okay now i'm worried.

[willair]

I object to constantly being told I'm doing it wrong by beginners who have yet to test their mettle though. I have tried to make the point that the last decade was atypical and as such will not be repeated in the next. Alexlee was a master at calling me a failure. I have proven myself a survivor though and that is more than the Pups here can claim.

But the fact is you are still here posting on SS must mean something i only ever came here to learn off people like yourself and several others that have come and gone in this site, property is longterm,the ASX is longterm,as with the pups they don't worry an old Dingo like myself..
anyone know the price of BHP on late friday..
willair..

 

[Bill.L]

Hi all,

Sunfish,

I have tried to make the point that the last decade was atypical and as such will not be repeated in the next.

Never a truer word spoken, same can be said about any 10 year period.

Sunfish, I don't think your calls on resources were as good as Thommo's and RichardC's though.


The call for gold $1000 before Sydney reached a 25% gain was also excellent.

However all such calls are probability calls, just like L.AAussie with property from 20 years ago. We can all back our judgements with dollars and make plenty if we are right, while trying to minimise the downside if we are wrong.

Because I believe that all future predictions are only probability calls, I will never make a fortune out of any investment, because I will never bet the house on it.

Hopefully you will call me a young pup,

I have my thoughts on the current state of the market (property and shares), and I follow neither the fully bullish nor the fully bearish cases. I currently do not hold any shares (in public companies) but I am looking for entry points.

On property, if I was much younger, and did not own any, I would be looking to buy. Currently we still own Ip's but are not looking to sell or buy further at this stage.

bye

 

[Bill.L]

Hi Willair,

BHP finished down 2.4% here on Friday, but up 2.2% in NY on Friday night our time.

bye

 

[steveadl]

Yes, you have shown it was a good move 20 years ago. That's OK with me. But the Bludger has yet to prove his skills and timing. He may find he has stepped of the pier but missed the boat.

I object to constantly being told I'm doing it wrong by beginners who have yet to test their mettle though. I have tried to make the point that the last decade was atypical and as such will not be repeated in the next. Alexlee was a master at calling me a failure. I have proven myself a survivor though and that is more than the Pups here can claim.

But were you one of the group on SS saying I was stupid for talking about Townsville when "everybody" knew all the cap gain was in Sydney?

Have you browsed the member's list here? There are thousands of lapsed members. Do we have a few survivors telling us it's all good while thousands of others have slinked away, locked into non-performing investments such as "ordinary" Syd property bought in '02 -'03?

The difference is who your giving your advice to. A lot of the posters here asking "should I buy" are new to the property market and a lot are young. Saying property won't do well and now is not the time to buy may not be the best advice for those sorts of people.

For young ones starting out, they need to get a foot in the market. Remember, not everyone on SS is a pro (young or old) with multiple properties already that needs to be advised to steer clear of property at the moment and how it will never be the same. That's the way a lot of your posts come across, intentional or not.

These sorts of posters would still do well now to focus on their research and pick an area with good fundamentals and perhaps make the decision to buy. Not all properties in Australia are destined for doom over the next 1-10yrs.

As far as the members list goes, it's pretty irrelevant. There are 1001 reasons people will stop posting, not the least of which; people starting out come to ask a few questions on their mind at the time and then go on their merry way with no intention of ever becoming a regular. I've personally helped a few of these people out privately to get into the market. Plus let's not forget all the GPHC trolls that have 5 nicks each.

 

[BayView]

I object to constantly being told I'm doing it wrong by beginners who have yet to test their mettle though.

Sounds like my 6 year old talking to me; I'm always wrong and he knows everything.

Come to think of it; I always knew more than my Dad when I was a kid too!

 

[INVSTOR]

Quote Stinktier
sorry? Is your post actually directed at me? or is 'you' just a generalisation?

Lets stick to facts we know i.e the economy,,, instead of ones we dont.

Its exactly this reason why in my opinion if you have not invested in property

Sorry Stinktier, I was speed reading and read your post as, "It's exactly this reason why in my opinion I have not invested in property."

I thought your post was a GHPC post.

 

[yieldmatters]

1. Buy decent properties in good locations when you can
2. Structure your finances properly from the beginning
3. Never sell
4. Wait for CG to do it's magic over a 20 year period

My 4 simple steps to financial freedom.

If you 'never' sell then the CG is worthless. It's just a number on a page.

 

[keithj]

If you 'never' sell then the CG is worthless. It's just a number on a page.

That's another one of your wealth-limiting misconceptions YM. Would you rather have $0 or equity worth $M's - they're both just numbers on a page ?. Think what you can do with that equity - borrow against it to buy more IP or shares or for LOE. The point is that the $M written on his page gives him a lot more options than the $0 written on most other peoples pages.

 

[myla]

hello,

same as your share, gold, commodity investments ym,


thanks
myla

 

[BayView]

If you 'never' sell then the CG is worthless. It's just a number on a page.

The richest people in the world have billions in cap gain/nett worth. Their wealth is tied up in their assets - businesses and real estate, some of it in shares. They don't have the cash just sitting around in a shoebox or in their ING account.

Worthless cap gain is superannuation sitting there for 40 years until you retire, with no access to it, and the day before you retire the stock market collapses and you lose the lot.

What about if I accumulate a ton of cap gain through my investments (IP's), then access the cap gain to buy one or several successful and cashflow positive businesses?

I can then live off the passive cashflow of the businesses, and/or reinvest it into other cashflow investments, or other assets that increase the cashflow and the cap gain.

And repeat.

The growth from that first lot of cap gain then becomes exponential. Could my income from that cap gain top $1 mill per year, or per month? Definitely.

That doesn't sound like worthless cap gain to me.

If I hadn't gone down the IP investing path some 8 years ago, and increased the cap gain and rental income we now enjoy, then the above plan would be just that - only a plan.

But it's now becoming a reality, and is almost at the stage where the need to work for earned income will end, and the life on the passive income alone will begin.

The question is YM, are you going to use your cap gain for such a plan, or just sell out and count it everyday, with no chance to increase it from there?

 

[yieldmatters]

The End Game

It all depends what your goals are.

If it is a game where whoever dies with the most assets wins then you might re-invest forever.

But if your goal is to have a full and enjoyable life then at some point you have to swap your assets from property into an asset category that has a better yield and then at some point after that eat into the capital itself.

Hence I made a point about the "never sell" advice. I don't necessarilly agree with it.

 

[wylie]

But if your goal is to have a full and enjoyable life then at some point you have to swap your assets from property into an asset category that has a better yield and then at some point after that eat into the capital itself.

My parents seem to be doing okay without "swapping their assets from property into an asset category that has a better yield".

 

[BayView]

It all depends what your goals are.

If it is a game where whoever dies with the most assets wins then you might re-invest forever.

But if your goal is to have a full and enjoyable life then at some point you have to swap your assets from property into an asset category that has a better yield and then at some point after that eat into the capital itself.

Hence I made a point about the "never sell" advice. I don't necessarilly agree with it.

As we all know, the process of selling to realise a cap gain (in property), and then re-entering the market at another time is usually a bit of a dollar swapping exercise and a waste of time. The transaction costs, as well as the lost cap gain when out of the market, and the cap gain tax swallow up a good deal of the gain. If you never sell, you never get taxed, and you are always in the market reaping the gains.

The goal, I would have thought, is to exit the rat-race as soon as possible, with as much expendable income as possible, to give you the choice to do whatever you want, whenever you want. Who wants to work hard all their lives, sacrificing and going without, just so the retirement is nice and there are lots of assets to hand over to the kids?

No-one is thinking about dying with a squillion assets either. It's all about the quality of the journey. To achieve that quality, you have to accumulate a sh!tload of cap gain, equity and cashflow. This is done through the above plan - the utilisation of that cap gain.

The property assets, as described in my post, are the engine from which the income, the cap growth, the businesses are all acquired.

 

[ffc1883_1996]

If you 'never' sell then the CG is worthless. It's just a number on a page.

Cash in a bank account is also just a number on a page!

So, what’s wrong with utilizing CG from property to turn these numbers from relatively small figures into numbers that are large enough to retire early? Seems a strategy that's more likely to succeed than most.

 

[Andrew_A]

It all depends what your goals are.

If it is a game where whoever dies with the most assets wins then you might re-invest forever.

But if your goal is to have a full and enjoyable life then at some point you have to swap your assets from property into an asset category that has a better yield and then at some point after that eat into the capital itself.

Hence I made a point about the "never sell" advice. I don't necessarilly agree with it.

I think selling is a powerful tool for the property investor, I did it on a CG free PPOR last year which was a tough choice for me but I'm glad I did.

Jan Somers original recipe was to sell down IP's to pay down debt and live on rents for the endgame, though I think the choices that are available for using equity mean that you don't really have to sell to access the advantages of increased value in your portfolio.

Turning over your smaller profits quickly leads to wealth faster than a higher gain at a longer timeframe potentially, Harry Triguboff probably best represents this with resi housing investments I think.

 

[JIT]

...But if your goal is to have a full and enjoyable life then at some point you have to swap your assets from property into an asset category that has a better yield...

Hence I made a point about the "never sell" advice. I don't necessarilly agree with it.

Agree.

The ''buy/hold/never sell'' mantra people talk about here can be limiting.

Nothing wrong with selectively selling the odd property at the appropriate time, with consideration to the potential CGT consequences.

Some people will have the foresight to convert from growth assets to income assets just in time for retirement.

Most though, I suspect, will get the timing wrong and find themselves sitting on a pile of equity, wanting to retire, but getting a relatively measly income from their IP's and smaller share/fund portfolio...and left wondering what to do next.

And also, I think the ''leveraging into higher income/yield assets'' strategy is a growth/accumulation phase strategy - not something that should happen when you are ready to retire, but several years prior...

This requires planning and above all, deciding how much is ''enough'' for you and your family.

 

[yieldmatters]

Cash in a bank account is also just a number on a page!

So, what’s wrong with utilizing CG from property to turn these numbers from relatively small figures into numbers that are large enough to retire early? Seems a strategy that's more likely to succeed than most.

I agree - cash in a bank account is also just a number on a page. A new boat, first class trips to Paris, a nice suit, helping your family with important things like education, significantly supporting your favourite charity (etc etc) are all things that aren't just numbers on a page.

My point is if property is all about CG and you plan to never sell then it really is a strange game as you can never get any benefit out of it.

I take Andrew (and I think Wylie)'s point that due to modern financial products (LOCs etc) you can access the CG early. Although I find it hard to differentiate that from just another loan. If I believed the asset value could never drop below the outstanding loan balance then I would accept it as a way of truly getting CG early. I don't believe that however.

 

[Andrew_A]

Ideally I would have all the purchasing power I ever needed through a large pile of it or a robust passive income steam and no debt at all. In the meantime I'm still hooked on debt.

 

[WinstonWolfe]

Ideally I would have all the purchasing power I ever needed through a large pile of it or a robust passive income steam and no debt at all. In the meantime I'm still hooked on debt.

Ideally, I'd have a lender prepared to lend for a couple of % below cpi and a few more % below GDP (BOJ comes to mind) at 100% LVR - fixed for my lifetime of couse.

Wouldn't be long before I was the wealthiest man in Australia. Well, that would have been the case if I started buying in 2001.

If I started buying now even with the cheaper credit, my wealth creation would be dependent on the credit terms available to the rest of the market.

 

[willair]

I agree - cash in a bank account is also just a number on a page. A new boat, first class trips to Paris, a nice suit, helping your family with important things like education, significantly supporting your favourite charity (etc etc) are all things that aren't just numbers on a page.

My point is if property is all about CG and you plan to never sell then it really is a strange game as you can never get any benefit out of it.

That's another little item you don't understand once the properties become unencumbered you get to milk those properties in several ways,rental return is just one,longterm C-G is another what happen shorterm is not important but the simple facts are you have the equitythere to use at any time for what ever you want,property investing works it's just the time factor you don't understand..willair..