Do you have a story to tell?

I'm happy as I am. DINKS - or whatever - doesn't, for me, come into the equation too much. We can all achieve success. There are no excuses! :)
 
the story

okay, don't obsess on the scrimping part of my description of my story - that was only one part, and I was trying to be colourful. The story - btw requested by our readers - does address the more sophisticated, financial matters - for instance, getting over the serviceability hurdle, a big one . You'll also see I mentioned investing in commercial for cash flow (tax breaks). Even, perhaps, this occurs to me just now - selecting the right kind of financial advisor or accountant might be important to starting off or advancing a investor journey - yknow, going for a property friendly accountant rather than a corner store accountant who's about 100 years old. And there's the thing about dropping down one income...
I really like some of the things you guys are saying about mindset, too. Which reminds me, if anyone wants their words to be quoted, say so, if you really don't want your words to be quoted, let me know that, too. - Sal
 
I reckon mindset is key. I often compare a person's attitude to money as you would a person's attitude to food.

As an overeater has an unhealthy attitude to food so does an overspender have a poor attitude to consumer debt. I see some pearlers of people who have borrowed multiples of their annual income on fast depreciating items like cars, holidays, furniture etc.

It doesn't take much to show them the difference between borrowing for income producing purposes and how the taxman helps foot the bill.

But nothing can change until a person actually changes their attitude to money and uses it as a tool rather than using it for comfort.

I hope this makes sense - I am currently writing a bit of an article on it and would be happy to share it if it helps.
 
Simon said:
I am currently writing a bit of an article on it and would be happy to share it if it helps.
Simon,

Good stuff, and about time! ;) You always post good advice, so I'm looking forward to that article... There's quite a few smart people around on this forum, and you're one of them, that I think could do worse things than putting some of their thoughts to paper.

Lesser minds have made a lot of money from doing just that. Maybe if we all did some writing we could pull it all together into a body of work and publish it as the Somersoft diaries or some such. ;) :D

Cheers,
Michael.
 
We are on our 3rd property now including a PPOR.

We are a single income familly of 6, 4 kids 13-4 and a stay at home mum.
I work for Defence and earn about $52000pa befor TAX.

Things are certainly tight most weeks, but if you have willpower, forsight and courage you can do it on a small budget.

For us its simple, we do without. We by Bi-Lo groceries. Cheap cars and clothes. We don't go on holidays or weekends away.

The only thing we don't scrimp on is our kids education. We budget hard and put our kids in a private christian school.

I think the secret is not starting too big. We bought our first house in 1995 for $32500. We squeezed into it and spent every spare dollar we had paying it down.

$32000 - 3br Whetherboard
$110 000 - $120 000 - Todays value

Few years later we used the equity to buy again. Once more we went small, only a little bigger than last time. $122,500.

$122,500 - 3 brm Brick.
$130 000 - $140 000 - Todays value

We then purchased our PPOR.
$165 000 - 4br brick
Todays value - Unknown. Only bought late last year.

We had no deposit to speak of for first house and used min of equity to finance other houses since then.

Only advise I can give is:

1. Start small and work your way up.
2. Learn to only purchase things that are going to increase in value.
3. Realestate is very forgiving if you invest long enough.
4. Realestate is a long term investment so don't rush.
5. Average income earners want to rent and buy a house aswell so don't just buy $200,000+ houses.
6. Learn to use the banks money and don't be afraid of debt. (BIG ONE!!!)

My wife and I are only 33.
 
sal said:
Even, perhaps, this occurs to me just now - selecting the right kind of financial advisor or accountant might be important to starting off or advancing a investor journey - yknow, going for a property friendly accountant rather than a corner store accountant who's about 100 years old. - Sal
Sal

Has any one done a article on what many would consider to be the best financial advisor they've come across. This forum. Why have one when you can have hundreds... ?


Our accountant uses what we've done as something to inspire his other clients. This place inspired me to do what we've done.

See Change
 
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I am married with 2 kids. Both at primary school (Grade prep and Grade one). Now a one income family.

We bought our PPOR - small 2 bed unit. Built some equity by living within our means while on two incomes prior to kids. Borrowed 110% on an investment property (another two bed unit) interest only.

Got married, had the average wedding - church, cars, reception etc. Spent 12 months in San Francisco - housing was too expensive so moved back. Sold two bed unit and upgraded for house and had the kids. Borrowed for 2 more units.

Got retrenched after 10 yrs with the one employer, but with the equity built over that time i was not too worried about it. Now contracting in the same field.

The keys to making it a success.
1. Be patient. Property takes time to grow.
2. Live within your means.
3. When you have equity in PPOR - borrow to buy an investment property. Subject to servicibility and sleep at night factor.
4. Borrow interest ONLY
5. Use the tax refunds to offset PPOR borrowings.
6. Buy for growth. I have bought near beach, schools and railway station.
7. Be patient. Did i say that again.

My objective is to have $2m in property including PPOR. If property appreciates by 5%, then I have made $100,000 for sitting on my bum and doing very little.

I have subscribed to API since 1998. I even got it sent to us in San Francisco. I love it and have subscribed ever since.
 
see_change said:
Sal

Has any one done a article on what many would consider to be the best financial advisor they've come across. This forum. Why have one when you can have hundreds... ?


Our accountant uses what we've done as something to inspire his other clients. This place inspired me to do what we've done.

See Change
How true sc

Don't think API has ever written about the best resource going for investors.
The forum has sure helped my journey as well.
 
The instant gratification plus attitude

After last weekend i can surely relate too that, sister came to visit me at my PPOR all she could say, yuck look at that carpet, she said that last year too. I know its old but i get so few visitors and theres only 2 who complain. You just go out and buy it (carpet she means).Me i cant see the piont just yet as i am 2 years away from replacing the windows there rotting out and the near new carpet would be ruined in the process.
Ive got priorities, build a portfolio now im single its a challenge on one income, in comparing many bills to married people many are the same ive had no baby bonus, no dependant spouse rebate, no first home buyers grant, paid a fortune in tax.
Its all about GENUINE URGE TO SUCCEED!!!!!

Thats me.
 
see_change said:
Has any one done a article on what many would consider to be the best financial advisor they've come across. This forum. Why have one when you can have hundreds... ?
Exactly!

It was the forum that inspired me, many years ago now. The fact that you can ask questions & get answers from many seasoned investors makes the prospect of investing not nearly as scarey for first time investors.

When I found the forum I only had 1 or 2 IPs, so it was a huge learning experience. Sat back & lurked for about a year before registering & becoming active, but learnt so much in that year. I don't think there is anything that compares to what we have here.:D :cool:
 
Agree wholeheartedly, Skater

Skater said:
When I found the forum I only had 1 or 2 IPs
SNAP !!! http://www.somersoft.com/forums/showpost.php?p=27590&postcount=2 And it was thanks to Jan, first for her books, and then the subsequent forum that burst into life late in 1999. What a journey - and so many thanks to the contributors over the years.

There have been the usual "ups-and-downs" of most start-up groups, (check out some of the Archived forums for "the early days" - some of the early drama lives on still - thanks to Mike) :D

But over the years, we've hosted so many WORTHY individuals (still do). I've been fortunate to see it all virtually from day one. WHAT a ride !!! DO stick around to contribute, as that's what makes it what it is - a sounding board for ideas re IP's,

Regards,
 
Goldminer said:
After last weekend i can surely relate too that, sister came to visit me at my PPOR all she could say, yuck look at that carpet, she said that last year too. I know its old but i get so few visitors and theres only 2 who complain. You just go out and buy it (carpet she means).Me i cant see the piont just yet as i am 2 years away from replacing the windows there rotting out and the near new carpet would be ruined in the process.
Ive got priorities, build a portfolio now im single its a challenge on one income, in comparing many bills to married people many are the same ive had no baby bonus, no dependant spouse rebate, no first home buyers grant, paid a fortune in tax.
Its all about GENUINE URGE TO SUCCEED!!!!!

Thats me.
Hmmm,

Keep the dirty carpet and realise your dreams sooner rather than later OR buy that new fluffy buffy wuffy woolen carpet and introduce a reason why'll you stay frustrated just that little bit longer...


Am I missing something here?


George "talk to hand sis!" Grubar
 
Goldminer said:
After last weekend i can surely relate too that, sister came to visit me at my PPOR all she could say, yuck look at that carpet, she said that last year too. I know its old but i get so few visitors and theres only 2 who complain. You just go out and buy it (carpet she means).Me i cant see the piont just yet as i am 2 years away from replacing the windows there rotting out and the near new carpet would be ruined in the process.
Ive got priorities, build a portfolio now im single its a challenge on one income, in comparing many bills to married people many are the same ive had no baby bonus, no dependant spouse rebate, no first home buyers grant, paid a fortune in tax.
Its all about GENUINE URGE TO SUCCEED!!!!!

Thats me.
I think that there are also plenty of us who have survived on one income while having a family, never got baby bonus or any Centrelink, had no first homebuyers grant, still have HECS debts (and had to pay up front for Post Grad studies), certainly don't get tax rebates, made the decision to go back to work earlier than other people may have etc etc etc.
But that's what it is all about, making the decisions, and in some cases, sacrifices that will get you where you want to be in the future.
There is a lot to be said for delayed gratification, if you can do it. That's part of the reason why this forum is so inspirational - every day.
Regards
Alanna
 
Sal/Lisa

M2CW...


Point 1 of 2 - Values and Mindset

I think many young people don't get an opportunity or make an opportunity to think and live outside the dominant cultural paradigm; which entails a lot of consumerist consciousness.

When I was young I backpacked OS a lot, and trekked.
This taught me a lot about what is essential and necessary.
It taught me a lot about:
- logistics and organization.
- to challenge the consumerist culture we have thrust at us each and every day.
- optimal nutrition and Calorie balance.
- fixing things practically, instead of throwing them away and spending $30 on a new thingamijig.

When you have to carry everything you eat and need for a week on your back, you soon learn to get rid of the unessentials.

I can thoroughly recommend trekking for a week as an excellent grounding experience for young people trying to make a paradigm shift away from the automaton mindset that prevails.

The most important thing i learnt was that health, happiness, an active curious mind, a smile, and a light and warm heart will always make someone look wealthier and more attractive than a new BMW and a $1000 suit or new shoes.

end of rant 1



Point 2 of 2 - Current Knowledge in a rapidly changing world

My perspective would be for you to focus on interviewing 3 or more reputable mortgage brokers or financial advisors. Several years ago when I was struggling, I was too embarassed and feeling "not worthy" to go along to the bank and ask about a loan. (after all, my dad had been a bank manager and I worked in the NAB in my first year out of school and thought I knew what was required for a home loan)

A PI friend changed my life when she said I'd get a loan easy, as things had changed a lot in the last 15 years.
That was one of those turning points in my life, but I had to break out of my self imposed limitations to move forwards.
When I saw a financial broker evetually, I was stunned that I could borrow and comfortably service 4 times what I imagined.

I reckon there'd be a lot of young ones today who take advice from their parents re borrowing, and they are probably getting out of date advice like i gave myself.



Cheers
BTW, I wonder what response Lisa has had from that "other" place... ;)
 
my story in brief.

We were able to purchase a first home in Oct 2001, in a OK, working class suburb, tiny 3 bedder, single lock up. Married but no kids yet.
Purchase price $150K. Happy as pigs in mud!!

Was reading on how to pay off my mortgage as that was the biggest financial goal (isn't it the great australian dream?), & sweating on it of an evening.

Read Your Mortgage & How to pay it off in 5 years, by someone who did it in 3 by Anita Bell.
Agreed with some principles but not all, and it got me thinking & talking to people

18 months later still in same house. one child on the way!

Someone recommended reading Jan Somer's book, and I started and finished it in one afternoon.
Talked to someone who was already doing all this: they gave me mortgage broker & solicitor contacts.. Went and saw them immediately.

A few weeks later - was putting offers on properties but getting out priced quickly in our suburb. started looking to the South side of brisbane.

Our baby was born which put a stop to things for a few weeks.... :)

a few weeks later - after personally spending the whole day viewing properties, and weeks prior investigating:
We were signing a contract on our first rental property, in Loganholme, under-rented and under valued. Baby was about 6 weeks old, so Mrs A/c had to feed him in the back of the car. I won't be getting away with making her go through that again! Next property is more up to me what and where, just discuss with her, but no dragging around town please!

Purchase price $157K, rent $170.
Changed the property manager and the rent went up immediately to $210.

Since then bought a renovator Unit and sold it 15 months later for good percentage profit, and bought a new bigger family sized PPOR 150meters away from the first!
renovated and sold original PPOR (too small for growing family)

So we are now in the position to buy and hold our next IP, having seen equity grow, adding value by adding a 4th bedroom to our current own PPOR and reading LOTS more books *(currently reading Michael Yardneys - v good by the way! )

There's lots more pieces to this story but that's where we are at now - along with another child, bigger car etc etc.

Third child planned, also next IP planned shortly. (This year!)

All this was done on one wage with a full time job. - so it can be done.
There's plenty of other's who have gone higher, faster though, and with less to start from.

Just a note - the original rental property we still have. One lease has finished and the rental manager has put the rent up $15 per week and it is now $265 per week! wow.

Sal,
is that the kind of story you are after? or maybe something a bit more inspirational like;

23 properties in 2 years! etc...
 
thefirstbruce said:
When you have to carry everything you eat and need for a week on your back, you soon learn to get rid of the unessentials.
totally agree - did some major trekking around new zealand's south island in my youth ... and it comes down to "do i take a change of underwear or another freeze dried meal".

after trekking for over a week in one of the beautiful west coast river systems, living off freeze dry and fresh trout, i ran into some pro fishermen when i got to the sea who gave me a couple of cooked lobsters - i could've cried - i needed a steak!! (and no rude comments geoff :eek: ).
 
lizzie said:
i ran into some pro fishermen when i got to the sea who gave me a couple of cooked lobsters - i could've cried - i needed a steak!! (and no rude comments geoff :eek: ).
No rude comments whatsoever!

The world is a great place, with so much to offer, in so many places.

Like they say, "The world is your lobster".
 
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