People who don't invest in property

[gooram]

Would you take advice on the direction for your life if you didn't ask for it? Are we all so enlightened so as to think we know what is best for everyone around us?
I whole heartedly agree that if someone asks for your help, tell them, if someone wants to know what you've been up to, tell them, if they have a problem with it, there's probably not much hope for a friendship.

If you spent your weekend exercising and your overweight friend asked what you did on your weekend... would you not tell them?

Would you tell them how they too could lose weight if they wanted to?

 

[Joker]

I don't discuss my investing with anyone. I might mention it to close family and friends and that's it. I like to be a quiet achiever besides most people would be negative (or jeolous) about it anyway. This is the great thing about this forum, like minded people sharing advice and experiences.

 

[KL1]

Hi Simon,

You can look at the changes to the super legislation that were just put in to place but unless you are taking your super out now or in the near future the changes may well be obsolete. If you're in your 30's it may be a good 30 years before you take your super. And there lies the problem. I'm sure there will be many changes to this legislation in that time. I would be very disappointed if I'd put all my spare cash into super over that time only to find out I could only have the money returned to me as a pension or as a lump sum but highly taxed. Add the fact that it is very hard to gear your super then to me it is not an attractive investment at all. Note that I'm in my 30s. I would reconsider if I was close to retirement age.

Kelly

 

[Simon]

Hi Simon,

. Note that I'm in my 30s. I would reconsider if I was close to retirement age.

Kelly

Isn't that a bit late?

So noone is up on the recent changes?

 

[Bricks & Mortar]

they just dont understand!!!

Has anyone received the reply
"Oh but I couldn't do that!"
"but your just lucky"
"if only I would have known that"
and of course "It's a different market now"

It does matter what response they come up with, they dont understand!!!

The last comment that really astounded us was from a couple we approached to venture into a 50-50 share in a development block. We thought we had maxed ourselves out and need a partner to build on one of two blocks we had purchased. They could choose which block.
As it turns out it the market was much more favourable to selling, because of an extra long settlement so we did and the first question was "how much we sold the blocks of land for" not how much we made, what were the holding costs, etc.
This question was quickly followed by the statement "You didn't tell us we could make that much", which totally floored us.

I personally believe others see it akin to a Tattslotto ticket, there are some lucky winners out there.

They dont and wont appreciate the sacrifices you do have to do occassionally to maximize the benefits in the future.
They are happy to accept the advise of financial advisers who get their commissions regardless of performance.
And futhermore are confused when their own finances are slowly eating away their ability to continually buy commodity goods (which to us are known as Bad Dedts.)

We adjusted and now we talk to like minded people, mostly on the forum/meetings as they too have similar interests. Outside that group of people we have become secret squirrels with the exception when someone is actually interested in investing.

As far as super goes, Although it is appealing at the moment we are endeavouring to provide our own funds for the future and will continue along that path.
Super rules change, so do governments......... and there are no guarantees that the rules that apply today will continue or will be able to be enforced in the future.
In fact its probably least predictable of all.

It would be great to talk openly to everyone about investing, but unfortunately other people dont see things the way you and I do.

cheers

Timm

 

[KL1]

Simon,

The obligatory 9% goes into my SMSF. I'm not willing to take a risk that legislation won't change again (many times) in the next 30 years. I actively invest in real estate, shares and Business. To me this makes much more sense.

Cheers
Kelly

 

[Dazz]

now we talk to like minded people, mostly on the forum/meetings as they too have similar interests. Outside that group of people we have become secret squirrels with the exception when someone is actually interested in investing.

Hi Timm,

I can see the sense in that, but then you may be missing out on striking up a fascinating conversation with someone who is a few steps down the same path as you are travelling and you may miss out on a very productive conversation which could develop into a good friendship.

I've had the most illuminating conversations over the last couple of years with complete strangers who are willing, when prodded, to divulge some fantastic learning experiences. Learning some big pitfalls is really what I'm after.....stepping in a 100K 'hole' just so you can personally experience it is not much fun.

As for Super....both the wife and I have piddling amounts....which are not acknowledged on our balance sheet....For us Super plays absolutely no part in our financial affairs whatsoever....and never will. We simply ignore it altogether and carry on with our property focus. Saves alot of time.

 

[goddessk]

If you spent your weekend exercising and your overweight friend asked what you did on your weekend... would you not tell them?

Hmmm, I do spend most of my week exercising and have a few overweight friends and I do tell them. And I try to encourage them to lose weight and try to get themselves a bit fitter for health reasons. Sadly, like property they are not interested. So I preach to the ones who are interested and give them my help and advice.

I guess after all this I have realised that this is the answer. Help those who want the help and leave those who don't to their own way of life.

 

[Bricks & Mortar]

Hi Daz

Hi Timm,

I can see the sense in that, but then you may be missing out on striking up a fascinating conversation with someone who is a few steps down the same path as you are travelling and you may miss out on a very productive conversation which could develop into a good friendship.

I've had the most illuminating conversations over the last couple of years with complete strangers who are willing, when prodded, to divulge some fantastic learning experiences. Learning some big pitfalls is really what I'm after.....stepping in a 100K 'hole' just so you can personally experience it is not much fun.

As for Super....both the wife and I have piddling amounts....which are not acknowledged on our balance sheet....For us Super plays absolutely no part in our financial affairs whatsoever....and never will. We simply ignore it altogether and carry on with our property focus. Saves alot of time.

Hey Daz,

Were only too interested if someone wants to talk about it.
sorry if it sounded like "we've shut up shop" to outsiders.
Its just that I think we wait until we find out that people are genuinely interested....... rather than blurting our advise/thoughts to others.

Good to hear that you treat Super in a similar vein,
So I'm not alone!

Cheers
Timm

 

[alexlee]

Alex,

This is a long held attitude that most share. Have you reexamined it in light of recent legislative changes?

Has anyone?

I will try and get to it but must admit that I find wading through it as attractive as slamming myself in the car door.

I haven't read the legislation itself, but I've read the newspaper articles about it. While it really makes super contributions (and withdrawals) VERY tax attractive, especially if you're in the top tax bracket, there are drawbacks.

Namely, it makes withdrawal of super for over 55s much easier and almost tax free. Sensationalist stories about how much tax Alan Moss (Mac Bank head) is going to save aside, MOST people only have a small amount in their super. The danger is that the people who are around 55 now will just yank all their money out.

I have very little faith in most people's financial skills, so I think what will happen is the current crop of retirees will spend the super far faster than expected. If they've only accumulated a small amount (I don't know what the average is, but can't be much: the US states that 47% of retirees will run out of money, and that would be with conservative spending estimates) of super, that means they're bad at financial management anyway. They're going to spend their super money.

As a result, the government will have to either change the tax rules again, or raise the minimum retirement age (perhaps justified by higher 'participation' rates amongst the elderly because they spent their nestegg?)

If you think waiting until 55 is unattractive, don't bother with super. I think they'll raise the minimum age in the future as the govt sees pension blowouts (retirees have a lot less super than we think). I'm sure they'll justify it with higher participation rates, longer life expectancies, etc.

In short, especially if you're young, super still isn't an attractive vehicle.
Alex

 

[Simon]

So Super is a safety net for those who don't invest? Better than doing nothing?

I think we are of an age now where I need to get professional advice - my wife starts a new career in January and has very little Super. I am wondering if she salary sacrifices extra funds into our super if it will prov worthwhile. She is just 15 years off from accessing it.

Great discussion folks.

 

[alexlee]

So Super is a safety net for those who don't invest? Better than doing nothing?

I think we are of an age now where I need to get professional advice - my wife starts a new career in January and has very little Super. I am wondering if she salary sacrifices extra funds into our super if it will prov worthwhile. She is just 15 years off from accessing it.

Great discussion folks.

She's 15 years from being able to access it based on CURRENT rules. I have a feeling they'll raise the minimum age. Wouldn’t you just feel monumentally ticked off if, 15 years from now, you’re all ready to access that nice super and they change the rules? At least they can’t force individuals, companies and trusts to hold assets until they’re a certain age.

Well, yeah. Super is forced saving. It's the government's way of treating people like the financial children that they are and taking away their money and saving it before they can get their greedy little mitts on it. Used to be defined benefit pensions but the govt realised just how expensive a financially inept population is. If people didn’t have forced super most wouldn’t save. Fact is 9% isn’t enough but people STILL don’t save.

It might make more sense if you're an executive making a few hundred k and you want to save tax. Active investors wouldn’t be depending on salaries anyway, I would imagine. Franked dividends and depreciation would go some way into decreasing the taxable income anyway. Deductions at the full marginal tax rate and CGT at half. Free money.

I have practically no super (a couple of k from when I worked in Oz). Doesn’t worry me, when I have IPs happily appreciating tax free.

For me, the decision is: Can I make better returns than my super fund? Given that I can gear and a super fund can’t, I think I can beat the average returns of a share fund. Even if they don’t change the rules, I don’t think it’s going to take me until retirement age (25 years) to achieve my financial goals.

Remember the government controls the super rules, and who trusts the government here?
Alex

 

[grossreal]

hi all
you do need to look at yourself and your plans.
you can tell people about your plans and give them advice or ideas but at the end of the day they will make there own path that maybe very different to you.
we all have different paths and different goals.
some are money, some are athletic, some are to help people they are all goals and they are all very different.
for me I don't tell people how to invest or what to invest in.
I'm happier if I find out what my friends plans are and try to help them to get to there goals and this does not in alot of cases include financial.
I will go back to a china saying as I like them.
the most important gain is not money but the gain of people that believe in you and can help you gain money this is alot more valuable then the money itself.
money or wealth can come and go but if the people believe in you then you will rebuild( the bond, scase,rivkin etc use this to great effect) don't make money make friends or people that either want you to make money or want you to get to your dream and it does not have to be money.
just a little note most of the people that have made it.
ie the bill gates, the multi millionaires are also the largest funders to charities around the world.
money and making money is all great for me but thats not everyone on this planets view and to try to explain that to some one is just to hard.
I have my views and I don't put those views on my friends.
most of my friends and soccer associates know what I do but I don't push either way with investing they have there priorities and I have mine.
you do need to get a balance from lot of different views and don't taint those views by imposing yours on them it makes alot better business person.
but thats my .002

 

[alexlee]

"Wow if you go into that much debt you go bankrupt for sure"- "No, thats not for me, I want to finish uni and have a long and established career" -

Trust me, Shonnie, give it a few years and all your friends are going to be complaining about how the company doesn't treat them right and they're having all these pressures at work. I'm starting to really see that amongst my friends, especially as they have more stress from jobs (promotions mean you have to manage people, and managing people sucks), family (kids are great, don't get me wrong) but most of all money. They're trapped in their jobs, afraid to rock the boat. I get to quit my job every 2 years (and change countries) because I have savings to tide me over. The FACT that you know you can just give them the finger and walk away makes you a lot happier at work, too, and not afraid to speak your mind. What are they going to do, fire me?

I have colleagues who work after they have kids because they need the money, and there's all the stress of wondering whether day care is taking care of their kids properly, etc. When I have kids in the near future, our situation will (based on the projections) allow her to work when/if she really wants to, and not because she has to.

My friends know what I do with IPs, but they're just not interested. These are people who are making six figures at their jobs and have no assets. Being a big guy (and I was much fatter a few years ago) I can understand that fat people and exercising analogy. There's just so much lifestyle inertia. You need a major shock, and they're usually bad: family crisis, retrenchment, etc.
Alex

 

[geoffw]

I was in the doctor's waiting room today, reasding three month old BRWs.

There was an article in one which suggested that in certain circumstances. it may be beneficial to borrow to invest in super.

The circumstances were (from memory):

.You're less than 5 years to retirement
.One partner does not work, and the other partner has heaps of super
.You can get a loan where the interest just capitalises until your super payout- and the super payout repays the entire loan plus capitalised interest.

This was before the latest budget changes- but the gist was that the tax advantages would far outweigh what was spent on the loan repayments.

At 52yo myself, strategies like this could be of value- though this particular one does not work, as we both work.

 

[RichardC]

People who don't invest in art.

I was just thinking about some friends of mine and their approach to life and the future.

In my humble abode I have a number of "nice things". The art, which varies in cost from a few dollars to a few thou is on permanant display. Some silver and gold is only seen if my lady chooses to wear it that day while other attractive pieces are locked away. And I would love to own some fine antique china.

Funny thing tho! The subject almost never comes up at a b-b-que. I certainly don't know enough to advise on the topic, I have no wish to brag about it and definately no wish to advertise.

Treat your friends with respect and only talk about your passion if they insist on talking about how their kids are doing at soccer.

No matter how passionate you are about an investment it is almost guaranteed to raise up and bite you on the bum sometime before you meet your maker. You would feel a little sheepish if this happened just a few weeks after you stated your case. (I'm speaking from experience here).

 

[alexlee]

I've had friends ask me 'So have you been hurt by the interest rate increases and soft property market?' I usually just say 'I'm in it for the long term so it doesn't bother me'. Funny how they never asked 'So how well have you done?' when the market was rising and they were too afraid to tip their toe in.

What I actually want to say is 'Well, I've already seen 50% appreciation. So it drops back 10%. Like I care. By the way I'm quitting my job and taking a few months off soon. How are your credit card bills?'

Might not endear you to your friends. Better to keep quiet about it anyway: if you tell people you have a private island, penthouse and SL55 AMG, people will want to come and borrow stuff.
Alex

 

[RichardC]

Might not endear you to your friends. Better to keep quiet about it anyway: if you tell people you have a private island, penthouse and SL55 AMG, people will want to come and borrow stuff.
Alex

Can I take your Merc for a burn Alex?

 

[alexlee]

Can I take your Merc for a burn Alex?

Even my own flesh and blood will be issued restraining orders regarding approaching the Merc.

Going off topic. Chances are, Goddessk, your friends will change as you progress in your investing career. As we change, our friends change. That's why old friends are special. So as you network with other investors, etc you'll develop more and more friends who are investors. I don't see that as a bad thing: it's no different if, say, you take up a new hobby. Naturally you'll develop friends that share that hobby.

If you enjoy investing, there's nothing wrong with seeking out friends who share that passion. However society (mostly non-investors, remember) puts a stigma on that: getting together to discuss money is somehow more evil than getting together and talking about the footy or Big Brother or so and so shop is having a sale. Ignore these people (but by all means talk about Big Brother and the footy and sales if you like that), and don't feel bad if they try to say it's not 'right' for you to talk / think about money so much. Money may not buy happiness, but it'll give you the opportunity and tools to be happy, and POVERTY certainly doesn't bring happiness either.
Alex

 

[goddessk]

Treat your friends with respect and only talk about your passion if they insist on talking about how their kids are doing at soccer.

No matter how passionate you are about an investment it is almost guaranteed to raise up and bite you on the bum sometime before you meet your maker. You would feel a little sheepish if this happened just a few weeks after you stated your case. (I'm speaking from experience here).

Thanks, I hadn't really thought about it like this before. I remember when I bought my first IP I thought I was the Goddess of the World and wanted to shout from the rooftops. That was just sheer excitement though at actually doing something that I had always dreamed of doing. I have calmed down considerably since then.

I do have those nerves that one day it might all bomb out on me and I have invested in the wrong areas, or the houses fall down or something. And I look like a fool to my friends. Oops, did I just say that out loud.