crisis - i've cracked

[lizzie]

With CGT is it worth spreading it over two financial years or will the looses you carry mop up the capital gains?

the losses will mop up the cg on everything except the development site, as it's held in a different hdt trust. so we will have to pay cgt on that, which, even at the top rate will cost us about 1/4 of the 50% gain on purchase price - but won't be due for payment until may 2009 ... it is a price we are prepared to pay for the massively increased cg on our ppor achievable in the short term.

then - watch out - we'll be back!

 

[GoAnna!]

CGT covered then Especially given you will have use of it from date of settlement until you hand it over.

 

[Lily House]

Hi Lizzie,

You will be fine. You have identifyed the problem and are now working on the solution. Even if that means selling all, you'll still walk away well ahead of the masses, and be in a position to set yourself up for the next upswing.

You know, that is exactly what my hubby and I have done over the last 6 months. On a lot smaller scale than you, but we are glad we did. We are hopeless at making decisions, but sometimes the status quo is just not going to cut it.

Last year, we took quite a few profits from the sharemarket (and with what it is doing now, thank goodness!), used it to go on our Big Trip and to pay off our mortgage. While we were in Queensland, we started the process of developing the property we bought there 3 years ago. At the time we bought, we were confident of walking away with $200k profit. The thing is, there was a small but vital problem that we, the buying agent, or the council, didn't notice when we bought - which to cut a long story short, meant we couldn't develop the block as planned. It was a horrid situation to find ourselves in, and we had to admit it as a HUGE learning experience and cut our losses. Though we sold the property for $50k more than we bought it, because of negative gearing etc, we still made a loss. That hurt, but there was no point holding it anymore.

Other big changes followed. We came home to discover our dream home for sale. We bought it, and sold down the remainder of our Victorian IP for a large profit to enable us to buy the (upgraded) PPOR mortgage free. We shift next week, and have the money to do the place up to our liking, and with no debt, other than a margin loan on our remaining share portfolio.

The way we see it, we have a house that we never want to shift from, debt free, that we can leverage when the time is right. We sold our Vic IP for a good price, at what we think is a good time, the market possibly set to fall. We plan to gear up into IP again when the signs are right.

It wasn't easy for us to make such major changes, but I don't regret selling IPs like I once thought I would. We kind of feel like we are starting again, but from a much stronger position.

Anyway, just wanted to say Lizzie, that if you do end up sellling all, it is not as scary a position as it may feel right now. Sometimes plans have to be changed, for the greater long term good.

Good luck with whatever you do.


Lily

 

[Mr. Fabulous]

They don't, actually. You can't split characters like that and interpret them separately. Characters have different meanings when used as a phrase and when used separately. In any case, the word crisis is made up of 'danger' and 'change'. By itself the 'change' bit is neutral.

Opportunity is the second character PLUS another character.
Alex

Alex,

It was a quote direct from The Simpsons. Put it up as a joke, not to be taken seriously.

Mark

 

[LynnH]

Lizzie

Must admit I'm a huge "buy 'em and hold 'em" fan, having been through the selling phase last century (got sick of tenant hassles and useless PMs) and then rebuilding the portfolio in more recent years. However I think that sometimes you can get to the stage where there really is no other sane, sensible, logical choice BUT to sell, sort out the mess and then move forward. It certainly sounds like it's been a painful learning experience for you, and it must have been a difficult decision to make.

One of the 'positives' to come out of it all is that you know you've done it all before and you'll be back, much wiser and more enthusiastic. I wish you luck, and hope everything goes smoothly.

Remember, what doesn't kill you only makes you stronger - so please keep us all up-to-date with a thread on "Lizzie's Back"!

Cheers
LynnH

 

[jingo]

OK, while that post wasn't directed at me, I do wonder why on earth you are on a property forum if life is sooooooo wonderful without property. Your first post & you try & tell a long standing forum member to sell up everything & save your way to wealth. If you have read as much as you say, then you would know that Lizzie had a temporary melt down (we all do at times) & things are fine now.

Hi Skater,

Our long lost Aunty is a visitor from GHPC. Smug as a bug in a rug, believing that her dividends (from her recently crashed shares) and her interest (from her term deposits that are currently being ravaged by inflation) will enable her to buy a yacht (which Lizzie already has) and retire to the Bahamas whenever she wants to.

She didn't define 'rich'. But I would think that her definition of rich, and mine (and others on this forum) would be poles apart.

Lizzie's posts may sound frightening, but I am confident that her networth would surpass most of the D&G's many times over.

Keep going Lizzie. These people are like annoying flies. They buzz around here until they are snuffed out with fly spray and a giant swat.

 

[lizzie]

thanks for the confidence boost guys - jingo, you might be right there.

 

[Harris]

Aunty colic has suggested,


Perhaps Aunty colic is elderly themselves. .


At least Aunty colic can write lucidly,


keep posting Aunty colic,

hehehe.. Its Aunty Conic Daz..


but I am happy calling her Aunty Colic..! reminds me of a 6 mth old with tummy ache..

 

[aunt conic]

Yes yes, I am such a visitor and jingo has shown that he has recognised me with a few nicely woven oblique references. I'm happy to accept lizzie's implied definition as 2 million without debt and a passive income of 100k after tax as rich. I like that, and will be there in well under ten years even if you take my rent off the passive income.

The lower the share prices go, the faster I'll get there, as my cash and reinvested dividends will buy so much more. I'm very happy that some of my best companies have fallen the furthest.

Anyway, I did not declare my visitor status, because I simply wanted to suggest another way to lizzy without offending. It's pretty clear it could work well for you as you are already so well off from both the income and net equity point of view.

Sorry if I appeared a bit of an insect to you jingo. Just trying to help. You seem like a nice enough person lizzy and the answer to your dilemma seems to me to be right there in your posts.

Please don't let me stop you from doing whatever is best for you. You are clearly coming to it anyway.

All the best.

 

[Mr. Fabulous]

i hope i'm the "knuckle down", make the hard decisions and move forward type.

believe me, i ain't giving up on property - just taking a short side trip for a bathroom break and feed to make the journey more comfortable!

i finished reading donald trump "art of the deal" last week. great read!! i would love a part II for 1986 onwards. that man had some serious gumption - but i feel he also had some serious cashflow and funds behind him to start with - even though he doesn't specify such.

Well Lizzie, look at it this way - you've achieved more than what 97% of people -at least- achieve in their lifetime. Think about that. So dust yourself off, move on and go get 'em!

Mark

 

[HandyAndy888]

i just don't want to do it anymore! i'm sitting here having a good cry - i've had enough.

on top of everything else, i've had my land tax reassessed because the osr had my properties registered under a company instead of a trust, causing the current bill to nearly treble.

the new bill has come in with 3 monthly installments of more than our entire income for each month (1.5x higher) because of back assessment of 3 years. i've spoken to the osr about paying it off over a a period but they say they'll have to charge near 14% on the outstanding and "why don't we just borrow the money?".

the assessment is more than the entire rent for the year for two of our properties.

dammit - i've only got a few cheap little houses in newcastle!! not like i've got fifty, or even expensive ips!!

the government wants us to be self funded, but every time i turn around there seems to be some new fee or tax or penalty for owning investment property.

i can't stand the struggle any more. i want to sell everything and throw in the towel.

why is it that people get thresholds but trust don't, when the income is going to the people anyhow? another government scam on "rich" investors.

i want out ... i don't want to do this anymore. the stress, first with the sh!tty trust structure costing us a small fortune to hold together, paying fees in the thousands of $$ every time we sneeze for our development site, and now this land tax ...

i feel sick.

Lizzie, when I feel really down, I just think of the kids in Somalia...at least I'm not one of them....

Also, this helps me too http://www.youtube.com/watch?v=unkIVvjZc9Y

 

[cgw]

Hi Lizzie, hang in there. I am too inexperienced yet to comment on any of the above, but I am sure you will pull through. My Land tax is only about $100 per IP in SA, so I really don't understand it.
I am starting to feel the downside now as well, I finally got rid of my first bad tenants, and Teri Schear would not pay my Rent Arrears of $1,017 cos I changed over to them when the tenant was already in Arrears, but was catching up at the time. Obviously I did not read the goddam stupid book properly. I am over it now, and I am sure I will have lots of other stressful times as well, and I will think of you and others on SS and this will give me inspiration to move on.
Hang in there.
Cheers
Chris

 

[skater]

Hi Skater,

Our long lost Aunty is a visitor from GHPC.

I thought as much. They stand out like dogs b$%^s.

 

[kissfan]

As long as we all get to where we want to be, who cares.

Well said Alex.

For most of us, "where we want to be" will be different from the next investor. Theres more than one way to skin a cat eh.

FWIW Lizzie, I'm sure you will do what is right for you and yours and that this little chapter in your investing journey will, in time, just be a distant memory.

From your posts, you are definately a "knuckle down" type.

Keep in kind that it is only a problem if you can't find a solution, and I feel for sure that you will find the solution and arrive at your destination with plenty of time to spare.

Regards
Marty

 

[austini]

... The lower the share prices go, the faster I'll get there, as my cash and reinvested dividends will buy so much more. I'm very happy that some of my best companies have fallen the furthest. ...

Hey Aunty,

In regard to your investing strategy I'm definately tracking with you on that one. Once you understand the power of share dividends then falls in the share price are looked upon as a great opportunity to buy more passive income cheaply rather than being worried about a temporary drop in capital value. Like CoastyMike and others I have become weary of the hassles and constant expenses associated with property so I have been progressively reducing my IP holdings and moving it into quality dividend paying shares. Being very conservative there is a preference for LICs and ETFs.

Cheers - Gordon

 

[yieldmatters]

They don't, actually. You can't split characters like that and interpret them separately. Characters have different meanings when used as a phrase and when used separately. In any case, the word crisis is made up of 'danger' and 'change'. By itself the 'change' bit is neutral.

Opportunity is the second character PLUS another character.
Alex

Ha! Too many years stuck at the desk studying kanji !!

 

[Perp]

Also, this helps me too http://www.youtube.com/watch?v=unkIVvjZc9Y

Tee hee - I'd never heard of Ronnie Johns before. That was funny.

 

[Ali G]

All the best Lizzie - I am sure you will make a success of things regardless of which way you turn - that's just the way you are.

 

[pi2012]

Hi Lizzie...
Just happen to read your story: Something About Lizzie - A true investor's story
Really a great story..
You are doing so well...keep doing

 

[Perp]

Once you understand the power of share dividends then falls in the share price are looked upon as a great opportunity to buy more passive income cheaply rather than being worried about a temporary drop in capital value.

What do you mean by "the power of share dividends"? I confess that I look at 2, 3% dividends and think "big deal"... but I'm guessing that you're alluding to some strategy or perspective that makes that few percent actually worth a lot more than would first appear. Are you able to elaborate, please?