Finding balance between investing and living life...

[fokas]

Since I've started mentioning my investment plans to people around me who are genuinely interested, I have had mixed responses ranging from 'congrats that you've made that decision, now go for it!' to 'bad idea. it will never happen'.

One of the most interesting responses I have had so far was discussing my plans with a fellow investor at work who currently has 5 IPs...

We were having a chat, as you do, and everything was going well (sharing ideas, plans, results..etc) until my age was mentioned... At which point he kind of laughed and said, 'don't start investing yet! Go travel and be young!'.
And that was the end of that.

Now as a 20-something year old, I don't see myself as being that young, and regardless of all the well meaning people who have no idea what they're talking about, and the doubters, I am already on my way to buying my first IP (well...I'm saving and getting rid of bad debt whilst I'm learning everything I can. Little baby steps. ).

So my questions are these...

Do you, as an investor, feel that you have a healthy balanced life? IE Not too much scrimping and saving, a bit of enjoying life, and a bit of preparing for retirement?

Did you have this balance when you started?

How do you personally, achieve this balance?

 

[GoAnna!]

The most important time is right now. Right now this very minute. If you are lost in your past or purely focused on the future then you are not living in the here and now.

That does not mean that you can't plan and work towards your future but life is short. Right now if you are managing your money well you won't be stressed by the electricity bill, will be able to join your friends for a bite out, will be able to follow your passions even if the pay is not great.....

Sure, part of enjoying the present can be knowing that you are working towards some future goals....whether it be health, relationship, financial or whatever.

Some things can only be enjoyed when you are young, others are a different experience when you are young. Sure you can go backpacking at 40 but if you have a wife and two kids trust me it won't be the same experience as it woule be as a single 20 year old.

Perhsps the wise advice you were given is that you are only young once....enjoy. Sure put some money away for the future but don't sell your soul for it. Starting at 20 is putting you well ahead of the game...just make sure you enjoy the journey there.

Me personally? I did skimp more personally in the begining but I did have the 3 month solo overseas trip etc and then came back and bought a car. Don't regret either of those.

 

[BayView]

Do you, as an investor, feel that you have a healthy balanced life? IE Not too much scrimping and saving, a bit of enjoying life, and a bit of preparing for retirement?

Did you have this balance when you started?

How do you personally, achieve this balance?

Depends on your financial situation when you start, and what your PAYE income is at the time.

If you are high income earner, it should be a soda to start investing, unless you are bad at managing money and have loaded yourself up with consumer debt already (which is the norm). You should be able to live and invest with a nice balance on a higher income.

For the lower income folk; hard yards are ahead for a few years - work on about 10. Learn to live on less and be happy about it for the greater good.

At the start of our investing life, we had a paid-off PPoR, but only average incomes, and we bought neg geared property which caused a sudden cashflow drain.

Life became scrimp and not much enjoying. Started to wonder if it was all worth it. Fixed that problem soon after by offloading the negs (at a modest profit thankfully) and used the funds for acquiring a few pos's.

A few years down the track the PAYE has not improved any (and don't care because soon we won't need it) but the wealth and cashflow has, so life is in balance.

 

[burty85]

I say go for for it. I myself brought my first house at 21 (23 now), sure i have had to miss a few things, but i have never really cut my self short on living life.

But at the same time my job takes me all over Australia fully paid for and have been once overseas, so missing out on a few trips here and there haven't really phased me.

And belive me, I wish that i got my act together a lot earler than 21, same house would be putting a lot cash in my pocket every month if i brought a few years earler, now tell me how that would be cheating yourself out of your youth???

 

[boomtown]

I need to be careful. I am a bit too keen on PI and its running close to impacting on my relationship with my girlfriend.

I am reluctant to fly overseas for a holiday because I regard the funds as wasted but she needs to travel because she is still young. We have also seriously compromised our living arrangements - not because we have to but because we want to save money on top of our investments.

I am on a high income but she has lost most of her income having gone back to uni. As a result I am finding it very hard to get the balance quite right.

That doesnt change my view that in 10 years time it will all have been worth it.

 

[Mom]

If I saved the monies we used to travel overseas this past 2.5 years we would probably have managed to buy another 2 or 3 investment properties.

We are on average income, we scrimp and save on daily basis, but I do not regret our overseas travels and money spend to parties entertaining our family and relatives or helping charities or people even a bit, because we need to balance.

Although we need to save for our future wealth, I do not think we should forget to enjoy our lives now.

You'll never know what's around. Enjoy today. I can't imagine having to work 12 months in a year. I think we need to work hard and smart for 11 months, and then enjoy 1 months of total switch off.

My 2 cents worth.

 

[burty85]

You'll never know what's around. Enjoy today. I can't imagine having to work 12 months in a year. I think we need to work hard and smart for 11 months, and then enjoy 1 months of total switch off.

Dont most full time workers get 4 weeks paid annual leave a year.....
I know i get a lot more than 5 weeks a year having a full time job, work hard, play harder....

 

[The Y-man]

I am reluctant to fly overseas for a holiday because I regard the funds as wasted but she needs to travel because she is still young.

Hmmm..... does that mean one should not travel when older

You can invest and travel - seminars, conventions and AGM's overseas......

Cheers,

The Y-man

 

[boomtown]

Dont most full time workers get 4 weeks paid annual leave a year.....
I know i get a lot more than 5 weeks a year having a full time job, work hard, play harder....

Its actually quite a tricky decision when you know you can get hit target this year and get a fat bonus if you dont go on leave - but that you might miss if you do go on leave.....

 

[Nathan]

BT, i suffer same problem.... i focus on my investing 100% and other times are placed after that...

but its what i enjoy, its a hobby, its healthy.... and its better then 99% of the rest the population is doing...

 

[our obsession]

Disclaimer: I am a journey girl...if the path isn't one that fulfills my heart and mind/values, I'm crashing and banging through undergrowth carving a path of my own...in a fun kind of way.

Do you, as an investor, feel that you have a healthy balanced life? IE Not too much scrimping and saving, a bit of enjoying life, and a bit of preparing for retirement?

I am a seeker and creator of healthiness and happiness...investing is very much fun, (and great learning), for me, the people, places, stuff...I have a very priviliged life, but understand for me, that kind of doesn't necessarily involve or revolve around the $$$ to do that...(just so we are clear).
As well as being a lot of fun, investing is taking me (and my family) to financial independence.



Did you have this balance when you started?

Yes, there is something in my deepset personality that ....(this is difficult to try and describe), ensures I enjoy life, living, have great passion for all that it brings, people....I love people.

How do you personally, achieve this balance?


These are tricky things to describe ya know?

How do I describe my contentment, happiness and love of life, it just is, it flows. It isn't an effort of I have to, I shoulds, I will, it flows to me. I certainly don't feel like I am walking a scale of anything, it's just kinda all good.

 

[Nards]

I think this balance is so hard to describe because every person has a different idea of what will make their life balanced - what they "need" to enjoy their life.

An example of this is my husband and myself - I am perfectly content to live very simply, just spend time with family and friends, and have no trouble giving up eating out on a regular basis, and just as much enjoy inviting all our friends around for a curry night or BBQ. I do love to travel, but am content to have "cheap" holidays while we get established.

My husband however loves his fishing and boys toys - he would dearly love a boat, and a better motorbike and a....etc etc, the wish list is extensive! And of course it is difficult to participate in some activities if you haven't got/cant afford the right equipment. He struggles with himself constantly to look at the big picture, and constantly questions whether investing is worth it, if you cant have what you would otherwise be able to afford.

So, we sometimes struggle to find the balance...As the "investor" in the house I have to concede sometimes - loosen the purse strings and take pleasure in the enjoyment he gets out of his "toys"...

Nadia

 

[Zeddy]

Perhaps it's not just balancing the investments with a young life... but also choosing investments that suit your lifestyle. I'm in a similar boat, though not as young.

I'm 26 and my girlfriend wants me to travel overseas to work/around the world. To that end, my first IP is cashflow positive, and my second property (about to settle, yay!) is only slightly negative in cashflow. The first is in the CBD, the second in a metro area. Both have decent growth prospects.

Yes, I have had to fork out some cash to get into the market which limits me short term. However, even on my average salary I am aiming to build some cash reserves so we can travel overseas to look for a working holiday arrangement. Also, by the time I go travelling, at the very least my properties will generally be self sustaining with minimal input from me.

Our current goal is to travel at the end of 2009... enough time for me to build some reserve following this purchase. In this way I am comfortable that I am 1) investing for my future and 2) meeting the aspirations of my partner.

 

[MarkandTina]

I'm in my mid 40's and a few years ago I had to choose between starting to invest in property or taking the family on an around the world holiday.

We chose the holiday. Went to Fiji, Disneyland (LA) and a few places in Europe.

Since then we have bought the first IP, but there is no way in hell I'd swap the 20k I spent on that holiday for an extra 20k off my home loans.
Theres a window of opportunity for taking your kids away, and its when they are between about 10 and 16. We worked that out and did it.

After I finished Uni back in 1985 I spent 3 months on a Contiki trip around Europe. Sure I could have banked/invested the 10k but I'm happy I didnt.

Yes 90% of the time you need to be diligent about how you save/spend your money, but lifes too short to not make the most of special holidays when you get the chance.

My kids are always talking about the trip we did, it helps define us as a family. That was priceless.

 

[Witzl]

We are focussing pretty heavily on setting ourselves up for the future and saving/investing.

However we do still take a holiday each year (this year was thailand), and we still enjoy ourselves every now and then. I think you can still enjoy life whilst investing - our PAYE incomes are average - you just need to learn how to do things on a budget.

Low cost living is what i like to call it.
Things like:
- driving a cheap car (sub $5000, under 2.0L engine)
- taking lunch to work
- only eat out once a month
- get drunk before getting to the pub
- buying 2nd hand furniture at huge discounts
- generally being smart with purchases

The money you save from these things can go towards both lifestyle enjoyment and wealth creation.

 

[josko]

Boomtown:

I need to be careful. I am a bit too keen on PI and its running close to impacting on my relationship with my girlfriend.

I am reluctant to fly overseas for a holiday because I regard the funds as wasted but she needs to travel because she is still young. We have also seriously compromised our living arrangements - not because we have to but because we want to save money on top of our investments.

I am on a high income but she has lost most of her income having gone back to uni. As a result I am finding it very hard to get the balance quite right.

That doesnt change my view that in 10 years time it will all have been worth it.

I can't really answer to any of the options.

I am re-evaluating my situation, ie: My Investment Strategy.

I had balance when I began my journey however, somewhere along the journey my passion has overtaken my sensibility. While I can use the excuse that I wasn't to know that Interest Rates would rise so much and the Sub-Prime Crisis would hit me so hard, I was too highly-geared when it hit. This can only be blamed on my own inexcusable ambition/self endulging blindness and lack of action when I realised that my reserve cashflow was draining at an uncontrollable rate.

My Strategy transformed into sacrificing most small pleasures but not my family and love of my husband and life. I was on a mission to accumulate assets and retire very comfortably. While I still maintain the same end result, I have now learnt that my line between sacrificing small pleasures and not having small pleasures at all was very fine and too close to the edge. So much so, that I have realised it nearly affected my children and did affect my husband.

Goodness, what are we all here for? It is so hard sometimes to see through and past your own passions, and realise that even though you think you are doing the best for your family...what is the point if all they remember is you shushing them while on the phone with a calculator in your hand, every time they come home from school.

While we need to be mindful of expenditure and savy with investments if we are to retire comfortably -don't lose sight of life and remember we are all only young once.

So my new strategy? I am no longer running to get there, but will be taking a brisk walk with the occasional leisurely stroll.


Regards JO

 

[kissfan]

Very well said josko. Kudos to you.

Regards
Marty

 

[LynnH]

Exactly, Jo! Very well said - kudos following.

It is soooo easy to get caught up in the day-to-day madness and lose sight of what really is important - and nothing like a health scare to put things well and truly back in perspective! We really do need to take time out to stop and smell the roses along the way!

Cheers
LynnH

 

[Tash_85]

Perhaps it's not just balancing the investments with a young life... but also choosing investments that suit your lifestyle. I'm in a similar boat, though not as young.

I'm 26 and my girlfriend wants me to travel overseas to work/around the world. To that end, my first IP is cashflow positive, and my second property (about to settle, yay!) is only slightly negative in cashflow. The first is in the CBD, the second in a metro area. Both have decent growth prospects.

Yes, I have had to fork out some cash to get into the market which limits me short term. However, even on my average salary I am aiming to build some cash reserves so we can travel overseas to look for a working holiday arrangement. Also, by the time I go travelling, at the very least my properties will generally be self sustaining with minimal input from me.

Our current goal is to travel at the end of 2009... enough time for me to build some reserve following this purchase. In this way I am comfortable that I am 1) investing for my future and 2) meeting the aspirations of my partner.

If only i could find a guy like you! Clearly educated, smart AND thinking about partners needs.

 

[Rickardo]

I think about life / investment balance quite a bit, and think i've got it right for myself. Sometimes i feel frustrated because i haven't made enough progress, although when i really think about it i believe i would be a lot further along the investment journey than most other people my age.

I'm 24, have 1 IP and a reasonable net worth due to other investments, but have also had 2 awesome overseas trips and don't really sacrafice my social life too much in terms of going out, etc. I know i could have purchased probably 2 more IP's if i saved a bit harder but i just don't think it would be worth it, while investing is important it's also just as important to enjoy life and keep that balance.