Cash or asset rich?.... or both?

Hi guys,

Just wondering what the 'norm' is for most property investors. Are you cash and asset rich, or cash poor and asset rich?

What about the commercial investors out there?

I realise the term 'rich' is subjective, but I'm interested on how you consider your own situations. ;)
 
cash and asset poor with 2 IPs and %75 LVR :) working on that by hoping IPs increase in value and me making more money with my business.
 
Asset rich and very cash poor. Best way for me to be for now as I am a spender and will always live just outside my means so best I have less cash to play with. :D
 
It very much depends on ages and stages.

At the beginning, most investors are mortgaged to the hilt and very cash poor (been there).

Towards the end, where we are now, we are probably both asset AND cash very-well-off (don't know where "rich" cuts in).
Marg
 
It very much depends on ages and stages.

At the beginning, most investors are mortgaged to the hilt and very cash poor (been there).

Towards the end, where we are now, we are probably both asset AND cash very-well-off (don't know where "rich" cuts in).
Marg

Cash average, asset average - how about that?
 
Cash and Asset - middle of the way - but we'll get there.

Am sure if the same question is posed in 10 years time, I will say
Cash and Asset - Richie Rich !
 
What about the commercial investors out there?

We've only been at this game for 5 years, so both still wet behind the ears and poor both with cash and assets. Of course definitions of certain words may vary slightly between individuals.

Give us a wee while (ask us again in 50 years time) and the story may have changed somewhat.
 
Hi Molly,

If your question is for guidence as to what you should do, then it depends on your comfort zone, your risk strategy and how soon you want to get ahead.

Yes, In the early days most of us are Asset rich and Cash poor.

I am currently fixing that little problem.:D

At the end of the next twelve months I plan to be Asset rich and Cash rich.:D

Regards Jo
 
Depends what ones definition of rich is.

To some I might seem ok to myself i dont belive I am, However I always will want more.

Lifes comfy, and i dont belive I have done poorly, but theres always room for improvement.

As for cashflo or cash, they are both about the same, you need the balance.
 
Still acquiring and building on asset base, (it is all relative Molly). I feel I'm a long way from "are we there yet".

Yet, it's still a pretty good achievement even if we stopped cold, right now.

I enjoy it all too much to stop, too.

So I think in reasonably relative terms of Ozzy assets, and income, well above average Bluey Smith's asset base, maybe around lower percentile of cash...but keep in mind we are cheap dates, we live off the land, not materialistic type people, more experience/traveller types, and that need not be expensive either..we seem to manage good bang for our buck.

All relative to the individual(s).
 
Hi all,

How about knowledge rich? There are/were plenty of people asset rich/cash rich before the GFC, but with poor knowledge lost the lot, just ask a Storm Financial customer.

Dazz is rich in knowledge about commercial property, probably just as important as the few baubles he has accumulated over time.

Topcropper is rich in knowledge about grain farming in his environment.

Geoff is rich in knowledge about running/managing a subway outlet.

Scramble the activity of each into one of the other and watch the outcomes suffer. Poor decision making comes from lack of knowledge.

bye

PS Apologies to the above esteemed members if they think they could do the other things brilliantly, I was just trying to make a point.
 
Hi guys,

Just wondering what the 'norm' is for most property investors. Are you cash and asset rich, or cash poor and asset rich?

What about the commercial investors out there?

I realise the term 'rich' is subjective, but I'm interested on how you consider your own situations. ;)


Hard question to answer, if you would have asked me that 2 years AGO it would have been a different story but as we only look at it day by day, we are at a different stage in the investing game then some in this site are and I learn every day, property wise I know a few people on higher levels maybe 10 mil plus if the sold everything, they don't think it's a lot of money for us we are unencumbered asset rich not that, means anything, and I have a small float of cash that I use to day trade on the "ASX"..
I look at it both ways 25 years ago anyone in a new up market euro car was considered "RICH”, these days anyone can look rich in the clothes the wear or any car they want as long as they are working, where all the high end "Rich" people I know drive 10 year old cars and wear old clothes that I know maybe it's just my inner circle of mates, as they say the wise control their minds, while the ignorant control only their bodies,and if you can control your mind ,you can do anything..
willair..
 
This is a fantastic post!

Im both asset and cash poor! I am almost into my 3rd year of investing, where I will have my 3rd IP by that stage....so 3 years, 3 ips is not too bad. Yet so early in the game with so few IPs have meant I have not been able to take advantage of both time in the market and the compounding effect required to generate any kind capital increase.

Can anyone comment on how many IPs and how many years in the market one needs before they begin to see the "compounding" effect work its magic?

By my calculations, you need to have approx. 8 Ip's with approx. 10 years to really get the engine cooking.
 
Can anyone comment on how many IPs and how many years in the market one needs before they begin to see the "compounding" effect work its magic?
.

For us, we found more voaltility in the market than would have originally been imagined. For example, when we started in 2000~2001, properties were going up in Melbourne at a rate where your next deposit was there in less than 3 months....

Cheers,

The Y-man
 
Compared to many people, i'm poor all round, but i'm quite happy with what we've got, both cash & assets, and i'm also very happy about the potential we've got in the near future.

Being proud & happy with what you have does kinda make you feel rich, and that's what is important i think. It's also easy to be happy for others when you feel good about yourself. There's a quote which is kinda true and went something like Being gratefull allows you to feel rich.

If you look at everyone else and just get jealous, making negative comments like a bitter old person, then it doesn't matter if you have billions in cash and assests, you'd be & feel in a very poor state.
 
Compared to many people, i'm poor all round, but i'm quite happy with what we've got, both cash & assets, and i'm also very happy about the potential we've got in the near future.

Being proud & happy with what you have does kinda make you feel rich, and that's what is important i think. It's also easy to be happy for others when you feel good about yourself. There's a quote which is kinda true and went something like Being gratefull allows you to feel rich.

If you look at everyone else and just get jealous, making negative comments like a bitter old person, then it doesn't matter if you have billions in cash and assests, you'd be & feel in a very poor state.

Great post. I agree whole heartedly.
 
There is a lack of numbers in this thread which is a bit unhelpful IMO.

How about I put a definition out there of cash rich? Say, if you have $1m in cash available at your disposal at any point in time. For me that would be cash rich - whether it's savings or from a loan secured against equity isn't relevant to me but may be to others. Of course everything is relative and for James Packer he would be feeling quite poor with that but the definition works well for me.

For asset rich, I would require a net worth of $10m to consider myself asset rich. That would mean I could meet the desires of life without having to think about how it would effect my financial situation (most times!). YMMV!

On both those counts, I am not (yet) rich! I will have to index these numbers to inflation going forward as well... :eek:
 
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