Basic question
- Thread starter MHS
- Start date
Read Jan's books
MHS,
Since you're making a major decision that will determine the quality of your retirement years, do yourself a favour and read some property books. ( I've read about 20 in my time). Start with Jan Somers "Building wealth from investment property".
The simple answer to your question is "pretty much, yes". But it's NOT regular increases each year. The market can stagnate for (say) 5 years and then have two years of 15 to 20% increases.
The longest stats on this are England where property has averaged 10.2% pa for 919 years. For Australia over last 120 years, average compound rate of 10.4%. The figures I quote are not "mine". They are from an article in The Age Sunday , June 6, 2010.
Some of our Melbourne IPs are up 400% in last 10-12 years.
LL
MHS,
Since you're making a major decision that will determine the quality of your retirement years, do yourself a favour and read some property books. ( I've read about 20 in my time). Start with Jan Somers "Building wealth from investment property".
The simple answer to your question is "pretty much, yes". But it's NOT regular increases each year. The market can stagnate for (say) 5 years and then have two years of 15 to 20% increases.
The longest stats on this are England where property has averaged 10.2% pa for 919 years. For Australia over last 120 years, average compound rate of 10.4%. The figures I quote are not "mine". They are from an article in The Age Sunday , June 6, 2010.
Some of our Melbourne IPs are up 400% in last 10-12 years.
LL
hi
entry-level question from someone considering IP instead of superannuation:
these are three very different question
question 1
your super fund could buy a ip if its a smsf
question 2
why do you see ips or any form of investing as a cost against super they should work together.
question 3
and this one only you can answer whats your goals
super is long term investing
comm is shorter term investing
resi is low return good growth but low income investing
shares is high volitile but usually cashflow investing
and businesses are posi cashflow business
so you need to decide whats your goals
and invest that way
you question for me is I want to go to bris from sydney and is it better by car or plane
well no good if you get car sickness or you are afraid of heights yes bith will get you there but they are not the same
super is a long term long hold investment and you can buy ips in it but the benefit kicks in at this stage at 55 or 60
is this your time frame
ip's are not the best form of investing anyway
maybe I am wrong here
but the best form of investing is a balance portfolio
so yes have a ip or a few but also cash flow positive comm and then gorwth businesses
not a great lover of shares but thats me
my best advice is simple
you cant get to where you want to go without a map to get there
thats why they sell tom tom's
you need to do the same
fine out first where you want to be
then get a map to get there once you have done that you know where your going
and then plan to get there and that maybe with both super and ips
entry-level question from someone considering IP instead of superannuation:
these are three very different question
question 1
your super fund could buy a ip if its a smsf
question 2
why do you see ips or any form of investing as a cost against super they should work together.
question 3
and this one only you can answer whats your goals
super is long term investing
comm is shorter term investing
resi is low return good growth but low income investing
shares is high volitile but usually cashflow investing
and businesses are posi cashflow business
so you need to decide whats your goals
and invest that way
you question for me is I want to go to bris from sydney and is it better by car or plane
well no good if you get car sickness or you are afraid of heights yes bith will get you there but they are not the same
super is a long term long hold investment and you can buy ips in it but the benefit kicks in at this stage at 55 or 60
is this your time frame
ip's are not the best form of investing anyway
maybe I am wrong here
but the best form of investing is a balance portfolio
so yes have a ip or a few but also cash flow positive comm and then gorwth businesses
not a great lover of shares but thats me
my best advice is simple
you cant get to where you want to go without a map to get there
thats why they sell tom tom's
you need to do the same
fine out first where you want to be
then get a map to get there once you have done that you know where your going
and then plan to get there and that maybe with both super and ips
I agree with the others. Historically they have doubled every 7 - 12 years. But this is average. Some have done more, some less. The skill is in picking the type of property and the position.
Will they continue to do so? I suspect they will.
However, you can read a whole lot of varying opinion on this thread:
http://www.somersoft.com/forums/showthread.php?t=54038
Super is designed for the financially illiterate to save over their working lives because the government can't afford to / won't pay for their retirements. From that point of view, it needs restrictions.
The question I've always asked is: super is designed to try to give financially illiterate retirees a better retirement than they otherwise would have. If that's not your plan, do you really want to use as restrictive a vehicle as super?
Yes super is for the financially illiterate.
However it is just as much for the financially literate as well. Why? Because it's a tax haven, and because your assets are likely to be safer in super than in any other vehicle.
None of us can neglect super as a vehicle for investing. We should all have a plan enabling us to eventually hold or transfer the majority of our assets into super at some stage.
It has SOME tax advantages, which you might be able to replicate outside super under certain circumstances (if you have a non-working partner, for example). However, it also has a lot of restrictions which you would not have using other vehicles. I would also argue because of the gearing restrictions, you can build up more assets outside super especially if you're young.
I plan on living off investment income decades before the preservation age, so super is useless to me.
Not for me...
You mean to have the majority of your assets in probably the most regulated, controlled "vehicle" available. A vehicle where the rules change almost daily, at the whim of the gov't. A vehicle that limits your access to those assets pretty much until you're too old to enjoy them. A vehicle that is growing sooo large, (now trillions) and is so easy for the gov't to target/tax/control/limit etc etc .
Do this at your peril is what I say. Not this little black duck.
LL
You mean to have the majority of your assets in probably the most regulated, controlled "vehicle" available. A vehicle where the rules change almost daily, at the whim of the gov't. A vehicle that limits your access to those assets pretty much until you're too old to enjoy them. A vehicle that is growing sooo large, (now trillions) and is so easy for the gov't to target/tax/control/limit etc etc .
Do this at your peril is what I say. Not this little black duck.
LL
Eaxctly !
LL
Exactly !! More assets, faster, with far less restrictions & BS.
Exactly ! Now you're thinking !! They are already slowly but surely adjusting the retirement age.
LL
Factors to take into account:
Lastly, note that super is a vehicle, and not an asset class. That is, you can invest in an IP in a super vehicle. They are not mutually exclusive.
- The long term returns from other asset classes such as shares - for example, over the last century, the All Ords Accumulation Index has returned just over 10% p.a. (that's capital gains plus dividends)
- The long term returns from other countries. E.g. see here for Robert Shiller's Index http://www.nytimes.com/imagepages/2005/08/21/business/21real.graphic.html
Lastly, note that super is a vehicle, and not an asset class. That is, you can invest in an IP in a super vehicle. They are not mutually exclusive.
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Hi, super can be good if one understands it & has the discipline to use it right, much like all else.
Someone in a high income bracket past 45 should REALLY look into super.
And we can have full control via smsf.
Not that hard. I can do it, anyone can.
KY
Someone in a high income bracket past 45 should REALLY look into super.
And we can have full control via smsf.
Not that hard. I can do it, anyone can.
KY
For people past 45 NOW, that MAY be a better option. The (in my opinion) inevitable changes to the preservation age is going to hit those who are young now.
Also, I would add even for those past 45, if you're close to a point where you can live off investments, do you really want to then transfer assets into super and lock them away until the preservation age?
LL perhaps in your LOE situation you need not worry about tax rates. For eveyone else LOR, the tax concessions available in super are there for the taking.
What's it gonna be... 250k at the top marginal rate? Or 250k at 15% flat, then tax-free?
The concessions are there to encourage people to use super to lessen the burden of an aging population on society. There would have to be a very good reason for govt to take those concessions away.
SOME tax advantages? The tax rate is 15% for super and for individuals earning less than 35k. Once you start a pension you go tax-free. Again... 250k at the top marginal rate? Or 250k at 15% flat, then tax-free?
Yes the restrictions are there but once you reach the age of 50 how heavily geared will you be? Gearing up is ok while young, but then your LVR decreases with age.
Like the rest of us. All I'm saying is that there should be at least an option to transfer asset holdings to super by the time an investor hits pension age. The tax costs of not having this option are massive.
