Good to read about success! We just cracked our first equity million this year. I'm figuring 5 years or so to the next.
Our 1st equity Mil.
- Thread starter agent007
- Start date
You might just suprise yourself. It's like a snowball. The growth isn't linear.
After you hit the first, the second is inevitable and will arrive ahead of schedule.
In 5 years time you will look back on this post and say "what was I thinking"!
Last edited:
Have they gone to the wall, or just stopped posting?
So true.
Our first was maybe just over a couple of years ago, achieved after about 8 years from starting.
Just did some rough figures again the other day and we seemed to have jumped over the 2 and 3 mil mark without even noticing.
I read somewhere that your wealth should double every 3 years.
Exponential growth is a wonderful thing.
I hope so! Thanks for your kind words and support, too, it means a lot.
Lol i did my figures just then, im still far away from that milestone, 1/5 of the way. Smart eggs can figure that out.
Regards,
RH
Regards,
RH
We're still here, even if a tad poorer. The GFC whiped some equity out of our portfolio through our share market exposure and we've spent another couple of hundred thousand getting our development ready to go. When its done though, we should be back above that $1M mark and half way towards the next one even allowing for our GFC equity losses. Holding a touch under $4M in properties might see us get there pretty quickly if Sydney holds up its end of the deal, even 10% growth would just about get us to $2M.
One step back, two steps forward or something like that. Persistence pays off eventually. Life would be boring if it was all one way traffic...
Cheers,
Michael
Hi Michael, we also lost in the market more than we thought we ever will. A lesson that will stick with us for ever.
Cheers!
Curious if you're willing to share what kinda % drop? The lesson learnt for you is to avoid shares or to avoid certain industries?
Every year we are required to provide an asset/liabillity statement for one of our lenders.
We don't have our properties valued as such, but we go by what is the lowest we would accept if putting it on the market.
This year we hit the 1 mil assett as well.
We joke about what the poor people are eating and doing....and you can't get much cheaper /thriftier than us
We don't have our properties valued as such, but we go by what is the lowest we would accept if putting it on the market.
This year we hit the 1 mil assett as well.
We joke about what the poor people are eating and doing....and you can't get much cheaper /thriftier than us
The funds in the stock market were leveraged and thus, the funds were swallowed almost entirely. I had enough buffers to keep on holding on but, have not control on the decisions... That was a significant % of my entire portfolio. Suffice to say I'd be half way through my next milestone.
The main lessons learnt:
1- Don't invest in anything you have no control over
2- Have a clear exit plan even before getting into the investment
3- Trust no guru
4- And last but not least, follow the KISS method because boring is good
PS. I blame noone but, myslef. I also appreciate the lesson received. Specially because Im still young and have a lot of time to go.
This is starting to get interesting for me.
Net equity $700k.
Gross value of property $1.5m
Property Debt $1m
Gross value of shares $255k
Margin loan on shares $55k
If I sell the shares and put into the line of credit, property debt falls to $800k and my lvr on property falls to 53% from current 60% lvr overall.
An accountant may say that I have a lazy balance sheet.
If I sold the shares I would be looking to buy another property (say a $450k property in Moranbah, where properties seem to be close to cashflow neutral at the moment).
My question for those who have got to $1m or $2m net equity fairly quickly is this...have you acheived this level of net equity mainly as a result of the large size of gross property holdings (i.e. $4m gross property value going up 7% p.a. means net equity increases another $280k in a year)?
I suppose it mostly comes down to what level of property capital gains an individual predicts for the next few years.
Net equity $700k.
Gross value of property $1.5m
Property Debt $1m
Gross value of shares $255k
Margin loan on shares $55k
If I sell the shares and put into the line of credit, property debt falls to $800k and my lvr on property falls to 53% from current 60% lvr overall.
An accountant may say that I have a lazy balance sheet.
If I sold the shares I would be looking to buy another property (say a $450k property in Moranbah, where properties seem to be close to cashflow neutral at the moment).
My question for those who have got to $1m or $2m net equity fairly quickly is this...have you acheived this level of net equity mainly as a result of the large size of gross property holdings (i.e. $4m gross property value going up 7% p.a. means net equity increases another $280k in a year)?
I suppose it mostly comes down to what level of property capital gains an individual predicts for the next few years.
Well, it depends on the definition of quickly. It has taken me 10y so far and I'm still not in the position I plan to be.
In our case, we had to build the portfolio first. I can tell you that back in the year 2001 our net equity position was approx $40k. We bought property every time we could at the max LVR we could get. We always went for -vely geared properties since our main focus was the growth to continue the replication process. I found that people talk about -vely geared property as if they would be -vely geared for ever. In reality, that conditions lasts in avg 5 years.
IMO, it is more important what ones does with whatever CG you get out of ones investments. Of course, the level of risks ones is prepared to take is important too.
Agent007 (and other established millionnaire forumites),
Does it feel any different having that million or two in equity? Do you feel wealthier? Has the wealth mindset changed?
I was saying to my wife just the other day that even with two IPs, I still feel somewhat poor and struggling. Now with a 7 month old kid, it seems at times we are not going forward financially.
Regards
Daniel Lee
Does it feel any different having that million or two in equity? Do you feel wealthier? Has the wealth mindset changed?
I was saying to my wife just the other day that even with two IPs, I still feel somewhat poor and struggling. Now with a 7 month old kid, it seems at times we are not going forward financially.
Regards
Daniel Lee
Nope!
It changed after IP #2 when was when we realised what we're doing
He who holds the largest asset base is more likely to get more equity quicker due to leverage and compounding
For me no.
Our cashflow stays pretty much the same.
Only difference is I'm on the countdown of quitting my employed job ( 39 days and counting)
Should we want more cashflow, we would just change the structure of our loans etc. At the moment we are still actively accumulating (and being naturally cheap/thrifty) so I don't feel deprived. I hope Rob doesn't either. He's pretty cheap/thrifty too.
