1. While the default rate looks "neglible" as a statistics, I cannot imagine that even during the Australian's continued prosperity over the last 15 years, some 2500-6000 households are losing their wealth each year as a result of property investing.
Kenneth I don't understand - you say you can't imagine that it happened?
It did happen.
During the best part of the last property boom, with very low interest rates, 2,500 households had their homes repossessed.
Every year - in good times or bad - people have homes repossessed.
That's not necessarily INVESTORS however - I'd hazzard a guess that it has a large component of people who were first home buyers who overbought, people suffering debilitating conditions that removed their capacity to earn income, people divorcing and old people losing their livelihood. Plus some in small, dying towns.
The only way I see to stop people making poor financial decisions is to give them a home for nothing...and that would create problems for the other 99.9% of households. (and it probably wouldn't work anyway - people still have bad luck or can have business and personal failures that cause them to lose their home anyway...or simply trash the place)
Of course it's personally traumatic, but it can be recovered from. People don't drop dead when they go bankrupt or lose a home. Many do better in the long-term without the huge debt burden and stress. They can renew their lives.
And if you reckon that holding property long-term is risky, then don't do it.
Others can form their own conclusions. No-one is forcing you to own property
8. High risk, high rewards... So, if property investing is as easy and safe as well as highly profitable as you would want to suggest to me, how come there are not many successful investors among our midst or/and for that matter in the overall population.
I've never suggested this Kenneth. You need to read more of my posts!
I constantly caution people about the work required to invest effectively.
As to the number of successful investors - many people simply don't want to invest, that's an investment decision in itself. Frankly I thought there were a lot of successful investors - both large scale and small scale success. I don't know where you're getting figures stating that there are few successful investors.
Show me the figures you're using thanks - then I'll comment further.
10. The other underlying theme which I do not agree with you as well as the other bullish members is to "assume" is that Australia's economic prosperity will continue indefinitely into the future as it has over the last 15 years.
More words in my mouth!
Ken, I've never said that I believe that past economic conditions will continue. In fact I called the end of the last property boom accurately (check my posts back three years).
What I have said, and still say, is that I don't predict economic conditions - I act on economic conditions and trends.
Hence for the last four years I've been primarily focused on shares and resources and largely treaded water on property - and have stated as such openly.
When the conditions change, I'll change my investing patterns again.
Ken, remember the words of Muhammad Ali. They are very relevent to investors:
"Float like a butterfly and sting like a bee"
In case you can't translate them, they say, in effect:
Be flexible and open to all opportunities and risks - then when you see an opening, go in boots and all.
Cheers,
Aceyducey
