Going through a Rut, self doubt creeping in..

[gronk007]

Hi All,

Will try and keep this short and sweet, but looking for some re-inforcement.

I'm working abroad at the moment with wifey and 2 children under 3: Have 2 IPs in Australia, both in Melbourne, one CF+ about $300/mth after all outgoings, and one is negatively geared about $800 month after all outgoings, as it was our PPOR we turned into an IP.

We're in our 30s, so its early days, but we've been OS this year now, and we moved OS for two reasons; the life experience in a really nice place (we are in Mauritius) and to get ahead financially - I'm on an expat salary with 15% personal tax.

That all said, having an asset base is nice including a reasonable amount of super, and the IPs are humming along seemingly, no vacancy issues, got some good valuations in November on both, but we always seem to be checking the bank balance - in other words, the cash flow always seems to be a battle. We are not natural savers, but rather than thinking about IP #3, I'm thinking I want to just sell everything, and have the security of a chunk of cash in the bank, and not giving a sh&t about anything else. This is the first time I've thought like this in 10 years!

Is this sound IP mentality? No
Is this the way I should be thinking about a legacy/nest for my children? Of course not.

I'm hoping this is simply a rut, as we were all ill/injured for different reasons in November; the job is not what I thought, the island is beautiful, but if we pull the plug on the expat gig and come back to Melbourne, then finding a place, getting a car, trying to save surplus in Melbourne (which we couldn't do before we left, which is why we left) all still exist; so it all feels like a bit of a conundrum right now.

Or maybe just need a slap in the face.

Thanks for any feedback in advance.

 

[Rixter]

Success is 80% Mindset x 20% Strategy.

In other words how you think is four times more important than how you plan on doing it.

Get some personal development mindset book reading under you belt. I particularly enjoy Bob Proctor.

Food for thought.

 

[joanmc]

^^ what Rick said.
Also, are your loans interest only or P&I?
Your negative cashflow is only -125/wk so you are in a pretty sweet position and if you are on a good salary where is the money going?
Not every one is a natural saver (I'm sure as heck NOT!) but it can be learned. Or failing that you can put things in place to do it on autopilot e.g. get money transferred to a savings account automatically when your pay goes in.
Definitely check out some good mind books and if wifey will read them too, even better. That way you can keep each other motivated.
Finally don't worry about IP#3, you are already doing better than 90% of Australians, take a chill pill and work on what you have.

 

[alexlee]

We're in our 30s, so its early days,

This is the biggest issue in your entire post. It's NOT early days. Your 'needs' will only increase from now on. Look further into the future. You don't have nearly enough.

 

[gronk007]

Thanks Alex, early days as in time to retirement, but I understand what you mean - my ex-boss is a property developer/syndication owner so I understand the tools and principles, it's just hard staying on track.

 

[alexlee]

Thanks Alex, early days as in time to retirement, but I understand what you mean

No, you don't. It only seems like a long time because you're thinking retirement in your 60s. Why do you want to work until the usual retirement age? Invest more earlier, and you have a choice.

 

[gronk007]

I'm not thinking retirement in my 60s, but at 37 and a desire to retire on $100,000 per annum in tomorrow's money as passive income before I'm 50 or even 55 worst case, then the wriggle on needs to happen yesterday, not tomorrow.

 

[gronk007]

Thanks Joan/Rixter,

Will look for some books....just finished reading about sub prime meltdown, holy moly!

From the CF point of view, easy to get a little giddy in a new country when things you're used to paying for cost "x" and now they cost "y", some things cost more, some things cost less, albeit Mauritius is a little more expensive than we originally bargained for; so we're probably stressing out that we're not hitting our saving targets, but we don't want to be sitting there eating toasted tuna every second night either!

That said, at least we are saving something - something we weren't doing in Melbourne.

My wife had to have surgery here, $4,000 out of pocket, dog back in Melbourne tore an ACL, $2,500, aircon in an IP needs an upgrade; just little shocks to the system that meant we are not as far ahead here as we wanted to be, thats all

 

[Adrian Cahill]

Hi Gronk007
You have really put your finger on the issues. Mindset. Sounds like your really tossing and turning about this.

Living in Mauritius with Property in Aus is Fantastic. I just returned to Aus to buy more property, fine tune investments, than return to Shanghai where I've lived the past year. Nothing like Mauritius but XPat life here rock! I was on TEDx Twice and do loads of Personal Development work here. I also lived in Chiang Mai, North Thailand and traveled abroad roughly for 4 years.


"We are not natural savers, but rather than thinking about IP #3"
Who is a natural saver? Delaying Gratification is not natural. But everyone on this forum probably understands its importance.
Your thinking about IP#3. Great. Why? Whats the purpose of it?
Your thinking about exiting to a chunk of cash in the bank. Why? Whats the purpose of that?


Bob Proctor, as Rick recommended and Joanmc backing it up, is great. If your not a big reader, try finding their MP3's. Self discovery, understanding where you want to be in future and why you want to be there will help immensely. Bob Proctor, Tony Robbins and these guys, will help drive you forward.

You may see this is my 2nd post here, I've been on Propertyinvesting.com instead for last 10yrs. I would love to offer you complimentary coaching or 'sound boarding'. Help you readjust and fine tune your mindset. Get over some obstacles. I've been in similar shoes. 6-8 x 45min session over skype. Free & no products. I would like a testimonial & feedback at the end though. I'll help you take the high road.

 

[BayView]

Having cashflow issues is my middle name these days.

We have had to sell 4 of our 5 IP's over the last few years, I've taken a 50% wage cut from my business this Fin Year, and we have had to kick in a lot of our own equity and savings into keeping the business and keeping our house - over the last 2 years.

It would be very, very easy right now to sell our house and completely pay off every debt, still retain our IP, and the business.

The upside would be a swag of cashflow to play with immediately, but would then have to rent somewhere.

Sounds simple; but to rent a similar house to what we have would take out a fair chunk of the new cashflow we would be enjoying, and we would probably not get into a similar standard of dwelling as owners possibly ever again in my lifetime....certainly not for at least 5 years or more. Also; there are no similar standard houses to rent in our neighborhood (I check all the time).

In 6 years time, our oldest son would be finished school and he would have missed out on our fabulous house and the enjoyment we/he currently gets from the pool and spa etc, having friends over, the location and so on. Our home is like a holiday destination (and our location is in one); great to be here, and won't give it up without a big, big fight..

(We could live in a much more humble abode, but have done that for most of our lives, and this house is our reward for all our hard work and sacrifice so far).

The other part of our decision to not sell down and take an easier road is you need to keep a footprint in r/e to make the real dough...if there is another boom around the corner, you want to be ridin' that wave as big as you can. Our PPoR is such that if there is a 10% rise in say; one year, that's about 5 years wages for me in one go. (not bragging about our house per se; just trying to illustrate how your footprint in r/e can make you rich - hold it and increase it as much as you can comfortably do or even with a little discomfort).

We didn't simply sell our other IP's just because times were tough for a bit - hell; they always seem to be tough, but you can still have some fun.

But, we had to sell to stay afloat, and still try to keep as much of our footprint as we could - and still enjoy life a bit.

The plusses for holding on for our kids' upbringing (one my wife and I never had) are considerable - more important to us than a simpler life for ourselves, plus some of our enjoyment is derived from the environment we are providing for them..

It's a complicated scene - providing a future for yourselves and your kids, and a lifestyle for yourselves right now and the future.

A $125 shortfall per week is a small amount over two IP's. You are not in a position where you might lose your house in the next 12 months.

We are a fair chunk older than you, too, so you have a bit of time. Look for a few ways to trim off $150 per week of wasted money, and all is well.

So, my point is; you can give up anytime you like; so why give up right now?

 

[macca446]

Hi gronk007,
Great post bayview and well said,honestly you are not out of pocket that much on your investments as bayview said try trimming your expenses I personally would only sell if my bank balance was going backwards by more than yours but everyone has to make there own choices.
I myself since been injured at work have had my wages cut by 70% and trying to budget debt on 6 properties is trying sometimes and in the new year I lose all of my benefits completely but I have a good buffer to work with and keep looking at the big picture and know that time will play its part, selling is easy but years down the track you will look at it and say only if I hung on.
Do not give up to easy their in most cases is a way to work things out and move forward.
Macca446

 

[Colin Rice]

Ive sold properties in the past and got a "big chunk of cash".

Looking back, if I held on then cash flow wise I would be no worse off and would have a lot more equity to utilise.

Life is a journey of learning and discovery so my 2c would be to ride out the negative sentiment as it will probably pass quicker than you realise.

Places like this and listening to the people and reading the recommended books will definitely help.

"Renew your mind and free your soul"

 

[Player]

Hi gronk007,

like some others have posted, I am also keen on some of what Uncle Bob has to say.

The following link with Bob Proctor material contains some audio you can save to your mp3 device to listen to and a pdf to read. It appears to still be active.

http://www.bplsp.com/main/sub-pages/success-puzzle-download/

Enjoy

 

[Deltaberry]

The cash flow always seems to be a battle. We are not natural savers...

Or maybe just need a slap in the face.

I think you said it all.

 

[redwing]

Maybe the sub-prime meltdown book sowed some doubts and a plethora of what-if scenario's also

Posting here about your scenario is a great start to obtaining a fresh perspective; I'm sure we all experience self-doubt at one point or another in the journey. Appreciate the opportunity to ponder, review and resolve. Wasn't it Socrates who said the unexamined life is not worth living?

I've found that many people take stock and make changes over Dec-Jan as one year concludes and another commences.

Some great feedback by others above

Try Andrew Matthews book "Happiness in a Nutshell" also

 

[BayView]

I've found that many people take stock and make changes over Dec-Jan as one year concludes and another commences.

I can never understand that mindset.

Plus - the most annoying bit - the empty New Year's resolutions.

EEEENUUFFF with the "I'm going on a diet" and I'm giving up smoking" guff...god; cracked records.

The diff between this year and next year is about 2 secs, Tues to Wed. Ask the cat what it thinks about it all.

How does it all of a sudden make you have to take stock of everything; unless you pencil it in each year as the date to take stock of yer life....

Why not May 12th?

It's just another day; how about go "Happy New Year" with no other silly conditions attached?

But yeah, whatever; do it if you must, I suppose.

 

[TMNT]

Having cashflow issues is my middle name these days.

We have had to sell 4 of our 5 IP's over the last few years, I've taken a 50% wage cut from my business this Fin Year, and we have had to kick in a lot of our own equity and savings into keeping the business and keeping our house - over the last 2 years.

It would be very, very easy right now to sell our house and completely pay off every debt, still retain our IP, and the business.

The upside would be a swag of cashflow to play with immediately, but would then have to rent somewhere.

Sounds simple; but to rent a similar house to what we have would take out a fair chunk of the new cashflow we would be enjoying, and we would probably not get into a similar standard of dwelling as owners possibly ever again in my lifetime....certainly not for at least 5 years or more. Also; there are no similar standard houses to rent in our neighborhood (I check all the time).

In 6 years time, our oldest son would be finished school and he would have missed out on our fabulous house and the enjoyment we/he currently gets from the pool and spa etc, having friends over, the location and so on. Our home is like a holiday destination (and our location is in one); great to be here, and won't give it up without a big, big fight..

(We could live in a much more humble abode, but have done that for most of our lives, and this house is our reward for all our hard work and sacrifice so far).

The other part of our decision to not sell down and take an easier road is you need to keep a footprint in r/e to make the real dough...if there is another boom around the corner, you want to be ridin' that wave as big as you can. Our PPoR is such that if there is a 10% rise in say; one year, that's about 5 years wages for me in one go. (not bragging about our house per se; just trying to illustrate how your footprint in r/e can make you rich - hold it and increase it as much as you can comfortably do or even with a little discomfort).

We didn't simply sell our other IP's just because times were tough for a bit - hell; they always seem to be tough, but you can still have some fun.

But, we had to sell to stay afloat, and still try to keep as much of our footprint as we could - and still enjoy life a bit.

The plusses for holding on for our kids' upbringing (one my wife and I never had) are considerable - more important to us than a simpler life for ourselves, plus some of our enjoyment is derived from the environment we are providing for them..

It's a complicated scene - providing a future for yourselves and your kids, and a lifestyle for yourselves right now and the future.

A $125 shortfall per week is a small amount over two IP's. You are not in a position where you might lose your house in the next 12 months.

We are a fair chunk older than you, too, so you have a bit of time. Look for a few ways to trim off $150 per week of wasted money, and all is well.

So, my point is; you can give up anytime you like; so why give up right now?

How you manage to wake up everyday and go to wwork is beyond me
If I had to take a 50% pay cut assuming you work fulltime
( I work part time so it doesn't count) sell four out of five ips at your age as well, with kids

Is amazingI certainly couldn't cope

A business I was working in just before I left sold for 325k in 2011
New Owher bought it for a migration visa
Fst fwd 2.5 years tried to sell it again for 350k
After 8 months it's now under contract at advertised price 90k

What a disaster!! Pity there is a lot more cash where i. Came from but he was a ***** as well

 

[gronk007]

Hi Gronk007
You have really put your finger on the issues. Mindset. Sounds like your really tossing and turning about this.

Living in Mauritius with Property in Aus is Fantastic. I just returned to Aus to buy more property, fine tune investments, than return to Shanghai where I've lived the past year. Nothing like Mauritius but XPat life here rock! I was on TEDx Twice and do loads of Personal Development work here. I also lived in Chiang Mai, North Thailand and traveled abroad roughly for 4 years.


"We are not natural savers, but rather than thinking about IP #3"
Who is a natural saver? Delaying Gratification is not natural. But everyone on this forum probably understands its importance.
Your thinking about IP#3. Great. Why? Whats the purpose of it?
Your thinking about exiting to a chunk of cash in the bank. Why? Whats the purpose of that?


Bob Proctor, as Rick recommended and Joanmc backing it up, is great. If your not a big reader, try finding their MP3's. Self discovery, understanding where you want to be in future and why you want to be there will help immensely. Bob Proctor, Tony Robbins and these guys, will help drive you forward.

You may see this is my 2nd post here, I've been on Propertyinvesting.com instead for last 10yrs. I would love to offer you complimentary coaching or 'sound boarding'. Help you readjust and fine tune your mindset. Get over some obstacles. I've been in similar shoes. 6-8 x 45min session over skype. Free & no products. I would like a testimonial & feedback at the end though. I'll help you take the high road.

Thanks for the feedback...the purpose of IP#3 is to grow my passive income at a later date. The cash at bank mindset is just my wife's fallback mode for "everything's OK, doesn't matter that we have $1m+ in assets when I have $95 in the day to day bank account on the last day of the month" mindset.

 

[gronk007]

Having cashflow issues is my middle name these days.

We have had to sell 4 of our 5 IP's over the last few years, I've taken a 50% wage cut from my business this Fin Year, and we have had to kick in a lot of our own equity and savings into keeping the business and keeping our house - over the last 2 years.

It would be very, very easy right now to sell our house and completely pay off every debt, still retain our IP, and the business.

The upside would be a swag of cashflow to play with immediately, but would then have to rent somewhere.

Sounds simple; but to rent a similar house to what we have would take out a fair chunk of the new cashflow we would be enjoying, and we would probably not get into a similar standard of dwelling as owners possibly ever again in my lifetime....certainly not for at least 5 years or more. Also; there are no similar standard houses to rent in our neighborhood (I check all the time).

In 6 years time, our oldest son would be finished school and he would have missed out on our fabulous house and the enjoyment we/he currently gets from the pool and spa etc, having friends over, the location and so on. Our home is like a holiday destination (and our location is in one); great to be here, and won't give it up without a big, big fight..

(We could live in a much more humble abode, but have done that for most of our lives, and this house is our reward for all our hard work and sacrifice so far).

The other part of our decision to not sell down and take an easier road is you need to keep a footprint in r/e to make the real dough...if there is another boom around the corner, you want to be ridin' that wave as big as you can. Our PPoR is such that if there is a 10% rise in say; one year, that's about 5 years wages for me in one go. (not bragging about our house per se; just trying to illustrate how your footprint in r/e can make you rich - hold it and increase it as much as you can comfortably do or even with a little discomfort).

We didn't simply sell our other IP's just because times were tough for a bit - hell; they always seem to be tough, but you can still have some fun.

But, we had to sell to stay afloat, and still try to keep as much of our footprint as we could - and still enjoy life a bit.

The plusses for holding on for our kids' upbringing (one my wife and I never had) are considerable - more important to us than a simpler life for ourselves, plus some of our enjoyment is derived from the environment we are providing for them..

It's a complicated scene - providing a future for yourselves and your kids, and a lifestyle for yourselves right now and the future.

A $125 shortfall per week is a small amount over two IP's. You are not in a position where you might lose your house in the next 12 months.

We are a fair chunk older than you, too, so you have a bit of time. Look for a few ways to trim off $150 per week of wasted money, and all is well.

So, my point is; you can give up anytime you like; so why give up right now?

great to hear a real life situation...our properties are in good nick, we know we can't afford to NOT be property owners right now.....the light at the end of the tunnel given we're not saving as much as we thought we would here is to imagine what the properties will be valued at in 2016 (my contract ends Jan 2016), and I can only guestimate that no amount of saving here in Mauritius will outstrip what possible gains in valuations we get out of the 2 properties.

Thanks again!

 

[gronk007]

Ive sold properties in the past and got a "big chunk of cash".

Looking back, if I held on then cash flow wise I would be no worse off and would have a lot more equity to utilise.

Life is a journey of learning and discovery so my 2c would be to ride out the negative sentiment as it will probably pass quicker than you realise.

Places like this and listening to the people and reading the recommended books will definitely help.

"Renew your mind and free your soul"

Thanks FMS, normally we absorb the negative sentiment from external forces, but this time its strange to come from within...hence the soul searching... we're back in Oz in a couple of weeks to catch up with friends and family over Xmas, 2014 will have bigger and better things on the way!