Hey guys, first time posting here, I'm 18, turning 19 in December.
I have taken a year off of school to save money for my first investment property, in 2 weeks I will have saved $80,000 ($50,000 of that I saved myself, Dad is chipping in 30). I still have another 8 months before I start uni in March (studying law) it will be a 5 year course and after that I plan on doing a postgraduate degree which will be another year. So that's 6 years without an income (or at least not one big enough to save any money).
I am currently working on starting 2 small businesses, they have the potential to bring in a bit of money, not lots though (small amounts, nothing big). I also want to buy some stuff after I've met my goal (clothes and stuff) but if I have time, I will evaluate my position and might look to save another 10 grand before I start school though I do want to take some time off before school.
Any suggestions/tips for a newbie investor, how can I best handle my situation? Thanks guys..
PS wealthy to my (really just a good goal), is like a net worth of about 10 million, which would give a salary of $900,000 a year.
As you are looking at being at uni and being based I assume in the one area, consider the possibility of something that will make good student accomodation. You can manage whilst you live there and will have an ongoing investment. Check of course with an accountant, but if it obviously your PPOR prior to any rent, then you have 6 years after it becomes a rental without paying CGT if you sell. It would be a very unique situation to be in and one well worth taking advantage of.
By the way, a HUGE congratulations on what you have achieved so far. There are not many at your age with your frame of mind. I look forward to hearing of how you retired before you even finished uni!!!
MickForget uni!
Now that I am old and have the benefit of hindsight I wish I just left school and started earning money straight away and investing. If you can save $50,000, then you are doing well and could continue to do so.
If you really like law you could get a job in a law firm as a paralegal and study while working. you can study law via distance education (eg. UNE where I am doing it and the LEC at Sydney uni). Finishing law will result in a good salary, but 5 years of not earning much is a long time. And remember the benefits of compounding – the sooner you start saving/investing the better.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I agree with Terry on this one. I went ot Uni straight of school and wasted 3 years. I am now "more mature" and studyng through distance education (I'm in 3rd year). It has been the best thing. This gives me so much flexibility. It really can be done quiet easily if you want too. Imagine where you could be in 6 years from now if work that whole time.
Most Uni's will tell you, you can only do 2 subjects a semester – so become an associate student at another Uni and get credits (this has been done by someone I know). This is how you can do the full load and not take 10 years to get your degree.
Well done, and good luck with your decisions.
JLAusstudy
If you are planning on getting Aus study you may have it reduced by any negative gearing loss as Centre link regards a loss as income for working out your income level for the Aus study. I invested in a property just before going to university and this was what I encountered with centre link. Also if you sell for a gain in the financial year you were paid Aus study you have to pay some of the Aus Study back as the capital gain is also regarded as income even though a capital loss is not regarded as income loss.
I went to university and wasted three years as a mature aged student and another three years as no one employed me after I graduated , so I have just finished learning how to drive an 8 tonne truck so I can get employed as a bus driver. You probably are in a better position as far as the market goes to go to university where as I missed out on 30% a year growth in property per year (2001 – 2004) . One thing that was annoying was I couldn't borrow more money as I didn't have a job or income while at university and saw the property rising in value.I good stratergy to build wealth from the bottom up, is BUY, ADD VALUE, REFINANCE.
I'm with the student accomidation idea, buy a large house with lots of beds, renovate as a student house, communal kitchen, bathroom, maybe furnish the rooms (opp shop is enough), rent the rooms, and manage the house while at uni. You can then use the increased equity to repeat the process by borrowing equity, as your next deposit.
Your main concern is having an income to service the loan while at uni. You could try a positive geared property but , where do those exist?? some people can find them, but most are created?
Read as much on property as you can, try peter spamm for value adding!
Good Luck, set your sights high and you will always go far!!!
Congratulations on a fantastic start! I suspect someone with your drive isn't going to need uni. Focus on building those entrepeneurial instincts! Do uni if you really want to, but I'd also recommend reading things like 'Think & Grow Rich', 'The E-Myth', 'Richest Man in Babylon' and lots of those other classics.
jkmtOh wow, thanks guys really didn't expect this much help really great stuff.
About Austudy and property purchase: I am planning on buying a warehouse or a shack, it will be positively geared, it will be in the ranges of $300,000 *(edit)*, I will also be buying the property through my Dad through the Family Trust so I will still receive Ausstudy.
I like law, but yeah I will definitely be at a disadvantage with not having an income for 6 years. I can earn $200,000 straight out of uni in America (my sister also does law and a guy said you can do this, with the right extracurriculars, which I can get no problems) so I'm sure you can do as good as in the UAE where I want to go. But I have no ideas what I want to do besides law, 6 years is a long time though mates.
Thanks so much again, James.Hi
Getting a uni degree is about providing choice in the future. I have a client with net worth over $3 million who is frustrated by the fact that he never did get a degree. It shows commitment – and helps lateral thinking.
I worked three jobs when I did my undergrad full time.
You can do it if you have the motivation – get a law degree and do your MBA and you could be earning $ 2mill a year as a CEO – go corporate not legal firm.
Think of the investment portfolio you can build with that.
Congratulations on your commitment to date and your achievements to date.
Wealth Accumulator wrote:HiGetting a uni degree is about providing choice in the future. I have a client with net worth over $3 million who is frustrated by the fact that he never did get a degree. It shows commitment – and helps lateral thinking.
I worked three jobs when I did my undergrad full time.
You can do it if you have the motivation – get a law degree and do your MBA and you could be earning $ 2mill a year as a CEO – go corporate not legal firm.
Think of the investment portfolio you can build with that.
Congratulations on your commitment to date and your achievements to date.
Thanks, that was the plan, I am doing law with a business degree also, then after that I want to do my MBA at Harvard or Cambridge. How can I get into the corporate scene, sounds interesting? Thanks bud.
southeastoz wrote:Wealth Accumulator wrote:HiGetting a uni degree is about providing choice in the future. I have a client with net worth over $3 million who is frustrated by the fact that he never did get a degree. It shows commitment – and helps lateral thinking.
I worked three jobs when I did my undergrad full time.
You can do it if you have the motivation – get a law degree and do your MBA and you could be earning $ 2mill a year as a CEO – go corporate not legal firm.
Think of the investment portfolio you can build with that.
Congratulations on your commitment to date and your achievements to date.
Thanks, that was the plan, I am doing law with a business degree also, then after that I want to do my MBA at Harvard or Cambridge. How can I get into the corporate scene, sounds interesting? Thanks bud.
The "corporate scene" is just a job like anywhere else. To reach these hieghts you just need to build your career profile by working in a number of larger organisations, honing your business acumen and recognising and seizing opportunities. You have the raw materials by the sounds of it – you just need time and practice now
Good luck
Daedalus
southeastoz,
im in a very similar position, first year uni actually (banking and finance) and i think to myself, why am i going to uni.
1) keep my mum happy and proud
2) id like my kids to do well, so ill set an example
3) i want a degree next to my name, alongside my billionaire portfolioi have a girlfriend (were tight, not like other teeny bopper ones, so we plan on staying together foerver, haha)
next year we will have saved 50k together, and are looking to by in the north-west-suburbs of victoria (<10k to cbd)so i did a feasibility study (which 99.9% of kids from uni have no clue about) and worked out we would have a NET worth of 176,000 (if the property sells and has achieved a 10% av. growth w. int rates at 9.5%), providing we pump 40k (combined) into our property over 3 years, by the time we are 22.
then i get stuck, haha, i think should we buy the house we want to live in at 22 (and rent it for 4-5 yrs) before marriage, and either
a) keep the other property and take out a LOC to purchase the house (which will be 600-650k by that time. (nice 2br townhouse in pascoe vale or essendon) or
b) sell the first house and (use 70k for wedding) and put the rest on the mortgage…..but by that time we would be out of uni and earning roughly combined 100k.so confused…..
Hi WealthyJvd,
Sounds like you've got your head screwed on right, congratulations.
In my experience, the houses that I've bought as IP's are NEVER places that I'd live in myself. The qualities that make a good investment don't usually overlap with the qualities that make a nice place to live – especially if your investments are CF+. And if they are of course, you could use the excess funds to help pay off your PPOR.
Your situation reminds me a little of when I was studying. I would usually start to question why I was at uni about this time of year (as the end of year exams approached – I was generally under-prepared
). It also reminds me of the amount of time I spent theorising about what might happen years down the track. My degree is in Mathematics, so there was no shortage of financial models and projections…Anyway, the thing I've learnt since is the only thing that really counts is that you make a definite first step. Invest in something. Your plan will certainly change soon after you begin, so don't stress about two or three steps down the track.
Just decide what your first step will be, make it happen, and get back to your studies
Daedalus
If i was in your shoes, I would stick to uni and get a p/t job as a clerk or similar at a law firm.
Things happen in life and can be unexpected. Having the degree gives you not only a piece of paper but also many opportunities in the event things do not go your way and you need to find a job. I have completed a combined engineering/business degree last semester and I am currently touching 6 figures income. Could I have done the same without my 5.5 year degree? I believe so. However, the degree has given me a foot in the door and many opportunities in both IT and finance industries. Sure, people like Bill Gates, Zuckerberg etc never had degrees. So too are many people who can't afford the basic necessities.
In regards to investing, banks would be looking at whether you have income to service the loan. Having a p/t will undoubtedly be a benefit but it is important to see how well can you handle the workload? You mentioned you want a $200k job in the USA and complete a MBA at Harvard. My gf's friend graduated from Law at UNSW with first class honours. She is registered in Australia, UK and USA. She is currently working in Hong Kong at one of the best law firms doing 13-14 hour days and getting paid only about 10k more than me. You will definately need to work just as hard if not harder than her to acheive $200k and Harvard acceptance.
If I was in your shoes, I would dump the money into a high interest savings account and not touch it for x number of years. When you graduate and want to pursue a masters at Harvard, you will need $$$$ and not be bogged down with mortgage repayments as a MBA will not be cheap especially at Harvard.
I admire your ability to save $50k in one year. It took me a bit longer to do that which I used as a deposit for my first IP. However, my goals are different to yours.
Hey southeastoz,
Im coming to the end of my third year of Bcom/LLB and am in the same mind-place ur in. Congrats on getting the deposit sorted out. But i rekn being a student and being this age, we only gonna have it this good for a few more years so y not get the travel bug? Im goin on a 3 month trip with some mates next year … cos like one of the guys said above we r going to b working ridiculous hours to make a few extra bucks than those who didnt even commence a degree, so why not enjoy being young while we can!!
Also an MBA at Harvard is pretty extreme to get into … the Melb uni MBA is one of the best in the world and a lot less pricey, plus u wudnt have to drag your gf along to all the dweebs at Harvard
Def a good option to get p/t work during your degree in the legal environment to set u up for getting articles or whatever u plan to do after. But id say hold ur dough until ur settled with that killer job and dont have to worry about a vacant IP
Regards
reviving an old thread.. and Daedalus you are so correct.. just get the first step down and not worry about the rest, as it will change.
well i got a house in Frankston (not <10k from the city as wanted) i have renovated it (never intended on doing a complete reno) and now im looking to develop it or buy somewhere else.
completely different to what i had originally thought of.. but 2 years later. i am a very happy man with big dreams!!
It is amazing how many people I know, clever, innovative people, who are perfectly capable of being great in a role, but cannot GET the role because they don't have the bit of paper. Doesn't matter why, apparently that is the entry ticket. So get the bit of paper. Go to uni.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Read Robert Kiyosakis book: If you want to be rich, dont go to school. It was my favourite book until i read Steve's 2 investing books.
Trust me, just read it
Hi all,
I think there are jobs like DR, lawyer etc, that if you are passionate about the role and want to do it, cool go to uni. There are plenty of other ways to earn money and job roles that will earn a lot of money if you do not have "the piece of paper". I have studied a couple of subjects (thanks oua). But I am sooooooooo glad I didn't waste 4 or 6 valuable years doing something that I may have come to hate after studying all that time or turning my self into an "educated" person. I don't know how much you can actually learn about making money in Uni, but it doesn't seem to be much. I've learned and earned much more through working and living.
Study if you love it and are passionate about it not just for the piece of paper. I know people who earn six figure salaries who didn't need a bit of paper, just motivation and ambition.
D
DWolfe | www.homestagers.com.au
http://www.homestagers.com.au
Email MeThere is basically four ways to make it to the top of the corperate ladder;
1) Work your way there over twenty or thirty years. (Possible for yesterday's generation, but not so much today).
2) Spend X number of years at uni getting a piece of paper… and then spend a bunch more years working your way up the chain.
3) Start the company from scratch and build it. (My preferred option)4) Buy an established company and make yourself the MD / CEO.
). It also reminds me of the amount of time I spent theorising about what might happen years down the track. My degree is in Mathematics, so there was no shortage of financial models and projections…
(My preferred option)You must be logged in to reply to this topic. If you don't have an account, you can register here.
