Passive Income Using Property – Is It the only way

Hi pipelinebender

2 k and property investment…forget it.

think outside the box?

I agree
30 years ago at 22, i bought my first IP 15K, interest only loan.
3 years on i sold it for 20k, and after subtracting costs it worked out i made 2k.
my thoughts about the property investment game….. “its a mugs game”.
i took that 2k and bought a business that was going down.
first couple of years where hard work..very hard work 24/7
its growth was fantastic, but to much growth was causing problems as well.
TAXES far to high (third year in a personal tax bill 120k)in todays money over 250k
that created an urgent requirement to understand what “profit and loss” and “balance sheets” and “tax planning” was?
26 years down the track…was it worth it?
That business is still operating today, it employees 6 people most of who are on a profit share bases.
The business has been a great vehicle to building wealth (both in IP’s and personal income)
So what’s my first IP worth on todays market..350k
the business…1m
and if i had kept the IP, what would i have made over 30 years of income 140*52*30…220k
over 26 years the business profit 10m
i didn’t retire by 30, nor 40 (private education and an expensive wife made sure of that)
but at 50, i am semi retired, and have a very comfortable passive income.
Now i have time, and cash, to explore IP investments.

looking outside the box?
worked for me
might not for you.

harry

hi pipelinebuilder
I’ll bite yes you can make an income with 2k it just depends how much time on top of the 2k you are willing to put in.
you can get 10 mates together and each put in the 2k you now have the 5% deposit on a 400k property, you then find a property thats posi at 10% moree is a good place to start (its gone but was there 1 month ago) you now have 3% posi income plus a 400k property to leverage off.
you keep it for 12 month and you save the 3%
after 12 month you have 12k this gives you the 5% deposit on a 240k property,
so you find that also try cobar, orange, broken hill again at 10%
and now you have 3% broken hill and 3% moree.
and you keep doing this.
as you have 10 people doing it together the bank will have no problem with serviceability.
after 5 years you will have a very nice little group of properties and then you start to draw out of the properties the equity to purchase the commercial properties or want ever.
I will tell you in 5 years weather this system works because my son is just about to start this system and is 16 with his 18 year old brother, he’s starting with 10k and because its a company, trust structure I sign as unit holder to purchase but he does all the work and runs it.
when he’s 18 he takes the company over,
he already goes to the investor meetings and has a good understanding of how it works, there is a group of 16 year old economics, business and legal studies and each is putting up the same amount and is long term.

here to help

Of course the easy answer is:
There is no such thing as “passive” income. (blah)

In my way of seeing things there are three comodities you can use in varying and interchangable quantites to live: time, money and knowledge. If you have the time you don’t need much money or knowledge, if you have money you don’t need much time or knowledge and if you have knowledge you don’t need much time or money.

If you have $2k to invest to live you obviously don’t have much money, so you will need time and or knowledge. As mentioned before you could buy a business with $2k and spend a stack of time and use some knowledge to build it up so you can sell it or have someone else manage it. If you have more money you could just buy an existing big earning business.

Property isn’t the only way, I would argue the amount of resource I’ve put into aquiring and maitaining my property (not much but hay) certainly fails the “passive” qualifier for income. Same with the shares I’ve owned. There is always paperwork to fill, questions that need answering, managers to fire and so on. So no real passive income (please just go with me on this one), but given a loose definition property can fit the bill. Is it the only way? Heck no. Is it the safest way? Not really, or not necesarily. It is a relatively easy way to make money in the same way buying blue chip shares is an easy way to make money. To make the big bucks (like steve 0-130 in 3.5 years) you need to expend big resources (money, time, knowledge). So: 3.5 years is not much time therefore I’d say big money and/or big knowledge was used. From reading the book it looks like knowledge was the main component (at least initially).

Rambling by:
Surrey.