Living off equity – a Reality Check
- Thread starter keithj
- Start date
passion
Steve,
Like Peter Spann's message about Ferraris (yesterday in the Coffee Lounge), it is obvious you are writing with a real passion.
Thank you very much for your very welcome contributions.
Of course, all are keen to receive the next installment.
Can you recommend one or two investment books that you feel best cover the topics? Otherwise, can we look forward to a book from you? Seriously.
Your contributions are greatly appreciated.
Thank you.
best regards,
Steve,
Like Peter Spann's message about Ferraris (yesterday in the Coffee Lounge), it is obvious you are writing with a real passion.
Thank you very much for your very welcome contributions.
Of course, all are keen to receive the next installment.
Can you recommend one or two investment books that you feel best cover the topics? Otherwise, can we look forward to a book from you? Seriously.
Your contributions are greatly appreciated.
Thank you.
best regards,
I think we are all aiming ultimately at an income stream to retire on. It's what R Kiyosaki called 'auto pilots'. You do not want to worry too much when you have retired. Most people would want to have a certain strategy of converting equity to annuity before retirement. Earning more equity or increasing cashflow after retirement is the cream on top of the certain 'auto pilots'.
Waiting when you have retired to try an achieve certain cashflows will increase risk by itself and one may have to rely on contingency strategy such as going back to work. If LOE means that you may have to go through such an 'obstacle cause' then you may be planning to have too much excitement in your leisure years? But, everyone to his own way!
Waiting when you have retired to try an achieve certain cashflows will increase risk by itself and one may have to rely on contingency strategy such as going back to work. If LOE means that you may have to go through such an 'obstacle cause' then you may be planning to have too much excitement in your leisure years? But, everyone to his own way!
Don't stop now, I'm lapping it up!
Thanks
Thanks
Steve, this is REALLY GOOD STUFF !!! Thank you so much for sharing.
Good timing also just prior to your course this weekend
Good timing also just prior to your course this weekend
Mark Leo said:Keep it up Steve, I was just getting into that.
Obviously a greater understanding of your principles is required. Otherwise people will just go on making expensive mistakes and wasting time.
I agree. I was also just getting into it.
Eagerly looking forward to the next instalment...
Mark Leo said:
Me too. You have a lot of interesting points in your postings here at Somersoft — a book would be a great idea in my opinion!
Awaiting instalment #2...
Hi Steve
re
Firstly I have been quoted as saying that without future growth LOE is a disaster.
This is out of context:
The question I was asked was: “If you are spending your equity and there is no CG for the next . . . years, what will happen?” To which I answered “That will be a disaster.”
This comment was made on your seminar on the First weekend in March 2004 in Sydney.
There was a thread , similar to this one ... going at that time on this link
http://www.somersoft.com/forums/showthread.php?t=14486&page=1&pp=15&highlight=Disaster
I recorded re recollections of that comment in this thread ( third page ) and being the day after the seminar I would be fairly condfident as to the acuracy of my recollections at that stage.
My Comments recorded at that time were
"When someone asked Steve what would happen if the value of the properties did go down for five years, his answer was " a Disaster ".
See Change
re
Firstly I have been quoted as saying that without future growth LOE is a disaster.
This is out of context:
The question I was asked was: “If you are spending your equity and there is no CG for the next . . . years, what will happen?” To which I answered “That will be a disaster.”
This comment was made on your seminar on the First weekend in March 2004 in Sydney.
There was a thread , similar to this one ...
going at that time on this linkhttp://www.somersoft.com/forums/showthread.php?t=14486&page=1&pp=15&highlight=Disaster
I recorded re recollections of that comment in this thread ( third page ) and being the day after the seminar I would be fairly condfident as to the acuracy of my recollections at that stage.
My Comments recorded at that time were
"When someone asked Steve what would happen if the value of the properties did go down for five years, his answer was " a Disaster ".
See Change
Yes, and I REPEAT that the question was asked in the context of one SPENDING the equity.see_change said:
So what's your point??
Or do you just contribute to be negative
see-change which of the following words are you failing to understand?
”No growth = NO SPEND”
I have explained MANY TIMES that one assesses what the previous years growth has been and that you cannot spend more than that.
Furthermore in your very own post:
(From March 04)
see_change said:
So it seems patently clear that you did understand EXACTLY what I was saying; and given that there can be no misunderstanding on your part again I ask you:
What is the point of your latest post?
I can find NOTHING positive in this post, only CONTINUAL NEGATIVITY. (Read it again yourself)
We all have a right to an opinion, I respect your right to whatever opinion you wish to express on the forum . . . but really if you have NOTHING but NEGATIVITY to contribute, rather don’t spoil it for everyone else.
Frustrated,
Steve
Last edited:
Steve Navra said:Question to Forum members: Do you find this interesting and useful?
If you do, I will continue to take you through the process step by step all the way through to establishing a balanced portfolio that safely (With ALL the necessary buffers) allows you to cashflow the holding costs of the portfolio and allows you to live off your equity, through good, bad and indifferent times.
I anticipate that this will take at least 5 posts of this approx volume to complete the task!
Please indicate by poll or other if you wish me to continue.
PS: I do believe this full understanding will give EVERY level of risk profile the necessary comfort to enhance what they have and enough SANF to live off their capital.
Steve:
Good post.
I think most of us have little problem to build a property portfolio as long as we are in this forum long enough. It is very good for us to know more beyone IP. Looking forward to the topic of portfolio balancing.
Please continue.
Thanks
TGP
Please dont let any negativity frustrate you too much Steve.
I think I speak for dozens of Forumites when I say that your advice is much appreciated and valued.
I have heard many pro's and con's for LOE, but never heard it explained quite so well - or in as much detail to the point where I too can start putting together a proper plan.
Pray continue.
<KS>
I think I speak for dozens of Forumites when I say that your advice is much appreciated and valued.
I have heard many pro's and con's for LOE, but never heard it explained quite so well - or in as much detail to the point where I too can start putting together a proper plan.
Pray continue.
<KS>
Hi Steve
IMHO, your education is better than "A grade" and I have learned a great deal from your posts and our conversations over the past few years. I contribute a large portion of our personal success as a result of your education on property criteria and financial structures. You know me and you also know that I like to control my own financial destiny so a lot of my comments on this forum are designed to help others to think for themselves.
My concern and the point of this post is, that people looking at financial structure may find it difficult to have financial flexibility if they become over structured.
Kind regards
Simon
IMHO, your education is better than "A grade" and I have learned a great deal from your posts and our conversations over the past few years. I contribute a large portion of our personal success as a result of your education on property criteria and financial structures. You know me and you also know that I like to control my own financial destiny so a lot of my comments on this forum are designed to help others to think for themselves.
My concern and the point of this post is, that people looking at financial structure may find it difficult to have financial flexibility if they become over structured.
Kind regards
Simon
MJK - you're failing to take into account the potential growth of the assets which could produce a far greater return in the longer term rather than investing unencumbered funds.
Sim,
I hadn't forgotten about CG at all. What I was alluding to was that if you didn't want to retire on equity by borrowing you would need to convert the equity to income and unencumbered equity produces much more income than the encumbered variety.
MJK
Sim,
I hadn't forgotten about CG at all. What I was alluding to was that if you didn't want to retire on equity by borrowing you would need to convert the equity to income and unencumbered equity produces much more income than the encumbered variety.
MJK
It is like having a well run rural farm. When times are tough the good farmer has enough food for his stock stored up to see him through. For me, equity is like the farmers food store. Other farmers who don't have enough will end up selling their farms to the farmer who holds out the longest. Yes, when things get better he will soon grow more food to replace that which was used up during the tougher times.
On the other hand, a good farmer will only set up sufficient structures to store only enough to see him through to the next season or two. He would not build lots of storage sheds on his good food producing land.(In other words be careful not to set up complex structures that will limit your future growth.)Stay flexible!
Also in tough times a farmer does not make his income from hand feeding his stock but rather from the sale of replaceable stock and other produce. His store of hay(equity) will see him through.
Simon
Simon,
I don't kow if you where trying to help with the Farmer parable but really mate It doesn't help me understand. I was hoping for easier to understand explaination but I suppose you've got your reasons for being vague and thats your perogative.
Cheers
MJK
On the other hand, a good farmer will only set up sufficient structures to store only enough to see him through to the next season or two. He would not build lots of storage sheds on his good food producing land.(In other words be careful not to set up complex structures that will limit your future growth.)Stay flexible!
Also in tough times a farmer does not make his income from hand feeding his stock but rather from the sale of replaceable stock and other produce. His store of hay(equity) will see him through.
Simon
Simon,
I don't kow if you where trying to help with the Farmer parable but really mate It doesn't help me understand. I was hoping for easier to understand explaination but I suppose you've got your reasons for being vague and thats your perogative.
Cheers
MJK
