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The Investors' Thread (pg. 6)
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| eRRaTiK |
Being a student is great. Especially if you're still living at home and work a part time job or get government assistance at the same time. Best time to get a start on investment. I've heard of many stories of young Australians owning multiple investments by the time they're 25. If only I knew about all this when I was graduating high school, I'd be set by now!
Australian Property Investor magazine is doing regular profiles of such successful young Australians. Very motivating! |
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| pkcRAISTLIN |
| quote: | Originally posted by eRRaTiK
I scored 492 days.
Still got a lot of work to do though. I'm far from being financially free ;) |
oh, so the score = days. i getcha. well, i think that's not true then. coz i should at least get half a year, which is basically the amount of capital gains i have made in comparison to my salary.
good for you anth! the property magnate!
lol @ gumble. im sure taking a nice, boring job in nice, boring canberra will help you out there ;) |
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| eRRaTiK |
| quote: | Originally posted by pkcRAISTLIN
coz i should at least get half a year, which is basically the amount of capital gains i have made in comparison to my salary. |
That's good mate. As long as it can be realised and your spending/expenditure doesn't exceed any income that can be generated it. Capital gains is a paper gain, unless you can turn it into liquid (ie. cash) it's not going to do much in terms of lifestyle. Of course you're probably thinking of leveraging that gain into other investments (which is the way I'd go).
I really do need to track my spending better coz for the past 6 months I've been living beyond my means, though I haven't got a great deal of consumer debt. Thank goodness. |
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| pkcRAISTLIN |
yeah, but capital gain is good for leverage additional loans for investments :)
i fail at maintaining my expenses. all i really worry about is paying the mortgage, as long as i can do that im happy! |
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| eRRaTiK |
| quote: | Originally posted by pkcRAISTLIN
yeah, but capital gain is good for leverage additional loans for investments :) |
I knew you'd say that ;)
| quote: | | i fail at maintaining my expenses. all i really worry about is paying the mortgage, as long as i can do that im happy! |
Yeh that's the way I was thinking before too, but once you manage your money man it can help your investing exponentially coz the money you don't waste is money that can help you pay down debt quicker and take years off your mortgage. It's amazing what $20/week extra into mortgage repayment can do!
Trying to understand trust structures at the moment before buying my second investment property in the Sunshine Coast, QLD. This time I'm going in with a mate, and we're planning on buying multiple properties together over the next 5-10 years, so structuring it right is key. |
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| pkcRAISTLIN |
i wish i had a mate to go partners with me. the only other friend i have that does this doesnt need my help dammit! he's in consolidation mode now, selling off a bunch so he can put into stocks.
looks like youre really on top of things, good for you! if you really love property that much, perhaps becoming an estate agent could really suit your needs? |
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| Lilith |
The result, 9645, means that if you stopped work, sold all your investment assets and paid off all your debts then you'd be able to survive until 08 Mar 2034, based on your current lifestyle.
But if I did that, I'd be bored. :( |
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| eRRaTiK |
| quote: | Originally posted by pkcRAISTLIN
if you really love property that much, perhaps becoming an estate agent could really suit your needs? |
I considered it but I don't want to do what an REA does. I only need access to potential investments and I've got that through buyers agents, publications, and online updates. All the research that I need to do can be conducted in front of my pc at home.
As for really loving property, it's all about leverage. People (lenders, government) throw money at you to buy property so getting wealthy on other peoples' money is a real possibility, and many people have done it.
Here's an article that compares shares with property:
| quote: | There are many types of investment: when should you choose property?
by JOHN EDWARDS (Residex)
The easiest way of determining how you should invest your money is to look at the pros and cons of the various possibilities. There are three obvious ways of investing your money - placing it in a bank account, investing in shares or purchasing property. Which one will be the most suitable for you will depend on your current and expected future position.
When are bank deposits a good investment?
Bank deposits certainly provide a very secure form of investment, but as a consequence the returns are very low in comparison to other forms of investment and they cannot be leveraged. The tax benefits that flow from negative gearing are not available and so it's quite clear that leaving your money in the bank is not likely to be the best option, unless you are seeking the highest level of security and are content with a low investment return.
When are shares better than property?
The most obvious advantage of shares over houses is that you don't need a big nest egg to begin investing. An investment can be under $1,000, whilst in the property market, usually at least $20,000 in savings would be needed. From this a number of benefits arise.
You can make a gradual investment. If you have a $1,000 in savings it can be invested straight away, and as more becomes available, subsequent amounts can be invested. With property, however, it's all or nothing. This makes shares ideal for individuals who are just starting up and don't have much to invest.
This type of investment also allows you to disperse your investment so that risk is reduced. Because comparatively small sums of money can be invested, you can have shares in a number of different companies. On the other hand, dispersing your property investment in a number of homes requires large sums of money.
Shares have negligible maintenance. With shares you won't have to worry about gardening, painting, or finding new tenants. This asset looks after itself, and also, shares can also be more easily and quickly sold than property. It takes time to prepare a home for inspection and find a buyer. Shares on the other hand can easily be sold on the day you decide to dispose of them.
When is property better than shares?
One of the key reasons why you might invest in property over shares is that this asset is less volatile, making it less risky for the investor. This occurs because house values won't dramatically increase one day and fall the next, so getting in and/or out at the wrong time is less risky.
Property is also "safe as houses" because you can guarantee almost always that the value will grow in the long term. Everyone needs a roof over their head, the population is increasing, yet no more land can be made. This means that land is becoming an increasingly scarce asset and so values are only going to increase.
Property is also advantageous because you are in charge of the asset. This means that you can personally enhance the value of your property - fixing up the kitchen or landscaping the garden are all things you can personally do to increase the selling value. In addition, unlike shares, each house is different and can be valued and sold on its unique attributes.
This asset also offers greater leverage than shares, as you can usually borrow a far greater proportion of your investment.This means that a comparatively small amount of cash gives you the benefits of owning an expensive asset. To take advantage of this, the returns - rent, property value increase etc - will need to exceed the interest being paid on the money borrowed.
Our just released Best Rent Report features the top 100 suburbs in Australia for both rent and capital growth to help you make the right investment choice. There are also grants and tax exemptions provided by governments to encourage some home buyers which are not available with any other form of investment.
What should you consider?
How you proceed is essentially dependent on how much you currently have to invest, what levels of risk you are willing to take, how accessible you need your saving to be and how much time you are willing to devote to your investment decisions. Usually, when you are first beginning to invest, shares are your best option. However as more equity becomes available, investing in houses will provide additional benefits, reducing your risk and increasing your borrowing capacity. |
For further articles by Residex, visit www.residex.com.au
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| quote: | Originally posted by Lilith
The result, 9645, means that if you stopped work, sold all your investment assets and paid off all your debts then you'd be able to survive until 08 Mar 2034, based on your current lifestyle.
But if I did that, I'd be bored. :( |
That's awesome! You don't have to stop work, but it's nice to know that you have the option if you wanted to ;) |
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| eRRaTiK |
| quote: | Originally posted by Michael Yardney (Metropole)
Property has made more millionaires than any other investment - According to the BRW Rich 200 list (published annually) property has consistently been the major source of wealth for Australia's multimillionaires. And it's the same all over the world. So why fight it? If it works for them, why try to look for a better way? |
Quoted from Dale Beaumont's book Secrets of Property Millionaires Exposed! |
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| pkcRAISTLIN |
| , i dont plan on living after 2034, id sell and sleep my days away! good for you lilith, you rich bitch you. emphasis on bitch of course ;) |
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| PauLie_C |
| Invest in the dogs at angle park or the meadows. |
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| Lilith |
| quote: | Originally posted by pkcRAISTLIN
, i dont plan on living after 2034, id sell and sleep my days away! good for you lilith, you rich bitch you. emphasis on bitch of course ;) |
Plenty of reasons why I don't, aside from being bored and there's plenty more areas along the east coast I'm interested in acquiring... where it's warm and not Sydney.
| quote: | Originally posted by PauLie_C
Invest in the dogs at angle park or the meadows. |
If you're a punter, forget dogs, horses and casinos...
With the current strength of the AU dollar, it's a good time to buy US currency sometime soon if you want to make a little more on the side as we're headed up to where there will be both US and AU elections. I'd expect Libs to get punted (hard) and an eventual downturn in the AU dollar, then the Reps will get punted (very hard!) out and the US dollar to climb higher.
Which is the risk bet as I'm still fiddling out any kind of long term projection there but I'd say it's better than average.
A safer one is buying Euro's (which aren't going anywhere except stronger) with $AU that carries a fairly minimal chance of any kind of failure.
Course if you do fail and lose money, don't blame me! Do your own damn research :p |
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