- Originally posted by hb:
OK lets try that same money…something different….
2. buy some plant and equipment $100K
HB
You make some very good arguments for starting a business with much higher returns. However, the old adage still applies “rewards are directly proportional to the risks”. Start-up businesses present a higher risk, therefore there are few lenders who would provide the $100k with little security for a new business. However, it is relatively easy to borrow the $100k for bricks and mortar.Cheers
PyramidHB Well my biggest concern is how do you suppose that in your first scenario Mitchy comes up with 100k for plant and equipment???
Commercial loans require 25% deposit, for a premises… if you propose someone is eligible for a 100k business loan could you please tell me how to acquire such a loan as I have a lot of interested clients? (seriously, I’m not being condescending, you obviously have a knack for starting out with nothing)
Look, I’m not against going into business, I hope one day that I could be like you HB… at 23 I created my own company and took a big risk going into business for myself, with something I am passionate about. I’ve been successful, however for the first year and a half I had to work 2 other jobs to pay for the costs it takes to get clients, I am very PRO-entrepreneurist!! I doubt I work 38 hours a week these days and have a great income affording me what I want, but I am lucky. I had a very down to earth mother, and a father who encouraged my business acumen. I was also born with certain talents that were fostered, I have a degree under my belt, and am thankful for everything that has ever happened to me…
You see, I look at my friends and acquantinces, and I’ve seen their misguided efforts at starting their own business, they either have an ability they are trying to sell, or simply came up with a plan one night and started a business… I’ve seen them fail and go into debt. They had no business acumen, they didn’t have a degree in marketing or work experience in the field they went into. Bottom line is, they didn’t know how to make their business PROFIT. There is nothing wrong with the product, they just don’t know how to market themselves, or bother putting money into marketing themselves. I’m not surprised why so many business’s fail, you have to play it so safe, by getting the knowledge and always setting goals, you have to be somebody that NEVER gives up. But a lot of people YOUNG OR OLD just don’t get it, they want a quick buck or they want to do what they love regardless of whether it makes a profit.
That is why I have to agree with property investing. If you do a bit of research, it doesn’t take much to make a lot of money.. in the LONG run especially. Being a mortgage broker I know how much easier it is for everyone, but I have the full respect of the banks underlying ‘risk factors’ and understand in more detail why some investments or higher gearing is a risk.
I’m not saying anyone in this forum is right, or wrong, the knowledge adds value, but I’m deeply opposed to one right solution for everybody. I do however think PI’ing is a realistic way to get ahead, in most cases the bank will require you to have an adequate deposit OR prove genuine savings (the ability to make repayments) to cover their risk, which in turn covers your own backside.
It is true, only a few succeed at business, and only a few really succeed, and that comes down to possibly a combination of luck, but largely, business acumen, and let me tell you, some people will probably never have that, or are quite happy to be employees.
I guess for someone who went into business for themselves is offering a conservative opinion, but that is how I’ve run my business. I’ve never used much credit, and paid to establish myself from working 70+ hour weeks, and let me tell you, it was hard, but also rewarding.
The best advice I can give anybody starting out is to get the knowledge, don’t look for quick answers, investigate, READ, LEARN be OPEN to opportunities that take EFFORT but always push your boundaries and LEARN work HARD. If you go down any avenue with these principles in place, you will have a much much larger chance of success.
Liz
Mortgage Lender
1300 780 826Hi Lizzy
“It is true, only a few succeed at business, and only a few really succeed,”really
from our $800 billion dollar economy …..companies paid $43 billion dollars in TAX……that means they made a profit last year of about
$150 Billion dollars….PROFITcan you tell me which of these “few successful business” are making that sort of money.?
hb
I’m not talking about large companies, a lot of which have been around for a long time. I’m not talking about the companies that provide for the infrastructure of our economy, and I’m not talking about international companies that operate in Australia.
The inference was that we are talking about individuals going into business. I learnt at university that four out of five new business’s fail, there was also some question over the profitability of those that succeeded. And I’ve seen these statistics replicated in real life through observation.
I’m not making a rash generalization here, just pointing out that most small business’s fail, and that’s largely due to the fact that a lot of people don’t have the acumen to succeed, or the personal characteristics to get the acumen in the beginning.
I’m not saying that business doesn’t drive our economy. I’m sorry but you’d be assuming I was completely ignorant if you thought I didn’t know what a bluddy economy consisted of!???
Liz
Mortgage Lender
1300 780 826Oh and please don’t spout another set of statistics at me, I see what you are trying to prove but every picture has another facet to explore. The more you try to generalize a topic the less interesting it becomes for those of us who want to intellectualize and add value to the conversation.
My argument is simply that generalizing that one answer is not always the best answer for everybody.
You must have realized I agree with going into business for yourself when I wrote earlier that I have my own company and run my own profitable business??[blink]
Liz
Mortgage Lender
1300 780 826thanks for all the interesting posts
how ever i think hubby and i will keep saving so we have more money to put into an IP later in the year maybe next.Well done Mitchy…..wise move
as i ran your idea past a financial adviser whos had 24 years in the industry, his reply was exactly the same “tell em to forget it!
save their money and get a decent deposit
brutal as this sounds…..”Hi lizzy…..you right, you win…..lets not get into a arguement about what makes a good investment.
I have NO vested interest in what mitchy should do, only as a concern parent.
You on the other hand DO have an invested interest as you are a “Mortgage Lender”
Mortgage brokers are not financial advisers, and are not obliged to find you the best possible deal………..
i didn’t say that…tthe asic web site “Using mortgage brokers for your home loan” expands more on it
http://www.fido.asic.gov.au/fido/fido.nsf/byheadline/Using+mortgage+brokers+for+your+home+loan?openDocumentyour advice of “There are a lot of new products on the market including 95% investment loans. 100% is available too however it comes at a premium interest rate although it’s usually worth considering if the capital growth will outweight the interest rate right?”
Is that really responsible advice for someone in Mitchy position?
if one has decent equity in PPOR then that advice is appropriate…
but the reality in this suitation….its not.It might pay to read “a briefing paper from the Centre for Credit and Consumer Law, Griffith University and the Financial Counsellors Association of Queensland”
especially the submission to the government for credit law reform.
an area of interest would be….”regulate finance and mortgage brokers so that they do not direct
consumers to inappropriate and/or unaffordable loans”just my little contribution
hb
HB
I find it hard not to take offence at the presumptions you keep making about me.
I never give my clients advice on what they should do or what products they should take over another. I don’t even tell them if they should fix their rates, I just tell them what is available, fiscally what is a cheaper option taking into account factors A B and C. When asked for advice I simply tell them I’m not qualified to give advice.
My quip about the premium rate on 100% loans was just that it was worth considering, and was posted in a public forum for discussion. Even so it offered an avenue for debate, and was ended in a question mark to note that it was ‘worth considering’. Everything is worth considering, if my clients ask me if they should fix a rate, I say ‘it’s worth considering’ then give them the figures so that they can consider it – simple right?
Anybody who hasn’t read the terms of use for this site probably should, namely you HB, before you go pointing the finger from up there on that big horse of yours…
https://www.propertyinvesting.com/tnc.htm#7 namely specific terms of use of content.
I must inform you that I’ve never once received work from this website, a few enquiries, but the biggest time wasters I’ve ever come across. In fact I’ve left this site so many times for months on end until the same people posting the same questions leave, as it literally drives me to insanity. I visit here only for personal interest, and to talk or see what other brokers are talking about. Or to provide a helping hand. My number is only here so people can see that I am proud enough to back up any comments I have with the integrity of my phone number. I could just as easily post here under an alias, but I choose not to.
Thanks for the information about the briefing papers, I am more then aware of the changes in regulations of my industry, and more then happy to see the changes come about. Many of the people I know in the industry are simply not even qualified enough to know how to adequately inform clients of their choices…
Anyway I’m tiring of your assualts, if you have any more gripes about me feel free to call me on my toll free number.
In summary, no, I’m not an idiot. When someone questions the integrity of my business, yes, I do get upset.
Liz
Mortgage Lender
1300 780 826HB you have probably made a point here worth noting. Most people are too ignorant to read the terms of use of this website, or too ignorant to realise that this is a public forum of debate about personal opinion, and not a place to find professional advice.
Backing up my earlier statement, LEARN the answers, READ the information, find out the knowledge for yourself and yes wherever available seek the advice of a professional to save yourself, in my personal experience I have found that any cost in professional advice has saved me over tenfold in costs if I hadn’t sought it.
Anyway, just so we are clear, if there is every any confusion over the nature of my posts please see my footer.
Now if you want to get into a debate about the benefits of 100% home loans, based on completely PERSONAL opinions, lets perhaps take it to another thread as I would be more then happy to discuss the pros and cons with you for the interest of this forum.
Liz
Mortgage Lender
The opinions expressed in this public forum should not be construed as professional advice of any nature.
1300 780 826Quote from Residex newsletter – John Edwards
“As you can see, while all cities are still currently going through the slow period, nonetheless, Sydney has produced three months of positive growth, unlike Melbourne and Brisbane. This is a good sign for the Sydney market, and indicates that a lot of the negative press is just sensationalism. (The latest example of this which occurred just a week ago, was a front page story claiming that the number of loan defaults in 2005 was the highest recorded for a number of years. However, what the article failed to mention was that the number of loans is also one of the highest recorded as well. When you actually looked at the actual percentage of those loans that had defaulted, the default rate is extremely low at the end of a housing cycle – approximately 0.17% of loans outstanding – compared with previous default rates of higher than 2% at the end of other housing cycles.)”
Funny how statistics can be used to support an argument both ways, depending on how you look at it. [blink]
Liz
Mortgage Lender
The opinions expressed in this public forum should not be construed as professional advice of any nature.
1300 780 826“A RECORD number of New South Wales families lost their homes last year as growing numbers struggled to meet mortgage commitments”
Hey HB …. Good point here…. however most people should get familiar with how money works and cover all your risks….
What are the risks with owning yourown house?1.Rising interest rates…..SOLUTION? = Set up fixed interest after you have worked out how many interest points you can afford to risk before you are hanging over the bread line.
2. Job security…. SOLUTION? = Income protection insurance….
3. House burns down etc: Solution? = Insurance
4. Servicability changes due to gambling etc…. just don’t do it!
cheers,
Kiwi[baaa]when i first stated reading books on investing i thought it was going to be so simple
buy a house rent it out done!
what a fool!
from all that i have heard from those who have responded to the forum i almost feel like crawling back under the covers!
why is it when ever you mention to others what your are thinking or planning they get that look on their face like ARE YOU NUTS
why are people so afraid to fail
you never know unless you try and if it doesnt work you learn from it and try a different approach
now this is not to say that ron and i are going to leap in with our eyes closed and hope for the best thanks to you all we now have much more to consider
thanx to everyone who replied your advice may have saved ron and i from leaping into muddy waters!!
[grad]Hi Mitchy,
Don’t be so hard on yourself! The fact that you are planning ahead, researching, writing on this forum… means that you are WELL ahead of most people.
Give yourself a little time and a bit of practice and you will know how it all works and it will seem a lot less daunting then.
I think people are more afraid to TRY then they are to Fail, simply because they fail even in the trying phase??!
Like they say, do your due diligence, cover your backside with insurance, make a weighted decision, seek professional advice where unsure and then you can ask yourself – how high is this risk? Have I calculated in all of the factors?
My philosophy on risk is that if I have a ‘bad gut feeling’ about anything, it means I’m uncertain, or uneducated, and it’s never until I’ve done my research or insured the risk or removed it, that I am comfortable again – simple right?
Keep learning! And Chin UP![biggrin]
Liz
Mortgage Lender
The opinions expressed in this public forum should not be construed as professional advice of any nature.
1300 780 826thanks lizzy your input has been very insiteful
i can only hope one day that it will all fall into place and our futures will be assured
thanks again to everyoneSorry HB Your right
$8k equity [confused2]
And Mitchy ; there ‘are’ many ways around this..mostly higher risk though, In your position I wouldn’t look at them until your financial situation improves.
Our last IP we put no cash into the deal and about $3k into the one before that (deposit).
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorWhile I agree with what HB is saying and think mitchy has done herself a good thing by changing tact, I struggle to see why age needs to be brought up in these sorts of posts?
I make more money than my dad ($120K in an average year) at 25. I’ve been making that sort of money since I was 18. We are both investing together now and will have a portfolio of a combined $1.5 million worth of property. I was in a similar position to mitchy in regards to my parents not being able to give me a head-start as they simply didn’t have the money at the time so I had to do everything myself.
Which leads me to what I think is the smartest thing to do with your time & money — education. Being the best at something is what makes you money, regardless of your age. Find your niche and hit it hard. I’m a software developer myself.
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