How do I get my investment strategy right from the start?

T

theperthurbanist

Hi guys,
I am a newb to investing and a newb to Somersoft (hi all!).
My question is regarding getting the right investment strategy from the start:

I am passionate about educating myself and have read a couple of books and attended a bunch of seminars (but no formal training), and I know there is all the knowledge I could ever want out there (and here) for free, but I feel that to maximise my time and (substantial) capital I would benefit from some outside input/professional advice on what the best portfolio 'plan' is for me.

I am wondering where/who you think the best place to go would be to sit down and work through my situation and work out the best possible strategy for me (atm). I don't just mean a quick chat with an accountant, I mean seriously working through my options. What I would like to achieve up front is:
  • Refine my goal(s)
  • Look at different strategies (FHO/PPR, multiple IP's, CF+, renovation, developing) and see which one best suits my goals
  • Work out a timeline/action plan utilising the best strategy(s)

It seems to me that the best options available are to:
  • Speak to a financial planner/accountant/mortgage broker (I have tried this to some extent but didn't find they delved deep enough)
  • Join a mentoring program (I have been looking at Poritive Real Estate, any thoughts?)
  • Enroll in a training course (I haven't found any that deal with this 'early stage' planning)
  • Read A LOT of books (and probably find as many questions as answers...)

Any suggestions would be GREATLY appreciated! Feel free to recommend specific programs/people too (I am in Perth). *Self-interested parties need not respond.

Many thanks guys :)
 
Hiya

you are correct

there is no course to get through the fluffy stuff which the more solid goalsare based on.

You pretty much need to work through this yourself from a variety of sources, since there arent many people of biz that cover that whole space of psych, money, fin planning, credit planning, tax planning etc.

Some fin planners and well established brokers go close, but will still leave gaps for properly licensed folks to fill

t
arolf
 
SickBazSimmo said:
Hi guys,
I am a newb to investing and a newb to Somersoft (hi all!).
My question is regarding getting the right investment strategy from the start:

)
Click to expand...

Some financial planners do specialize in property. I believe that a firm called Pro Solutions in Melbourne will sit down with you to map out an investment plan from the beginning. They base the plan around your life goals etc.

Pro Solutions is run by Stuart Wemyss - author of 'The Property Puzzle'.

Regards Jason.
 
+1 for your to do list:
Various searches and reading through this forum. One would argue every topic had been debated, and some to death. Suffice to say there is an amazing amount of knowledge in here at the click of a mouse.

In terms of getting strategy right, what I have noticed is that for many of the forum members, their strategy has changed over time. And yet they are still very successful and have achieved their end goals.

What does this say to me? Taking action is more important than analysis paralysis and their is plenty of time to get your strategy right.
 
There will be very few people who are able to do what you want. I suggest you do it yourself. Just sit down and and map out a plan yourself. Play around with excel and different growth rates etc. Keep coming back to the forum with questions and then keep on refining your plan.
 
SickBazSimmo said:
Hi guys,
I am a newb to investing and a newb to Somersoft (hi all!).
My question is regarding getting the right investment strategy from the start:

I am passionate about educating myself and have read a couple of books and attended a bunch of seminars (but no formal training), and I know there is all the knowledge I could ever want out there (and here) for free, but I feel that to maximise my time and (substantial) capital I would benefit from some outside input/professional advice on what the best portfolio 'plan' is for me.

I am wondering where/who you think the best place to go would be to sit down and work through my situation and work out the best possible strategy for me (atm). I don't just mean a quick chat with an accountant, I mean seriously working through my options. What I would like to achieve up front is:
  • Refine my goal(s)
  • Look at different strategies (FHO/PPR, multiple IP's, CF+, renovation, developing) and see which one best suits my goals
  • Work out a timeline/action plan utilising the best strategy(s)

It seems to me that the best options available are to:
  • Speak to a financial planner/accountant/mortgage broker (I have tried this to some extent but didn't find they delved deep enough)
  • Join a mentoring program (I have been looking at Poritive Real Estate, any thoughts?)
  • Enroll in a training course (I haven't found any that deal with this 'early stage' planning)
  • Read A LOT of books (and probably find as many questions as answers...)

Any suggestions would be GREATLY appreciated! Feel free to recommend specific programs/people too (I am in Perth). *Self-interested parties need not respond.

Many thanks guys :)
Click to expand...

I think it's impossible to device a strategy for you. Only 'you' can do it for yourself. It's like asking to chose a menu for you to eat certain foods but only you really will know what you like and what you can and will eat.
I suggest to start with a plan/goal. What do you wish to achieve, what's the end result?
Then decide on the timeframe (10, 20, 30, 40 etc.. years to invest for?).
Adopt one strategy and give it a go. Do not fall into paralysis analysis.
There are so many books, yes, but which one do you like to follow?
I follow the ones which make sense to me!
Read the following 2 books "How to Achieve Wealth for Life" by Tony Melvin & Ed Chan and "How to Grow a Multi-million Dollar Property Portfolio - in your spare time" by Michael Yardney.
Say you wish to buy a house and 1 IP in your working timeframe (say 40 years between 25-65 years of age) you will see from the first book that after 30 years buying $400K home and $500K IP you would have $6.4 million equity.
That's a simplistic BIG picture so you must know what you want. Whithout you knowing what you want is very hard getting there!
I think that's why most people don't seriously invest as they don't really know what they want.
Also if you ask people's advice always ask if they invest themselves into property (so basically take recommendations from successful mentors that have done it themselves). Be open minded but filter the information through.
Good luck though.....
 
'plan/goal'

Against the popular opinion, I'm still struggling to see if it is really practical. It is similar to the interview question 'What will you be doing in 5, 10, 15 years?'. Reverse back ten years. Do you think you knew where you would be 10 years ago?
What is wrong with going with the flow and make the best out of what you got at any point in time? :)
 
devank said:
Against the popular opinion, I'm still struggling to see if it is really practical. It is similar to the interview question 'What will you be doing in 5, 10, 15 years?'. Reverse back ten years. Do you think you knew where you would be 10 years ago?
What is wrong with going with the flow and make the best out of what you got at any point in time? :)
Click to expand...

Feeling that you are unfamiliar with the flow and what it might bring and hoping to get some knowledge to use when it might be needed, might be helpful (?)
 
devank said:
Against the popular opinion, I'm still struggling to see if it is really practical. It is similar to the interview question 'What will you be doing in 5, 10, 15 years?'. Reverse back ten years. Do you think you knew where you would be 10 years ago?
What is wrong with going with the flow and make the best out of what you got at any point in time? :)
Click to expand...

I know that's why only few % do it and are really successful. We all know better and even my spouse objects this idea.
There's nothing wrong with going with the flow (just make sure it's in the right direction).
I just think if I was building a house or making a recipe and I didn't have a plan to get there I am wondering what the house would look like or how much would it cost and what my food creation would turn out like?
When I was 22 I attended a course paid for the company I was working for where Brain Tracy presented this idea and I dismissed it like you. Well, many years later I wish I knew earlier how to set proper goals or I listened and tried it. I know now I may have reached them sooner...
When I put down on paper when I planned to buy properties, eevn though I had to modify plans, I somehow managed to buy them...
Just remember this was my personal journey but how do you get to where you want if you do not know what you want?
IMO...I think plans keep us on track that's all.....
 
MIW said:
I know that's why only few % do it and are really successful. We all know better and even my spouse objects this idea.
There's nothing wrong with going with the flow (just make sure it's in the right direction).
I just think if I was building a house or making a recipe and I didn't have a plan to get there I am wondering what the house would look like or how much would it cost and what my food creation would turn out like?
When I was 22 I attended a course paid for the company I was working for where Brain Tracy presented this idea and I dismissed it like you. Well, many years later I wish I knew earlier how to set proper goals or I listened and tried it. I know now I may have reached them sooner...
When I put down on paper when I planned to buy properties, eevn though I had to modify plans, I somehow managed to buy them...
Just remember this was my personal journey but how do you get to where you want if you do not know what you want?
IMO...I think plans keep us on track that's all.....
Click to expand...


What this most often comes down to is we don't know what we don't know.......

Where it gets hairy is where we opierate on assumptions and societal norms
For many, the best test q to ask is. how is our current methodology going so far?

For most not real good........that's why most retirees today can not be independent of some gov help.

Ta

Rolf
 
To the OP..
Here is a 20 year plan I created sometime last year as a parent for ourselves and what we want for our kids. It covers the ?life priorities? in order of importance? Family, Health, Wealth, Work, Leisure & Extra Curricular.
I removed all other sheets which go into each priority in detail because it is hard to make them ?general?.
Hopefully it will make you think year by year into your future and finally come up with a plan!
 
Last edited by a moderator:
devank said:
To the OP..
Here is a 20 year plan I created sometime last year as a parent for ourselves and what we want for our kids. It covers the ‘life priorities’ in order of importance– Family, Health, Wealth, Work, Leisure & Extra Curricular.
I removed all other sheets which go into each priority in detail because it is hard to make them ‘general’.
Hopefully it will make you think year by year into your future and finally come up with a plan!
Click to expand...

Quite interesting devank, but I think your goals are too broad. Goals should be short term, medium term and long term (have a deadline). They should be realistic (not merely a wish or fantasy), specific, quantifiable and measurable (make a list of everthing you will need to do and organise it into plan). Then take action and do something everyday closer to your goal.
I will actually give you an example. About a year ago my doctor informed me that my bad cholestrol went too high up and asked that through diet and exercise I try do do something about it.
I was always comfortable about some excess weight so I never did anything about it until that meeting with the doctor.
So I decided I will set a goal to improve my health.
I decided that I would like to lose about 10kgs (about 1kg per week). I chose Dukan diet to follow (just my choice).
Then I went shopping and bought different kinds of foods so that I could plan my meals the night before.
First 5 days I ate proteins only and yes I lost 1kg by the first week.
The next phase is to add vegetables until your desired weight is reached (and continue with once per week on proteins only - for me it was Mondays).
In all that time I still ate 1-2 times per week out with my spouse and drank small amout of wine.
In about 3 months I reached the desired weight even though I did not exercise (I should have at least 3 times per week).
So the point is that if you know and plan what you want you will achieve it but it has to be a realistic goal.
You see previously I tried to loose weight by going with the flow but somehow always gave up to stay on track.
So thinking about it, I planned the foods I would eat, I made sure I had the foods I needed. If I didn't I would probably eat just what is quick or handy, etc...just go with the flow.
So the whole purpose of knowing what you want and planning how to get there is achievable by all of us if we really decide to do it and to follow a plan (to change how we do things).
I know lots of people mock it even my family but motivation requires a 'motive'.My sister always says she will invest in 2 years time but when I ask her how will she save the money for the deposit she cannot provide the answer.
Also my sister-in-law always complains how hard it is. And I say,"If you do what you do you will have what you have". You need to change and do someting else otherwise why do you expect something else?
So perhaps my "evangelistic" approach seems funny to some but I have applied it in my life for various things and it worked.
As Brien Tracy says..."
1. What are your three most important business or career goals,
right now?
2. What are your three most important family or relationship
goals, right now?
3. What are your three most important financial goals, right now?
4. What are your three most important health goals, right now?
5. What are your three most important personal and professional
development goals, right now?
6. What are your three most important social and community
goals, right now?
7. What are your three biggest problems or concerns in life, right
now?"Answer all of them in 30 seconds and they should provide an accurate snapshot of your true situation in life at the moment. They should tell you what is really important to you. So what is it?
 
Yes you are absolutely right MIW. Your detailed description is SMART :)

Other sheets have the S.M.A.R.T. (Specific, Measurable, Achievable, Relevant and Time-bound) goal for each category with a column to monitor them. I didn't include them since it is a bit personal and it would take more time to make it ‘general’. I should also admit that it is not well defined as MIW's example.:eek:


What I attached was kind of ‘wish list +’ to understand what is important to us. It is similar to the what you have mentioned at the end (Brien Tracy's). It was an interesting experience for us as we (Mr & Mrs) wrote down our own and found a common ground at the end. We hardly ever talked about this beforehand and it kind of helped to focus on what is important. I only gave this as a starting point to the OP.
 
Hi Devank,

Thanks for uploading your spreadsheet. It is a really good way of plotting/thinking about the 20 year goals.

If it is not too much trouble could you upload an example of the other tab/s. I would be interested to see how you have structured the SMART/specific components of the plan.

Thanks,

Matto
 
Thanks!

So being the newb I am I only just realised I had to subscribe to my own thread to get updates! And here I was thinking nobody like me...

Thanks for the great comments so far.

Aaron_C - I guess that is my problem, I seem to 'fall in love' with every strategy I read, it is the 'which one is best for me' that I stumble on! In general though: value adding interests me (but is a whole other level of knowledge I need to attain); a strategy that doesn't have a huge impact on my CF would be ideal (I'm about an average income earner). Really though I guess was the basis of my question was finding out where I can find someone/something to advise me which is the best strategy given my situation. I understand there are likely to be myriad opinions on this, and I will need to do some searching myself, but my opinion is that given my fairly limited knowledge of tax, loan structures, IP in general, someone who knows more about these will likely be able to provide better advise than I can!

I guess a simple answer on 'where to go for advice' is this forum. So much gold on here, I just sometimes have trouble adapting it to my specific situation. As a matter of fact, I am just writing a post with some specifics on my situation and some thoughts on strategy, so forumites could offer some feedback (i'll keep it separate from this post for the sake of staying on the topic). - I'll post a link here when it's up, if anyone would like to offer their thoughts.

Rolf - That is a shame - I was hoping the answer might be 'try xxxx book for an easy and effective guide to setting property investing goals'! Looks like i'll just have to adapt the usual SMART goal setting *nods to MIW and devank* methodology to property/financial freedom.

Jingo - thanks, i'll check them out but would really like someone I can sit down with in Perth.

Matto_, Terry_w - Yes I sort of agree with the 'learn by taking action', but I cant help but feel I should get at least a second opinion before parking with what is an extremely significant amount of cash to me! I know if I launch in, I have the mindset that will (hopefully) guide me towards success on some level, but a month's delay to start off on the best possible foot seems a warranted delay to me!

Great post MIW. Agreed. Although I would clarify I don't expect someone to set goals/strategy for me, just offer some guidance.

Thanks for the spreadsheet devank. Kind of you to share. I'll check it out now.

Thanks for the comment so far guys. Keep them coming! To add some fuel to the 'seeking advise vs jumping in' debate, I guess my issue is that a number of investment approaches appeal to me, but id really like to see the hard numbers on which was likely to yield what, which would allow me to reinvest again soonest, etc. I guess for this I should sit down with an accountant? Or a financial adviser? Mortgage broker perhaps? Maybe I should just host a dinner party...
 
matto_ said:
If it is not too much trouble could you upload an example of the other tab/s. I would be interested to see how you have structured the SMART/specific components of the plan.
Click to expand...
Sorry Matto. I'm not prepared to publicly show what my family's yearly plans are on a public forum :)
Maybe you tell us your plans & goals are and how you are going to achive them. Many experienced people here would be happy to offer advice.
 
Hi Devank,

Understandable.

I wasn't after specifics - more in terms of structure.

I really liked (and appreciated you sharing) the way you had setup the various components of the high level sheet, and was curious about the detail you spoke of.

Our plans and goals are still not SMART - apart from the norm's - financial freedom, ability to choose to work etc.

Anyway - thanks again for sharing the overarching spreadsheet.

Matto.
 
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