Right. Where to start.
I'll start at the beginning.
It seems there is a lot of information available in the world to those interested in investing but nothing that tells one how to start at step one. Every book I've read gives no real information and always has the assumption that the person already has an understanding of how investments work. Nothing I have ever read/seen/heard assumes that the reader knows NOTHING.
Let me give you some background here. My husband and I are nearing our forties, have two children, an income that feeds us and pays the rent but that is about it. We have nothing in the way of savings or assets. Not by choice but by life circumstances and ignorance. I want this to change and soon. I fear that we'll be at retirement age and forced to live in government housing and living on a less than adequate pension. We'll have nothing to leave our children and no way of helping them with their own struggles.
So, to where I want to go with this. Does anyone know of a book, website, anything that assumes the person has nothing and knows nothing but wants to?
There also seems to be the assumption that the person even interested in investing or seeking information on how to change their circumstances already has some money to invest or to even buy their first home.
I need help here people. I don't want to try to come up with dollars to fork out to people like Jamie McIntyre to learn all the supposed secrets he has. I want to learn the secrets myself by doing my own research but want to know where to start. I want someone to assume I know nothing, not even the first question to ask, and offer up something for the ignorant like myself. I don't want to read books that tell me how to get the mindset because they tell me nothing of any real value or practicality. I can change my mindset on my own. I want to know how to make money, from nothing and zero knowledge.
Maybe I wouldn't be scared of debt if I thought it had a purpose and would eventually pay off but how do you get the debt in the first place? How do you buy something with nothing? Do the banks give money to people with nothing?
I have no wealthy family members to borrow money from. Some are comfortable but would never loan me money for because they're all too cautious. Plus the have a "do it yourself" mentality. Fair enough. I'd love to but how????
Any help greatly accepted.
You need to develop specific goals for where you are going. No one can tell you what it is as it can only be specific to your own strengths and goals. I personally like the long term buy and hold strategy mixed with some positive cash flow trading schemes to help offset negative equity. This is not suitable for everyone!!!
Only then can you decide what courses to do and what will be a waste of time and money. Many people waste money doing course after course and taking no action. Spending even $20,000 on courses in a year is well worth it if you action that knowledge and use it to make $2,000,000!!!
People say knowledge is power but knowledge alone without action is just a waste of time.
Knowledge plus action is power!!!
There are numerous strategies for investing with "no money down", but these are probably a bit dangerous given that you have kids and not much spare income. If it goes wrong it could be disastrous.
I assume you are interested in property because you are on this site, and there are many books you can read that will give you the "nuts and bolts" of how to start. Some are available in libraries, others (most) you have to buy.
There is also this forum and the Somersoft forum as well to gain valuable info and help, so yo don't need to outlay thousands to get the info you need to get started.
Read all the Margaret Lomas books, Noel Whittaker, Jan Somers, Peter Spann, Steve McNight's (later) books for nuts and bolts.
For inspiration read Rob Kiyosaki's "Rich Dad" series, The Richest Man in Babylon, Think and Grow Rich.
For money management read John Burley's "Money Secrets of the Rich (the seven money steps)".These will keep you going for about a year while you save for a deposit and look for ways to free up more funds for saving/investing. Think about the things that are wants, and what are needs. Once you can distingush between the two and make the commitment to only buy needs it will get easier to find more funds. I won't kid you; it is very hard; especially with kids who are only interested in "wants".
Start with a severe look at the budget and list EVERY expense for the week/month. If you want to email me with this list when it's done I would be happy to help you trim off the fat.
This is critical as with your track record and no savings, it will be very hard to get any finance. Not only that, but as property investor you need to be in very good control of your finances and spending habits.
You may be to access some of the more "fringe" loans such as No or Lo Doc, A.R.M etc, but these are expensive and leave you very exposed with lots of debt. Not recommended in your current financial position.
Hi Nina
Congradulations on wanting to make a change in your long term financial position. If this thought is followed up with determination you will make a huge difference.
I agree with all Marc above has said. You need to reduce your expenditure increase your savings and start getting some cash reserves or equity.
While you are doing this the local library is filled with property investing books with all kinds of stratedgies (most explain the ins and outs of that stratedgy)
What you will find when you are educating yourself is that there are literatley hundreds of ways to make money out of property investing. It is only you who can sift through these stratedgies and come up with a plan of action that suits you, your family, your circumstances, your time comittment and your risk level.
Good luck on your journey. It can be very rewarding and heaps of fun.
Don
Hi Nina
You sound like a very sincere person, and good on you for starting your quest for your family's financial security.
But!!! Just a word of warning regarding advice etc.
Like an awful lot of people starting out, once you sit down and begin sifting through the avalanche of information, you will be bewildered and confused. And as you said, they assume an awful lot about their readers.
Particularly if you are not familiar with all, or indeed any of the property/investment speak that goes on here.
My advice is to find a good financial planner; preferably an accountant, with a proven background in property, who will be able to steer you in the right direction.'You get what you pay for', has never gone out of fashion. The money spent here at the beginning could save and make you, whatever the financial goal you set for yourself. I can recommend a good accountant, in every State of Australia. I will be happy to recommend you to one if would like to email me.
Cheers
pendoHi everyone
First of all thanks for the feedback and the replies. I appreciate the honest answers you've given me.I realise my circumstances are not unlike a lot of others. It's just a matter of sorting through the myriad of information and trying to make sense of it. There is a lot out there and I will continue to do my research.
I have done budgets and expenditure lists etc and really don't have a lot left to play with or save. Our combined net income is only around $55000 and when raising two children that money doesn't go a long way. Without including anything considered non-essential we spend sometimes more than we make. We don't take holidays, don't eat out, we go to the movies so rarely you could say almost never. We just manage to pay the rent, buy food, maintain and run our out of date but trustworthy cars, pay education (public school) and child care fees, utilities, insurances and that's about it. We, unfortunately have to run an overdraft facility (around $4000) in order to meet our expenditures. I often review our insurances and other expenses to ensure I'm getting the most out what I'm paying for.
(This is not a sympathy plea, just an overview of our situation)
I pretty much know where each and every cent we spend goes and how it's being utilised. I have kept books that recorded every cent we spent over a few months and there really was no room to move and we rarely buy anything that is unnecessary.
Fortunately however we don't have any car loans or other loans (aside from the overdraft facility).
My husband works full time (he's changed career in the last four years and is slowly working his way through the process and is on his way to bigger and better things) and I work part time on a casual basis. I realise I could work full time but there are many disadvantages to doing so, the biggest of which would be to my children. The cost of childcare would eat most of my wages away anyway so I can't justify working full time to pay for childcare.
I have goals and each time I think we're getting somewhere some unexpected expense pokes it's ugly head out and we're back to square one.
Anyway, I have many more questions and will have to wait until I can write something that makes sense at some point when I don't have a small toddler running around distracting me.
I would like to reply by email to those who invited me to do so. And will follow up as soon as I am able.
I would love to invest in property, or better still, own a stable home in which to raise my family. One I can call ours and stop paying for someone elses.
Thanks again for your friendly advice.
Hmmmm…interesting….hard to say how this would work with only 55K pa. Here are some quick pointers:
1. Try to stick to one car, or a car and a motorbike, or a car and a pushy
2. Overdraft facility sounds bad, if you can successfully keep to an overdraft facility, you shouldn't really need it.
3. 740/week income after tax (approx.) should be enough to get a PPOR, or IP, albeit a crappy one. HOWEVER, its one way to start…
4. Do u have mobiles, phone or internet with Telstra, insurance with a bank, pay TV? Time to CRITICALLY review….think about ALL your expenses.These are just a few hard truths that I see you may need addressing.
I guess in essence, you may need to calculate down to one figure; how much money can you put towards IP/week???
Finally check out my website…
I do have one question right now.
My father died four years ago. He owned a small but invaluable property (and also another property that he sold on vendor finance) that he had left to his five children. We've been wrangling with his solicitor to transfer the estate to my sister as executor. This is just happening now. There are small regular payments for the vendor finance property being made to the solicitor. The story behind the sale of this property is a long one and I won't go into that right now.
Apparently the small property is in the name of the solicitor and to transfer it to us would incur some expenses. I'm not sure what or how much though. I'm not even sure (and neither is my sister) of all the details of the whole estate as we are still not in possession of all the details)
If the property was to be transferred to his children, in their names, what would it mean for me? Would I still be eligible for the first home buyers grant? I'm even ignorant to how all this works. Is it better to leave it with the solicitor who perhaps holds a trust fund or something.
Any clues for me who is clueless?
Hi Handy Andy
Thanks.We have no pay TV. The cars are both owned outright and really cost next to nothing to run. My husband needs his car for work (he gets reimbursed for all his travel expenses) and I have to transport two children around and get to work. Hard to do with a pushy or using the God awful public transport system in Brisbane.
We have internet phone (minimal expense) and internet access with optus (my husband is in IT and our broadband connection is not negotiable. For him anyway). I don't deal with telstra and intend to never do it again. We have prepaid mobile phones (my husband's employer pays for his).
We have only car insurances and contents insurance. I also have a life insurance policy through my superannuation. My husband is reviewing his.
Can you please explain what IP, PPOR is? I have no idea!!!!
hi nina,
congratulations on being sooo determined… where there's a will, there's a way !!!
I, like you, am in a similar position. We have 2 small kids and I am not working at the moment, however I will be starting up nightwork in the near future as this wont cost anything in childcare. I am a restaurant manager so I can go back to doing that 2-3 nights per week which really helps with the $$$$.. It'll be tough and I get a bit tired and grumpy but I figure it's only for the short-term and if we end up with a great portfolio then it'll all be worth it.. Maybe its worth having a look for some nightwork, waitressing, stacking shelves in a supermarket – it all helps and its only short-term.
I am also a novice and trying to obtain my first IP (Investment Property), we have no cash or assets, however we do have some equity in our PPoR (Principle Place of Residence)… you'll soon learn all the "lingo" after hanging out on this site…
I found this website a fantastic source of information, just remember that everyone has their own opinion about the best way to invest (and there are many different ways and everyone thinks they know the best way…)… the best way is what suits you and your budget !!! Also, the Jan Somers and Steve McKnight books have been fantastic and you can always source these cheaply on Ebay or 2nd hand shops..
We are not in a position to invest at this time, however this time is not wasted as I am continually reading and learning when the boys are napping during the day or after they go to bed at night. Knowledge and research is invaluable, then when you're ready to "jump in" you've already done the hardwork of investigating.. Dont ever give up and think you cant do it…
I've been told we are not in a financial position but I'm determined to find a way, even if I have to get a low doc loan with slightly higher interest rate because I figure if we buy and hold for CG (Capital Growth) then the higher interest rate is irrelevant and after a few properties we can easily re-finance and get better rates…I dont know the "ins and outs" of the legalities of your fathers property, but I'm sure someone will give you some insight and I'm sure there'll be a way you can use it to your advantage to get your first property. Is your husband handy?? Because even if you buy a rundown old shack and renovate you'll soon get some equity and be in a position to get your next IP… We bought a dogbox 2 years ago but luckily my hubby is a builder and we've already added over $100k to its value so this will help us get our next one.. It's the best way to start if you can get into your own place and renovate…
anyway, this is just my opinion from one newbie to another.. good luck
Hi Nina,
I know its very difficult.
You may find someone within this website willing to pay you a finders fee for finding positive geared property. – Please note, I have not done this yet but it may give you some extra dollars to get you started.
All the best
Hi Nina,
I forgot to mention, there may be legal requirements such as being registered as a Buyers Agent etc. I am told the legal requirements (if any) can differ from State to State.
If your interested in this, I suggest you do some more research.
Cheers
Chookai don't know if this helps at all, but the way my wife and save cash is like this. We basically have both our salaries and the rent from both our IP's put into one a/c. We live of our credit cards all through the month. At the end of the month, we pay our mortgages, credit cards and anything else that needs to be paid. The money that is left over at the end of each month gets transfered into a bonus saver a/c which we try not to touch [although life sometimes forces us to!] Once we have enough saved, bang! theirs our next deposit! It sounds like a lengthy process but i think you'l be pleasantley suprised how much you can actually save. Hope this helps and good luck!
I only purchased a IP about 6 months ago although i wanted to buy one just after purchasing my PPOR 5 years ago.
That waiting cost me possible capital growth in a IP like i expierianced with my PPOR. Live and learn.
What finally got me going was dropping in to a few lenders and finding out my borowing power. From there i had a idea of what i had to do plus the investing bug began to bite. Thats just my expieriance.Thank you all so much for your advice and interest in my situation and for sharing your stories with me. I'm very glad I stumbled across this site.
I am determined to make it work and whether it means buying an IP first (I now know the lingo) or not I'm not sure. I have been to one lender to see how much we may be able to borrow and while I wasn't laughed at I didn't come away from the experience feeling any more confident. The amount we could have borrowed would not have been enough to buy even much of a mobile home. I guess one has to start somewhere though.
I'm going to look for the books suggested and also the websites.
When I said earlier that the property my father left was "invaluable" what I really meant is that it isn't, apparently, worth much at all. But since none of us know exactly where it is the real value is yet to be determined.
I have plans to see a financial planner to see if they can offer any help and will watch this sit with interest.
Strangely I was in a better financial situation when I was a sole parent with my first child. I had less income on paper but also less expense. I was also able to access all kinds of things that low income earners (ie those on a pension) can. I worked and studied while I was a sole parent but only part time. Homes were cheaper then too but I was too scared to take the plunge when I was a single person with a child to support.
Now it almost feels like I've left it too late. I have a teenager and a three year old and as anyone with children knows, life is busy. Finding time to research, go to work, and spend time with the family and take care of a household is trying but not impossible.
Thanks too to Chooka for your advice on getting paid a finders fee. I'll look into that!
Hi Nina – nice determined post – it WILL work for you……trust me (I can't quite say that like Governor Schwarzenegger)
There are people that have never earned 55k per annum, and do it with less, so don't let that be a discouragement.
Couple of questions. Have either of you ever lived in a home anywhere that has had your name on the title/you have owned?
If not, the first home owners grant is the thing that will get you on your way, it is literally a blessing for people who have never owned a home before, and essentially will allow you to buy a house 'no money down' depending on how fussy you are and where you live. (ie smaller country town, regional centre, or city – won't happen in the city!)
Also, when you review a loan with any lender, if considering an investment property , the rent counts towards your 'servicing' of the loan. And you can start small. (there are still plenty of properties around the 90-125k in some regional centres, especially Vic, and some parts of tassie, without resorting to buying in ghost towns.
And as a point of interest, how much rent to you pay per week at present?
Answers to those points may give us a clearer picture.
All the best.
Hello nina10
I can't understand why it's taken 4 years to get any results settling your fathers estate and why, after all this time, you still don't know what the estate is made up of. Surely you should by now know all your fathers assets. It may be worth while going to speak to another solicitor. Between the five of you the cost should be minimal.
I don't know if the house that is "not worth very much" is in your area but is it possible for you to live in it (saving rent) and renovate it slowly to increase it's value? Some sort of arrangement with your more financially free brothers/sisters may be possible.
Cheers
ElkaHi again
First of all to answer v8ghia. We currently pay $280 per week in rent which is really very cheap for the inner city suburb of Brisbane in which we live. We have a private deal but our landlord has just had the place appraised so he can increase the rent. We've been here six years and paid the same rent the whole time. The house needs lots of work doing to it and since he hasn't raised the rent we haven't bothered him too much. If he raises the rent significantly however I will be asking him to take care of some things around here.I never thought of buying a house that is not in my own state. I'll do some looking around.
Elka
It's taken four years to deal with my fathers estate because he had a friend of his who was a solicitor take care of things. That friend, after my father died, stopped practicing and bought a survey business instead. He's slow to act and we've requested numerous times that he get things in order and forward them to us. It's taken until now. My sister (executor) is not one to share information readily either. That's just the way she is.
The property is only a block of land. There is no house on it so nothing to live in. It's in the village/township of some tiny farming community near Gympie. Apparently the block is not easily accessible. That's all I know.
If there's somehow I can use any of his estate as leverage I will try to.
Hi All,
Nina – I really hope things turn out better for you in the not too distant future.
L.A. Aussie – You mentioned:
"Read all the Margaret Lomas books, Noel Whittaker, Jan Somers, Peter Spann, Steve McNight's (later) books for nuts and bolts." – Are you able to recommend any specific titles from these Authors? I'm looking to by my PPOR in 1 year's time (and turn it into an IP) and would lke to better prepare myself knowledge wise.Regards,
KenHi Nina.
What is your family (recipients) of your fathers estate planning to do with the land. If you can convince them to sell it then you will receive a cash injection. You may also be able to convince them to put a house on the property therefore having a cashflow from the property. For your investing or PPOR future it is important that you get a solution to this issue ASAP.
Another way to get some momentum on investing is, if you are time rich but asset poor then you may be able to take on a joint venture with another party where they put in the cash and you put in the time. This sort of thing can work for example a purchase renovate and sell, where you both then share in the profit. This profit can then be used for either a deposit on an IP or PPOR.
Don
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