with your access to information noodles.
My point is that Aussies living in the lucky country are tooo lazy to save, get a second job, get off their butt’s, expect others to do it for them, think the government will bail them out, expect their parents to help them, win lotto, why shouldn’t i have it now while i can afford it … etc etc
I ask many young people one question “if u r so smart why arn’t u rich” the fact today is that people would rather get into high debt and start at the top rather than do what the rich do and start small and build up, (in my opinion)
Education and awareness need to be taught at school to build good habits, most people also need a trade even Steve McK trained as an accountant before he got started.
There is an excellent income stream that we should all consider. Network marketing. Now some people have a problem with it but if you do your due diligence you will discover that it really is the best business in the world.
Robert Kiosaki actually recommends network marketing. Network marketing has the great advantage that you are in business for your self but not by yourself. You are in a business in a very supportive environment.
Network marketing requires a very low investment and you will get all the training you want at no cost to you. You will get all the help you need from people keen to help you build your busienss
Do your homework but:
Select a company that is solidly established in the market place and is growing expotentially.
Has an excellent track record and wont go broke after you have built up a business.
Has products that people want and which also actually work
That is in the wellness business as the biggest market in the world is the baby boomers.
One that has consumable and marketable products.
Has one of the best payment plans in the business.
One where distributors place their orders over the internet or by fax.
One where you don’t need to carry any stock.
One where the organisation does nearly all of the paper work for you, you have very little paper work to do.
One where the company posts your bonus cheques directly to you.
One where you can build a business bigger than your own sponsors business if you wish.Network marketing is doing to become huge in the not-to-distant-future for this reason.
In 1960 a product that cost $300.00 to produce, cost $150.00 to make and $150.00 to get into the customers hands.
Today that same product cost $200.00. It costs $50.00 to produce and $150.00 to get into the customers hands. You can see from this where the potential is for increased savings lie.
Any marketing person will tell you that it costs 6 times as much to get a new customer as it does to keep an existing customer. Such a person will also tell you that word of mouth advertising is the least expensive and the most effective form of marketing there is.
Honky tonk
[email protected]hi
you could investigate the suitablity of purchashing management rights (permanant or holiday) this includes a realestate component which you can live in or rent out (permision required from bodycorp) and also a bussines component which gives you the right to be the on or offsite manager for the block of units or townhouses you purchase in. You recieve a body corp salary for maintaining the common grounds of the complex.The salary is proprtional to how much work is required.You also are the letting agent for the complex which means that when you rent out a unit you receive the letting fee usally the first weeks rent furthermore you also recieve 7.5% (generally) of all the further rent received for being the onsite manager which involves collecting the rent,attending to broken taps etc by calling trades people etc.You act as the rentel property officer for the site and this can be quite rewarding. you can earn as much or as little as you are comfortable buying or/and workingThe old saying “A penny saved is a penny earned.”
Seems to have been overlooked here. I’ve recently made myself a still from which i produce my own pure alcohol spirit. Costs me about $7.00 to make a pretty decent bottle of whisky. At a geuss i’d say i’m saving about $30 a week. Might sound like peanuts but $30 x 52 weeks = $1560pa multiply this over the next 40 odd years and i’ve saved $62400.00. Only cost me $500 to make my still! not a bad investment plus a great little hobby. Not to mention the $20 i save by taking a hip flask to the pub with me each time. Maybe that should be a dollar saved is a dollar earned!Work smarter, not harder!.
Cremin,
I’d be worried about your health if I were you… hehhe i like your way of thinking though! Anyone considering drinking a bottle of whiskey a week for the next 40 years (if they live that long) might need to invest the money they save on other things, such as:
* New Kidneys
* New Liver
* Life support machine? LOLI’m just being silly here!
But I know of a way you can save even more than what you are already doing. How about not drinking? $7/week = $364/yr = $14,560 over 40 years
Regards,
Oziwhats the point in being a tight bum all your life?
money has but ONE use. TO BE SPENT.
At what point do you stop being tight, and start enjoying the money? When you die? You gonna take it with you maybe? lol
Live life for gods sake!
A life spent worrying about where every penny goes is no life at all.
How much is your time worth?
I worked this out recently. My time is worth a dollar a minute. $65 an hour is what I charge. If time is money, then spending 2 mins to save $1 is a nett loss. I watch people waste half a day shopping around to save $10 on an item. If they worked that time instead, they would be $50 – $200 better off. Some people will waste half a day getting a refund for an item because they saw it $5 cheaper elsewhere. get a grip.
Start thinking this way and you will be MUCH happier and RICHER.
http://www.posigear.8k.com
Positive Geared Share InvestingHi Crashy,
thats an interesting, how you say how much your time is worth, but also i do believe that in the same way… that my time is also worth money…
though i dont think im worth as much, im about .75 cents a min, and thats probably about right 24/7 consisently, (including losses taken out… lol), but thats probably, personally bare minimal… for every minute…
but yes, i like your alology… (sorry dont know the spelling)
Cheers,
sisHi All,[biggrin]
The most important part of my job is to know product and asset class risk factors ,and I am obliged by law to match risk in line with client profiles. I am in life an optimist and sometimes play the part of devils advocate solely to provide information so that balanced decisions can be made by my clients.
So will we start of with the macro picture?For the last few years BIS Shrapnel have reported in their biannual publications that interest rates will rise to 10% in 2006, with the modification of their prediction to 9.5% in the last report. During the same period other economic reports issued from other sources such as banks, including the Reserve Bank have seemed in conflict with this view.
The information from BIS Shrapnel in regard to longer term forecasting seems to be either limited or written in a language only understandable by those with economic degrees who wish to write something without saying a great deal.
Because BIS Shrapnel have been so consistent with their forecast this conflicting situation raised my curiosity and has prompted me to search elsewhere for answers.
I am not an economist but know enough to realize that some people take advice from economists seriously whilst at the same time laugh at fortune tellers etc, and I present my views to you on my understanding that, economists are usually incorrect in regard to long term forecasting, as unforeseen variables such as 9/11, Sars virus etc cannot be predicted. Their predictions are generally more accurate in the short term i.e. 3 months and can be extended by factoring in additional events as they occur.My search led me to the writings of the well respected American economist Paul Krugman who singularly gained prominence (in relationship to this discussion) when he correctly predicted the collapses of the South American economy and also the Asian meltdown. He has taught senior economics at a number of respected American Universities and also writes for the economics section of the New York Times .Parts of his career highlights can be found at http://www.wws.princeton.edu/~pkrugman/incidents.html
A full study of this man and his prolific achievements would take a long time and should not be undertaken by the faint hearted, several websites are devoted to him and a search for his name will reveal them.What Krugman is saying about the US economy is that it will collapse at some point within the next 10 years. This type of prophesy would normally belong in the realms of Nostradamus; however his arguments are logical and make enough sense to be taken seriously.
The US economy is running a record external current account deficit. The budget deficit is $US2 Trillion and is expected to double within 10 years unless addressed. Half of this deficit is now financed by Asian Central Banks. The largest and fastest growing areas in public spending are mandatory entitlement programs such as Social Security, Medicare and the Military and domestic Security. The baby boomers will be retiring in ever more numbers in a mushroom effect over this period, further straining an already stretched system.
Clearly Bush is caught between a rock and a hard place.A more complete story from another economist is found at this link http://www.financialsense.com/series2/perspectives2.htm
The problem will have to be faced one day (whether the US goes bust or not) by the Central Bank Increasing interest rates and decreasing the supply of money.
Australia faces much the same scenario and does BIS Shrapnel believe that the Reserve Bank will increase rates in 2006?
The following post was found on another site and was unanswered so perhaps we can comment on it hereHave been talking to a friend today who is a finance analyst at St George, as well as property investor. She said all the charting their top economist have been doing lately indicates that interest rates will hit 8.5% by the end of the year and go as high as 11% by 2007 (which basically is similar to the BIS Shrapnel’s and Merryl Lynch’s predictions). She is the first to admit that “all economic forecasting is crap”, but nevertheless she is liquidating part of her portfolio to reduce debt. The general consensus among other people I’ve been talking to is that we are not going to see interest higher than 8% for quite a few years. But this conversation has made me nervous. What do our resident economists and other experienced folk think? I am still green where property investing is concerned, my position is not very robust and I get spooked easily
Hmm?Regards
Bryce Inglis
Investment Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS175.An appropriate professional should be consulted for specific advice
If anyone’s worried about interest rates hitting 8 or 9% why wouldn’t you fix for the attractive 3 year rates that are being spoken about in other threads?
cheers
rHi resiwealth,[biggrin]
How do you stop Australians spending instead of saving, in my experience the majority of people at the end of the day will tell you to jack off?You make some very true and pertinent comments in your reply. However I find a lot of people tell me to jack off as soon as they find out I’m a financial planner.
Hi Honky tonk,[biggrin]
That is in the wellness business as the biggest market in the world is the baby boomers.
It is important to look after your health so that you can enjoy being wealthy instead of dying.Robert Kiosaki actually recommends network marketing
I have nothing against NM and am a member of a couple of groups but it doesn’t appeal to everyone.Hi Cremin,[biggrin]
Send me the recipeHi Ozi,[biggrin]
My wife would stop me; she makes tut tut sounds halfway thru my second drink.Hi crashy,[biggrin]
I’m Glad your business ventures are working out well for you.HI sis,[biggrin]
analogy; I write my longer answers in a word document and use spell check.Hi Richmond,[biggrin]
I will try to reply to you in more detail tommorrow (The boss is away)Regards
Bryce Inglis
Investment Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS175.An appropriate professional should be consulted for specific advice
Hi All,[biggrin]
Posted by Richmond
If anyone’s worried about interest rates hitting 8 or 9% why wouldn’t you fix for the attractive 3 year rates that are being spoken about in other threads?
This very question had me puzzled, as it is in direct conflict with the economic views expressed in the prior posting. The ANZ Bank for example offer a 10 year fixed loan at 7.6%, and historically variable rates have outperformed fixed rates.
How then can they make a profit if the Reserve Bank raises rates above this level in order to reduce debt levels of the type posted by resiwealth and including Balance of trade, CAD levels etc?
Credit card debt in Aus is 27 billion dollars (the highest in the world per head of population).
100% home loans were taboo in the 1990’s only 4 years ago.
Over 40% of the average income goes to meeting the mortgage commitments.
86% of people who take out interest free (store accounts) finance, refinance and the end of the term and pay over 40% interest to catch up.
The answer is that both scenarios can be true under certain circumstances. What if the interest rate rises for a short period and this triggers a recession.
I.e. rates rise to above the fixed rate for 6-12 months and this is followed by a fall below the fixed rate for a longer period of time?
To illustrate this we can look at what happened to the 2nd largest economy in the world (after America).
In Japan from1995 to mid 2001 the official discount rate was 0.5%, it was then lowered to 0.1% and has remained at that level up to the present time.
The Housing Loan Corporation offers a 10 year fixed loan on a 35 year Mortgage at 2.55%
Values of residential land increased by 7,800% during the period 1955-1985, it peaked in 1988 and has since dropped by 62.8%.http://www.colliershalifax.com/eng/investment/japan_investment2003.pdf
An interesting point arises here that if the economy is controlled by a centralized banking system, then how you induce the Japanese to spend more in order to bring them out of a recession when interest rates cannot be lowered further.
So to summarize
I am not trained in economics
Economic forecasts can sometimes belong in the land of the Fairies
The opinion of a growing number of American Economists is that America is broke and may collapse.
BIS Shrapnel forecasts interest rates of around10%
Banks set fixed interest rates around 7.5%
The Japanese economy appears to be stuffed.
And this isn’t a confusing situation as John Howard has personally assured us that interest rates will not rise.Regards
Bryce Inglis
Investment Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS175.An appropriate professional should be consulted for specific advice
Hi All, [biggrin]
To continue with the subject of risk
“Government’s view of the economy could be summed up in a few short phrases:
If it moves, tax it.
If it keeps moving, regulate it. And
If it stops moving, subsidize it.â€
_ Ronald ReaganRobert Shiller PhD, Professor of Economics at Yale University has written a book titled ‘Irrational Exuberance’ with the assumption that the majority of investors buy shares or other investments based on dinner party conversations and were basing purchasing decisions on emotive issues rather than researched facts.
From his introductory remarks delivered at his 2002 Engle Lecture;
“First, I should make one point. I did not coin the phrase irrational exuberance (in regards to his book title) I testified before the Federal Reserve Board in December of 1996, and I told Alan Greenspan that the market was irrational. Then at lunch afterwards I asked him when was the last time that a Fed chairman had ever said the market was overpriced. And he said he didn’t know, but somebody else said, “That was William McChesney Martin in 1965.” So I think I might have put the idea in his mind to coin that term, which appeared 2 days later in a speech he gave. And the reason that that term is so famous is that stock markets all around the world dropped as soon as he uttered those words.â€So, a widely publicized idea about the irrationality of the stock market causes it to drop in value whilst people think about this until the next dinner party topic comes up.
“It will fluctuate.†J.P Morgan (founder of one of America’s first great investment banks, when asked what the stock market would do.)
Robert Shiller’s full lecture can be found at http://www.amercoll.edu/About_Us/Lectures/engle2002.asp
This is one reason why people can invest incorrectly, putting themselves at risk if they purchase an investment at the wrong time. For example, it explains why people buy apartments in areas where there is no capitol growth, the yields are poor and vacancy rates are high
Southbank and its surrounding area is an example of this. I covered this (rather badly) with an earlier post and I hadn’t taken the above into consideration. This was prior to the AFSL deadline for compliance when I was working as a property investment consultant.
https://www.propertyinvesting.com/forum/topic.asp?TOPIC_ID=5540All investments are subject to external marketing forces, and marketing has four phases; Development, where money is placed into an investment and short term return is not expected
Growth, the investment starts to make money.
Maturity, the cost of making the investment rises causing the yield to fall.
Decline, leading to the death of the product, unless restructuring takes place, so the cycle may restart anew.By the time something is discussed at a dinner party it may be too late in the cycle and the risk of losing money may occur.
From Warren Buffett talking about stocks but applies equally well to all investment classes.
“Look at stocks as businesses. Look for businesses you understand, run by people you trust and are comfortable with, and leave them alone for a long time.â€until next time
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
Hi All, [biggrin]
Awareness of risk is a necessary part of living; it is part of our lives and we use it subconsciously in most of our daily living activities such as driving, cooking, working, etc.
When it is stated that risk is inherent to all investing and that the amount of risk is proportional to return, it does not mean that because there is a risk that we shouldn’t invest, rather that we should understand where the risk is originating from so that steps can be taken to reduce its effects.The hardest risk factor to predict is that of greed, fortunately it is rare, but its effects can be devastating to the innocent victims affected by it.
Greed coupled with stupidity, arrogance, self pride and a lack of morals can have its affect on people individually or as a large group.One greedy person together with their cronies, accomplices, and dupes can also by their actions affect a whole nation as seen by the Enron crash, although it will take years for the full story to come out
A typical link of the blame game currently being played is found at,
http://www.accountancyage.com/News/1137608It can also be world wide as seen by the effects of the 1929 stock market crash, which led to the great depression.
When this Wall Street Bubble had reached gargantuan proportions in the autumn of 1929, Montague Norman (head of the Bank of England) sharply cut the British bank rate, repatriating British hot money, and pulling the rug out from under the Wall Street speculators, thus deliberately and consciously imploding the US markets.For the complete story,
http://www.tarpley.net/29crash.htmIt may also speculated that this led to economic conditions in Germany and thus to the rise of Hitler and World War 2
A very long story, covering economic history during the period 1929 up to the present (Possible reading for holidays or for Economic and history buffs) is found at;http://econ161.berkeley.edu/TCEH/Slouch_Crash14.html
A short excerpt is found below.
The substantial loan to Austria was not made because French internal politics entered the picture. At the beginning of his political career French Premier Pierre Laval had styled himself a politician of the left: the Clarence Darrow of France. But by the early 1930s he was shifting to the position of a strong nationalist. He blocked the proposed international support package for Austria, insisting that if France was to contribute France had to get something out of it. The price that Laval demanded was made up of a series of diplomatic concessions, most important of which was the renunciation of a prospective customs union with Germany. To Laval, playing the nationalist card in French politics, nothing that benefited Germany could be allowed by France.
The Austrian government refused to make the required political concessions fast enough for negotiations to be completed in time to be of use. Austria lost: the support package collapsed, and the Austrian economy abandoned the gold standard and went into recession. In the long run France lost too: what might have been a chance to moderate the Great Depression was lost. The ultimate consequences for France were dire. The rise of Adolph Hitler in Germany is inconceivable in the absence of the Great Depression. Nine years after the Credit-Anstalt crisis the French government surrendered to the Nazis.
The study of history can be helpful in predicting the future actions of those surrounded by the same circumstances, so I will go on with this theme with one last example.
I borrowed a book from my mother in law titled the Land Boomers written by Michael Cannon, Melbourne University Press (I hope that I don’t have to give it back as I think it’s out of print) .A copy of it may be found at your local Library.
It s a tale of greed and corruption in Victoria just prior to the Federalization of Australia which resulted in unemployment rates of 50% (approximation) and people starving to death in the streets of Melbourne.
It’s very hard to imagine this happening today just 100 odd years later.
It’s also a tale of individual heroes; men like Isaac Isaacs (later Sir) who started to lay down laws to prevent such a catastrophe from ever happening again. Preventing things like private arrangements with creditors. To only pay a penny in the pound, and in the case of one bankrupt being able to do this twice in one year.Imagine the antics of Henry Kay being able to go on and on and on.
Laws which evolved into current laws which we now take for granted.
Now the whole point in the above post is (hopefully not to send you to sleep and I will apologize if I have bored you), to make you aware of how important the new Financial Services Reform Act is for your protection against greed.
ASIC is charged with policing the FSRA, and the results of their endeavors are reported in the link below
The regulator’s enforcement activities in the 2004 financial year saw 28 criminals jailed, and 22 directors and 42 people from financial services banned.
Sixty illegal investment schemes were shut down, involving $110 millionhttp://www.theaustralian.news.com.au/common/story_page/0,5744,11418854%255E643,00.html
Greed can be fought through personal awareness and education, but we must all have the will and moral not to join in for motives of our own self gain.
Regards
Bryce Inglis
Financial Advisor
[email protected]Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice
here is a good way to “make” money…get a job in a regional centre and your employer will often pay for your accomodation or give you subsidised rent. I work for a shire and my 3×1 costs $99 sallary sacrificed. Rents for a simular place here would be $350+ (karratha WA) even some govt jobs provide housing like teachers etc…
ohh i forgot to add commonwealth has 15 yr fixed at 7.96 % for anyone highly geared and wanting future security in rates.
I am thinking about doing this even though few people think it is the right decision…but it will enable me to untangle the loans and have them only financed by the 1 property. currently each is secured by eachother.
A good way to save is to put off buying what you want for a week if you still want it buy it… i supprise myself on how little i really wanted it.
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