It's 1st January and Did You Do Enough in 2010??

G'day

Happy New Year

I have been gently reminded that I have missed a beat and not posted my bi-annual update

http://www.somersoft.com/forums/showthread.php?t=48330&highlight=year

So put on the kettle, break open the Tim Tams, and here I am with the Late News for 2010:


Well, I thought about starting this thread back about 8th December but didn’t really have the time then to write, and it crossed my mind a few times since then, so here it is although we are now into 2011

Time passes, and we can often forget to reflect on what we have done and what we have experienced. We all achieve something every day, even if that achievement may not be measured on a scale it is still the achievement of our lives.

The Age today (1st January) had an interesting collection of articles about the Baby Boomers, and although I am not quite a Baby Boomer I am not far behind.

Our experience of life certainly changes as we move through the various stages, and by the end of 2010 the nest was empty and that has taken some emotional and practical adjustments.

So here are my experiences since I last wrote on this subject 24/12/2008.

During 2009 I gradually recovered my balance from the events of 2008 and particularly being away from home for so long. Like Dorothy, we do not realise the importance of ‘home’ until we are not there.


No: 1 Son came ‘home’ in April, 2009 for a series of Engagement celebrations and again in May, 2010 to be Married, but it is obvious he and his Wife now regard London as home and are in no hurry to return to Melbourne. I envy them their brave hearts and their courage to have these adventures, and to not then have regrets that they could have, should have, gone, or to have gone but returned too soon.


After two years ‘on the beat’, Daughter has become quite a competent Court Reporter (including running in streets, keeping up with the photographer) and is now looking for greener pastures – hopefully, a daily paper which is quite a different beast to a bi-weekly paper. More nitty gritty and fewer cats up trees stories!

We treated her to attend the Wedding of No: 1 Son’s Best Man in June, firstly in London for a ‘traditional’ ceremony and then on to Edinburgh for an Anglican High Church Wedding (with the Castle in the background). Mike and I were not able to go but wanted to show our respect for a young man who has been part of our family since kindergarten. Daughter enjoyed her trip but was more than ready to come home at the end of four weeks living in youth hostels. She was seriously covered in bed bug bites from one of the hostels, so the trip was not all beer and skittles.


No: 2 Son’s apartment was finished and he triumphantly left home to go and live in his eyrie in the sky. He continues to really enjoy his career with the supermarket and in 2010 enrolled to study for the Bachelor of Viticulture – a big step for someone who, due to illness, had not gone to school since he was 14. He took up one subject, and this involved study, assignments, practical work in the vineyards and at the University. To his great delight he attained an overall mark of 74, so he is much encouraged to press ahead with two subjects for each semester during 2011.


So the family home is empty now except for Mike and me and the last of the cats.


During 2009 we bought ‘the house next door’ on Golden Pond and settled in 2010. For the past year we have tried to find an architect who is actually interested in designing a house which we can afford to build, and which has enough flair and pizzazz to be interesting in it’s own right.

We now have almost completed the plans with an architect we have complete faith in but Mike is in anguish about the likely cost of the construction

However, we have invested in property since 1994 – well, all properties are investments and when we built our first home together in 1981 we had half the carpets on the credit card. That was the extent of our debt. Now, we have enough debt to bring tears to our eyes but if we still had and sold that first house now, it would probably buy the house we currently live in. It would not even buy the land under the house we are about to build.

Over the years we have invested consistently although not necessarily methodically. If we had actually developed a plan our current situation could have been much different.

However, we invested for ‘later on’. It has taken us a while to realise that now is ‘later on’ and so for the first time we are getting ready to sell off some of the portfolio in order to be able to move forward.

No, not the Mission Brown Wonder – that is still for Ron – but the deck chairs need a decent reshuffle and so this must be done.

Building requires a quite different approach to buying, and putting the money on the table and into the deal means having the money, not just eg having a contract of sale or an intention to sell. It is almost as if the order of settlement is reversed. This isn’t about showing the Funds to Complete, it is about actually having the Funds to Complete. We expect that if we see the Architect next week and give the instruction to proceed, we may be in the new house by June, 2012. So our money has to be there, and all our money has to go into the deposits and fees and progress payments before the lender starts the drawdown payments

Although we knew the day would eventually come, this will mean selling the Family Home within the next few months. We will probably move into Myrtle Cottage while the new house is under construction - dropping from 300m2 to 90m2 will require ruthless culling of the debris and detritus of 30 years of married and family life.

When I bought Myrtle Cottage, back in 2002, and then spent a year on the renovations, it was one of the happiest times for me. The house was in a dreadful state – it could be smelled from the street and I learned to pull out rat’s nests and to climb ladders and to use a short iron with some efficiency and to master the art of oil painting doors and woodwork, but when it was finished it was an absolute delight. So living there will be some compensation for selling what has been a happy family home for the past eleven years.


During 2009 and 2010 we have been blessed with excellent and unobtrusive property management.

There have been some thrills and spills but overall, changes of tenancy have come and gone and rent has been paid on time. Rents have increased overall but not by any significant amount for any individual property. Tenancies have generally lasted the long term national average of 23 months and nothing has required any significant maintenance. Well, just the usual items – an appliance call out here or a bit of a paint up there. Steady as she goes.

Property values have been uneven. In order to settle the house next door I undertook a mammoth refinancing early in 2010 and valuations were interesting. Three properties, which had shown no growth at all from valuation in 2003 to valuation in 2006, showed significant increases in valuation by 2010.

It’s all about being in it for the long term

So I have been putting together the next Five Year Plan.

If it is eighteen months until we move in to the new house we will be able to plan and stage some rolling sales (after the first batch) keeping an eye on the market at the time. The Concrete Bunker is still not finished but the consolation there is that is will be fresh when it goes on the market in about two months time. The Possum Palace (aka The Bomb Site) would probably fetch more if it was sold with development plans, but that’s a could have should have project from two years ago, there is not enough time (or will or energy) to get involved with that now.

And the Family Home needs a complete overhaul before anyone would be interested in it. Time to renew my acquaintance with my trusty crew of tradies and ‘all rounders’.

So did we ‘do enough’ in 2010?

Yes, plenty. It has been a very productive and happy time for us as a Family as a whole. I continue to work from my state-of-the-art laundry, and my office in the new house will be no bigger, prompting Daughter to express the opinion that I am definitely suffering from Stockholm Syndrome. I have since told the Architect to rename the room from ‘Study’ to ‘Utility’ to alleviate her concerns!


I would once again like to thank Somersoft and all who make this Forum possible. It is certainly one of the best run forums on the web and this is due not only to the diligence of the volunteer moderators but also to the calibre of the people who participate and contribute.

Mike and I enjoy the monthly dinner meetings and look forward to these events each month. I also appreciate that from time to time people think I may be able to help them with finance and I always consider this to be a great compliment and privilege to be asked.


And getting back to the Baby Boomers: Life, like property, continues to increase in value with every year and to pay handsome rewards. The ‘rent’ paid on the capital of our experience is immeasurable. As ye sow, so shall ye reap. For those of us who actively participate in the property market and particularly, take on the noble and time honoured role of landlord, we see the value of what we do not just in monetary terms but also within the philanthropic framework of providing housing for those who need it.

Even a cat can look at a Queen. For Mike and I to be able to build this special new house is amazing to me, and we certainly could not be doing this from the base point of only a ‘day job’.

So will we be ‘doing enough’ in 2011? For sure, and in 2012 and ongoing. And when we move in, we will take a deep breath and get back into it. Selling some of the holdings now is part of the strategy and what goes now can be replaced later.


Best wishes to you all for a happy New Year, and a year of significant productivity. May your values increase, your tenants be happy, and you be very pleased with yourselves come Christmas.

And this year, I shall tag my calendar for the ‘It’s the 8th December and Did You Do Enough In 2011’ thread! Watch this space!

Cheers
Kristine

And now, please all join in! Let us know what you did, how you are travelling and what you plan and intend to achieve in this wonderful and never to be repeated year!
 
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nice post Kristine.

Did we do enough in 2010?

I know I put a huge focus on the J.O.B which saw me travel about 80% of the time! Wife added her travels at end year and counted 10 trips to different countries!

Investment was set and forget and DCA into our share funds. Our well located properties in Sydney rose in value and rents increased significantly.

It was an easy year investment wise and a tough year work wise. Will want to reverse that in 2012. On the lookout for a major investment near the harbour!
 
Great post Kristine.

2010 was a fun and productive year looking back on it. Basically just tried to achieve a better balance in life by achieving investment and lifestyle goals.

Gave my partner a gentle shove to rent out his apartment and buy a house by the beach! Missed the fresh sea breeze! Slowly got back into my running being sensible this time with a proper running plan. Dropped to 4 days/wk at work. Sold my first house bought in 2000, set up a company and trust and bought a beachside IP achieving a goal of mine to basically swap my first house for an IP in a 'better' area. Dealt with lots of unfortunate repairs on IPs, which I'm hoping will slow down this year! Reviewed my portfolio and realised I'm not so scared of selling IP's anymore if it means you can go on to bigger and better investments! Put the slow QLD IP on the market.

Enjoyed my friend's beautiful wedding in Thailand. One thing that was thoroughly enjoyable was a honey massage! I also went scuba diving which is something I have wanted to do for years but was unable due to my asthma. Bought a British Shorthaired kitten, which I have wanted for a long time also!

Now for 2011!
 
Thanks for the update Kristine; it’s been interesting to read the threads over the years.

Did I do enough..??

Never feel that I have, though each New Year I look back and reminisce about the previous one and I ask myself: Have I achieved the goals I’d set for the year? Have I been a good husband and father? Have I treated myself and others well?

I believe I have set realistic and achievable goals for 2011 in all areas of life, though within this, I also determine to be better and do better in the coming year, setting my ideas into goals and my goals into achievements.

I used to keep an A4 diary with motivational quotes on the last page and last years and this year’s goals on the first page. Daily activities, meetings, investment and personal notes and information went into the pages between, the last couple of years this habit has dropped off. I did however get a chance to review and reflect upon some earlier year’s diaries when I recently spent a day clearing out the shed, de-cluttering and re-stacking it all, so a current goal is to renew this habit (keeping the diary, not cleaning the shed..that can stay an annual event :D )

Personally I completed a couple of Certificate Four courses during the year and a couple of industry specific courses, one of the goals for 2011 will be to complete a few more industry specific courses.

Work is going well and I have enjoyed the challenges therein, the company has grown as have I, though starting this year I will be taking a week off every three months, as well as taking an interstate family vacation. With my son going to High School this year he and I are both planning an annual trip together, whether it be camping or fishing is yet to be determined and his choice; looking at it long term its only four or five trips together.

We didn’t purchase anything this year, we did however complete some renovations and refinanced a number of loans during the year as well as increased rents across the board and we also exited our position from an income based managed fund as its growth prospects were negligeable to increase our safety buffer, we still have some funds in the market with individual stocks.

Being involved in our SMSF has kept us with an eye on the Stockmarket and 2010 was a much better year than 2009, Mr Market it seems, is always happy to teach you a lesson or reward you ;)

Highlights throughout the year would have to be the family moments and even then it’s the smaller moments that bring joy to the heart. Whether it be watching a child ride her bike for the first time or see the sense of accomplishment when she gets a kite to fly, or watching a child win an award, catch a fish or the numerous funny things they say or do; accomplishments, though not yours are enjoyed more-so.

This year we have determined to set themes for different nights, such as a game night once a week, a family meeting/discussion night, the wife also has a weekly scrapbooking night with her mother coming over and joy of joys a bank/receipt reconciliation night where we get to review and forward plan, other nights to be determined at the next family meeting

I like the below quote from Brian Tracy:

Just as your car runs more smoothly and requires less energy to go faster and farther when the wheels are in perfect alignment, you perform better when your thoughts, feelings, emotions, goals, and values are in balance.

We invest and make decisions based on our desire for a better tomorrow where we can have more control of our time and more money to spend doing what is important to us.

Thanks to Ian and Jan for a free site like Somersoft, the Moderators for their time and efforts trying to keep things on an even keel as well as keep the trolls at bay throughout the year and all the members for their participation, it’s great to have a relatively safe environment where you can engage with other investors no matter where they are in their journey, ask questions and learn from the community.

The thread also had me thinking about portfolio performance, with regards to that TopCropper previously posted a link to a site to work out compound annual growth rates, the link is here. It was interesting to look back on our first two properties still held

  • 10 periods Compound Annual Growth Rate: 13.11%
  • 10 periods Compound Annual Growth Rate: 14.51%

Rents have increased substantially over that time also with further increases due across the portfolio this year; we recently increased the rental on a renovated property $30 p/wk and another property $10 p/wk to meet market rates

Over the course of 10 periods your investment grew from $105,000.00 to $360,000.00, its compound annual growth rate, or its overall return, is 13.11%.

CAGR essentially smoothes out the progress of your investment over a period of time, providing a clearer picture of your annual return. However, although your investment started at $105,000.00 and ended with $360,000.00, its growth in any one year may have been quite a bit higher or even negative (if the investment ever lost money over that time).

Consequently, the CAGR figure may give the impression that the investment has produced a stable return throughout its life, even if the investment was extremely volatile, fluctuating a great deal from year to year.

Remember

Ability is what you're capable of doing;
Motivation determines what you do;
Attitude determines how well you do it.
- Lou Holtz
 
Nice post Kristine.

2010 was by far and away the biggest year we've had in our investing career. We made two acquisitions, doubling our current rent income. They were our first purchases for 3 years. We did 'more than enough'.


2011 will be a year of consolidation. We are currently like a sleek, fat anaconda slowly digesting what we've swallowed.


Give my regards to Mike and your family.
 
2010 was an exciting year.
We survived a tax audit for 2005 & 2006 tax years..that started in May 2008.
We objected to their ruling, and won.We agreed to settle on some issues,otherwise it would have been an expensive appeal.

We purchased an inexpensive IP with huge profits.That always makes us happy.

I received my PR for Australia this year, which is nice to be a resident in 2 countries now.We live here, and work in Canada.

I quit my employed job, which makes me only nervous when it somes to financing properties.How will our lenders feel about that....
Being retired is great, and I have planned my whole working life to never be reliant on a government pension...and have succeeded.

Our kids are finally technically on their own. Emotional support and advice is always available to them. They have all become nice, stable, drug free adults.
(as far as I know!!)
We thought our cat (actually grandkiity) had cancer, and was terminal, but so she is doing good.So keeping fingers crossed.

Our IP's are growing in value every day.We had very few vacancies.A few feral tenants, but nothing terrible happened...part of the game.

We live rent free 8 months a year in Australia, so can't complain.
Also been provided with a vehicle.

We are healthy and happy,less debt every month, so all is good.
 
2010 was a busy year for us. We sold two one-bedroom units ourselves (ie. no real estate agent involved) which was a complex but rewarding way to do it. To replace these, we bought two new properties (two-bed units), which we then renovated. There was supposed to be a substantial gap between settlements, but due to mucking around we ended up settling on one, renovating it, having one week off, then settling on the second and commencing renos. I don't recommend this approach if you are working full time during the day, and renovating at nights and weekends (as we did) - even the most hardened renovator ends up pretty burned out!

We have decided not to renovate any more properties this year, and while I will keep an eye on the market, I suspect my husband will also not be prepared to buy either. However we are fairly satisfied with where we are, so twelve months' break from it will not be a major issue. Plus it's funny how things can change...... ;)

All the best to you all for 2011, and I hope your investments go to plan!!
 
2009 was a pretty rough year for me.

On a professional level, after Lehman Brothers went down the UK jobs market froze up, and I was out of work for about a year. That decimated my cash reserves, along with loss of earnings.

On a personal level there was a family tragedy just before Christmas 2008, and my mother has been ill for a couple of years.

The above probably explains why I'm a Doom and Gloomer. :D

2010 was more about consolidation and recovery.

I picked up a contract in November 2009, and that ran until March 2010 before the company changed direction and my skills became irrelevant, and they felt that I didn't fit into their development practices. (I come from a more structured software engineering background.) So that was that.

After that I was in Newcastle from the end of April to the start of June. Because I was living away from home I had to carry a second set of accommodation costs, which meant that it wasn't much better than break even.

July was spent on holiday in Australia. I visited Melbourne, Sydney and Adelaide. I had meant to make it up to take a look at Brisbane too, but didn't for one reason or the other. Like Kathryn D I was awarded PR, and the trip was to activate my visa.

August to October was spent in the Netherlands. The agent who placed me there was taking a very big cut of the rate, and my mother went through a bad patch, so I decided to head back to the UK. A friend found me something in London that appeared to be going well, until it got cut off on Tuesday.

In terms of investments, I seem to have been short of cash all year, though that's partly because I'm a freelancer and tend to get paid a month or two after finishing the job.

My only regular investment has been pushing cash into an ISA (tax free savings account) that wraps a cheap stock market tracker. Dividends are re-invested, and I think that what I've put in over the last four or five years is worth roughly the same as I initially invested. Which isn't too bad given the ups and downs of the FTSE 100.

So, 2011?

I'm currently seriously thinking of bootstrapping my own software business, because I've got a bit hacked off with doing bugfixes on badly written projects that I don't really believe in. So this year is likely to be more about being entrepreneurial than being an investor.

If I can manage to get a regular income, houseprices continue to slide in the UK, I don't move to Oz, and the banks become a bit less cautious about lending to the self-employed then I might start looking at buying a house later this year.

There are a few two or three bedroom detached houses on decent sized plots (quarter of an acre or more) that have good transport links into London and affordable at a bit of a stretch on my income. I'm figuring that something like that would meet my immediate needs, and give me space to extend if I end up having a family. (I'm in my late thirties and single, so it's getting increasingly unlikely, but not impossible.) The idea is to get something that will cover my needs for the foreseeable future.
 
Beautifully written Kristine. Thank you again for sharing and starting this thread.

2010 started off by welcoming a daughter in the world. 6 months off, and I returned to work 2 days per week whilst my baby was looked after her 2 grandmothers.

I realised that if we were to have more kids that I would prefer to stay home to look after then full time and that we would need a plan to do this. Cue a visit to our accountant where we set up a trust and company.

My husband submitted an application and sat an exam to become a Victorian domestic unlimited builder after building a few speccies over the years as owner builders. We just heard back that he was successful so we are anticipating our first build this year in addition to him working his full time job in the commercial construction industry.

We were also the winning bidders at auction for a derelict property that we had hoped to knock down and build 2 townhouses on. Unfortunately the property was passed in. 6 months later it is still on the market with no bites.

In 2011 we will be welcoming our 2nd baby into the world so it will be busy one. We no longer have any IPs and not sure when that journey will start again, but hope to get back on the investment road.

Wishing everyone a great journey this year and hope to have really exciting news for this update at the end of 2011.
 
In 2010, I managed to attend every Somersoft Monthly Melbourne meeting :D

Other than that, it was a year of consolidation, building up cash reserves, buying gold, and oddly enough - travel.

I rarely leave town, but 2010 saw me in Qld, Taiwan and then ending the year off in England :eek:

All the best to everyone on Somersoft for 2011!!

The Y-man
 
IP wise we added to the portfolio, happy with the plan and progress of financial independence goal.

That's all been overshadowed by how precious life is, how absolutely treasured and beautiful it is... and every moment with family and friends is a privilege that we can sometimes take for granted.

Oh and more additions to the family!:p:):D
 
at the end of every year i always think i didn't "do" enough.

then i sit back and go thru all the things that we "did" do and it's usually a substantial list - and much more than the average person.

2010?

started the year with mother in law in a serious condition in hospital, moved on to sailing a tall ship on sydney harbour for australia day, finished renovations on current house, set up new business (did appropriate training courses, had product designed up, attempted to get prototype made, researched various product options, organised chinese production etc), sold reno'd house, sold development block after getting final council da/cc's, bought two new ip's, went to nz for a week, extensively planned and met with architect re extensions on current ppor, took daughter for long driving lessons (she got licence), bought two new cars ... and lots and lots in between.

this year started a little slow - but we're off to seaworld in 2 weeks (hope weather is better), then nz again in march, off to furniture expo in sydney 1st week of feb ... and so it continues ...
 
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