HI All,
My wife and I recently attended a free seminar organised by our financial broker. The guest speaker was a highly successful property developer/investor from Melbourne who spent his time slot explaining and endorsing living off equity. In other words instead of explaining ways to reduce debt and becoming financial independent he bought multiple properties relying on capital growth and using the equity to live off and to buy new property. Although this sounds great in theory the problem we have is how is that becoming financially independent when you are always in growing debt? Looking forward to opinionated responses!
[gossip]
This guy probably just made up any nice sounding ideas to get the dummies in the audience excited enough to buy whatever he was flogging at the end of the seminar.
Free seminars and their information are usually intended to butter up the audience for the salesmans ‘close’ at the end.
In these situations use your own judgement, take anything said wih a grain of salt and dont rely on anyones opinion until you’ve done your own investigating and due dilligences.JLtarra,
I presume there was time at the end of the seminar for questions ?? What was his response when you put your query to him ?? This is only theory to people who are unaware of it – it is a well established practice
Good ol’ Kevin Young and his disciples from the Investors Club has been living this life and advocating this approach for yonks – ‘harvesting’ is the term they use I believe. It works. Mr Yardley has also hinted at this method.
Surely – if your portfolio increases by $3MM during the year, and your finance provider agrees with that increase via independent re-evaluations, and you draw a modest $100K for personal living expenses, you can see that you net balance has increased enormously and things are looking rosy ??
What’s the secret ?? No secret – just need to get the numbers up a tad bigger, so that the % gain swamps your personal living expenses.
After reading the above, do you still have a problem ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Originally posted by JLtarra:Although this sounds great in theory the problem we have is how is that becoming financially independent when you are always in growing debt? Looking forward to opinionated responses!
Hi Jltarra,
Steve Navra also uses a similar strategy.
As Dazzling said the key to the success of this is to have an asset base large enough to sustain your lifestyle.
The other key is to spend less than your assets grow.
It is all about positioning yourself in preparation for leaving the workforce before you do. I guess you could almost, at a pinch, call it retirement planning.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.I Had a very similar introduction to Investing!
Young guys talking up the investing and making statements that “Capital Growth” is King and so on.
Great until you learn that the intent of the spend money is what determins its Tax Deductibility! So your CG grows, and so does your non-deductible debt! Sounded good for a while, too bad if your CG aint goin up!I like the theory that a trust (or entity) that you control buys everything, assets that allow the purchase of other things like boats and cars, while I own nothing and pay nothing but get to enjoy it all.[strum]
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonCalvin,
I believe Mr Bond – Alan, not James – also quite liked that concept, much to the chagrin of the Bell Resources shareholders…
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
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