Young investors - tell all

Hi there,

Some great stories!! I thought it an idea to add our situation as I know from having read stories over the years that these types of stories can be inspiration enough to admit to oneself that yeah, I can do this!!

Wife and I purchased then PPOR for $150k in 2002. Big money back then for a couple of 21 and 22 year olds!!

Lived there for almost 2 years and at this point my step father gave me Jan Somers' book to have a look at. The value of the place we were in had gone up so we started looking for something bigger with a view to renting out the one we were in. So found a lovely place, big house big yard but knew it would be out of our league!! Went to the auction with no intention to buy and it started REALLY low. So we bid and kept bidding and and when we picked it up for $40k less than what we thought it would go for, we had a new PPOR. Paid $291k in late 2003.

So I got the bug and went looking!! Managed to find a little GOLD mine at a Qld Uni town and purchased about 6 months later for $140k, acheiving $200 a week in rent.

So situation now is:
PPOR - Value: $380k, owing: $297k
IP 1 - Value: $305k, owing: $126k
IP 2 - Value: $160k, owing: $137k

Very keen to get the next but unfortunately work has been hectic and I really haven't had time to organise some things. Need to commit more time to this though as it is our future!! Missed a couple of opportunities so really need to get on top of things again!!

Dos.
 
Sultan of Swing said:
For me, NO!!

I menationed alex's situation to my better half tonight - that of being a million in debt - and she needed me to change the subject cos it was stressing her out!! I can see I'm never going to be able to do all I want to do and leverage will always be quite low.

Any suggestions?
SOS, when we started investing it was fuelled mainly by myself. Hubby didn't do anything except sign the paperwork. He didn't want to know how much we owed or what rents came in, that was all my job. His job was to bring home a pay packet each week.

Over the years we have had a few businesses & lost mega bucks & it was the loss of yet another business that started our growth into investing as we had one IP that had a large capital gain. This, I reasoned, was what we were looking for.

After we closed the business for good & moved to Sydney, I became a stay at home mum & invested. Hubby read a few books (reluctantly at first) but really didn't understand what it was that was happening. I would drip feed him little bits of information at regular intervals.

It wasn't until about 2 years ago that he understood. After telling him how much we owed & him then starting to ask a few more questions. When I explained that I had earnt more than him by staying home than he had at work, the penny finally dropped.

These days he scares me sometimes as his risk profile is higher than mine. I have to put on the breaks as it is hard for him to understand why we would have difficulty servicing something when others (on higher incomes or with less expenses) don't, but he is learning & I am proud of him.

I'm still in the drivers seat, but he is there as my co-pilot now. When he gets the time, he reads & posts on the forum. He will look at things & know that they would make good/bad investments. He is an excellant handyman as he was an electrician by trade & can turn his hand to anything. This has also been a huge help in our investing journey.

My advice to you SOS, is take it slow, feed her information at regular intervals, but only small bits. Don't focus on how much you owe, as that might be a little scarey for her, but let her see the progress you have made. It's a learning process & it can take a lot of time for some to come to terms with what it is that we do. Be open & honest, & in time she will get used to the situation. She may just surprise you & become a lot more involved when she finally understands.

Best of luck.
 
skater said:
SOS, when we started investing it was fuelled mainly by myself. Hubby didn't do anything except sign the paperwork. He didn't want to know how much we owed or what rents came in, that was all my job. His job was to bring home a pay packet each week.
my hubby was the same (and still is to a large degree). he is just really not interested as long as i don't lose any money, and i do have to show him a profit/loss and planning projection for each purchase before he will sign the documents.

oh - he's also a good handyman and will do some tarting up work if i need him to ... but that is all. i must admit, many years ago, when i started investing beyond his comfort limit we did have some doosey discussions over the kitchen island bench - but as long as i could show him the figures he would come around. once we made enough to buy him his boat, he has trusted me implicitly ... and there is a lot that i don't tell him.
 
keithj said:
Hi SOS,

One thing that may help is for someone else to hold the assets & debts for you - like a trust. Since being is debt is a 'mind' thing, if it's your trust that has the debts rather than you & your wife, maybe that'll allow her to keep her mindset. So no assets or liabilities in your or her name.

Let use know if it works!!

Cheers Keith

Why don't you try telling her how much your 1 million debt (or whatever it is) actually costs you each week to service.
I'm sure it will seem alot less scary if you compare apples with apples, like a pair of shoes for example ;)
 
keithj said:
Hi SOS,

One thing that may help is for someone else to hold the assets & debts for you - like a trust. Since being is debt is a 'mind' thing, if it's your trust that has the debts rather than you & your wife, maybe that'll allow her to keep her mindset. So no assets or liabilities in your or her name.

Cheers Keith

Maybe I'd better think about this for my partner. He's stressing out at the amount of money that flows in and out of our account, but mainly out. He's quite proud of how I've managed to get us into property investing but often says, 'we have so many bills!' doesn't see that we have the extra income to cover this now and depreciations etc. he got heaps back from tax this year and last year was able to buy a new car (I let him buy a car -good secondhand station wagon- rather use the money for a deposit on a new house...hehe)
 
Another young 'un

I'm only 23, so I don't have much of a story to tell. Bought my first IP with my wife in April 2005 for $245k. No idea what it's worth now (how do I find out?).

I am definitely the 'investor' of the house and my wife is happy for it to be that way. She has read about 3/4 of Jan Somers Wealth from Res Property, but I couldn't quite get her to finish it. As long as I explain to her what I'm doing she is happy to smile and nod for me. I try really hard to explain different concepts to her but she just doesn't care so I just do it myself.

We are likely going to be on 1 income as of next year so we are not looking at buying anytime soon until the rent picks up on our current one to pick up some more of the shortfall. Until we buy our next one we will continue to put our savings into managed funds with conservative gearing.

BR
 
Bantam Roosta said:
I'm only 23, so I don't have much of a story to tell. Bought my first IP with my wife in April 2005 for $245k. No idea what it's worth now (how do I find out?).

I am definitely the 'investor' of the house and my wife is happy for it to be that way. She has read about 3/4 of Jan Somers Wealth from Res Property, but I couldn't quite get her to finish it. As long as I explain to her what I'm doing she is happy to smile and nod for me. I try really hard to explain different concepts to her but she just doesn't care so I just do it myself.

We are likely going to be on 1 income as of next year so we are not looking at buying anytime soon until the rent picks up on our current one to pick up some more of the shortfall. Until we buy our next one we will continue to put our savings into managed funds with conservative gearing.

BR

Be proud of yourself, Roosta. Buying a property at age 23 is something only a small minority manage to do. The same minority most likely to become wealthy, by the way.

Just run a search on www.domain.com.au or www.realestate.com.au for similar properties in your suburb. That gives you a rough idea (though as I’m sure you know ad prices tend to be higher) of the value of your property.
Alex
 
Bantam Roosta said:
No idea what it's worth now (how do I find out?)

If you just want an idea of market value, ask a local REA to do an appraisal. Be up front with them and tell them you're not selling. If they're still happy to do it you MAY have yourself a good agent who is looking at the big picture and is there for the long term. I often give appraisals for people in that situation and look at it as an opportunity to build a relationship.

If you want to draw down equity you'll need a registered valuer. That will cost maybe $200 - $300 and is usually arranged by your bank.

Bantam Roosta said:
She has read about 3/4 of Jan Somers Wealth from Res Property, but I couldn't quite get her to finish it.

Well done!! That's 3/4 more than I've been able to get my better half to read. :p

After reading a few more responses, I think its just a matter of time and growing into the debt, one loan at a time. I think as the equity increases her confidence will also increase.

As some have read in a recent post, we bought a block of flats (or as Geoff says, a flock of bats :rolleyes: :p ) a couple of months ago and we have a debt of around 370k. Today we've made an offer on another property ( and I'm anxiously sitting here waiting for the damn agent to call, lol) and wifey is ok with it.

Something that i thought of that will help is to write a manual explaining what to do if something happens to me. eg, with life insurance money, invest it here, payments will come out and go there etc. Contents insurance is with XYZ, landlords insurance is with ZYX, shares are sold here etc etc.

So I guess I should start.... :rolleyes:

Cheers :cool:
 
Sultan of Swing said:
Something that i thought of that will help is to write a manual explaining what to do if something happens to me. eg, with life insurance money, invest it here, payments will come out and go there etc. Contents insurance is with XYZ, landlords insurance is with ZYX, shares are sold here etc etc.
That sounds like an excellent idea SOS. I dread the day I die and my wife has to try and sort out the mess. My father's the only one I would trust to help her sort it all out, the only problem with that is that I intend on living past his used by date :D.

Thanks for the tips on valuations. I think I will talk to my agent and get a guide. No LOC yet, still too high LVR so I'll go the cheap option.

BR
 
alexlee said:
Be proud of yourself, Roosta. Buying a property at age 23 is something only a small minority manage to do. The same minority most likely to become wealthy, by the way.
Don't worry Alex, I'm proud of what I have achieved. I just hope I continue along the path I'm on and have a wonderful tale or two to regale in the future. I quite enjoy hearing others peoples stories and I will enjoy being able to share mine when I have some.:)

BR
 
Bantam Roosta said:
Don't worry Alex, I'm proud of what I have achieved. I just hope I continue along the path I'm on and have a wonderful tale or two to regale in the future. I quite enjoy hearing others peoples stories and I will enjoy being able to share mine when I have some.:)

BR

I tend to go through manic depressive episodes. One day I'd be thinking 'Yep, I'm doing better than most and in 10 or 20 years I'll be doing MUCH better than most!' (usually when I read something like 'By the time you're 30 you should try to pay off all your credit cards and start saving for a deposit on your very own home!). Then the next day I'd be thinking 'Is this it? I haven't bought a property in over a year, and it just seems to grow so SLOWLY!' (usually after I've had a bad day at work).

I might need medication.
Alex
 
alexlee said:
I tend to go through manic depressive episodes. One day I'd be thinking 'Yep, I'm doing better than most and in 10 or 20 years I'll be doing MUCH better than most!' (usually when I read something like 'By the time you're 30 you should try to pay off all your credit cards and start saving for a deposit on your very own home!). Then the next day I'd be thinking 'Is this it? I haven't bought a property in over a year, and it just seems to grow so SLOWLY!' (usually after I've had a bad day at work).

I might need medication.
Alex

Hi Alex

I agree with you on this one. I go through peaks and troughs as well where I think I am doing okay and then other times I feel like I havent acheived nearly enought or I have been sitting on my butt to much and not taking enough action...especially after I go to an ARIEG here in Adelaide and some of the guys there have over 70 properties and are starting to do land sub divisions and developments and I am still buy/hold/renting.

I guess everyone has there own ladder to climb hey

Cheers

Corsa
 
Corsa said:
especially after I go to an ARIEG here in Adelaide and some of the guys there have over 70 properties and are starting to do land sub divisions and developments and I am still buy/hold/renting.

I've been to 2, and yes, it does fuel that fire in the belly.

I hope to buy my first IP sometime late this calendar year.

I'm 21, so there's still hope for me yet. :D
 
Corsa said:
Hi Alex

I agree with you on this one. I go through peaks and troughs as well where I think I am doing okay and then other times I feel like I havent acheived nearly enought or I have been sitting on my butt to much and not taking enough action...especially after I go to an ARIEG here in Adelaide and some of the guys there have over 70 properties and are starting to do land sub divisions and developments and I am still buy/hold/renting.

I guess everyone has there own ladder to climb hey

Cheers

Corsa

Everyone who is at the front of the line started out at the back of the line and the key to success is to get in line and stay in line. We aren't in a race here against anyone else.

IMO comparing yourself to others is a deadly game to play. But if you are going to compare yourself to others, why not go the other way and compare yourself to all those people who have less than you. Did you know that if you earn $35000 a year, you are in the top 1/2 of 1% of the wage earners in the world!

I can tell you that people who make money on a slow and steady basis tend to make far fewer mistakes and tend to have more at the end of the race than those who go very quickly. This is a documented fact.

Focus more on what you do have and you will get more of what you don't have. Those that focus on what they don't have rarely take action, which is fundamental to getting what you want.
 
oc1 said:
Everyone who is at the front of the line started out at the back of the line and the key to success is to get in line and stay in line. We aren't in a race here against anyone else.

IMO comparing yourself to others is a deadly game to play. But if you are going to compare yourself to others, why not go the other way and compare yourself to all those people who have less than you. Did you know that if you earn $35000 a year, you are in the top 1/2 of 1% of the wage earners in the world!

I can tell you that people who make money on a slow and steady basis tend to make far fewer mistakes and tend to have more at the end of the race than those who go very quickly. This is a documented fact.

Focus more on what you do have and you will get more of what you don't have. Those that focus on what they don't have rarely take action, which is fundamental to getting what you want.

I don’t agree there, oc1. It’s not about choosing between slow and steady or wanting to go fast. Competition (even if it's only in your mind) can be healthy. By comparing yourself to those better off than you, you force yourself to improve and take action.

If you keep comparing yourself to those worse off than you, you become complacent. You become satisfied with what you have and do less than you otherwise would. Focusing too much on what you do have (as opposed to setting goals and acting to achieve what you want) means you’re not thinking about improvement. Following your logic, if I made $35k I’d be thinking ‘I’m already beating 99.5% of the world so why rock the boat?’

I know that focusing on the fact that I don’t have a waterfront mansion or a Ferrari or first class tickets whenever I want and having to go to work every day makes me much more effective (active?) an investor. Focusing on what I don’t have is exactly what drives me to read and research properties and think about how to make money in property. Hunger is what drives action, at least in my case.
Alex
 
oc1 said:
I think you have misunderstood the point of my post Alexlee. :)

Oh, you meant don't compare oneself to the point where we do something stupid because we want to go too fast...... Sorry......
 
alexlee said:
I know that focusing on the fact that I don’t have a waterfront mansion or a Ferrari or first class tickets whenever I want and having to go to work every day makes me much more effective (active?) an investor. Focusing on what I don’t have is exactly what drives me to read and research properties and think about how to make money in property. Hunger is what drives action, at least in my case.

Hi Alex

IMHO I'd have to agree with OC's way of looking at things.

Those that look at what they have and are thankful or grateful tend to be a lot more content with what they have and a lot happeir in life in general, whether they're broke of wealthy.

Those that are always looking at what they don't have are never content and often unhappy.

It would be sad if someone had all the wealth in the world and still wasn't satisfied. The person that had little but is content would be a happier person, even if that person has nothing.

Just my 2 cents :)
 
Great stuff guys. I'm similar, I always feel like I should be doing more but it's just not possible at the moment, my portfolio won't grow overnight and I just need to forget about it for a while... But I'm hooked! I'm moving to the UK in a year or so it's not the best time to buy anyway (well that's what I keep telling myself)

You shouldn't compare yourselves to others, but use them as a mentor/guide/inspiration for your future ventures. You really have to be patient though, it won't happen overnight and you just need to get on with your life and whatever you enjoy doing.

Regards

Luke
 
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