I was bought up with a dad that was a business person and has an investor mindset. Although I went to uni and got a PhD it was always drummed into me that my profession was seperate to my business (real estate) and that it is the real estate that makes the money while the profession was a means to fund the cash flow.
I was also bought up with a save to invest attitude and drawing down equity to buy as many properties as possible.
I was not surprised to find that other uni students did not buy real estate like I did as alot of them were young and not financially capable. What really shocked me was to finally get a job in medical research and find very educated professionals living from pay cheque to pay cheque and absolutely no financial literacy despite their nobel prizes and PhD's. Some were 15 to 20 years older than I was and were totally dependent on a pay cheque to the point that they even made comments of getting together for lunch at the begining of the month closer to their pay cheque and not at the end of the month where they were likely to be out of money.
This was such a huge shock to me that I often thought that someone was playing a joke on me and there were some hiden cameras somewhere to gauge my reaction
Before then I just naturally assumed that everyone had an investing attitude!This just makes me wonder for people who were not bought up on investing and who's parents were dependent on paycheques and are now investors, when did the penny drop?
When was the transition made and what was the turnaround point?
I was encouraged to invest. How did others get started?We are now running a property management agency and bringin on 20 new listings per month. This intrigues me. Where are these investors coming from. Certainly in the early 2000's when I was doing my post doctoral research the scientists on big salaries and other educated professionals in the industry were certainly not investors and actually very against it! I was alone
I'm glad there are many around now, but just curious to know what changed!
Hi Xenia,
I don't think that much has changed. The reason you are taking 20 new property management listings per month is becuase "YOU" are doing something right and those investors are not being attracted to other firms, or, indeed being repelled away from firms that are less than satisfactory.
Like you, I was brought up with the investing mindset of my parents. Unlike yours, they were not business people, however they lived below their means and invested in property. I guess being migrants from Greece they arrived ib Australia with little, and they embraced the opportunities on offer here and optimised their salary and what it could do.
Whilst I doubt they ever read The Richest Man in Babylon, the advice and values they instilled in me were right on the money (sic). In fact many of the property investing ideas/tips that my dad passed on to me are no different to those being published by some of the authors of today. Only difference is that the books on offer to us today have a more strucutured message and formula/recipe to the wealth creation ideal.
I also notice in my primary profession that the bulk of my colleagues/peers earn much and spend even more.
Good luck with your property management business.
So who did you work with? Currently, Sir John Cornforth, Peter Doherty, Rolf Zinkernagel, Barry Marshall and Robin Warren are Australia's only living Nobel Prize Winners?
As for all the investors-they all came from TV and Newspaper land where they have read how easy it is to become a millionaire in property
no financial literacy in any sense. my father owned two pharmacies and pretty much invested NONE of his profits. i only became interested in investing (which i am yet to do) simply due to meeting people on incomes 1/3 of mine and owning properties. my mother taught me how to spend without any caution!! even in her tender age of 70, she still enjoys spending copious amounts of money "touching up" her house..
I had no background in investing, my parents rented the same house for 26 1/2 years. i decided that would never happen to me.
so far i have three blocks of flats returning around 15% PA, which i am happy about. i have made some good decisions and some bloody awfull ones.I am a bit concerned with the current market, and i am very wary about any get rich schemes, or buy my book or system for your own financial success.
Recently i heard some horror stories about a QLD based "guru" who has moved into house and land developing using those suckers who watch his late night infomercials. he makes all the profit and you carry the risk, there are lots of investors who still are runnnig at a loss in the Gold coast/Brisbane which is as a direct result of his marketing.
My only method of sourcing properties is to have a realestate agent(s) who will ring me when a good deal comes across their desk. this i got from this site.
Thanks
You know that old fable about the ant and the grasshopper? The ant working hard gathering for a cold winter and the grasshopper playing all day and is left with nothing.
I was a grasshopper for the first 40 years of my life and came from an immediate family of grasshoppers, however my extended family has some cunning investors amongst them.
My father was in banking his whole life, (which bank) and my mum was a paymistress at several local factories (both retired). In all our time growing up I can't recall a single lesson being given in financial affairs. Occasionally my mum would offer some tidbit of advice. So I grew up in a state of ignorant bliss when it came to money and boy did it come round and bite me on the bum several times. I've only recently learnt that mum and dad are pretty crap with money too – they hide it well.
When I left school at the age of 16 in 1980 I started working in the Film Industry. All very glamorous so I thought but most of the people I worked with didn't know a bloody thing about money either (except how to spend it). To make matters worse I was freelancing. I'd only work about 8 months of the year and got paid quite well. Now in those days the banks looked at anyone who didn't have ongoing full time employment like a leper. I actually had to get my father to go guarantor so that I could get a cheque account to pay bills. I had to jump through so many hoops just to get a credit card, which didn't happen till I was 25.
So I earnt a lot and spent a fortune. I shudder now sometimes when I think of the money I used to earn and have nothing to show for it. During this time I watched my best friend buy his first house in the western suburbs of Sydney. We were both 20 at the time and it seemed like such a grown up thing to do. He even moved back in with his parents to save dough. Wasn't I the fool when he grew his portfolio into 4 houses within 4 years.
To cut to the chase of this thread, I continued to live from week to week for many more years until 1999. The penny dropped when I realised that I'd be living in rental accomodation for the rest of my life unless i started taking control of my finances. I just couldn't go on being 18 years old forever and a day. One morning at work I happened to have a quick meeting with Phil Ruthven (from IBISworld – a social/financial forecaster) and I got a quick introduction into financial salvation. Phil basically said, it's not too late and get off your backside and take an interest in your future. The idea was to still rent and set aside a certain amount of each paycheck to invest in managed funds, which started to do.
Then I met my wife to be and I cashed in my shares so that we could buy our PPoR in 2002. Feeling rather pleased that I'd gotten on the property ride at last, I sat on my laurels for a few years. In 2006 my brother wanted me to show him round some suburbs of Brisbane (where I'd lived for 5 years) as he was keen to buy an IP. He flicked me a copy of API and I've never looked back from there. I devoured as much information as I could get my hands on and started asking lots of questions. I have several friends and relatives who've made some smart moves in property and I've singled them all out for mentoring.
At the age of 45 I'm a bit of a late starter but my goals and dreams are realistic (not aiming to be a multi millionaire) and the hard yards required to make investing work are all ahead of me but I'm ready and prepared for the challenge. Best part, I take an active and keen interest as to where my money's going and how it's working for me. I can't wait till my kids are old enough so that I can pass on as much as I've learnt to them so that they never have to walk around in a state of ignorant bliss.
Oh and just for a bit of trivia, the house in Brisbane my brother was interested in back in March 2006 was located in Woodridge and was priced at $164k. Being a novice and and a tosser I told him "who'd want to live here, it's the pits, you're asking for nothing but trouble". He didn't buy it in the end and he keeps reminding me every week that most houses in Woodridge go for over $270k now. Yep, still making mistakes but learning every day.
Also from a paycheck to paycheck family. The first unit we purchased was our PPOR when the FHOG came in and why?……because the repayments were less than the rent we were paying an an adjoining unit (+ve cash flow…..whats that?!?!?!). The second, purchased 6 months later and in the same complex, was because my younger sister was coming to uni and it was up to me to "keep an eye on her" and when she got 2 friends, again the rent more than covered the repayments. I recall thinking wow, we have an investment property. Did not know anyone in the family, either side, who had done same so were a bit smug, and I actually recall thinking "dont be greedy…that will do" and went off and bought a car, holidayed etc. Then came the boom (laughed everytime someone purchased in the complex for more than we paid….little did we know!), and then value of our properties more than doubled.
Now with some education about property, I think back to all the places we looked at when we bought the first one, all were +ve cash flow, as my criteria was simple, repayments had to be cheaper then rent. I wish in hindsight to have had some advice hat would have guided us. My mission now is to ensure the next generation in the family at least knows this is a possibility.
Gee, you know……if only I had bought them all.(all now more than double, some 3 times their original price)….I think there could be a story in there somewhere!!!!……..LOL
Cheers
TammyWhen I brought my first paycheck home in 1980 I had $88. Was very excited and showed mum who turned to me and said "Your father makes around 11 times that amount each week" I immediately asked "where is our Mercedes then?" They spent all that they earnt every week. Dad encouraged me to buy my first car on Hire Purchase! Needless to say I carried their spending habits until I was about 35. Then I was introduced to Robert Kyosaki etc. BUT I still didn't really believe in my own ability to perform and be rich as was demonstrated when I was 38 and standing behind my car arguing with a repo man who wanted to take it there and then! It was at that point that I realised I desperately needed to change my thinking. 43 now and life is really looking up. Even my bank manager personally calls me to check if he can help with anything nowdays! Wealth is a mindset, change your mindset change your financial position
My parents came from poor families, however my dad was one of the first in his generation to get a university degree. Through my parents sacrifices including unrooting an established life to come to Australia, I gained the benefit of growing up in Australia and getting a uni degree myself, and now in a stable job. My parents were strong savers and lived modestly, however as investors they had mixed degrees of success.
Growing up there were no strong mentor figures or role models who advised me to get into business or property, however my parents did buy some property, and in fact helped me buy my first property at the age of 18. I was holding down 3 part-time jobs at one stage while in uni – the usual waitering jobs. I've always been a dilligent worker(1st job at hungry jacks at 14) and managed to save up along the way.
That first property was a basket case for the 1st 7 years or so I held it. It was literally the cheapest house in the cheapest suburb in Perth at the time, about $55K in 1991. But I managed to squeeze out a 2-lot subdivision , and the area underwent urban renewal, then of course the Perth boom unfolded.
From 1996-1999, I was in a dream job however I lost my savings to share speculation and a bad bout of casino speculation. I was virtually cash broke. It was such a waste of money, and more importantly the time wasted was such an opportunity cost towards greater things I could've achieved. Anyway….the saving grace was that I learnt these tough lessons early in life…
After that first purchase in 1991, I did not buy another property until nearly 10 years later, something I regret. It meant missing out on the Melbourne boom around 1999/2000. However since then I have aggressively invested into property, and have made the most of my opportunities in the last 2 years. I have virtually trained myself to absorb every bit of info about property investing in my spare time. It is a passion. I sat down this year and made a skeleton plan with some unbelievable targets, don't know how I'll get there yet however it's a compass to know where I want to get to. I hesitate to say what it is, however since there is anonymity, my property plan is called "$40m at 40". The $40m is gross market value of property. I am 34 now, and control just over 10% of that figure currently so the foundation is there…dream on I know, but heck I might as well dream big. 6 years, with some natural compounding along the way, is what underpins it.
In closing, the self-help and motivational books are all there to unlock one's potential, there are not many "money secrets" left unpublicised so it's down to applying the small cachet of them that works for you. And the self-visualisation and actualisation of dreams and goals – "imagining yourself getting to that place", really does work.
I should correct myself and say my parents were always property believers and instilled in me that buying property is a great way to build wealth. So I realise they are in fact role models to me there, and got me the break when I was 18. My dad said something to me this year that I never knew – he said that in Chinese circles, our clan(or dialect group), is historically poor and uneducated. However, there are two things they strive for despite the odds – 1) to give their children a good education, and 2) accumulate property. When he said that, another few pieces of the puzzle to my genetic makeup just fell neatly into place.
Envy's not an attractive emotion, but I admit to feeling a bit envious as I read some people's upbringing stories. How lucky to be raised by parents who understand investment.
I'm the youngest of 7, born to very loving but financially unsavvy school teacher parents. They were very careful with their money – they had to be, with so many kids and such low incomes. Though I never went without, I do recall that some school camps were missed and new clothes were rare as my parents struggled to put us through private schools.My mother showed some initiative, buying land when single in her early 20s and newly migrated. It's that land that enabled my parents to build a large enough home. But there were no IPs, just a few managed funds with pathetic returns. I was very conscious of money, or lack of it, from a young age which is probably why I set up my own little business as a 10 year old, pet minding, dog walking and garden watering. I was determined to be self sufficient and – being an animal lover – I had acquired a menagerie that needed income for their care.
My initial interest in investing came in my late 20s, largely through a painful separation and subsequent stupid decision in virtually giving away a beachfront (yes, you read correctly) property to my ex. But good comes from bad sometimes, and I started to seek ways to earn income other than my 9-5 job, interesting as it was and still is. I started to read books, articles and anything I could lay my hands on that might educate me.
Unfortunately it took me a long time to act. I bought a PPOR with my now hubby in 1997, but it wasn't until 2004 that we started to buy IPs. Now 42 and – like others in this thread – have set goals and staying focussed in a bid to achieve them. And I am intent on enjoying the journey towards achieving them – investing can be hard work but it should also be challenging and fun AND not all-consuming. Life is over before we know it, for some much sooner than is fair. One saying that I remind myself of often is "You can always make more money but you can't make more time."
Despite being a late comer to investing, I have no regrets about what I did instead in my 20s, which was to travel widely around the world. Those solo experiences in remote lands are what have shaped me and I fully recommend to any young person to experience the world before tying yourself down with mortgages and other responsibilities. You will never have that time again, with the energy that 20-somethings have. Travel does give you a wider perspective on life and priorities, and also builds self confidence.
My wonderful hubby and I still travel, but our journeys are now partly funded by rental income. So we are slowly starting to reap rewards for our efforts. It's good to also have the funds to support my elderly parents, some charities and the occasional friend in need. Without wanting to sound like Pollyanna, it is a privilege and good for the soul to be wealthy enough to help others.
Good luck to all of you on your journeys, and thanks for sharing your stories.
Carlin
Before then I just naturally assumed that everyone had an investing attitude!
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