Education, qualifications, experience, etc

[oc1]

I think psychology is more useful to understand than economics in regards to investing. Did an economics and finance subject at uni which hasn't really helped with my investing at all - mostly formulas on how to calculate GDP, GNP, intrest rate returns and others that I can't even remember.

I agree Natmarie73. Teaching Economics and Finance at various universities for half the year is my day job and while the info is great, its not much help to investing. The demand and Supply concept is one to grasp properly, but I would say the psychology aspect in very important. Whats the use of knowing everything if you cant pull the trigger?!?!

I also have a Commerce degree and postgraduate qualifications in finance. Worked in a bank for 3 years after university. Traded/invested in property while working there then took the plunge and quit 2 years ago to go full-time. I trade property, acquire property for 'buy and hold', started doing a bit of developing and use shares & options to create income....uni study hasn't helped much in all of this.

I have friends that either have or near completion of their PHD's in this field. Not much of a correlation between it and investing. (Most say if their research actually made money they would toss the PHD and focus on the money!)

I'd say you would need to be more of a gambler than an academic to succeed.

Cheers

OC1

 

[Simon]

Work experience in Banking/ lending/finance has helped me to look at situations from the bank's perspective and I have never had problems with borrowing money. I have never had to use a mortgage broker and I've even managed to borrow on little to no income.

You make it sound like using a Broker is a refuge for the ignorant? Perhaps working closely with a broker may have added something? It certainly wouldn't have cost you anything.

You know a couple of them are pretty good...

 

[alexlee]

You make it sound like using a Broker is a refuge for the ignorant? Perhaps working closely with a broker may have added something? It certainly wouldn't have cost you anything.

You know a couple of them are pretty good...

For me, having a good broker just means I don't have to spend time researching loans, keeping track of the lenders, etc. I just need to know enough to understand what my broker is talking about and know more or less what I want. I don't have enough time to become an expert on everything, so professionals give me the knowledge I don't have time to get.
Alex

 

[sue78]

Hi Simon,

I didn't mean to offend anyone. Brokers are great and doesn't cost anything. What I meant was that often people go through brokers because they do have problems getting a loan and brokers know of many ways to help them get a loan and, in that sense, I've never needed the help of a broker.

 

[avura]

Hi Simon,
I didn't mean to offend anyone. Brokers are great and doesn't cost anything. .

Just as you have to research and constantly analyze mortgages, the same is with brokers. Just as in business, you usually can't pay anyone enough to care about your matters as much as you. With that said though, I use a broker. I think they're invaluable, especially with getting better rates.

 

[skater]

Just as you have to research and constantly analyze mortgages, the same is with brokers. Just as in business, you usually can't pay anyone enough to care about your matters as much as you. With that said though, I use a broker. I think they're invaluable, especially with getting better rates.

As far as Brokers are concerned, there are good ones & really bad ones (same as everything in life). I have experienced both. From my point of view, if you are looking for a Broker & don't want to get burned by one of the bad ones, then try one of the ones on the forum. They are all knowledgeable, though I only have personal experience of one. When you find a good one, you don't want to leave.

 

[-T-]

Hi All

I have thought about this in a bit more detail and have the following to add. Please don't crucify me for giving my opinion, I'm still a bit of a novice, so I am just proposing arguments more than anything.

I think university and higher education is more than what it's being portrayed here. If it were as easy as sitting through three years of boring lectures, then we'd all do it. I think what makes the difference is how we see the experience and how we leverage it. The universities don't profess to teach everything needed to meet our goals. I see them just as institutions to propel those willing to take on the challenges. The people who do succeed would succeed regardless; university is just another channel, maybe a catalyst.

People seem to consider self-education and university are opposites (I know, I made up the poll). Do we think that a lecture in which we're half asleep is really designed to teach us everything? University is all about taking an initial direction and starting a journey of self-education. The highest levels of tertiary education, PhD research programs, are the definition of self-education. Sure you have an advisory panel, but they're just meant to be synonymous with mentors in the real (non-uni) world.

Most people will agree that self-education with mentors and direction is more successful, rewarding and enjoyable, than without. Sure it can be done without any direction, but personally I like to bounce ideas of others and understand other points of view. I believe this is all university is meant to be, a mentor and a sounding board. But just like any institution of such size, there are unreal expectations, politics, reputations and critics. But the experience is what we make of it. A university gives you allotted time every week, it gives you access to information, it brings peers with similar interests together, and it even provides access to those who've enjoyed success. There are not many other places where this is possible with such magnitude.

We can argue forever about the relevance of university, but at the end of the day, the experience is what you make of it. If you decide to let is pass by, only concentrating on grades, then that's your prerogative. If you take it by the balls, leverage everything the university has to offer, just as you would in a seminar with successful presenters, then I think it is unrivaled. To be given five years of your own time exploring a passion, hey... enough said.


Have a good w/end
-T-


PS. I noticed Peter Spann voted for the top option of the poll. I know he must be a busy guy, but it would be interesting to know how much credit he gives to his studies. I know he is self-made and it's more about psychology, attitude and personality (my disclaimer), but it would be interesting nonetheless.

 

[geoffw]

PS. I noticed Peter Spann voted for the top option of the poll. I know he must be a busy guy, but it would be interesting to know how much credit he gives to his studies. I know he is self-made and it's more about psychology, attitude and personality (my disclaimer), but it would be interesting nonetheless.

I suspect Peter's finance qualifications came after he became rich and famous. That would have been a part of taking Freeman Fox from a company offering seminars towards becoming a financial advice and stockbroking company.

 

[Simon]

Hi Simon,

I didn't mean to offend anyone. Brokers are great and doesn't cost anything. What I meant was that often people go through brokers because they do have problems getting a loan and brokers know of many ways to help them get a loan and, in that sense, I've never needed the help of a broker.

No offense taken - I have been abused by professionals in my earlier career Most anything here is like water off a duck...

I think you will find some of the very best brokers will care almost as much as you and they also have access to a huge knowledge base.

I am not suggesting that I am a better broker but I do lose sleep over my clients affairs and spend more time than some of them do in looking to optimise their finances! Some of my clients have little to no interest in why or how - Just show me where to sign they say. That level of trust is disconcerting at times.

 

[Kristine..]

After reading many posts on this forum, I have come to wonder how so many of you know so much about investing and property. It is obvious from signatures that some are accountants and brokers, but for everyone else, what have you done other than reading forums like this?

Do most of you work in the financial sector /business, real estate, management, accounting, banking, commerce, etc. or are you undertaking tertiary study?

Quote rearranged a bit to save space!

Hello -T-

Knowing and Doing are two different sides to the one coin.

On this Forum there is a ready sharing of information and experience, and obviously the 'Professionals' amongst us make factual contributions from time to time.

However, even the 'Professionals' have their own personal ways of doing things and it is rare for someone with a related qualification to offer 'advice'. Infomation is not advice.

As you explained, you are wondering how so many Forum participants know 'so much' about investing and property. However, by limiting the Poll to the connection between academic qualifications and (success) in investing, perhaps you are going to get a skewed result from the Poll, although you have achieved a wide range of responses in the posts themselves.

In so far as this Forum is concerned, I think it may be fair to assume that only people interested in property investment will be active here. This produces a biased sample to base results on. Many of the professionals and para-professionals have contributed here for years, some since the very beginning of the Forum.

Simply as a result of this, we would know much more than the rest of the population, as most of us are active investors not just active Forum participants.

For those of us working in the field, we are explaining property investing to our customers all day every day. This keeps us up to date with tax, law, accounting, structuring, loan products etc, all the technical stuff which is quite meaningless unless someone wants to act.

Over the years I have met many people who know 'How' to do things, but the most successful people I have met have been the ones who simply get on with it. They 'Do' it , whether they fully understand it (tax, law, structuring) or not.

Doing will win over Knowing every time.

From my earliest days in real estate I realised that the people with two, five, twenty properties were often the factory workers or labourers and rarely was English their first language. Yet they bought when they could, as soon as they could, and never, ever, gave up their day jobs.

In my view, work ethic and general attitude is far more important to wealth than income, academic qualifications, or general cleverness. 'Wealth for Dummies' would not be a best seller; the world is full of genius, most of whom can never understand why, with their six figure incomes each year, they live off their credit cards and will retire poor.

If you were looking at the value of family homes or family income, there is a definite and proven correlation between University qualifications and the overall quality of family life. But for wealth, investment action and general determination to achieve financial independence, there seems to be nothing more valuable than life experience, a burning desire to 'do it', and the action necessary to 'do it'.

Just my opinion, but thirty years in real estate, property, finance and business has demonstrated this to me over and over again.

Ciao!

Kristine

 

[The Wild One]

Very nicely said Kristine.
And may I add that some of us who are investing, have families, putting kids through school, and earn under 50k pa have only had the internet connected for less than 12 months.

 

[-T-]

Hey Kristine..

Thanks for the detailed response.

Knowing and Doing are two different sides to the one coin.

Agreed. Like the saying 'Guns don't kill people. People kill people', I think, 'Financial strategies don't create wealth. People create wealth'. In both instances, without people you only have a tool.

As you explained, you are wondering how so many Forum participants knew 'so much' about investing and property. However, by limiting the Poll to the connection between academic qualifications and (success) in investing, perhaps you are going to get a skewed result from the Poll, although you have achieved a wide range of responses in the posts themselves.

The poll had nothing to do with success in investing. As you recounted, it was to do with how the people here knew 'so much'. I would never (at least not publicly ) make a direct correlation between success and number of degrees. All I was asking is where did their knowledge base come from? Did they first learn about compounding, leveraging, markets, economies, etc through uni or self-education? It really was that innocent of a question Anything since has been an alteration of the initial intent.

In so far as this Forum is concerned, I think it may be fair to assume that only people interested in property investment will be active here. This produces a biased sample to base results on.

Excellent point. Sure you can be successful just with property, but I personally believe a balanced portfolio (in terms of asset allocation) would be more successful. This mindset of mine started with direction from uni and has been built upon with self-education.

ver the years I have met many people who know 'How' to do things, but the most successful people I have met have been the ones who simply get on with it. They 'Do' it , whether they fully understand it (tax, law, structuring) or not.

Again, I completely agree. My initial question was just about knowledge, not about 'doing' or success. But if it was, I would assume those voting/posting would all be 'doing' people.

From my earliest days in real estate I realised that the people with two, five, twenty properties were often the factory workers or labourers and rarely was English their first language. Yet they bought when they could, as soon as they could, and never, ever, gave up their day jobs.

It could be said that the ratio of 'doing' people in this group is higher because they had to have some sort of 'doing' motivation to migrate in the first place. Comparing this to the entire locally-born population of the country may not be fair.

In my view, work ethic and general attitude is far more important to wealth than income, academic qualifications, or general cleverness.

Agreed. As I proposed in an earlier post though, I see uni as an opportunity more than a piece of paper. You can't determine from that framed piece of paper whether the student made good use of that opportunity.

If you were looking at the value of family homes or family income, there is a definite and proven correlation between University qualifications and the overall quality of family life. But for wealth, investment action and general determination to achieve financial independence, there seems to be nothing more valuable than life experience, a burning desire to 'do it', and the action necessary to 'do it'.

Most certainly. I stand by this 100%.

Just my opinion, but thirty years in real estate, property, finance and business has demonstrated this to me over and over again.

More reason for me to listen to what you have to say and heed your warnings; not only in this thread either.



Anyway, great discussion, obviously no chance of actually getting anywhere, just good to throw ideas around .


-T-

 

[Kristine..]

Hello -T-

Thanks for the detailed comments.

I apologise for drawing a long bow here:

The poll had nothing to do with success in investing. As you recounted, it was to do with how the people here knew 'so much'. I would never (at least not publicly ) make a direct correlation between success and number of degrees. All I was asking is where did their knowledge base come from? Did they first learn about compounding, leveraging, markets, economies, etc through uni or self-education? It really was that innocent of a question Anything since has been an alteration of the initial intent.

You're right, the poll did not make a connection to 'success'. Mea Culpa.

OK, where did I learn about leveraging, Internal Rate of Return etc? While standing out in paddocks with bunting strung between trees or road signs if there were no trees, often rained on, sunned on, or winded on (!) while trying to keep people's attention while I wrote figures on the backs of plans of subdivisions and tried to point out where recalcitrant survey pegs were hidden in the grass / bushes / behind trees.

My primary source of all this wonderful knowledge was my vibrant, garrulous, endlessly energetic and amazingly funny little (yes, he was quite short) darling Greek boss! Socrates (for that was his name) had arrived here with no English, a pregnant wife and a toddler, and promptly went to work for General Motors at the Fishermen's Bend manufacturing plant.

After six months learning English at night school, he started work with Wilmore & Randall, and the rest is history.

I have never met anyone, before or since, who had such a tremendous, deep seated conviction that property was what it was all about!

The sales team used to wait at Station Pier for the migrant ships to dock, and would walk along the pier carrying placards saying 'Land! Two Pound Deposit! ' and would sell blocks sight unseen to people literally straight off the boat!

That's how much of St Albans (Kings Park) was sold! 'Walk to the train station' they said. Yeah, right, if you start walking at 5 in the morning! but those who bought, prospered, and some people still live on the land they bought the day they arrived here.

Did I study this at University? No, the rich history of real estate in Melbourne is taught in no school. When I studied for the full estate agent's licence, was any mention made of negative gearing, internal rate of return, leverage, loan structuring? Nope. What about the studies for mortgage lending? Nah!

But after five years with Socrates, thousand of interviews with customers, endless sales meetings (Don't just sit there - sell something!) and travelling most of Melbourne & Victoria, with the occasional foray into Tasmania and Queensland, I learnt as much from my customers as they did from me.

What helps, -T-, is to take notice of what's going on around you, digest at your leisure, and relate stored information to each new circumstance. In other words, see things in context.

Docklands is just another Chirnside Park. Restrictive lending practices are nothing compared to the prohibition on lending against vacant land thirty years ago. We sold brand new three bedroom houses in Lalor in 1977 for $13,995. I got one of the very first 95%LVR loans, as a single woman with no male guarantor, in 1976 to buy a brand new two storey townhouse in Ivanhoe with views of the city for $33,500.

I have always worked with investors. Sure, a proportion of home buyers, but mainly investors. Try explaining the two centimetre thick Section 32 and lease agreement of a Stockland serviced apartment to a middle aged couple from the suburbs who have read one book or been to one seminar and you know you really should be charging them tuition fees!

And as an investor myself, I have learnt volumes from my bank managers over the years, from my accountant while we wallowed through the books, from my original broker, and of course as a broker myself from the various lenders' Business Development Managers who are usually the pick of the bunch!

And I aint finished yet!

We never stop learning, it is always such an amazing adventure. I am researching business funding now and it is a whole new ball game to residential lending, just amazing and such fun!

So, sorry that I jumped to conclusions regarding your question: In my experience no University teaches how to invest although we may be able to study the basic fundamentals of investing. The University of Hard Knocks is by far the best teacher - and it helps to have had a marvellous mentor like Socrates for five years, and a couple of thousand customers to practice on.

Cheers

Kristine

 

[Gabriel Conroy]

Trying to be more cut and dry ...

when it comes to finance. Have an English/philosophy degree. Helps zip at the sharp end, however, I like to think I'm a good reader and scanner of information! I tell ya what though - it's a tough gig tryin' ta get ya head around all the ins and outs of the game. Up to my armpits in the HDT thing ATM. Best, Gabriel

 

[grossreal]

Hi all
interesting post.
Not sure how to answer the post.
As I dont have a degree in anything but I am a electrical/electronic technician by trade.
Am a broker but just because I did the coarse so that I could do my own deals,do my own lending via different brokers because I know how a bank works and know what they want.
Do the negotiating on the project from the start and organise the funding for each project.
Am a private one on one lender as you don't need any qualifications to lend out your own money ( and am moving into an area that lends out the banks money on my account).
Its interesting reading this post how many accountants and bankers we have on the forum we should have another page instead of caveat empire we should want a loan and want a structure,
and then different people could tell the person how they can get it with there bank.
but I digress I have seen a few post with regard to brokers and why would you use them, the reason for me is very simple in sydney alone there are about 2000 lenders, now if you had one broker that represented all of them thats a very busy boy and there is no such boy.
You can walk up and down macquarie street or york street and try and get a loan and again you are waisting your time and for me times money.
so I get different brokers to look at my deals and tell me what they can offer if the deal works out I run with them.
and once I allocate a deal I stick with that deal, for me to go and do each lend would take me away from core business and for me thats a no no.

Work out what your good at,
do that and only that for me,
I'm the guy that pulls all the threads together and does the deal.
sorry but I haven't seen a coarse thats has a degree in dealing ( maybe cards at a casino).
The money is not in the product its in the deal a property maybe worth 500k but if you have neg 400k up front with a deal settlement of 2 years vendor finance for 24 months and then pay the other 100k to the owner and the property is in an area of 20% growth.
You have paid the same price but made 200k and you did the deal.
The property is still worth the same you have made the profit.
I like what I do, I get very upset if a deal goes bad but thats business.
we are dealt a hand of cards when we are born and its what you do with that hand thats important thru out life you get a single card put on the table and you change your hand constantly for me I try and carry a royal flush, some time the other guy shows his hand and I put mine away and play on. this is the same with any part of life, if your negotiating don't show your hand unless you have to.
This post is on education or qualification well they are good and we try and distille this into our kids and keep them working on their books but its not the B all of every thing, for me I find that doing what you understand and working around your minor humps in the road are alot better.
rule number one is find out what your good at(and work on being better at it).
then find out what your bad at.
then get some one who is good at, what your bad at and get him/her to do it.
I'm bad at paperwork hence allan and robert do it.
success for me has nothing to do with degrees as they don't have a degree on how to make a million in 12 months( a few spuikers do but thats a different question) success is relative to the person who is looking at success.
you may have success as getting to 1 million, I may have success as getting to 35 million and bill gates may have success as owning all of europe and have of south american, he's at 2 billion and he still does say he's got success.
reason
because our view of success changes as we draw close to it.
so as you can see for me it is relatively an easy post to post but a bit difficult to answer and this was my best attempt I did say I was going to cut down the size of the post and haven't grammered it so have fun reading

 

[Bill.L]

Hi all,

Grossreal, ne'er a truer word was spoken....

sorry but I haven't seen a coarse thats has a degree in dealing

That is the crux of the matter. They just do not teach that at university.

I did some tertiary economics (Bill shows part of his hand here), but never did it come close to telling/teaching you how or what. In fact if you waited for all the conditions to be correct from the economics point of view, you have probably missed the boat.

-T-, you have been given some sage advice in this thread, but you will probably have to go out and learn it all by yourself, and when you have had Kristine's 30 years of experience you will finally have found your answer.

bye

 

[-T-]

Grossreal, ne'er a truer word was spoken....

That is the crux of the matter. They just do not teach that at university.

They don't teach everything about 'dealing' at primary school, secondary school, investment seminars, in property books, etc. Does that mean they are all useless?

Come on guys, if you read my post you would see that I suggested uni is like everything else; it is what you make of the opportunity. If you expected your uni to hold your hand and make you the top of your field without self-educating, then no wonder you didn't see value in it. You are given massive flexibility, especially post grad.

The debate on the value of uni really is like religion and money isn't it?

PS Just to add some irony, you could most definitely study 'dealing' at university.

 

[Riverfront]

Educational Contributions

I don't, and have never, worked in the investment or property industry but I completed the Diploma of Financial Planning a few years back as part of my own self education. It was actually a bugger to complete without all of the inherent investment software available to financial planning companies but I did learn a lot and have used the principles for my own benefit. Education is a personal thing and you need to be clear on what you are trying to achieve and ultimately how you are going to combine education with practical experience to achieve your goals.
This site, however, combines the best of both worlds. Many contributors have appropraite professional qualifications while others have a wealth of experience, and some have both. I have learnt more from this site than I could have from any formal course and I thank each and every one of you for your 'educational' contributions.

 

[grossreal]

hi T
I have read the post and yes uni does give you the tools to understand the principles of investing just the same as gardening and hair design the point here is not that uni is not good its what you do with that knowledge.
for some me being one of them uni was not an option it the old saying if I knew then what I know now, I would be alot better of well that is true.
investing is a numbers game and with the use of spread sheets it makes a bit easier but at the end of the day some one needs to do the deals and unfortunatly there is no coarse for that.
You also have to learn to cut and walk which when you have invested alot of time and in some cases money in the project, thats is harder then getting the deal across the line.
I hate to lose but some times I do and make it known to all concerned that I don't like losing.
we all have a learning curve and if thats uni or the colledge of hard knocks its still learning.
I like dealing with asia and am just about to launch into a joint venture in shanghai with asian jv and they have some interesting ways at looking at learning and investing quite different to western lending and investing and their rules are different I don't think that any uni coarse here would be able to explain networth lending, that is not lending on a property or tax returns etc but what your networth is and that value is given by you.
or networth lending were depending on your networth the interest rate changes depending on the value of the lend.
these arn't here but they are in the asia rim.
in the area of finance there are alot of different areas of lending and funding.
sorry about the grammer in a hurry

 

[Glenn]

My Education

As yet, not one person in my blood lineage has completed a university degree.

In 1988 I completed 6 weeks of a geology degree...a very tough 6 weeks as I was carrying the hopes of a whole family, spread as far as Holbrook, High Wycombe, Kelmscott, Ballarat and Springvale. Alas, the periodic table and Chicken Little got the best of me :-(

Next was 11 months working at FAI insurance in Perth...ha! Weekly pay = $178.50 paid in caaaaash each Friday afternoon in little orange envelopes...woohoo! Used to go to the skimpies at the Grosvener Hotel with said caaaaash straight after work and destroy vast chunks of it

Early 1989, jumped on bus to Brisbane to work on construction project between Roma and Gladstone. Weekly pay = $750 - $1000 paid weekly into bank account. Worked 4 stints, being 4 weeks, 2 weeks, 9 weeks and finally 13 weeks (10-12 hour days, no days off). Arrived back in Perth as (what I thought) slick as a rat with a gold tooth....$25,000 in the bank, young, dumb and full of ah, ah, you get the idea

Six months later...all cash gone :-(

1991 - 1992, broke, broke, broke, broke, broke....this sucks big time!

1993, start to get angry about lack of cash

1993-1994 (12 month period), work like hell and save $30,000. Buy a townhouse in outer suburbs of Perth

1995, read "Making Money" by Paul Clitero while on another construction project, get really angry about lack of cash and become serious tightass. Work 80-100 hours per week for most of year and save $50,000.

1996-1997, go to job that pays penalty rates for overtime (I seems to have the energy for long hours, might as well find a job that rewards it), continue to save $20-30,000 per year, continue to be tightass.

1997, hit gold but don't realise it, buy a 1 bed flat in the inner suburbs of Perth as it is close to pubs, clubs, and work. I am no longer driving so many miles to work, less time driving = more time for overtime and less speeding fines = wooohoo!

1999, flat next door comes up for sale. I NO NOTHING OF IRR, CGT, CASHFLOW NEG, CASHFLOW POS OR ANY OTHER OF THE TRICKY TERMS THAT ARE BANDIED ABOUT ALL THE TIME. The rent covers the interest bill, I pick up the rates...this is good, but the real killer....I sell 6 years later for 2.5 times my purchase price. During this time I learnt about how to make renovations work to a budget, short term letting, how to say NO, when to say yeeees (grimace), the fear of not having a tenant during a rental glut, and how that cashflow is nice but it is the capital appreciation of assets that is able to set you free.

1999 - 2001, get married and move to Sydney, rent for a couple of years

2001 - 2003, return to Perth, both our incomes go up by at least 30% (go figure?) yet Perth property is at least 60% cheaper....we see the opportunity and gorge.

2006, I can see the whites of the buyers' eyes...

My education has not stopped yet.

Good hunting

Glenn