Millionaire's Club

[Buddybee]

Congrats LAA, what a GREAT acheivement, and thanks for sharing it with all of us.

Sorry, I may be youthful and wasteful as a result - but I just think that's pathetic. Seriously, how much could leaving the lights on during games night possibly cost - $2 maybe?

Steve, I looked at this a little differently, but perhaps that's because I have 2 young kids. The way I looked at it was not so much of a money making exercise or that of being a miser, but a structured way to create rules for a family night in the home. How hard would it be to have a family games night if the kids insisted on running all their doodads, with a TV or music playing in the background etc.

It's not a problem for my 2 - they are too young at this stage, but I dread to think of teen years with sporting/friends commitments a couple of nights after school, iPods, SMSing, watching TV in their living room etc - IMO, family games night without lights makes sense - but not for cost saving purposes. No lights, no doodads encourages quality family time without the distractions....repeat the entire process regularly (in this case weekly) it becomes part of the routine or second nature.

Cheers
Buddybee

 

[Debt Junkie]

Congrats LAA.

Fantastic achievement, one I hope to emulate - along with many others, based on the posts in this thread!

Next stop ... $2M, or will you skip it and just jump to $5M??

 

[Rockstar]

Great stuff LAA. Though I expected you to be a bit more advanced than that by the way you confidently harp on to us all.

On a little more serious note I have been a secret admirer of your wisdom since originally reading your posts on propertyinvestment.com.

Just don't try to spin me any moral guidance. ( I could do with a free golf lesson or two though - now you can afford to be charitable)

Keep it up mate!

 

[BayView]

Hiya,

That's awesome news Marc, really great to hear.

To annouce such a thing publicly, as Dazz said, is a great feat in itself. The world needs more people who are proud of what they have achieved.

I've been looking out for your posts lately, along with those from Dazz and Scott. Might not always agree with your POV but I do like the way you put your point across. I wonder, will you buy something expensive and otherwise pointless to commemorate the occassion...?

Cheers

James.

The public announcement was not so much to show how proud we are (although; we are) - it is more to offer some inspiration to the ones starting out who no doubt feel that the light at the end of the tunnel is a million miles away.

Hearing of a feat like ours would seem unrealistic if it was put forward by someone who is up around the $20 mill level, whereas if it's from a Mr.Average Joe-Thong like me, then it seems just that little bit more within reach I would hope.

I did by something expensive (but not pointless as far as the recipient is concerned) today; a batman utility belt for our son from Toys-R-Us.

Cost $34, but the experience is priceless

 

[BayView]

Big congrats LA. Awsum feeling for you and your wife im sure and im sure very well deserved. It gets a little disheartning I guess when I see 1 or 2 of my props not moved much (if at all) in the last few yrs but fingures crossed by continuing to add to our portfolio I hope to achieve similar goals (one day) to the one you have just reached so its great to see that it can be done and has been done by more than a few on here.

Congrats again

cheers Jayro

None of the properties we have ever bought were bought for cap growth as the main factor.

It has always been about the cashflow first (including the tax benefits and depreciation), the cap growth second.

This has allowed us to keep on reducing debt, and live a lifestyle as well.

By luck (actually no; good D.D) we also copped some excellent growth over the years, so the combination of all of the above has gotten us to this point in a nice time-frame.

 

[travelbug]

A sign of a "would be if they could be".

People I know who are genuinely wealthy just buy it and don't ask the price.

Why would you need to ask? Money is no object.

Not necessarily. My uncle is a multi millionaire.
He is embarrassing. When we went to the movies he told the cashier that we were seniors. He asked for our seniors card (which we didn't have- not old enough). He complained saying " we don't want to buy the cinema".

Attitudes are ingrained in us. If you are brought up with no money. You have difficulty not thinking about what you spend it on.

My hubby hates paying full price for anything. When we got married, I wanted a sewing machine. They had a special of $50 off if you traded in your old machine. I didn't have one so hubby asked if he could still get the $50 off. NO! Anyway he said "I could go and find one at the tip, bring it in and give it to you. Then you would have to get rid of it. I'm saving you the trouble".
The lady laughed and said she couldn't argue with that so gave it to us.

It's all in the attitude (as mentioned already).

Congrats LAA, what a GREAT acheivement, and thanks for sharing it with all of us.



Steve, I looked at this a little differently, but perhaps that's because I have 2 young kids. The way I looked at it was not so much of a money making exercise or that of being a miser, but a structured way to create rules for a family night in the home. How hard would it be to have a family games night if the kids insisted on running all their doodads, with a TV or music playing in the background etc.

It's not a problem for my 2 - they are too young at this stage, but I dread to think of teen years with sporting/friends commitments a couple of nights after school, iPods, SMSing, watching TV in their living room etc - IMO, family games night without lights makes sense - but not for cost saving purposes. No lights, no doodads encourages quality family time without the distractions....repeat the entire process regularly (in this case weekly) it becomes part of the routine or second nature.

Cheers
Buddybee

I agree. I really miss games nights at our house since the kids moved out.

My son came around a few months ago and said he wanted a Backgammon game for his birthday "not the cheap kind but the one with the felt etc". I went into my cupboard, pulled one out and said "happy birthday". Haha. I still have all my games from when I was a kid. When cluedo came out (again) my stepkids said they wanted to get it. They were amazed that I had it "already". Little did they know it was 15 years old.

 

[steveadl]

Congrats LAA, what a GREAT acheivement, and thanks for sharing it with all of us.



Steve, I looked at this a little differently, but perhaps that's because I have 2 young kids. The way I looked at it was not so much of a money making exercise or that of being a miser, but a structured way to create rules for a family night in the home. How hard would it be to have a family games night if the kids insisted on running all their doodads, with a TV or music playing in the background etc.

It's not a problem for my 2 - they are too young at this stage, but I dread to think of teen years with sporting/friends commitments a couple of nights after school, iPods, SMSing, watching TV in their living room etc - IMO, family games night without lights makes sense - but not for cost saving purposes. No lights, no doodads encourages quality family time without the distractions....repeat the entire process regularly (in this case weekly) it becomes part of the routine or second nature.

Cheers
Buddybee

BB, I agree with you entirely. But the way that quote came across (or the way I read it anyway) was it's focus on the cost saving side of it. I'm all for the family games night without TV, but I'll sure as hell be leaving the heater/aircon and lights on.

Maybe that wasn't the major point for that person, but I have read on many occasions rich people pulling stuff like that to save a few cents here and there. Sorry, but I don't even do that when I'm not rich, let alone when I will be. You don't get rich by saving $5 here and $2 there on bits and pieces. Well, not the sort of "rich" I'm interested in anyway.

 

[BayView]

Sorry, but I don't even do that when I'm not rich, let alone when I will be. You don't get rich by saving $5 here and $2 there on bits and pieces. Well, not the sort of "rich" I'm interested in anyway.

Yes you do.

You've all heard me harp on about the "latte factor", and we have lived that mantra consciously for the last 8 years, and it has contributed largely to the creation of this post.

At the start of your journey, when you are out for the first million, unless you have found some unique vehicle for wealth that will get you very rich in a hurry, or you are a very high income earner, it is critically important for the guys on average (or less) incomes to have this mindset, or strategy.

It's that old adage of "look after the pennies and the pounds will look after themselves" - and it works.

The "savings" in the early days for most average folk is what will get them to that first million sooner, and then you can step up to that next level where the small savings are probably not necessary.

To have the attitude that these small savings are not necessary, or tight, is "cutting off your own nose to spite your face" in my book.

However, that "savings" strategy is also a fundamental to good money management at all levels of commerce and financial endeavour, and there has been many a business, or person, with high cashflow that has lost it all by not adhereing to the fundamental.

A good example is the person who has a high paying professional job - earning say $200k per year, who spends $70k on a new car, buys take-away coffees twice a day at $4 a pop, spends around $200 p/w on clothes and another $200 p/w on going out, and rents an apartment for $400 p/w.

This would be a common scenario in most capital cities around the western world now - especially in kids of around 21-30 years of age.

While the lifestyle is really cool, and they can afford to spend money on this level (but can they really?), there is no need to do it.

They could easily spend just $15k on a car, have 1 latte per day, spend $100 p/w on clothes and $100 p/w on going out, rent a more modest place for $250 p/w.

Not a massive blow to the lifestyle; the outward appearance to others would still be the much the same, so the "Joneses" factor is still satisfied, but the nett worth would increase extremely fast.

Imagine then if you then committed those "saved" dollars over 5 years towards even just one cheap IP.

The nett effect could be spectacular if the person has the notion to go on and buy more than one IP in those 5 or 10 years.

 

[Dazz]

I expected you to be a bit more advanced than that by the way you confidently harp on to us all.

hmmmm....this gets back to that old thread questioning how much weight does one place on a certain poster's opinion.

Are you in the "ignore" bucket, or the "must listen to the guru without question" bucket....or maybe one of a myriad of buckets in between.

 

[Dazz]

Hearing of a feat like ours would seem unrealistic if it was put forward by someone who is up around the $20 mill level, whereas if it's from a Mr.Average Joe-Thong like me, then it seems just that little bit more within reach I would hope.

Agreed, when you are on Level 1, seeing what someone on Level 3 is doing is inspirational. Seeing what someone on Level 9 does wouldn't even compute for a Level 1 chap or chapess.....and mores the point, they couldn't take advantage of anything, in terms of techniques or asset buys, so yeah, I'd agree.

 

[steveadl]

Yes you do.

You've all heard me harp on about the "latte factor", and we have lived that mantra consciously for the last 8 years, and it has contributed largely to the creation of this post.

At the start of your journey, when you are out for the first million, unless you have found some unique vehicle for wealth that will get you very rich in a hurry, or you are a very high income earner, it is critically important for the guys on average (or less) incomes to have this mindset, or strategy.

.....

The nett effect could be spectacular if the person has the notion to go on and buy more than one IP in those 5 or 10 years.

I agree there's no need for wreckless spending, but yes I draw the line at penny pinching with electricity etc. I agree with you about cars and late's etc. For most people, the savings you've talked about are wise - but I was talking about millionaires having that way of life. Although I guess old habits are hard to break once you pick them up.

Regardless, large wealth (that's what I'm aiming for) doesn't come from saving your pennies each week. If I was too busy worrying about every $1 extra I paid for this or that, I'd miss out on the more important stuff like that next property deal, or creating that promotion that will boost my sales this month etc. That's where the bigger $'s are made and hence where I focus my time and effort on, not saving the $5 by shopping at Foodland instead of Coles, or going to the chemist that's out of my way to get extra discount.

For example, Rupert Murdoch could have been a tight wad and checked every penny before he parted with it (although this isn't the case). Saving a few bucks here and there on suits etc is not the reason he's a billionaire.

 

[steveadl]

Agreed, when you are on Level 1, seeing what someone on Level 3 is doing is inspirational. Seeing what someone on Level 9 does wouldn't even compute for a Level 1 chap or chapess.....and mores the point, they couldn't take advantage of anything, in terms of techniques or asset buys, so yeah, I'd agree.

There are some exceptions - I love reading about the Level 9 guys. Great inspiration, even if you can't necessarily use some of the ideas practically yet.

Although I've got no idea what level I'd be on now!

 

[BayView]

Congrats LAA.

Fantastic achievement, one I hope to emulate - along with many others, based on the posts in this thread!

Next stop ... $2M, or will you skip it and just jump to $5M??

I would love to "jump" to $5 mill, but I don't know that it works that way.

I'll be working on getting to $2 mill - same as before, with the same fundamentals. I'm a bit risk averse. For example; 80% LVR's make me nervous.

It's sorta like what I see people do in casinos with their bets; they get on a roll, start winning using a particular system or strategy.

Then, they see the success building, and get a little carried away, start increasing the bets, make more aggressive ones, and then all of a sudden it's all gone. They didn't stick to the winning system.

I realise that gambling is a bit different to property investing, or building wealth per se, but you need to keep in mind the fundamentals, the numbers need to be right and so on - no matter what amount of zeros are on the end.

While we are now able to play at a higher level, I am still VERY aware of how we got here and play by the same rules.

 

[BayView]

Well Done!

what's your next goal?

Thanks Xen.

A few have asked about our next goal so far, so I thought I'd give you a quick beer coaster plan.

In the immediate future, we are buying a business. There has been a huge amount of D.D on it so far and is close to being done.

GR put forward some excellent words of warning for me, which I am yet to respond to and thank him for, but he is preaching to the converted - Mr. Risk Averse, here.

The reason for the business is to increase the current cashflow, and allow us to maintain our lifestyle while reducing the debt. We are using some of our existing equity with the rest of the funds via another loan. The business very well established, profitable and, will enable us to exit the rat race in terms of having to work.

This will allow both of us to work part time in our current jobs, and I will also be involved in the new business as a manager. Businesses is what I like to do and can do well. Our working lives will be basically free for us to choose the hours that suit our lives. The ultimate goal - freedom to choose!

The cashflow from the business will be reinvested back into both it, and the existing property portfolio as well as for future property acquisitions.

Given the current property cycle, we believe that the next 6-12 months will be a good time to go property shopping, and our next property will be for the specific purpose of buying to then redevelop in the near future.

We are looking at hopefully acquiring something that can be redeveloped into 2 or 3 units/townhouses to start with. This will be the first project of this kind for us, so we will then sell 2 and keep 1 as an IP with a pos cashflow.

If there is cap growth after this, then great, but our focus is to keep on accumulating more pos cashflow first. As it will be the first project of this type for us, we want to start small and safe.

The income from this will also be re-invested back into the pot, and then repeat.

The combination of the business, our existing portfolio and a few of these projects will be more than enough for us to live on.

 

[ianvestor]

Regardless, large wealth (that's what I'm aiming for) doesn't come from saving your pennies each week. If I was too busy worrying about every $1 extra I paid for this or that, I'd miss out on the more important stuff like that next property deal, or creating that promotion that will boost my sales this month etc. That's where the bigger $'s are made and hence where I focus my time and effort on, not saving the $5 by shopping at Foodland instead of Coles, or going to the chemist that's out of my way to get extra discount.

For example, Rupert Murdoch could have been a tight wad and checked every penny before he parted with it (although this isn't the case). Saving a few bucks here and there on suits etc is not the reason he's a billionaire.

This is how I see things. Eg, why worry about paying $1.59 at the bowser when it's only $1.53 on Tuesdays...? Do you realise that's probably only $3.60 per week you're worrying about? Not worth worrying about when you could be looking at the bigger picture.

 

[semboyan]

That is really great news. What is your future plan? Double up you money?

 

[steveadl]

This is how I see things. Eg, why worry about paying $1.59 at the bowser when it's only $1.53 on Tuesdays...? Do you realise that's probably only $3.60 per week you're worrying about? Not worth worrying about when you could be looking at the bigger picture.

It always amazes me when I drive past the Caltex on my way home from work (I forget which night it is). Cars are queueing up 7 deep behind each bowser, even spilling onto the main road. 500m further there's the BP where you can pull straight in and fill up.

I value that 20mins I'd be in line waiting and getting frustrated more than the $4-5 I'd save every fortnight.

 

[Buddybee]

You've all heard me harp on about the "latte factor", and we have lived that mantra consciously for the last 8 years, and it has contributed largely to the creation of this post. .

The latte factor is killing me ATM - I bought a really good coffee machine over 2 years ago for 2 reasons - to get a decent coffee every time and to save money (nothing worse than forking out hard earned doe for some pimply 15 YO to make a crap coffee). We've made 4,000 coffees since we got it (yeah we like a GOOD coffee or 2), so it's well and truely paid for itself....but this week it's gone in for a service Paying $8.50 for 2 coffees and a baby cino this morning felt like a real waste

Doing the maths 4000 X $3.50 per coffee = $14,000 not spent. It costs us $30 on coffee per month, and about the same in milk The machine cost $1100, so I figure I'm over $11K in front

Cheers
Buddybee

 

[HiEquity]

The latte factor is killing me ATM

Ever wondered what all that coffee is doing for your health as well as your wealth?

 

[ianvestor]

Doing the maths 4000 X $3.50 per coffee = $14,000 not spent.

Hehe, that works out similar to my maths:

0 x $3.50 per coffee + no coffee habit = $14,000 not spent