Hi Nina,
Why don't you go for a drive some time and have a look at the block of land? It isn't far from Brisbane by the sounds and then at least you know what you are dealing with. Perhaps too it may be time the solicitor told the neighbours to clean up their mess. Having rubbish dumped on it sure won't improve its value, and therefore wont help you in the long run. Be politely persistent with your family. I am not keen on confrontation but have learned that noone else will look after my interests as well as me, so I have had to learn to be firm and open my mouth, repeatedly if necessary, even if it means some short term feelings of discomfort.
If you stay motivated you will make progress toward your goals. If you want it enough you will find a way. My husband and I have aquired 3 properties and a decent share portfolio in six years, from nothing and on a lower income than yours. We have 2 young children, we work very hard renovating, rarely have a weekend off. My son was imitating power tool noises before he could speak! But we have averaged $2000/week capital growth over that time which is far more than we could have earned at a job let alone saved. I have to add, we were lucky that we went in at the right time for our location and I would not expect things to happen so quickly in the near future.
Just a thought, be careful to consider how much your family tax benefit (if you get it) will be affected by your working more hours. I checked and found that I was losing 70c for every dollar not including childcare so decided it wasn't woth missing out on the time with the babies. Maybe look at sorting out your father's estate as a priority to secure a deposit (combined withthe first homebuyers) and in the meantime start saving a set amount each week into a higher interest account so that when you are ready to buy you have evidence of a savings history. Banks like to see this for a loan. If you do this as an automatic set-up you will probably find that you survive with what is left. And get rid of the overdraft thing asap.
Best of luck with your plans. Let us know how you are getting on.
Louise
Hi Louise.
Wow. You really did do well to get so far. I love to hear stories like this because it just reassures me that it it is possible. You're right though about getting into the market at the right time. Properties are much more expensive than they were only a couple of years ago. By the calculators that I've used which are outlined in all the books I've been reading we could only borrow up to $195000 (that is with a deposit which we don't yet have). What we have to do is get saving and find a property in that price range. My daughter has only two years of highschool yet and does not want to move away. My husband just has a new job which is his dream job and will eventually earn him more money. If we move to a place where the properties are cheaper we have to uproot everything. We have to decide whether to buy an investment place elsewhere and hold onto it and sell later to buy what we want or move. STill, it's not going to happen overnight. We've got a lot of work to do yet.
I did look into the loss of family payments. When you work more hours you earn more money meaning you lose more family benefits which also means the CCB percentage increases and you're paying more for childcare. To work more hours somewhere through the day would mean working just to pay the childcare fees and we might in fact be a step backwards. I'll try to find something at night. I'm already feeling overwhelmed because life is already incredibly hectic!!!
I am not prepared to push the issue of the block of land yet with my sister. She has plans to see it sometime soon (she lives less than an hour away). Once she feels able to tell me the location of it (she is not exactly sure either yet) I will take a look myself.
I have been looking carefully at our expenditures and am working on developing a strict budget but don't know how much room to move there is. We already live very carefully. I have an automatic deduction set up to an ING account and have had for some time. Problem is though each time an unexpected bill comes I have to draw on it.
I'm looking into perhaps buying shares as a savings plan in the short term but not sure if this is the way to go either. I have invested in many books (all bought second hand) and am reading up a storm. But as you know, with kids there's very little time left in each day after going to work to do anything too productive. My son is an extremely demanding three year old and can't cope with me doing anything that doesn't revolve around him! He is very cute though. It just means I can't do much with him around that requires concentration. While I'm doing that he's usually doing something dangerous that is likely to cause a permanent injury such as building a ladder using the cushions off the lounge which topples over and means he conks his head on something hard …you get the picture…. Ah kids!
I have plans to eventually talk to a financial planner (still in progress of finding the right one, hence my request for advice from Pendo) to help steer us in the right direction and give us something to get started on.
My teenage daughter seems to have some unexpected school expense each and every day. Sporting events, excursions, book hire, camps, new school shoes, bus tickets, stationery…each time I think I've made progress we seem to take a step backwards. It's very hard to budget for all those things that you are not expecting. The schools rarely give you an expenses list at the beginning of the year. Then the kids get sick and need a doctor – more money. Then they need medication – more money. Then they break something like the car door handle which means no one can get into the car – more money…but that's life and I wouldn't want it without them.
Anyway I'll keep you posted on my progress. So far this week though (fingers crossed) I think we've managed to save around $100 dollars by being conscious of exactly every cent we spend.
Nina,
I laughed at your description of life with your 3 year old. Mine are 2 and 4, so I can empathise. There seems no limit to the bad things they can find to do in the minutes you are either in the shower, the loo, answering the phone etc. You've done well to write a few coherent paragraphs here! I actually have found that I really enjoy reading finance/investing books etc (a little bit at a time) as it gives my brain an escape from Mummy land. Don't be too hard on yourself if you are not able to buy something right now. It is easy to feel like you are being left behind but new opportunities will always arise. You are already creating a different path for the future by thinking about what you want and learning ways to get there.
In my view (and plenty of others it seems), we are at a time where property is generally expensive (compared to wages) and interest rates are trending up. If people are struggling to afford entry level houses now, any steep increases in price in the near future seem unlikely. I am not an expert, if such a thing truly exists but I recall my parents sold a house in 1991 for $120k. We bought a similar house 3 blocks away in 2001 for $86k. Now it is worth $300k. Wouldn't be surprised if it is still worth only $300k in 5 years.
Shares have the advantage that you can start investing with a smaller amount and if you want you can get a feel for 'good debt' using a margin loan to increase your holdings. There are some nice big solid companies (blue chips) that pay a good dividend at a rate better than an average rental yeild. When borrowing, interest to buy shares is deductible against your regular income (though always check that kind of thing with the tax office as I am not qualified to say!) so you pay less income tax. The most difficult thing for many people seems to be coping with their fear of the normal volatility, that is the prices bouncing around, because it is so easy to sell shares when you get nervous. And hence lose money.
It won't be too long before your son is school age and maybe then work would fit into life better. If you spend the next 2 years getting a deposit together, making plans and learning all you can it is not time wasted. Though I don't want to offend any financial planners out there, it seems to be largely a sales job where much of the advice offered is restricted to the products they are authorised to promote/sell. There is a place for their services but the more you know before you go the better you will be able to consider their advice and recomendations in the context of your own needs and circumstances.
Good Luck,
Louise
kenzel wrote: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,
KenSorry to take so long to reply Ken; I just re-read this thread and saw your question.
The answer is; read'em all!!
Google all the authors and /or titles and you'll find them. All the above have their own websites (not sure about Pete Spann)Nina,
As V8 said; you can apply a certain portion of the rent towards your loan servicability, and you can start out small in purchase price.Another point; do you have to live in inner-city Brissy? Can you move out a bit and shave off $50 or $80 bucks a week on the rent? This is hard yards I know, but it may be worth it.
Hi Marc
We only intend to start out small but right now we're starting from zero so I want to do as much research as I can before I take any leaps.
We don't have to live so close to inner city Brisbane but when I moved into this house it was on the expensive side but I shared with my sister (my then young daughter also) and half the rent was small. My sister bought her own place, I got married and had another child. The rent here is even cheaper than some of the other outer suburbs right now (aside from way out of town) so we've been hesitant to move unless forced to. If we move to a suburb miles away from work and schools it will be like moving out of Brisbane all together as my daughter would need to change schools and she only has two years left so I'm hesitant to do that to her. Plus the small savings we might make would be chewed up in travel to work. The rents aren't so much cheaper that it will make it worthwhile. I've heard of people paying more than us in places that would require a 40 minute drive to work. It's one of those catch 22 situations.Hi Nina
I develop websites for a living and would love some assistance. If you can write (which you obviously can!) then you can do it. it would be some extra pocket money for you on a regular basis. Email me at rebecca19 @ optusnet.com.au and we can chat (remove the spaces in that email address).
I'd love to assist you (in a very small way) in buying your home.
I'm yet to buy my first but am working hard and aiming for next year.
Good luck!
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