Poor V Rich mentality?

[Sunfish]

Kim, your thoughts are "different" to this gentleman's but they are not necessarily "better". What is the difference in ages?

The term "lazy equity" worries me as it is used on SS and this chap sees his equity as his wealth, he owns that house. I only have a small LOC on my house (enough to keep it open) but I would react violently if you said I had "lazy equity". I have a buffer and some savings. At least that's how I see it.

 

[jingo]

After I paid my handyman yesterday he wrote out my invoice and we talked a bit about the deduction I could claim. He sounded like he knew a bit about tax so I asked him if he owned any properties. He laughed and said no. He told me he paid off his home. I said wow that is great, you would have a lot of equity to use to buy an ip. He giggled slightly and said "he is not a gambler"

There I was was thinking what a great position he is in but is too scared to invest. So much lazy equity just sitting there. Then later on he started talking about how he worked for real estate agents for 15 years repairing rentals. He probably thinks mosts tenants cause damage. That could be why is strongly against buying properties. Hmmmm maybe though he is into shares i dunno.

Hi Kim,

I suspect that many PM's and tradesmen who are involved in investment properties daily easily conclude that they are troublesome to run. PM's see the repair bills, re-letting fees etc etc, while tradesmen deal with the maintenance issues that arise from time to time. Looking at it from this perspective I can understand their reluctance to invest in a physical asset that requires money to be continually poured into it.

On the flip side, what they don't see is the equity that builds up over time, allowing for further leverage into more property, or other asset classes. Nor do they see the buffers that investors build up over time through LOC's, cash reserves etc.


Regards Jason.

 

[jaycee]

Of course they dont see that in the clarity that those involved do, hat natural.

Still doesnt mean automatically they made the wrong choice, there's more to leading the life you want than which particular way you organise your finances or not.

 

[jingo]

Of course they dont see that in the clarity that those involved do, hat natural..

Very true. Hence the reaction Kim received from her tradesman when he refered to investing in IP's as 'gambling'.

Still doesnt mean automatically they made the wrong choice,.

Very true again. The tradesman may have many other assets besides IP's, perhaps a business or two etc.

there's more to leading the life you want than which particular way you organise your finances or not.

Sure, investing should free you to lead the type of life that you want to live!

Regards Jason.

 

[craigb]

i call that financially ignorant ? spell!
he see's that owning his home as security, but has not put two and two together, things he knows, houses have gone up, houses probly will keep rising, he knows that he did very will in buying back then , but would not be able to do it today, he has not worked out that when he stops working , he will have to sell and then perhaps he will have 400k to last him for 30 years, he might see it as financial freedom.

what he has not worked out! that he is missing many opertunitys, in being able to buy and renovate (his job).
he is not fully using his equity, accessing the best leverage he can get,
its likely that he does'nt know others would be paying off the second home , whilst he recieves all the tax benifits of depreciating,

he knows of this stuff, BUT! the coin has'nt dropped yet,

My plumber is the same , great plumber, and an awsome guy, but just, doesen't know, so very proud of his home ownership. and he should be , but will be working all the rest of his life nonetheless.

 

[cloudyday]

I laughed when a young hoon (always hoon) hit it with modern car in a roundabout. It cut throught the modern car like a can opener, in exchange for a medium dent in the side fender.

I think it was proven recently that modern cars are stronger than older cars, plus the crumpling effect is designed to be a safety feature. In a full head on crash, a modern car is "more" stronger than an old one.

View crash test video of Chevy from 1959 vs it's 2009 model. The 1959 gets it badly. http://online.wsj.com/article/SB10001424052970204518504574417212362984366.html

It's interesting how many people "assume" things are meant to be, based on old, out proven facts. I think some of us old people can always learn new things and can stop assuming.

 

[BayView]

Of course they dont see that in the clarity that those involved do, hat natural.

Still doesnt mean automatically they made the wrong choice, there's more to leading the life you want than which particular way you organise your finances or not.

I find that by organising my finances, it allows me to lead the life I want.

 

[Sunfish]

Good post Cloudy. The thing that stood out for me was the steering wheel in each car. No way would I drive a car without a collapsible steering column. I was a youngun when hundreds of guys were impaled on them, VW Beetles were the worst.

Edit: I may be an oldun now but I'm not nostalgic. Modern cars are streets ahead of the old ones in every way other than "style".

 

[VYBerlinaV8]

Panel damage is a completely different story to structural damage. A modern car is vastly stronger and safer than an older one, despite the apparent panel damage that occurs.

Personally, I buy brand new cars, but keep them for a while. Having a comfortable and reliable family fleet is important to me. I'm not so worried about what the neighbours think, though, which is why I buy 'normal' cars rather than luxury/imported brands.

 

[Peter 14.7]

I think it was proven recently that modern cars are stronger than older cars, plus the crumpling effect is designed to be a safety feature. In a full head on crash, a modern car is "more" stronger than an old one.

It's interesting how many people "assume" things are meant to be, based on old, out proven facts. I think some of us old people can always learn new things and can stop assuming.

Agree, but I didnt say the FJ was safer. It simply had less damage to repair.

Personally it was way scary. 1950 brakes, no blinkers until 20 years back , no heating or AC, and the only way to stop sliding on the vinyl bench seat ( no seat belts) when turning was to hold arm over door.

Give me ABS, seat belts, AWD, any time. We just moved Dad to a 2006 Elantra and the change, safety wise is massive.

Still the J had real charm.

Peter

 

[jaycee]

I find that by organising my finances, it allows me to lead the life I want.

so, if you plan, you can acheive things..... who knew ?!

perhaps not all people have the financial literacy and therefore confidence you do ?

lets blame them & put them down like children do and repeat ad nauseam "we're part of less than 5% or maybe even 1% of the population ra ra ra" so mny pople must look at what Im doing and ahve not been doing for so long nd say "what a moron".... another may look at me nd say, not bad..... Suppose I should ignore the negative comments ? What do you thnik other people do when they hear you slagging them off for thier finanical ineptitude, they say f you and ignore you for the same reasons

some are great investors, but I doubt thtt the high mjority of them (or dare I say it agian us), so I think a bit of mutual respect is worthwhile.

 

[BayView]

perhaps not all people have the financial literacy and therefore confidence you do ?

Well, here's the thing;

I am a product of broke parents who had no financial knowledge. Dad (bless him; a great man) died as a pensioner, and Mum is still on one, and is negative and bitter.

So, what do you do?

a) become a bi-product of your surroundings and make excuses your whole life for how little you've achieved, and how life sucks, or

b) get off your arze and make your own luck.

Um....option B.

There are always choices you can make. The best ones are the hardest ones.

By the way; I don't tell people to their face they are inept at finance. I'm no expert either.

I'll help anyone who wants to be helped and will bother to ask me for my 2 cents.

But you know what?

Most of those who could do with the help never ask, or are jealous of those who have done something (I haven't done much) and chop them down behind their back.

Sad, but that's how Aussies generally are..

 

[VYBerlinaV8]

Well, here's the thing;

I am a product of broke parents who had no financial knowledge. Dad (bless him; a great man) died as a pensioner, and Mum is still on one, and is negative and bitter.

So, what do you do?

a) become a bi-product of your surroundings and make excuses your whole life for how little you've achieved, and how life sucks, or

b) get off your arze and make your own luck.

Um....option B.

There are always choices you can make. The best ones are the hardest ones.

By the way; I don't tell people to their face they are inept at finance. I'm no expert either.

I'll help anyone who wants to be helped and will bother to ask me for my 2 cents.

But you know what?

Most of those who could do with the help never ask, or are jealous of those who have done something (I haven't done much) and chop them down behind their back.

Sad, but that's how Aussies generally are..

Aussies are 'traditionally' a working class people. Despite enjoying amazing opportunity, many Aussies still don't like the idea of someone getting wealthier, because it makes them feel badly about themselves.

And frankly, I don't give a stuff. I also started from nothing with parents who had little. But so what, play the cards you're dealt. Of course, we don't seem to have a culture of working hard and getting ahead, more of borrowing as much as we can, showing off as much as we can, and as we get older, bragging about our children (doing the same thing!) as much as we can.

 

[Y33]

Some of you guys need to get out and meet more 'Aussies'. Then again what is your definition of an 'Aussie'? Most of the ones I know are successful in business and life and don't carry on the way you guys keep going on and on and on about.

 

[VYBerlinaV8]

Some of you guys need to get out and meet more 'Aussies'. Then again what is your definition of an 'Aussie'? Most of the ones I know are successful in business and life and don't carry on the way you guys keep going on and on and on about.

Cool. Can you define what you mean by successful in life and business? Most of the Aussies I know struggle with business and finance.

 

[jaycee]

Cool. Can you define what you mean by successful in life and business? Most of the Aussies I know struggle with business and finance.

Agreed...

Perhps also it depends on your defintion of "aussies" - I mean, we all live here, who do you think we see ? HOnestly do not get what is meant by this

The whole country goes on bout what is gone on about here - you've never heard the terms battlers before or greedy rich or nythign in between ?

 

[quoll]

But you know what?

Most of those who could do with the help never ask, or are jealous of those who have done something (I haven't done much) and chop them down behind their back.

Sad, but that's how Aussies generally are..

So true, unfortunate, but true.

There are a few family members I would like to help but they just aren't open to the idea that they could do something else. They keep going on about how things suck and nothing is going right, yet they are unable to ask for advice and unable to see that they could do something different.

Cheers
Graeme

 

[BayView]

Then again what is your definition of an 'Aussie'?

People who live in..... Australia.

 

[DavidMc]

Heheh yeah I get that all the time.

Apparantly my friend is 'European', as their grandparents were born in Greece. Both parents born in Australia.

Yet I am 'Aussie' (of Anglo-Celtic decentant), even though my Mum was born in Ireland and I am also an Irish citizen (dual).

Sometimes I wonder if I should try to argue that I'm actually more 'Euro' than they are but it's all a bit silly really...

 

[RumpledElf]

In this house we call ourselves Euro-mutt Aussies. I'm German/Romanian/Pom, he's Ukranian/Pom, both born here, both sets of parents came here as small children. Offspring is ... indeterminable. Neither of us identify at all with the 'mother country' but some of the grandies still do.

And I can give you a very long list of people that whine about not getting anywhere and are financially disorganised, I think the ones getting ahead in leaps and bounds are the exception not the rule, and whichever category you fit into chances are your immediate friends fit that too as like attracts like so you're less likely to see how the other half lives.