And Do You Know What I Think!

[nu2ips]

I have heard this so much lately. I have only recently in the last couple of months considered the investment plan. it seems the resposible thing to do, im 32 male , married , have lovely but very much on the move 2 year old. i owe it to my family to be financially stable. ive heard all about having to fund your retirement as super is just not going to cut it. But i tell you , im just a simple bloke who nows how to fix your car (i fix dents, i pray for hail storms) i do have good education ( i cant spell for crap) and i believe i have a reasonable idea of how to go about things that you must in everystage of your life. BUT
i dont think ive been so disheartened about an industrie as much as the investment industry. i run a smal business and i strive to give my clients value for money and good service as i believe this will keep them coming back to me but maybe i should model it on some of the business models of the investment industry and i mite be able to make crap loads more money without having to do anything. i know , i know , not everyone is like this but i must admit every new corner i have turned there seems to be someone there who wants to put their reassuring arm around me and say " ill show you the money" but first they want my money up front1
i have learnt about asste classes, leverging, gearing , positive and negative cash flow and heard a thousand more jargons and initials that i have no idea what they mean + read books obviousley Jan Somers, Margert Lomas, Rich dad Poor dad and a stack more plus as many magazines i can get my hands on. I have lost count the amount of times my wife has told me to get of the computer and she is sick of hearing investment talk most waking hours (fear enough i suppose, but its that or cars!)
My point to my whole rant and rave is that i have taken a geniune interest in investing and this just doesnt include property but also equities and business, and i tell you i have never been so confused in all my life and i now know why 95% of people do not have investments that can create a retgiorement income. NO ******* REALLY CARES ABOUT THEM!!! I say this with confidence because if im finding it hard to get involed with investing and i have done some research and asked for help and recieved a thousand different answers that more often than not makes it more confusing.

AND DO YOU KNOW WHAT I THINK, i think that maybe people should be able to learn from say the TAFE course ( as being offered at the gold coast for about $3k I think) but at a more affordable rate. This mite only be a basic course and abit luaghable to most of the seasoned investors here but hey youve gotta start somewhere.

it would be nice for people who aree interested in taking control of there financial wellbeing to have one starting point with most of the crap cut out. it may not be perfect but not as confusing.

Ill tell you this , Im a licenced PANELBEATER and trained 4 years to be quilified, just like all other quilified tradespoeple i only had the one option for the place where i went for traing and this gave me the fundamentals of the trade in which i went back to my workplace and put in to practice under supervision.
now i know its abit different with finances but its seems just a little bit important for everyone to be skilled in managing money.

In business you are only going to be as succesful as your clients will let you be, dont investment properties need clients (tennents) to work. If the tennant cant mange there money wwhen things get tight they cant do business.

If you have read this far THANK YOU for listening to my little winge. I feel lot better now. So i think i will limit my forum reading from now on as it was getting a bit depressing when you relize you dont know crap about money. i will go forth and learn.

Cheers
Chris

 

[kingchevy]

Mate I am in a similar position as you are I own a business in the automotive trade and am very interested in investment sometimes the simple things are what will get you started ie look at buying you're own home and also buying the building you're business is in you're business will be worth something in a few years then it is still hard to sell goodwill in my opinion and most of the time a business is only as good as the bloke running it. Or another option is move to weipa and open a panel shop and get rid of this idiot running the one up here I'm the RACQ up here and tow vehicles in rollovers etc and in the busy season would give him at least one big job a week but it took him 3 months to do my own car. I'm soo close to buying a spray booth and hiring a panel beater its not funny.

Do simple things like save 200 bucks a week and buy shares that is still investing . Mate the only way you are going to learn anything is to read of this forum. The trick I find to investing is less talk more do.

 

[BayView]

You are right though; no-one cares about you (not true; we do), so you have to be responsible for your own destiny and make your own luck.

Don't worry that the tenants can't manage their money; that's why a lot of them will only ever rent. This is good for us. All you have to worry about is that they can pay the rent and most of them can at least do that (and max-out credit cards).

Just because you don't know a lot about money doesn't mean you can't learn. And if you want to be a successful investor or business owner you MUST know about money/finance/cashflow etc.

Commit to making it your next learning curve, and I promise you that in 6-12 months you will know as much as anyone here (maybe even more).

Don't hide behind "I'm a simple guy", "I've got o.k education" and all that - that's excuses talk. You are not dumb; you learnt how to panel-beat cars didn't you?

This forum and the Steve Mcnight one are the best places to get the free education you need. All you need to do is ask questions.

As you learn, you will formulate your own path and strategies. You already run your own business, so there's a good place to start learning about cashflow, budgeting, expenses, depreciation, finance. It's all very boring, but you must learn it or don't at your peril.

Get hold of an accountant who is also a property investor and he/she will help you formulate a plan, without trying to flog you an over-priced property or a managed fund.

After this, start looking for ways to free up more cash from your business to put towards investing, keep saving and get ready.

 

[wylie]

I have never really given thought to this, because when I was 12 my parents bought a six day a week business. Three years of that without a holiday was enough for me to know I never want to run a similar business. They sold it for a healthy profit due to the work we put in to build the business and bought their first IP. I was then 15.

I grew up from 15 watching my parents manage their own IPs as they bought a few more. We have renovated, painted and landscaped plenty of houses since then, learning all the time. My aim was to buy my own IP and house which I did in part shares with family the first times (because I didn't have enough money to do it alone) and finally got going on my path.

So my education came from watching my parents do it and getting my hands dirty. I didn't realise at the time what a valuable education it was. If my parents had been buying shares back then I would probably be more comfortable with them, but I am not.

I know many do both, but we don't have the funds to do both so we stick with what we know and keep our superannuation in shares, so I suppose we are still in the sharemarket, albeit arms length and don't have to do any research, apart from very basic choices within the super funds.

So my advice would be to start small and build from there. I tend not to read too much on this forum about shares because it just confuses me. I don't say you should do that because shares may be your "thing" but don't be disheartened if you don'e understand things. Just ask and the forum people will do their best to answer you.

Good luck, Wylie

 

[sailor]

Chris, Marc has given some really sane advice here. Most of us started out on this journey knowing zilch and just wanting to increase our wealth, so we could have more choices about how we live our lives.

There's just so much information one can learn from books and courses, as you said. In the end, you just have to go out and try to put it into practise and see how it applies in the real world. You did this with your trade as you say. BUT there's nothing like getting your hands dirty and learning as you go.

I was terrified buying my first IP...didn't know what I was getting into...didn't know what a reasonable price was for what I was buying...didn't have a decent accountant to give me sensible advice. I've learned a lot of what I know the hard way...by my "mistakes", or as I prefer to see them, as my "learning experiences".

Tis also important to look at one's attitude towards all of this investing stuff. Is it positive or negative? Is it optimistic or pessimistic? Do you believe in yourself or not? Are you scared of winning or scared of losing? Fear can be an enormous deterrant from taking any form of action. So feel the fear, and do it any way. The fear passes. We all wish we had heaps of confidence before we embark on something. The way it really works, is that the confidence comes after doing something, and not usually before. Not fair you say! But tis the truth. Don't we all wish that hindsight was foresight! But it doesn't work that way.

I'm reminded of something I read in one of Peter Spann's books. He said he had a mentor...and his mentor was all the people he spoke to about wealth creation, plus accountant, lawyer, property manager, mortgage broker, and all the books he'd read. That sounds like a pretty powerful mentor to me. Sure...some of the information and advice seems to be confusing and contradictory, but take the time to wade through it all and eventually take out the bits that make sense to you. That will give you your own plan of action.

Sometimes Chris, we just need to psych ourselves up, to believe we can do this. Gosh...I think of some of the HUGE deals I see Dazz doing...and my heart skips a beat. I'm envious of his sheer courage...and I think...if he can do such a big RE deal, I can surely do my smaller ones.

Take heart my friend...don't give up. Keep going!

 

[kissfan]

Hi Chris.

No-one will care as much about your future as yourself.

It appears you are taking a positive step in reading/researching financial security.

Keep at it and keep learning. By doing something, you will already be ahead of the pack.

Theres a couple of people I know who were as thick as two bricks at school level and were destined to be dodos all their lives. Both of them started their own small businesses, one of them started mowing lawns and has expanded into rubbish removal etc. Along the way, they have bought I/P's and mgd funds (or shares, not 100% sure which one) and have set themselves up financially.

One of them could stop working now and be quite comfortable but still chooses to work. Both of them are still considered thick by others.

They didn't have to be that smart to see that qualifications meant nothing (to them), and both worked out that by purchasing appreciating assets was the key to their future security.

Please note, I am not saying or implying that you are in the same category as these two. The point I'm trying to make is that if you can get financially smart, you can go a long way to setting yourself up for financial security.

Keep on learning and don't be afraid to change direction every now and then as your knowledge grows.

All the best.

Regards
Marty

 

[HandyAndy888]

All I can add here, is the notion of being future oriented. Who knows, maybe they'll start making cars from plastic and then you're up shet creek without a paddle....

Also, do you like working/your job? That is THE most important question you have to ask yourself....if the answer is no or hmmm, then perhaps you should keep reading these forums, think about investing and perhaps be able to do what you rally want (like do sweet paint jobs on hot rods or somefink) within 10 years...

PS. What I think!!!

 

[lizzie]

all great advice - as usual. all i can suggest is get out there and actually buy something (after due dilliagance) and that on occasion you will feel like you're about to have a brain explosion from the steep learning curve you are undertaking, but then the next property is easier (still the odd brain meltdown), the next one easier ... until eventually (after about 2-3 properties) you can do this property investing stuff in your sleep.

that also depends on your goal - do you want buy and holds, renovations, developments etc? my suggestion is to start with a property that needs a minor renovation - paint and carpet, do a couple of those then expand from there onto, perhaps, subdividing a block into two, then onto duplexes - and off you go. each property you will learn something new.

only you can know what you can manage workwise with your property investing and how much time you can devote - and work out your plan from there. obviously a small makeover (paint and carpet) takes a lot less time than a big reno. subdividing is pretty easy if you have the team in place - and so are duplexes - but a lot of work if you don't.

and use this forum - you will find someone who has done what you are thinking of before (no matter what that is), so don't hesitate to ask for direction or advice.

 

[jasperjue]

first thing is to ditch the shotgun approach to learning about investing. shotguns spray wildly and are v messy.
Pick something, one class.....lets say property. forget for now shares etc and just concentrate on property.

Good, focus is key.

Now go buy something average and take a breather and ease into the one property for a while and get a feel for it.

You should also realise that you are a business owner which is a fundamental step in wealth creation in my view so you have a lot to chew on anyway.

 

[sue78]

I only ever read one book and was a lurker on the forum for years...just reading and understanding. I only became active here after I had some properties under my belt. My posts are generally more contribution rather than asking for advice.

Best way to learn is to do it...yes, I made many mistakes but unfortunately, I'm quite dumb and only learn from mistakes!! I am a very mpatient person which doesn't help.

You're right that people don't invest coz they don't care. If I start talking about investments with friends....shortly silence will follow coz to them it's just uninteresting. But the things is...people should care. I think everyone should understand the fundamentals of economics, keep abreast with the sharemarket news, understand basic accounting principles etc.....i mean if you lose your job at least you could see it coming...if there's a recession at least you understand why and be well prepared for it, you should undestand debits and credits, and how to read a balance sheet. A job will earn you money but you need these skills so you know what to do with your money.

I think it would come easier for you as you already manage a business...managing properties is similar.

 

[kaf]

The bit that got me into investing was when I understood that money = time in the sense that by improving my financial situation and getting into income producing assetts I create time to spend with my husband and family which is the most important thing for me. This is what kicked off my motivation to learn about all the bits that by themselves were just not interesting at all for me, like finance, tax, markets etc.

And with this goal in mind I now find that I am actually really interested in markets and the details of a clever financial strategy etc. So I guess as it is said all the time your goal is the starting point and everything else flows from there. And if you feel you've reached your goal already with your business, then don't worry about investing - I think it's as simple as that.

kaf

 

[alexlee]

In business you are only going to be as succesful as your clients will let you be, dont investment properties need clients (tennents) to work. If the tennant cant mange there money wwhen things get tight they cant do business.

If you have read this far THANK YOU for listening to my little winge. I feel lot better now. So i think i will limit my forum reading from now on as it was getting a bit depressing when you relize you dont know crap about money. i will go forth and learn.

There is literally too much to learn about money. However, you don't need to learn everything. Just saving money and buy any property in a capital city and some shares every year is a perfectly ok strategy that will make you rich in 20 or 30 years.

I don't need my tenants to be THAT good at managing money. I just need them to be good enough to have enough money to pay me rent. I mean, your customers aren't going to pay you more just because they are better at handling money, right? Your rates are determined by the market and your own skill. Just because your customer saves more money doesn't mean you can charge them more. I can't change rents based on the tenants' financial skills.

I think you feel information overload when you try to absorb too much at a time. Start small and start with the basics first. You'll find that when you develop the basic knowledge (which might take months and months of reading) you really build up your knowledge quickly.
Alex

 

[Jocker10]

nu2Ips

By the number of replies to your post, I will understand if you are more confused now than when you first started posting. All excellent replies. Let me just randomly select few phrases:

1. save and buy property -- but how do you buy ?
2. cleaver financial strategies -- what is this ?
3. the best way to learn is to do it -- to do what ? how ?
4. buy something average -- what is average? is there high average, mid ?

All those replies are excellent and very clear for experienced people. But for someone starting out, those phrases may not make sense.

If I am in your shoes, these are what I will do.

1. Buy/borrow Jan's book. " More Wealth from ...."
2. Read it like a bible, word for word and understand every sentence.
3. If you do not understand a sentence in that book, ask the forum. Once you know how to ask the right question, you are half way to getting your objective in property investment.

Thats a good start.

Cheers Jocker 10

 

[timmyboy]

nu2Ips

By the number of replies to your post, I will understand if you are more confused now than when you first started posting. All excellent replies. Let me just randomly select few phrases:

1. save and buy property -- but how do you buy ?
2. cleaver financial strategies -- what is this ?
3. the best way to learn is to do it -- to do what ? how ?
4. buy something average -- what is average? is there high average, mid ?

All those replies are excellent and very clear for experienced people. But for someone starting out, those phrases may not make sense.

If I am in your shoes, these are what I will do.

1. Buy/borrow Jan's book. " More Wealth from ...."
2. Read it like a bible, word for word and understand every sentence.
3. If you do not understand a sentence in that book, ask the forum. Once you know how to ask the right question, you are half way to getting your objective in property investment.

Thats a good start.

Cheers Jocker 10

Is anyone aware of a thread that outlines peoples own "investing rules"?

I understand that there is no lesson like experience - the "just get out there and make a decision and then...just do it" - I have applied this myself and thank goodness have done ok.
From a beginner's perspective - as I was, lurking on this forum and gathering as much info as I could over the last 12-18 months - there is so much more than the "buy the right property, in the right location, for the right price, at the right time, possibly reno for the right price, sell for the right price or else hold and rent for the right return".

Eg: A couple of years ago I read something along the lines of:
"check the last 5 yrs average annual growth - if the last 12 months growth is considerably less than the 5 yr average, there is a very good chance that the area is undervalued and will play catch up in the very near future"
...........or similar.

Which, for a seasoned investor may make sense, or else they may possibly say it was overvalued in the first place...

The point I'm getting at is that I take so much more away from the "this is what I bought, in this area, for this price and here are the reasons why............. and research I did to come to my decision was...........".

There is certainly a wealth of this type of info on the forums, but is there a thread where new investors can reference people's "rules/theories" in a central location?

Tim

 

[sailor]

Is anyone aware of a thread that outlines peoples own "investing rules"?

Eg: A couple of years ago I read something along the lines of:
"check the last 5 yrs average annual growth - if the last 12 months growth is considerably less than the 5 yr average, there is a very good chance that the area is undervalued and will play catch up in the very near future"
...........or similar.

The point I'm getting at is that I take so much more away from the "this is what I bought, in this area, for this price and here are the reasons why............. and research I did to come to my decision was...........".

There is certainly a wealth of this type of info on the forums, but is there a thread where new investors can reference people's "rules/theories" in a central location?

Tim

Tim, I certainly think it would be useful to have a set of guidelines or theories for new investors...a short of quick checklist of what to consider.

Having said that, the recipe/cookbook approach doesn't do it for me. Everyone's situation or starting out position is different (eg age, salary, family responsibilities, personal values, risk tolerance, and certainly wealth creation goals).

Then the market itself is a moving feast, where the goal posts are always changing and not in the same way in each state, town or neighbourhood, at the same time.

So, my preference is for each person (as they seem to do now) puts forward their own scenario and others have a chance to post their experience, ideas and ask questions.

There's just no omnipotent bandaid for every sore!