G’day Steve,
Received your little booklet yesterday. I read it last night.
I must admit to enjoying the read. Sad I didn’t learn anything from the chapter. But then I’ve been around for a long time.
I have given the book to a mate who has read your previous two books.
My property adventure is now over. I’m putting every penny into superannuation.
But I am going to buy and read your book number three,
just for the pure pleasure of having a good read.Again, thank you S.McK.
bruham.Steve,
Your insights- no. 4, Is a great reminder that one can not live on debt for ever.The Investors Club uses this system. Hold ten properties, refinancing one property each year. Using your equity to live in your required life style . By the time you have reached no. 10, you just do it all over again.
Michael Yardney of Metropole does the same.Sooner or later the banks will say enough is enough.
When this happens, you have been retired for a number of years
and are un-employable.
You are then forced to start the sell down, so you need to reduce your debt levels and also to live.
Less properties, less debt and less living comforts.
The above sounds tragic.bruham.
Your insights- no. 4, Is a great reminder that one can not live on debt for ever.
Centrelink reckon people can live on net property losses forever.
As they deem a loss as income. It goes against normal accounting standards but I would love to hear from anyone who has managed to buy groceries at their supermarket with a net property income loss.Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Another “GREAT” who says you should live off your equity is
Ed Chan of Chan & Naylor P/Ltd.
You just keep on having your properties revalued and living off the new equity.
The properties are suppose to double in value every ten years (At 7% a year).
So you owe more, but the new equity covers you.
So the ROLLACOASTER ride goes on for ever.
Not for me.bruham.
Sounds scary when you say it like that but I have two thoughts:
1) I can only see the banks calling in your debts when a depression hits and property prices start to fall or stagnate to the point where they start re-valuing homes with high debt-to-value ratios.
2) Surely these plans can be modified to smoothly transition from ‘living off your debt’ to living off cash flow positive properties. Eg buy more than ten and when it is viable, sell down to a few to reduce the debt to income ratio and then have an income for retirement. Surely then the rising rents over the years will increase ones lifestyle the further into retirement you get. Plus you have growing assets that you can leave for your kids!
Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional.
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