Invest or payoff debts - question on another forum

Invest or payoff debt

  • Invest

    Votes: 26 76.5%
  • Payoff debt

    Votes: 8 23.5%

  • Total voters
    34
  • Poll closed .
Leave him and make me your plaything.

Just joking.

My take is this - and I'm one of the oldest and made the most mistakes on this site....

1. Pay off any debt when you can. It's all good.
2. However; further to point 1 - pay off any non-deductible debt first, and pay off the highest interest rate debt first (credit cards).
3. Pay down investment debt too - after non-deductible debt is paid out.
3. Depending on your level of sophistication as an investor - pay only the minimum into Superannuation. Any decent investor (everyone here on SS) will be able to generate better returns on their after-tax dollar than Super can.
4. Above all else; cashflow is King.

:)
Hahaha Bayview... I need a new plaything. ;)

Regarding point 3.5, with super though, your contributions are only taxed at 15% (if you contribute pre tax dollars, that is). Most people are on a higher marginal rate than that. But I acknowledge, you don't have too much control of your super investments unless going down the SMSF Route, and generally you can't touch the money for a looooonnnnggg time. I would like to retire soon, and it won't be anywhere near the age of 65.....

(By the way, it looks like people in the US can get to their 401k's before retirement with almost any excuse, I wanna go buy an xyz!! --> no retirement savings....)
 
I actually prefer the thoughts of the Forumites here than Paul Citheroes' advice he dishes up to readers. Often readers write in, I have xxxxxx salary, a PPOR, 2 IPs, share portfolio xxxxxx. A lot of the time I always got the feeling in his reply: you have enough money in property now, put your money in shares. However, I personally think, if you can do property well, stick with it. .

imho, you do what you are comfortable with. I once had an investment advisor tell me to start buying shares. I have dabbled--won some and lost some. But to me it's paper money and too risky; I prefer bricks and mortar. I've lost money following Clitheroe's advice to invest with Bankers' Trust. If you know ppty, keep with that.
 
imho, you do what you are comfortable with. I once had an investment advisor tell me to start buying shares. I have dabbled--won some and lost some. But to me it's paper money and too risky; I prefer bricks and mortar. I've lost money following Clitheroe's advice to invest with Bankers' Trust. If you know ppty, keep with that.

Exactly! Do what you understand and what you are comfortable with, basically specialise rather than generalise. I think the very wealthy just do one thing very well, to perfection (Warren Buffett, Anthony Robbins, Donald Trump, etc...).

I often dislike when most people then will tell you to diversify, I agree with the concept and they probably mean well, but why invest into something I have no knowledge off, if I can specialise on something that works for me?
I think that's where most go wrong, chasing the latest deals, rather than specialising and becoming the best in one field, right?:)
 
Depends on your cashflow position.

If you have strong positive cashflow and a buffer, chase opportunities, but probably not many in Sydney/Melbourne.

If you are negative cashflow, would highly recommend paying off debt during this period.
 
Depends on your cashflow position.

If you have strong positive cashflow and a buffer, chase opportunities, but probably not many in Sydney/Melbourne.

If you are negative cashflow, would highly recommend paying off debt during this period.

Not sure I understand? Do you mean like, you need money to make money?
Of course, we need to start from the beginning one must save then invest but then if it works for you and you specialise, you know what you are doing, yes you can spread some $ and invest into other things but that's not what most wealthy really do...
I think from what I have seen some start a business then invest the proceeds or sell the business and then invested the funds into what they know works for them (the scale of wealth though I mean like over $100 million)...
 
From my observation as an old b@stard who's been around the block a couple of times; the majority of Mr.Averages are out there trying to narrow the gap between the end of the week and the money.

You can put any amount of zeros on that.

What this means is that the majority of folks will fill up their income with spending.

Not on investments - consumer stuff; car, clothes, holidays, school fees and so on.

All stuff that keeps them poor

Some here will scoff and say; "you are a frackwit and don't know what you are talking about"." Maybe I don't; just giving my observation of humans living life.

Sorry, but it's true (not the bit about me being a frackwit - the bit about the spending despite the zeros on the end of the payslip.)

The reality is many folks play their life at looking rich, but aren't.

This place - SS - is a minority of folks in the wider community who are on the correct page financially and financially educated, so you cannot compare yourselves or include even your small circle of friends and acquaintances as a good example as a representation of the wider community...

The wider community is broke..


This is good psychology.

I mentor explained it like this to me;

We all have an internal financial thermometer that is set at a certain level based on our self worth.

If its set at 50k per annum and you earn 40k you will do what it takes to earn 50k. If the same person earns 100k they will do what it takes to get rid of 50k to come into balance internally. Think multi million dollar lotto winners loosing thier windfall in a short space of time.

We however have the power to reset the thermometer via education and implementation.

The internal thermometer is set via external influences from parents, religous leaders, family members, media, friends and family etc.

I have observed this firsthand in myself going from a below average wage earner to a business owner and investor with a 300k/annum mindset to now thinking 3 million/annum is possible. This has transpired over a couple of decades so it can be a slow process but does not have to be so.

Awareness is the begining of change.

Ps. A lot of self effort is involved in the process.
 
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Not sure I understand? Do you mean like, you need money to make money?
Of course, we need to start from the beginning one must save then invest but then if it works for you and you specialise, you know what you are doing, yes you can spread some $ and invest into other things but that's not what most wealthy really do...
I think from what I have seen some start a business then invest the proceeds or sell the business and then invested the funds into what they know works for them (the scale of wealth though I mean like over $100 million)...

I meant, if your properties cost you $60k pa to hold due to interest, council rates and land taxes, you may want to pay down debt quickly and leave some buffer for when rates go up and prices come down.

If your properties make you $100k positive cash flow per annum, you may consider taking a bit more risk.

As Buffett said, in the long run blue chip shares (properties) outperform cash. But you want some elephant guns for when things dip.
 
This is good psychology.

I mentor explained it like this to me;

We all have an internal financial thermometer that is set at a certain level based on our self worth.

If its set at 50k per annum and you earn 40k you will do what it takes to earn 50k. If the same person earns 100k they will do what it takes to get rid of 50k to come into balance internally. Think multi million dollar lotto winners loosing thier windfall in a short space of time.

We however have the power to reset the thermometer via education and implementation.

The internal thermometer is set via external influences from parents, religous leaders, family members, media, friends and family etc.

I have observed this firsthand in myself going from a below average wage earner to a business owner and investor with a 300k/annum mindset to now thinking 3 million/annum is possible. This has transpired over a couple of decades so it can be a slow process but does not have to be so.

Awareness is the begining of change.

Ps. A lot of self effort is involved in the process.

Completely agreed.

Everyone has 24 hours in a day. Some use it to make $300k, some $30k, some $3k.
 
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