RPI That's great growth in such a short amount of time! I am wishing I could have started earlier, but I'm also glad I discovered investment and got started when I am still young.
I am starting in a similar way just a bit later and slower.
I finished uni mid 2001 and bought a 3 bedroom in Canberra at about the same time for $140,000.
Before that though I had borrowed $12k and tried trading shares for a bit, after losing about 10% of that I realised that shares aren't the holy grail of making money. Also I was finding it difficult to find a place that would let to us (3 students - Canberra had a very low vacancy rate at the time). I heard about the first home owners grant and used the money from the shares as a deposit (instead of paying it off).
So I never really had to go through the pain of saving money, just the pain of paying 12% interest on the personal loan and the credit card (some of my other costs).
Later that year it became apparent that the house was worth a bit more than that and while in the stock market section of the bookshop I noticed one of Jan Somers books and grabbed a copy. I had also been reading about futures/currency trading and was convinced that was what I would do with the equity once I had trained myself enough (I may still do so one day but not till I retire and I can afford to take those risks).
While reading Jans books the argument of property over shares took me and I understood the massive leverage of using other peoples money to get maximum exposure to the market, which was in a way similar to futures (in futures you only need a very small % margin deposit).
The nice thing about property though is it's not as time consuming as futures, you don't have to work on it everyday for it to make money. And if property goes down in value (less likely than it going up) then you don't get a margin call. This also makes risk management easier with property.
End of 2002 I valued the property again at about $250,000 so I took out a line of credit to pay off the other debts and have some extra cash for some other things.
Start of 2003 the same property was valued at $290,000 it had doubled so I thought it time to follow the "method" and look for another one.
After looking at various properties I had trouble with finance because of my income level (was about $45k then + rent on the other 2 bedrooms my flat mates were paying). Even though I had trouble with finance, I had enough equity for a deposit bond and had caught up with an old friend in Sydney at the same time who was working for a bond issuer / mortgage broker.
She gave me some details of some marketers she trusted and I decided on buying a 1bedroom in the Motto development in Erskineville for about $300k.
It's due for completion next year some time.
In the meantime I had leftover equity in the line of credit, so what did I do? I had to go back to the sharemarket while I was waiting around ;-)
This time was a little better though and I put $25k into my employer company(Objective Corporation) in April 2003. After all the corporate scandals in the world I could only put my money where I knew enough that the company wasn't going down the drain! and would have good growth. I intend to keep them until I need the money, if I can settle on Motto without the share money I will keep them longer
Price has been an uptrend and have received some dividends as well and claiming the interest as a tax deduction - so it is nicer than my first share market attempt...
The next step for me is paying the stamp duty that's due on Motto! A pain in the bum tax but that's the price you pay for living in the best country in the world isn't it!
Settling Motto after that, still not sure what LVR the banks will want at the time but there are lots of options if they make it difficult such as lo docs or selling my shares.
It has only been 3 years but it seems so long!
RPI you have done a great job and I hope to use your achievement to inspire me to keep leveraging myself into a third property some time so when the next boom comes along I'll be positioned and leveraged to the hilt and can ride the price trend to the top of that boom.
You must have been very happy to spend your investment years starting right near the start of the last boom!
Had to edit this to put the details of my bomb car, I love bomb cars they are the best investment vehicle!
I had the same car since high school a VL commodore, almost bomb but reliable and I loved it, it even had a nickname. Had it for 6 years and then in October 2003 work allowed me to transfer to UK so I had to sell it :-(
At that time it was worth $2000, other people said I should get an expensive car but it seemed unrealistic to buy a car that cost as much as a whole years salary!
I know it wasn't a REAL bomb but it was low enough cost for me and was on an interest free loan from the parents - which I am only just making my final payments on
My new bomb car now in England is very flash. It is powered by my legs and is silver with stripes!
It is a £250 mountain bike. I intend to ride to work for the 3-4 years I am here and not own a car at all. Also nice to see the place on a cycle, I am a tourist after all and cycling around is nice.
I am starting in a similar way just a bit later and slower.
I finished uni mid 2001 and bought a 3 bedroom in Canberra at about the same time for $140,000.
Before that though I had borrowed $12k and tried trading shares for a bit, after losing about 10% of that I realised that shares aren't the holy grail of making money. Also I was finding it difficult to find a place that would let to us (3 students - Canberra had a very low vacancy rate at the time). I heard about the first home owners grant and used the money from the shares as a deposit (instead of paying it off).
So I never really had to go through the pain of saving money, just the pain of paying 12% interest on the personal loan and the credit card (some of my other costs).
Later that year it became apparent that the house was worth a bit more than that and while in the stock market section of the bookshop I noticed one of Jan Somers books and grabbed a copy. I had also been reading about futures/currency trading and was convinced that was what I would do with the equity once I had trained myself enough (I may still do so one day but not till I retire and I can afford to take those risks).
While reading Jans books the argument of property over shares took me and I understood the massive leverage of using other peoples money to get maximum exposure to the market, which was in a way similar to futures (in futures you only need a very small % margin deposit).
The nice thing about property though is it's not as time consuming as futures, you don't have to work on it everyday for it to make money. And if property goes down in value (less likely than it going up) then you don't get a margin call. This also makes risk management easier with property.
End of 2002 I valued the property again at about $250,000 so I took out a line of credit to pay off the other debts and have some extra cash for some other things.
Start of 2003 the same property was valued at $290,000 it had doubled so I thought it time to follow the "method" and look for another one.
After looking at various properties I had trouble with finance because of my income level (was about $45k then + rent on the other 2 bedrooms my flat mates were paying). Even though I had trouble with finance, I had enough equity for a deposit bond and had caught up with an old friend in Sydney at the same time who was working for a bond issuer / mortgage broker.
She gave me some details of some marketers she trusted and I decided on buying a 1bedroom in the Motto development in Erskineville for about $300k.
It's due for completion next year some time.
In the meantime I had leftover equity in the line of credit, so what did I do? I had to go back to the sharemarket while I was waiting around ;-)
This time was a little better though and I put $25k into my employer company(Objective Corporation) in April 2003. After all the corporate scandals in the world I could only put my money where I knew enough that the company wasn't going down the drain! and would have good growth. I intend to keep them until I need the money, if I can settle on Motto without the share money I will keep them longer
Price has been an uptrend and have received some dividends as well and claiming the interest as a tax deduction - so it is nicer than my first share market attempt...
The next step for me is paying the stamp duty that's due on Motto! A pain in the bum tax but that's the price you pay for living in the best country in the world isn't it!
Settling Motto after that, still not sure what LVR the banks will want at the time but there are lots of options if they make it difficult such as lo docs or selling my shares.
It has only been 3 years but it seems so long!
RPI you have done a great job and I hope to use your achievement to inspire me to keep leveraging myself into a third property some time so when the next boom comes along I'll be positioned and leveraged to the hilt and can ride the price trend to the top of that boom.
You must have been very happy to spend your investment years starting right near the start of the last boom!
Had to edit this to put the details of my bomb car, I love bomb cars they are the best investment vehicle!
I had the same car since high school a VL commodore, almost bomb but reliable and I loved it, it even had a nickname. Had it for 6 years and then in October 2003 work allowed me to transfer to UK so I had to sell it :-(
At that time it was worth $2000, other people said I should get an expensive car but it seemed unrealistic to buy a car that cost as much as a whole years salary!
I know it wasn't a REAL bomb but it was low enough cost for me and was on an interest free loan from the parents - which I am only just making my final payments on
My new bomb car now in England is very flash. It is powered by my legs and is silver with stripes!
It is a £250 mountain bike. I intend to ride to work for the 3-4 years I am here and not own a car at all. Also nice to see the place on a cycle, I am a tourist after all and cycling around is nice.