Fast and slow words

[BayView]

Was reading RK's "Retire Young, Retire Rich" (again) last night, and he is talking about the words we put in our heads as a factor in your progress to get rich (assuming you are trying to do this) -

Slow word - Save (money in a bank, etc)
Fast word - Depreciate (tax deductions on assets)

Slow word - appreciate (waiting for an investment to grow in value - Sydney right not withstanding)
Fast word - cashflow (allows more acquisition of assets with cashflow)

Slow word - doodad (keep you poorer)
Fast word - asset (increases your cashflow)

Interesting...I hadn't realised just how much my (and others here, no doubt) mindset has changed since first starting down this investing path...

How much has your mindset shifted since discovering investing, or have you always had the right words in your vocabulary?

 

[wategos]

I find it odd how property investors use the term PPOR (Principal Place of Residence) instead of "Home".

 

[wylie]

I find it odd how property investors use the term PPOR (Principal Place of Residence) instead of "Home".

On the forum using PPOR makes it very clear whether the house being discussed is rented or not. It is a bit clearer than "home", which could have been both PPOR and IP.

 

[Sonamic]

Because you can rent a home? PPOR terminology implies ownership. There are more people opting to rent a "home" as it improves cashflow to further invest. With more younger people wanting to adopt the fast track to retirement by 30 to do whatever for likely 60 years after that, it is becoming a popular option. It's not just for young people either.

I'm early 40's and happy to work till 50, so having a PPOR Motgage doesn't bother me so much as my repayments are half what rent is in my area.

 

[wategos]

Because you can rent a home? PPOR terminology implies ownership.

Pretty sure you can rent your PPOR, it doesn't imply ownership. Anyway I use the term home, I dont see any difference. When is your home not your PPOR and when is your PPOR not your home ?

 

[perthguy]

How much has your mindset shifted since discovering investing, or have you always had the right words in your vocabulary?

I grew up with property investors and started reading for sale ads for property as soon as I hit high school. I helped my brother in law renovate his second IP when I was in first year uni so he could get a better rent and improve his cashflow. I think I picked up the concepts early on and I have applied them to each IP that I have purchased. They work!

 

[perthguy]

I find it odd how property investors use the term PPOR (Principal Place of Residence) instead of "Home".

It's a tax thing.

 

[Phar Lap]

Pretty sure you can rent your PPOR,

Yes, rent it out to someone else.

it doesn't imply ownership.

Oh yes it does.

Anyway I use the term home, I dont see any difference.

Really? I'd wager the Tax Office knows the difference.

When is your home not your PPOR

when you are renting a house while ...

and when is your PPOR not your home ?

...you are renting out your PPOR while not owning any other property.

Lesson here is Home = Slow word.
PPOR = Fast word.

 

[BayView]

LVR, DSR, IRR, PPoR, P/E, Subdiv, reno - fast "words"

I find it odd how property investors use the term PPOR (Principal Place of Residence) instead of "Home".

From a taxation angle; investors use this word to refer to their place where they live, as opposed to any other property they own as investments that are rented.

Generally; it refers to the property they are living in and buying; with a non-deductible loan attached to it.

It can also refer to the place in which you live - which you might be renting - but this is not the normal use of the term, I've found.

It separates the place where you live from the places you have as investments - either in discussions, and/or for taxation purposes.

 

[datto]

I think PPOR sounds more, what's the word....sophisticated.

It makes one feel more clever than what they may appear and I like that. Everyone knows "home", but PPOR, now that's something special.

 

[Angel]

I still like RK's massive mindset myth buster "Your home is not an asset, it is a liability". Pre investment mindset, the home owner pumps never-ending cashflow into something that looks pretty and gives us warm fuzzies.

With an investment mindset, a PPOR is an ATM of cash deposits to be levered.

 

[twodogs]

I still like RK's massive mindset myth buster "Your home is not an asset, it is a liability". Pre investment mindset, the home owner pumps never-ending cashflow into something that looks pretty and gives us warm fuzzies.

With an investment mindset, a PPOR is an ATM of cash deposits to be levered.

Nicely put, very succinct.

But, still wouldn't make the wife understand.

 

[VYBerlinaV8]

It's a tax thing.

Yep, sometimes it's easier to get into the habit of using the proper term rather than coming up with something else.

 

[lazibones]

I find it odd how property investors use the term PPOR (Principal Place of Residence) instead of "Home".

A lot of people rent their home out then rent places overseas to live for a few hundred dollars a month.

 

[spludgey]

Oh yes it does.

Nothing in Primary Property of Residence implies ownership to me.

It's merely saying that if you have multiple homes, this is your main one.
I know that it's generally accepted that you own it, but that doesn't necessarily need to be the case.

 

[Hooray]

Nothing in Primary Property of Residence implies ownership to me.

It'd help if you actually know what PPOR stood for?

 

[spludgey]

It'd help if you actually know what PPOR stood for?

Primary ~ principal

I stand by my point though.

 

[Angel]

Principal Place of Residence.

Until three hours ago I had always assumed it meant the house we own and live in, differentiating it from the IPs we own. I can see now that it can be a place we live in that we rent off another party and we do not have to own it. However with this second meaning, it would not offer any cash out facility. Let's not go into the various cash flow details of owning vs renting, that's another matter.

Thank you Twodogs BTW I am the wife.

 

[Phar Lap]

Primary ~ principal

I stand by my point though.

Well no, I disagree with your point.

PPOR means you own it as far as Im concerned, the tax office, land tax assessment is concerned and banks, and brokers?etc.

All except you and wategoes.

 

[Hooray]

Primary ~ principal

I stand by my point though.

Go find your Primary Property of Residence on the ATO site. Can't find it? not the same thing, then.