"One Million Dollars,,,,"

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From: Peter Mumford


Well what would we do... One Million
Dollars... to start with to Create wealth
and income.

I would be interested to know what every
one would do .

The Conditions of the question are:


One Million dollars in the bank to use

Have no debt

Have no income(need it from property)
as you don't want full time work

Own unit equity $800,000.00
 
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Reply: 1
From: Rasputin .


is this just rhetorical question or are you in this fortuante position ??
 
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Reply: 2
From: GoAnna !


Hi Peter

Are you sating that in this hypothetical situation you have 1 mil in the bank plus a mil property you live in (equity of 800k) or have a I misunderstood?


GoAnna !
(aka Anna before she got real)
 
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Reply: 2.1
From: Ian Douglas


I like these sort of things, it gets people thinking. (get ready for a long answer)

A few things, whether this is real or fantasy it doesn't matter for me in answering your question.

I would guess that you would have some financial savvy or have inherited something.

This is what I would do, and even though this is a property investors forum, not much of my answer is property related. I see property as a foundation and grounding.

Firstly if you haven't done so already get some financial education. Read , Read, Attend lectures, seminars fill your mind with the mentality and knowledge you need to succeed.
Always be positive, even when things seems to be going wrong, If you don't know it already, find out about sowing and reaping, you can learn many invaluable lessons from nature. Know that you are going to succeed in this, and you are going to find the best way to invest your money.

What are your dreams ? What do you want in life, Where do you want to be in 2, 5, 10 years from now ? Set goals and work towards them -NEVER GIVE UP ! Set them High, even what others might say are unreachable, and commit yourself to the journey towards them.

Invest in expert financial/ and expert tax advisors, those with fee based billing and who have international skills.

Associate yourself with those wealthy you admire, mentoring is important, but choose them well. If you hang around criminals, your behaviour is likely to be tainted and eventually they drag you down, If you hang around successful minded honest individuals they will lift you up. if you can't hang around them read books about them/ by them, learn from them, and how they did it. It is not a formula, but many truly wealthy have many common features in their mentality and other areas of their life.

So to start with, don't be average, don't follow the crowd. Be different, dare to take educated risks.

Set up offshore accounts,(trust,company,personal, anonymous) learn about tax minimising company structures, Invest internationally. I read some months ago that the federal government moved $5billion in Telstra assests to a tax haven in Bermunda and put it in a two dollar shelf company to save billions of dollars worth of taxes. The government knows how to minimise tax, why don't we ! (It is legal you know)

If you have inherited this and have never had any experience with large sums of money, educate yourself. As the saying goes 'a fool and his money is soon parted' Learn more than everyone you know, learn principals of the wealthy. (LEARN-DO-TEACH)

Look at John D Rockefeller. A man who in the 1900's had estimated wealth of 900million. Thats like more than Bill Gates in todays money. Many people hated him, and many people still hate him, but look at what he did and how he did it , He gave well over 560Million (worth more than tens time the amount today)away to create universities, desease research, feeding and clothing programs for the poor & much more. He believed God gave him the power to get wealth and it was his responsiblity to use it for the betterment humanity. He spent the last 40 years of his life giving it away.
Even today his legacy lasts.

Anyways back to you and the question.
Step one is Get Educated.
Ofcourse while you are getting educated you will need an income.

2. Re invest into a high yield property investment. With 800K, I would probably go into a commercial or motels, resorts as they offer much higher returns than your average residential returns. Not all , but you can choose wisely and benefit. between 12-40% returns. Mind you the higher returns are usually associated with being the owner manager, but there are exceptions. Qld has some great high return resorts/motels etc.You can always sell a 25 year lease/managment rights and pay off a lump of your loan or choose to reinvest elsewhere.

3. Eg $800,000 x 90% = $720,000 to use
$1.4m property - 25% return - $350k
$1.4m I/O loan @ 8% = $112K interest pa
Income = $350k - 112k =
$238k gross pa - $19,833 per month gross

Find out about paying interest quarterly, six monthly , the reason is if you can invest the interest payments before they're paid, into high return investments, the return on those yet to be paid interest payments can infact pay off the loan and you can start keeping some more money.

Find out about Renting shares - from Jamie Mcintyre, 'www.21stcenturyacademy.com.au'
You can have a 2-5%pa return on your shares each month so thats 24%-60% pa return be (writing a call) or renting shares.

Get that money working hard for you, find out how the rich keep getting high returns on most investment ( high meaning above 100%) Know that Australia holds only about 1% of the world investment opportunities.

Hence Lookoffshore !

Invest elsewhere and spend in Australia, and build Australia up !

This is really long , and I could go on for hours, but that's all I am going to say, my email is their and any comments questions drop me a line.
I don't know everything (of course! only the arrogant fool does !) but I have only started learning, and I will never stop.

So again finally - It is about learning, acquiring knowledge and acting on it. Don't worry if you fail from time to time, We humans always learn from mistakes. Always look for opportunities for your money to work for you !

After reading your question thatis what came out of me.
Learn about making money- wealthy mentality
Do- Go out and make money
Teach- Go out tell evenone how you did it.

Ian
(always learning, )

PS.

If all the money in the world was divided evenly with all mankind, do you know that each person would have $3,000,000 It is your birthright to be wealthy. But if that did happen, you would soon see poor people and extremely wealthy people all over again. The financially educated will again rule the world as they know how to acquire wealth.
The main ingredient - knowledge then action
 
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Reply: 3
From: Cathy Baxter


Ian

You wrote:

"I read some months ago that the federal government moved $5billion in Telstra assests to a tax haven in Bermunda and put it in a two dollar shelf company to save billions of dollars worth of taxes. The government knows how to minimise tax, why don't we ! (It is legal you know)"

Are you serious - no wonder this country's up the creek - government owned businesses don't even pay tax. All to push the share price up i presume. I hope they spend the profit on re-investing in regional Australia and i want a rebate on my phone bill!

Cathy
 
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Reply: 1.1
From: Anonymous


A interested investor in learning from all.
 
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Reply: 2.2
From: Peter Mumford


On 4/17/01 8:32:00 AM, GoAnna ! __
wrote:
>Hi Peter
>
>Are you sating that in this
>hypothetical situation you
>have 1 mil in the bank plus a
>mil property you live in
>(equity of 800k) or have a I
>misunderstood?
>
>
>GoAnna !
>(aka Anna before she got real)

Yes the question is if you had one mill in
the bank to use for investments and
income and a unit property that is debt
free worth $800k plus. The unit can be
taken as either available to rent, but lets
say at this stage not rented at this stage,
or as the principal place of residence

I am always Interested in peoples ideas
and love sharing of idea's

Peter
 
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Reply: 3.1
From: Ian Douglas


Hello ,
I'll see if I can find the article online and post the URL to get there - re Telstra

But, I'm trying to be delicate & diplomatic here, it is no use complaining about wanting a refund,as each person can find out about how to do this (go offshore) to benefit themselves. I would suppose that if they did not save tax we would be lumped with an additional bill.

The Gov't paints pictures of Christopher Skase and Offshore and tax havens and everyone puts all three into the same boat. Yes there are legal ways to minimise your tax and illegal ways as Christopher Skase knows, or so I've been told.
But the point is the truth is out there
(just call me molder) and the truly wealthy know exactly what it is.

Apparently Offshore banks cannot advertise, that is why many people don't know about them. But since the internet, things have become a lot easier for the average person to find out more. I'll stop there I have a tendancy to go on a bit with subjects that interest me
Bye for now
Ian
(always learning)
 
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