We'll make it a joint celebration, I never did anything for my first milestone either.
What did your mate end up doing with his offer in Maylands?
How do you celebrate breaking the first $1m in debt?
- Thread starter vincenzo
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We'll make it a joint celebration, I never did anything for my first milestone either.
What did your mate end up doing with his offer in Maylands?
To make money you have to go into debt. They go hand in hand!! The more you are in good debt the more properties are growing for you. Who cares if you are indebted to the bank anyway cos as long as you can service your loans, keep a buffer and hold them comfortably then your fine.
I think thats why lots of aussies fear investing in property they are scared to take on large amounts of debt but they dont look at the bigger picture do they.
He didn't listen to us, that's for sure
. He nailed it at $8k less than the vendors rock bottom, "I won't take a cent less" price.I think he did real good.
He didn't listen to us, that's for sure
I think he did real good.
Nice! Certainly better than we would have done.
You're right. He claims to be a "newbie", too. I think he's hoodwinking us. I'm watching my back. No way I'm letting him overtake me. Not that I'm competitive, of course
I am on my way to 1 mn in good debt..just 33k short. It's definitely a milestone and a reason to celebrate.
. It's definitely a milestone and a reason to celebrate.
I am on my way to 1 mn in good debt..just 33k short
Yeah, don't you just hate that. I got to $15K short of $1M at one stage and just had to buy another house to tip it over...............I didn't want to buy another one mind you, but I had to
............then I got another one...andHi Trogdor,
One cannot buy buy until he/she can afford to make payments
. The reason to celebrate is that I am able to afford 1 mn debt, which was not even on my radar when we migrated 2.5 yrs back. First milestone to achieve 1 mn in equity.So enjoy...
Yeah, don't you just hate that. I got to $15K short of $1M at one stage and just had to buy another house to tip it over...............I didn't want to buy another one mind you, but I had to
It's like batting on the score of 98
. Don't want to get out..as we have stretched our serviceability. Will get there soon.Agreed.
Nope, totally disagree. You have to have clean credit, ability to repay, equity or cash to satisfy LVR of the lender, etc.
Or a high paying job!
I see your point though, all things being equal, higher debt would be an indicator of some investing success.
Yes, that was the point I was trying to make. Cheers.
Yes, that was the point I was trying to make. Cheers.
OK!
Maybe a small pat on the back for debt milestones and a big celebration for equity milestones
I sure hope so!
What I meant is that while I read the posts, I take what is said by people involved in buying & selling RE as comments or advice with a vested interest.
There are many on this forum for whom "now" is always the time to buy something. History (and the latest subprime) tells me it may not be a good MO. With all due respect, of course.
As for me, I listen to many but take advice from none.
I don't take advice from so called "professionals", I decide what I'm going to do and they are their to help me do it. Sometimes I may ask if there are different ways of doing the same thing.
Maybe I'm fortunate to have others with whom to discuss such matters, and maybe it's their influence. But they are all in 8 figure net worth these days.
Now back to debt:
Debt is an expense and a liability.
Yes it is incurred so that gains may be increased, and these days losses as well, but check again what side of the ledger your debt and interest is. It then becomes a cost of doing business.
But it is always a cost, expense & liability.
It seems to me that only those who follow seminar speakers and book writers seem to have this concept of "good debt", as NONE of the many old time investors (and there are quite a few) I know do.
Now please dont tell me times have changed, that's what Keynes thought in the 1930's when he said "wont wont ever have another recession", and he is another economist guru. And too many other examples to mention.
Parable:
There is only one good side of the ledger
well... the fiancee and I are just about to hit the $1million mark (well, $986K actually), when our PPOR settles on 27th April.
$503K over two IPs, and $483K on the PPOR.
Whilst half of it isnt "good debt"... i personally see it as "not so bad debt", because the repayments on the PPOR are very close to what we would be paying in rent otherwise, so it made sense to have that "rent" go towards an appreciating asset.
The two IPs cost a massive $8K/year to hold, including all expenses, and excluding tax benefits. So its pretty comfortable for us to hold this portfolio.
We're quite pleased with our progress, and we will hit the magic $1million in debt when we refinance our Colyton IP in June - to allow us to debt recycle a bit of the PPOR mortgage
$503K over two IPs, and $483K on the PPOR.
Whilst half of it isnt "good debt"... i personally see it as "not so bad debt", because the repayments on the PPOR are very close to what we would be paying in rent otherwise, so it made sense to have that "rent" go towards an appreciating asset.
The two IPs cost a massive $8K/year to hold, including all expenses, and excluding tax benefits. So its pretty comfortable for us to hold this portfolio.
We're quite pleased with our progress, and we will hit the magic $1million in debt when we refinance our Colyton IP in June - to allow us to debt recycle a bit of the PPOR mortgage
Yes debt is on the bad side of the ledger, but it's the underlying reason you have it which is what people are 'celebrating'. If you have a large debt on one side of the ledger, you have correspondingly large assets on the other side (where we're talking property etc not useless items).
I'd much rather have $5M of debt and be easily coping than struggling on $50k of debt. Yes in theory you'll be celebrating once you have the same assets without the debt - but most of the people celebrating $1M in debt would just be starting out. $1M in debt is just another symbolic figure that shows people investing in property that they are on the right track, so they feel like celebrating it.
Just as they would have celebrated the first $1M in assets, they also would celebrate the first $1M in debt which would perhaps correspond to $1.416M in assets - doesn't have the same sort of milestone ring to it does it? Yes it's just people giving themselves warm fuzzies, but hey - whatever floats your boat.
I'd much rather have $5M of debt and be easily coping than struggling on $50k of debt. Yes in theory you'll be celebrating once you have the same assets without the debt - but most of the people celebrating $1M in debt would just be starting out. $1M in debt is just another symbolic figure that shows people investing in property that they are on the right track, so they feel like celebrating it.
Just as they would have celebrated the first $1M in assets, they also would celebrate the first $1M in debt which would perhaps correspond to $1.416M in assets - doesn't have the same sort of milestone ring to it does it? Yes it's just people giving themselves warm fuzzies, but hey - whatever floats your boat.
