Motivated Money by Peter Thornhill... Shares for Property Investors!

Hi there,

A poster in another thread (I think it was Peter14.7) some time back mentioned this book, and I ended up buying it to check it out:

https://www.motivatedmoney.com.au/store.php

Having since read the book... I have to say that it has, to my surprise, made me re-consider my "property bull" status! - and consider putting more of my $ into shares.

I almost put the book away after starting at a chapter called ''Property Myths''! - but then fortunately went back to the start and read it from the beginning.

I'm interested in comments from anyone else who has read this book, positive or negative.

Thanks.
 
Finished reading it last week. It's good to have different perspectives, and although some times I felt he was bashing property investing, the guy highlights good things about shares.

One thing that I like was the concept of dimensions when you invest in any sort of asset. Not only it should give you capital growth (first dimension), but it also must give you income, and income must be reinvested in the asset to generate value.

So, for shares, the main thing that I learned from this book was that many of us concentrate in buy low, sell high, ignoring the importance of dividends. Dividends is one of the so called dimensions that most of us ignore, and what gives us the ability to retire. You need the cashflow to retire, and this is what the author enphasise.

even though I'm not native english speaker, the book has few spelling mistakes, or incorrect sentences (which I'm surprised for an author), but apart from that, it was interesting.
 
I am suspicious of any of the tried and true "broad brush" investment approaches now. It's a mine field out there and a lot of people will be blown up in next five years.

A fortunate few who, through good luck or good management, do the right thing will do well. I think I know a few places not to be but I am far less certain about where I should be.
 
Hi there,

A poster in another thread (I think it was Peter14.7) some time back mentioned this book, and I ended up buying it to check it out:

https://www.motivatedmoney.com.au/store.php

Having since read the book... I have to say that it has, to my surprise, made me re-consider my "property bull" status! - and consider putting more of my $ into shares.

I almost put the book away after starting at a chapter called ''Property Myths''! - but then fortunately went back to the start and read it from the beginning.

I'm interested in comments from anyone else who has read this book, positive or negative.

Thanks.

Any chance of a summary of his strategy?
 
I am suspicious of any of the tried and true "broad brush" investment approaches now. It's a mine field out there and a lot of people will be blown up in next five years.

A fortunate few who, through good luck or good management, do the right thing will do well. I think I know a few places not to be but I am far less certain about where I should be.

elaborate?
 
Ive read a bit of his stuff - but not this book - and his strategy is to buy shares in blue chip co's with decent dividends and then reinvest them.

Dividends first and growth second. The growth will look after itself over the long term.

Hes very big with the silver haired retirement population. Obviously his shares for income strategy is popular with them.

This book may be a departure from the above but its what i have gathered from him from what i've read.


Any chance of a summary of his strategy?
 
I'd rather not. I have posted on this matter many times and to do so again would sound like carping.

Besides, What do I know? :D

SF,

You don't give yourself enough credit.

I for one think you know a great deal, and like to hear you share your knowledge with us all.

I don't always agree as you can attest to, and I'm in the same boat - what would I know? :D, but we all know a little bit - enough for someone to gain benefit from.
 
SF,

You don't give yourself enough credit.

I for one think you know a great deal, and like to hear you share your knowledge with us all.

I don't always agree as you can attest to, and I'm in the same boat - what would I know? :D, but we all know a little bit - enough for someone to gain benefit from.

Well said.

None of us is as smart as all of us. ;)

Go on Mr Fish. I am always learning......whata ya got?
 
I think this book is well worth a read. It describes a simple strategy based on similar tenets to buy and hold property investing.

Buying high yielding, blue chip shares and holding long term - if not forever.

If you want a get rich quick idea then keep looking.

Peter is a nice fellow too. You can buy the book from him directly on his website.

I am one of the regulars who have mentioned this fellow more than once.

Cheers,
 
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Having since read the book... I have to say that it has, to my surprise, made me re-consider my "property bull" status! - and consider putting more of my $ into shares.

Personally i think that if a book can just 'fundamentally change your investment beliefs' then
there is the possibility that you lacked conviction in your own beliefs in the first place.

Now i am probably going to get flammed for this comment, but sit back and reflect for a moment.

Investing is not about the latest 'fad'.
In my opinion investing is the same as running a business. You do your research, you allocate your capital, and then you do everything possible to make sure your business succeeds.

You dont think: today i will open business 'x', tomorrow you think nah, i recon business 'y' is a better opportunity.

This is why i constantly state that people should try to become as much of an 'expert' in an area of investing, rather than a 'jack of all trades'.


By the way, this is me talking from experience, i have also travelled down the investment pathway in my younger years with a lack of conviction.
One of my first mistakes was to extrapolate future performance of mutual funds based on prior performance without understanding the underlying CATALYSTS of that prior out performance.

JIT when in doubt stick with your original thought: INDEX FUNDS with a consistent monthly allocation (regardless of the market,ie dont try to time the market).

I highlighted something with you in mind here:
http://www.somersoft.com/forums/showthread.php?t=24546&page=5

Go and do a bit of research on this.

But it reminds me of Wall Street: Why cant the majority of funds managers out perform the S&P: because they are sheep, and sheep get slaughtered.

The next stage is going to be hedge funds:D
 
Ive read a bit of his stuff - but not this book - and his strategy is to buy shares in blue chip co's with decent dividends and then reinvest them.

Dividends first and growth second. The growth will look after itself over the long term.

Hes very big with the silver haired retirement population. Obviously his shares for income strategy is popular with them.

This book may be a departure from the above but its what i have gathered from him from what i've read.

I suggest reading David Dreman's 'Contrarian Investment Strategies',
if someone is serious about this approach.

The statistical research supports the theory, but only through multiple cycles and only with massive diversification (ie you dont run a concentrated portfolio). Refer specifically to page 167, 183.

However also note that the dividend approach achieved the 'lowest' outperformance, when compared to PE ratio and PBV contrarian investments.
 
Thanks for the replies.

Just a note, the strategies/ideas in this book are nothing new of course, but what I liked about the book was just the way the information was presented as it helped me look at shares from a slightly different perspective, and better see its application to my own personal investment strategy.

Personally i think that if a book can just 'fundamentally change your investment beliefs' then
there is the possibility that you lacked conviction in your own beliefs in the first place.

...

This is why i constantly state that people should try to become as much of an 'expert' in an area of investing, rather than a 'jack of all trades'.

...

JIT when in doubt stick with your original thought: INDEX FUNDS with a consistent monthly allocation (regardless of the market,ie dont try to time the market).

IV,

I know exactly what you are saying!

The book didn't ''fundamentally change'' anything with me, it actually reminded me of why the index fund approach to share investing has so much merit (I already knew this, but sometimes you forget when you are so focussed on one area, ie. property) ... and as you have just pointed out!

And, the place this could still have in my overall investment strategy, despite my core focus being in property, which is my recognised strength.

Reading this book didn't give me any inclination to stock pick whatsoever, as this is beyond my skill set, and I understand and accept this. I have no intention at all of reading annual reports or analysing stock price trends!

But the book has reminded me of the logic of investing in shares for the long-term for growth, and more importantly, for a long-term dividend income stream, that rises at a greater rate than bank interest or rents.

Dollar cost-averaging into an index fund portfolio, which as you correctly point out, was my ''original thought''! - is exactly what this book has given me greater conviction to follow through with, that's all.

But, something that I will personally do via more tax-deductible contributions into a SMSF.

And most importantly something I will start to do earlier rather than later, as the aim would be to purchase the shares for income as early as possible and hold them for as long as possible, such that by the time I get to my chosen ''retirement age'' the dividend cheques will be quite healthy.

Yesterday I actually sent an e-mail to Peter Thornhill to see what his thoughts on the index fund approach were and whether his portfolio has actually outperformed it!

I might report back his response.

Intrinsic_Value said:

Thanks IV, I didn't see that, I will read it and post back tommorrow.
 
Thanks for the replies.

Just a note, the strategies/ideas in this book are nothing new of course, but what I liked about the book was just the way the information was presented as it helped me look at shares from a slightly different perspective, and better see its application to my own personal investment strategy.

At the end of the day, the MOST important message i can impart on people, is that investing in shares is very similar to investing in businesses.
In todays world there is too much removal of ownership of businesses (and that is all that a shareholder is)




Reading this book didn't give me any inclination to stock pick whatsoever, as this is beyond my skill set, and I understand and accept this. I have no intention at all of reading annual reports or analysing stock price trends!

there is no 'shame' in this at all. The key in long term investing is to know ones strengths and weaknesses. There are many 'smarter' property members on this forum than me. My knowledge of opportunity in property is quite limited, but this doesnt inhibit me from making great gains in property, why?
because i just wait for the right opportunity in my limited sephere of knowlege (my returns on property have exceeded my returns on the stock market, but maybe that was just due to a limited window of opportunity in my area of limited property knowledge)

But the book has reminded me of the logic of investing in shares for the long-term for growth, and more importantly, for a long-term dividend income stream, that rises at a greater rate than bank interest or rents.

Over the very long term, shares should outperform because they are the most risky, its basic risk vs return. This has been supported by the 'long term' statistics. But long term here can really mean long term, there was a recent comparison of shares vs bonds which showed that for the first time in over 20 years, bonds outperformed shares (however this just means to me that shares over the NEXT 20 years have a greater propability of outerforming, ie regression to the mean).

Dollar cost-averaging into an index fund portfolio, which as you correctly point out, was my ''original thought''! - is exactly what this book has given me greater conviction to follow through with, that's all.

the key to dollar cost averaging in an indexfund is to maintain it regardless of timing.

Someone might out there might want to do a statistical analysis of the Japanese market with dollar averaging.
It could be quite useful to this forum.
The Japanese share market has been in a secular BEAR market for the last 40 odd years.

Has dollar consistent dollar averaging produced an 'ok' result.
Winston Wolfe, maybe you can add to this.




Yesterday I actually sent an e-mail to Peter Thornhill to see what his thoughts on the index fund approach were and whether his portfolio has actually outperformed it!

If you are looking at this you really need as much of a 'long term' as possible.
this is really the playground of the funds management industry marketing material (however conveniently they dont have to report 'after tax' effect, another benefit of index funds in my opinon)
 
question,

what are "Renounceable Rights Issues" When i was looking at ARGO's website (a listed investment company) it had this under the benefits of investing tab.

Also JIT how often do you do you plan to do your Dollar cost averaging? every month, 6 months, 12 months?

I'm planning to do monthly

Regards,

RH
 
question,

what are "Renounceable Rights Issues" When i was looking at ARGO's website (a listed investment company) it had this under the benefits of investing tab.

By taking up (buying) the new issues, it's a great way to increase your holdings in Argo at a discount and without any broker fees. If you don't want them, you can "renounce" them.

It is definitely a benefit to take up every new issue which is offered at the maximum amount you can.

http://www.argoinvestments.com.au/investing.php?id=395
 
Investopedia Says:
Stockholders that have received renounceable rights have three choices of what to do with the rights. They can act on the rights and buy more shares as per the particulars of the rights issue; they can sell them on the market; or they can pass on taking advantage of their rights.

Note that you can buy or sell the rights on the market before you take up the offer.
 
By taking up (buying) the new issues, it's a great way to increase your holdings in Argo at a discount and without any broker fees. If you don't want them, you can "renounce" them.

It is definitely a benefit to take up every new issue which is offered at the maximum amount you can.

http://www.argoinvestments.com.au/investing.php?id=395

Trying to wrap my head around it

So you get offered to purchase new shares upto a certain amount Eg. $15,000 at a discounted rate and no brokerage fee's, but if you don't want to purchase them you can actually sell your entitlement to those benefits (or collect them to sell at a later date) and collect some cash.

so you can either

1.) purchase the shares under the new issue
2.) sell the rights for some cash?

Ohhh does the amount of shares you get offered to purchase based on the amount you already own?

let me know if im on the right track or totally off

Regards,

RH
 
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