A plan

[kum yin lau]

Hi again Tony,

not being smart-assed or nosy but you need to remind yourself that family can be very selfish. From what you disclosed, who are the selfish ones?

Perhaps you need to let your mother know the effects of all these financial worries on you. Tell her in no uncertain terms that if you all don't move, you are going to go mad and then bad things will really happen!

I was 30 when the same thing happened to me. I went up to my room & cried. My mother saw me and offered to sell her jewellery.

In the end, she borrowed 13 thousand from a relative.

That got me out of the hole. I didn't buy another house until I was 45.

Hope this gives you strength.

KY

 

[TonyY]

hey guys,

to answer your questions, my mother was taking care of the bills, i was just paying my own phone bill, internet, c.c debts etc...

for some reason if i dont pay this house off and screw up the family because of this reason im the selfish one according to my mother and brother. They clearly dont understand how it effects me. There was many times i just cried at work because of the stress but my mother thinks its easy to work your *** off and pay the interest only knowing were not getting anywhere.

I came up with 2 scenarios. Best bet is to rent out the house, firstly i need to find a job asap, my mother has her brothers house she can move into. I found a place for 250 p/w ill find someone to live with me and we can go harvy's and whats that going to be? ill be only paying 125 p/w rent plus bills etc thats NOTHING compared to the interest i pay here. As you guys have mentioned we can move in whenever we are financially free again, but then again no point in doing that. I dont care if i live in a DUMP as long as im financially free and my mindset is on par. I think this is the best thing to do. Lets just hope mother agrees... -.-

 

[devank]

to answer your questions, my mother was taking care of the bills, i was just paying my own phone bill, internet, c.c debts etc...

for some reason if i dont pay this house off and screw up the family because of this reason im the selfish one according to my mother and brother. They clearly dont understand how it effects me. There was many times i just cried at work because of the stress but my mother thinks its easy to work your

I'm beginning to change my mind here.
Your mother is paying the bills. I'm sure your mother is cooking and cleaning as well. Your mother raised you alone. You are the eldest son and I'm sure you are expected to take care of the family in your culture. Everybody has their own issues and problems.
To me, family is the most important component in our lives. If I'm in your shoes I would find the best solution with the family in mind.
I think the easiest solution is to find a good job... or two!

 

[TonyY]

yes she is doing all the above. Thing is your not in my shoes. It is hard, depressing. I dont want my life to revolve around WORK WORK WORK and only for it to be enough to pay IO and few bucks in my pocket. If i were to earn 100k a year then fine, sure. I dont. The solution i stated in my previous *post* i think is the best for the family. I am the father figure the "man of the house" and im doing everything in my hands to look after the family, it is my duty too. I've done the best I can for years now. Such a responsibility at such a young age is not easy.

 

[JWR]

Well if you rent the house out problem solved.

Don't discount the depreciation either - on a house less than 5 years old you would be getting a few thousand in your pocket each year - and the rent of $20k p/a or so (10-15k net since you will rent somewhere with your mum/brother.)

You will have a lot less stress then - and won't even need to work as hard if you don't want.

 

[DaveM]

No point in selling due to CGT and also the fact you have a good house with lots of depreciation available. You can always move back in later.

Why would there be CGT? He lives there as his PPOR.

 

[JWR]

Yeah good point Dave - my mistake - I guess I just always look from an investment perspective

 

[BMan]

imo you need to sit down with someone be it a broker or financial adviser that specializes in investment property and work out whether you should sell or rent out your house

--pros of selling--
CGT free
family problems fixed?

--cons of selling--
Market is down
agent selling fees
tax benefits if renting

now onto family issues i have read on here and multiple other areas dont listen to your parents for investment advice especially if they disagree with everything you put forward
theres a few reasons. first are they experienced investors.... likely not
second even if they know a thing or 2 theres alot of things that have changed since 30 yrs ago.
the less they know the better. it makes more financial sense to have the house on IP and put your spare money into the offset so any money in the offset is "paying off the house" so you are paying off the house just not at the speed the banks want you to the speed you can


IMO not knowing much of your situation i would try rent house out get a job anything that will keep you going for now until you can find a better one
get a depreciation report and also fill in a tax variation form to help give you more cashflow each week


if you make the incorrect decision now it could end up costing you $100s of $1000s of dollars

 

[pennyk]

imo you need to sit down with someone be it a broker or financial adviser that specializes in investment property and work out whether you should sell or rent out your house

if you make the incorrect decision now it could end up costing you $100s of $1000s of dollars

My suggestion was also going to be to get someone independent to look at your financial situation.. a financial planner or even a broker. They will be able to assess your situation objectively and see what is the best way forward.
To be honest, it sounds like you are too emotionally drained to see the long term picture. That may well that it is best to sell, so that you dont have that financial stress, whether or not it makes financial sense in the long term is less important.
But it would be good to have someone outside the family to take a look and see what they think.

 

[TonyY]

Thank you guys. You have all given me great support and ideas. To be honest, I want to rent out the house. I've spoken to my mother about the benefits and the long term outcomes but for her its either sell or live in the property just because she doesn't want to move into rent OR move into her brothers house :S... confuses me, I feel like she's choice-less but really she's not. I'm currently trying to get my previous job back so well see how that goes as much as I hate lifting boxes, wrapping pallets, working from 2pm-10pm with the WORST working days where I basically have no life, I have to I guess. I would take that advice and book an appointment with an financial planner. Till then be safe and be RUTHLESS (seems to me that's the only way people succeed) -.- only kidding, be good. Where ever it gets you

 

[rowena]

Hi Tony,
something else you mentioned was that any profits you made from selling the house you were going to give to your brother and mother, however both of them are on centrelink benefits. Be very careful before giving them any money, because centrelink has rules on how much money someone can give them before they loose their centrelink benefits. Its called gifting, and it depends on what welfare claim as to how much they can be gifted over a certain amount of time!

If you did sell i would use any profit for your next home.

Good luck with the financial planner.

Rowena

 

[Graemsay]

I don’t have a life. I was that stressed and mind ****ed I quit my job, pulled out 20k from the equity tried to make more income so I decided to trade currency with it. I did very well until I made ONE stupid mistake, emotions took over and I lost it all.

A word of advice: Don't trade currencies, as it's a mug's game.

The FX companies have a business model whereby punters are encouraged to take highly leveraged positions, and are then wiped out by a relatively small movement in the market.

For example, if you were long on the Euro at 100:1 leverage, which is the kind of level that I've heard talked about, then the week before last would have wiped you out, as the Pound strengthened from 1:1.230 to 1:1.245.

I've got a feeling that 70% to 80% of amateurs who engage in these activities lose everything. Stay well away.

The golden rule of investment is returns are proportional to risk. We live in a world of low inflation and low growth, and anything promising massive profits is going to include a distinct chance of losing your capital. Even professionals get it badly wrong, as the London Whale has so ably demonstrated.

(If you've not been failing, one of JP Morgan's top traders, who earned $23 million last year, has just lost the bank $2 to $3 billion. )

 

[Belbo]

Tony,

Your problem is not financial. Your problem is that you are conflicted.

On the one hand you want to do as your mother asks and be a good traditional provider. On the other hand you want to be break out and be the financial pioneer of the family.

There's only one way you can have both: Go and get a job on the mines.

Next!

 

[laurieload]

Tony I really feel for you! But second belbos idea. Rent house, Put family in cheap rented accom and go someplace else to earn decent wages to get yourself some space. Will give you some emotional freedom being away. Perhaps put a time limit on how long you are willing to try that for, eg 1-2 years, then reassess. Selling can be planB. Have you also checked with a broker that you are on best deal?
Best of luck, and remember you can rebound from this.

 

[JWR]

Lol I love it Belbo!

See a financial planner too though Tony!

 

[TonyY]

A word of advice: Don't trade currencies, as it's a mug's game.

Agreed, yet I still think there is potential if played smart. I was actually up 50%! in the first month till I made one stupid mistake that could of easily be prevented. You are correct though.

There's only one way you can have both: Go and get a job on the mines.

Ill surely look into that Belbo thanks for that idea.

laurieload - Hi, I haven't spoken to a broker as of yet. I will rebound from this. I'm certain I will come out strong. Thanks for all the support

JWR - I don't know if I'm in need of a FP to be honest =\.


On what happens next, I'll update you guys. Thanks for the support, be safe.

 

[Graemsay]

Agreed, yet I still think there is potential if played smart. I was actually up 50%! in the first month till I made one stupid mistake that could of easily be prevented. You are correct though.

Warren Buffett is considered to be the world's greatest investor, and managed to return around 20% growth per year up until 2005. Between 2000 and 2010 Berkshire Hathaway made a total return of around 76% (according to Wikipedia), which is about 6% per annum.

Bob Diamond targeted an annual return on capital of around 13%, last year it achieved about half that. In fact, some commentators reckoned that their goal would involve risky investments.

The point that I'm trying to make is that a realistic return is going to be in the single figures, low double figures if you're very lucky. The risk of loss is correlated with this, so if you're making a 50% gain in one month, then you're likely to make a similar loss.