Yack and others,
I dodged this thread for a while, but thought I might venture an opinion given I fit in the newbie demographic and might be viewed as a lemming.
My first post on this forum posed the question on whether this was the right time to invest in the current market cycle, so I hope that shows that not all newbies are lemmings. The outcome of that dialogue is my plan to pay off my PPOR at present and continue to look for good value investment opportunities in a depressed market. If I do buy it will be recognising that interest rates could rise to potentially double digits and that capital gain will potentially be stagnant until 2008+.
But isn’t that what investing is all about anyway? Look at an investment, allow for worst case, build a contingency, and if it still looks OK, invest!
Just because you’re a newbie doesn’t mean you’re ill informed or illogical. Nor does it mean that you’re impetuous and just want to jump in and follow the herd. I’ve read Somers, McKnight, Kiyosaki, Burley and now Spann. I’ve also lurked on half a dozen REI forums and know for a fact that I don’t know everything there is to know on the topic. I am not over-analysing, its just that my financial position has brought me to the point that I am now ready to invest, not some hype over REI or the market cycle.
Given my financial position, my education and my willingness to invest I am now analysing the market for opportunities. I didn’t get to this point by reading newspapers and books over the last few years. I read Somers in around 1985 and have never stopped learning.
At the risk of posting too long a response I might add the following observation…
People are like the market in that they have life cycles. I’ve already lived an education cycle (Uni under-grad) then a career cycle (focussed on developing my career to where I am now). In there is also a family cycle where relationships were all that mattered and I got married as well as my braun years when I joined the army reserves and studied TaeKwonDo to 2nd Dan black belt. But I’ve now reached my investment cycle. I’ve got these lifestages behind me and now have both the financial and emotional maturity to become a good investor. If I put even half the drive into investing as I’ve put in to my other life stages then I’m certain I will be successful.
To suggest that it is the market that has created the rush of newbies would be wrong in my case at least. I made myself in to who I am and am not following the herd. It just so happens that my evolution has timed my entry in to the market at a peak point. I now have to deal with that as best I can and profit from it.
My 2c,
Michael.Michael:
I think you are a well informed investor who is living proof against the stereotype of the ill-informed, do-it-on-a-whim, follow-the-crowd, sheep-to-the-wolves new investor.
I too am a fairly new investor and have found some of the posts in this thread condescending and patronising. It is almost as though some people feel threatened by other people wanting to make a success of investing. Hence the reason for their posts painting new investors as bumbling, fumbling fools who they will clean up from when they go bankrupt through their own stupidity.
Try not to pay too much attention to these negative posts and/or people. There are MANY other regualr contributers to this forum who will give you invaluable advice about investing. Sometimes a heads up warning about the market is needed but that is not what I hve seen generally posted on this thread.
On your theory of cycles in a persons life. I would agree to a certain extent. Maybe I misread your post but I was slighly disturbed by the notion of having certain times in life when relationships and education are important but that they are now surpassed by investing. Investing is a means to an end. Specifically it give you choices in life. These choices include more time for relationships and education. I think investing becomes a detriment to your life when it becomes an end in itself, (ie. the most important thing in one’s life) rather than been seen as a means to a greater end.
Hope this does not come across as too critical or patronising. I really admire the thought you put into this thread. You certainly balanced it out and put paid to the misconception of the no-idea newbie.
Kind Regards,
TimNo matter what I say, what I believe, and what I do, I’m bankrupt without love. (1 Corinthians 13:3b – The Message)
Tim,
Good point on how my statements on life stages could come across wrongly. I’ve actually also read Steven Covey’s “7 Habits of Highly Effective People” and I agree with a lot of what he has to say. I personally live a principle-centred life and agree that everything should be in balance. This means that I am not now dropping my focus on my wife or on my education, but will continue to consider them an integral part of my life and will “invest” in them as much as I “invest” in my REI future.
I was just trying to illustrate my thoughts on the “principal” focus of each stage in my life to date. Not to the detriment of all other aspects, just as the area where I invested the lion’s share of my efforts above and beyond other areas. My wife is by far the single most important part of my life and investing in my relationship will always take priority over financial concerns. Fortunately, we have a wonderful relationship now that does not require 24-7 effort to maintain. With my spare time I am now “focussing” on REI and other investment strategies to grow my financial future.
Good point though, it certainly made me think some more about what I’d posted and the risk you take if you focus too much on one area. And thanks for the afirmation. I know there are a lot of supportive people on this site, they’ve helped me heaps already. And I include yack in that number even though he started this thread. I think he was really playing devil’s advocate when he posted. [biggrin]
My personal mantra is “You’re only ever as good as you allow yourself to be”, and ain’t nobody on this forum or anywhere else can stop me once I get my teeth in to something.
Cheers,
Michael.Michael:
Point taken about life cycles etc. The way I read it did not fit in with the rest of your post.
I too agree that Yack is largely helpful and that his first post was deliberately provactive to stir up the pot.
Unfortunately it was some of the latter replies that were not so helpful.
Kind Regards,
TimNo matter what I say, what I believe, and what I do, I’m bankrupt without love. (1 Corinthians 13:3b – The Message)
Michael & Tim,
You both make excellent points. Not to be paronising, well done.
Thanks for the posts.
Hi All,
A great thread and a long read from start to finish… But worth it.
My hat off to Mini for such a wonderful ‘from the heart’ post… Go girl![specool]
Also to MichaelWhyte for dispelling the stereotype that newbies are ill-informed idiots fairly salivating and frothing at the mouths to dive in for a slice of the pie while it’s hot.[thumbsupanim]
I too am a newbie to IP’s (6 months) but I have made my 4 investments by not over stretching my finances (currently 80%LVR), researching my areas, locking in interest rates for 3-years and plowing through the various threads on this and other forums.
We are all unique; therefore we all have different ideas, thoughts, strategies, limits, fears, phobias etc… So one size does not fit all in this or any other cycle of the property market.
So to newbies I say ‘go for it’ as long as you know and understand what you have to loose and are prepared to loose should it all go wrong.
On the upside you could also end up with a big s***t kicker grin on your face [biggrin] like Mini.
Either way it’s your choice… But remember to look before you leap.
Cheers, Nobleone [thumbsup2]
Drewbie, Michael, Agile, Nobleone etc
Thanks for your replies. The intention of my post was never to say not have a go. It sounds like you have given some thought to it.
The concern I have at the back of my mind (and I cannot predict the future) is that I have reservations about whether now is a good time to invest in property or not.
John Symonds just yesterday mentioned that he expects property prices to fall possibly from 5-10% over the next 12 months.
That has always been my concern. I just wanted to make sure new investors were aware of the risks. Its not fun making repayments when interest rates rise and paying for new repairs and continually ringing the property manager for a new tenant.
Personally, now I am consolidating and not buying anything for another 2-3 years. My last purchases were in 2000 – they have doubled and rents have only gone up 20%. Do you really think newlyweds can afford a $200k loan on a new home? Thats the main reason I am conservative.
At least you guys have given it some thought and locked in interest rates etc. Again good luck.
Hi All,
Since my last post to this thread I have been thinking…
In a nutshell, for any ‘noobies’ following this thread and getting mixed messages as to whether or not to jump into the property market at this point in the property cycle…
…This forum is populated by investors who have different strategies, which will determine whether they invest at this point in the cycle or not…
… Investors who have different goals, which will determine whether they invest at this point in the cycle or not…
… Investors who have different financial situations, which will determine whether they invest at this point in the cycle or not…
… investors who have different fears/mindsets/experience, which will determine whether they invest at this point in the cycle or not…
And so on and so forth… Add in as many different whatever’s you can think off.
The point is, until you as a ‘noobie’ have decided what your own personal investing strategy is and what your personal limitations are, then whatever is said on this forum is just someone else’s opinion based on their own personal circumstances not yours.
It all comes down to you at the end of the day.
Happy learning/investing/experiencing/growing/contributing etc.
Cheers, Nobleone
[xmas]Nobleone,
Nice post! No one size fits all eh?
I know where Yack is coming from though, a concern that ill-informed noobies will pick up a book and become an instant expert only to invest in the market in a poorly judged manner and be burnt for life.
But, to assume that all noobies are created equal would be a mistake. [biggrin]
Not putting myself on a pedestal at all, I still consider myself a novice. But, I know enough to know that different strategies suit different investors in different market conditions. I just hope most noobies know that much at least.
Cheers,
Michael.Michael,
I also see Yacks point… However he/we have to ‘get over it’ because there’s multitude of people out there all buying books and becoming instant property gurus and we can’t stop them all from making some mistakes.
As my father used to say…
“you can’t put a young head on new shoulders”
People buy cars everyday, some buy lemons some dont… It’s the same in property investing.
OK so we hand out advice on this forum if we’re asked, whether the askers take that advice and use it is up to them… Stop worrying about them.
As I like to say…
“Making mistakes is just another another tool for learning.”
Cheers, Nobleone [biggrin]
Yack,
Your concerns are valid, some indicators show that the economy is starting to slow, the Gov. released figures just recently, retail spending is down 0.7% and new home approval’s have dropped 2.4%. We also dropped U.S. 1C on the Aussie dollar.
There is even a rumor that the Reserve Bank will in fact not raise interest rates next week.(Bigger news, maybe rate cut!!) Who knows? we will have to wait and see, this info was provided by mainstream media, so how much validity you hold in it is entirely up to you.
I guess the main thing is to stay informed.
Informatioin is power. Gather what you need and make an informed decision rather than just “jumping in”
Don’t be afraid of the uncertain, research, plan and enjoy the ride, but most importantly. Plan an exit strategy.
I’ve got nothing to add at this point… Just seeing if my new signature works!
Nobleone
“Making mistakes is just another another tool for learning.”
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