And the ASX averages 9.8% per annum
ASX or ASX accumulation index?
ASX accumulation index at around 10% makes sense.
4% dividends, 3% inflation, 2% productivity, 1% something else
Property Prices Doubles in every 10 years rule
- Thread starter LoneWolf
- Start date
ASX or ASX accumulation index?
ASX accumulation index at around 10% makes sense.
4% dividends, 3% inflation, 2% productivity, 1% something else
The main problem with all these types of calculations is can one hold during a difficult down market.
Its been a long time in Australia. But residential property was popular in the 1980's, then the 1990's recession came along. Many people couldn't hold, and lost serious sums of money.
Same with the stock market. A lot of 'long term' wealth accumulation plans were established prior to the GFC, along game the GFC and many people couldn't hold.
So yes these types of conclusions DO WORK, but only if positions can be held.
This is a killer.
Happened to Victoria during the 'recession we had to have' in the 1990's.
People were net migrating to queensland in hope of a better future.
By 2114, for 512 million I would want to buy my own space ranch under an atmospheric dome on a planetoid suspended in hyperspace to avoid pillaging from warrior aliens from Zylax 5
But I also expect that myself and Datto will be heads in jars with our 2770 props all at 512 million a piece.
And pinkboy still wont have had KFC
Sorry you may have a different way of thinking to me.
First up I accept return on equity is fundamentally important to ones wealth position. that said when one says I have made 3.5pc or 10pc or whatever returns they have made at face value this means for me return before interest.
Otherwise it doesn't allow a comparison across investment classes.
I guess I was trying to make the point that in his example he was making a far better return than inflation even if he said he would be happy to make inflation level returns he is actually making 8.5pc returns before interrst. Roe who actually knows what he is making, it will depend on level of debt v equity.
If you are talking after interest and tax, well that varies so much between individuals and requires a whole lot of other information about levels of hearing and marginal tax rates it is difficult to compare.
Like if I came on here and said I made 20pc return on a Perth Ip in the last 6months and after you all quizzed me I said nah it was leveraged at 90pc but went up only 5pc but I also pay a higher interest rate than normal of 6pc... Ie it is not how you compare returns and certainly I would not call the example of 5pc rent return plus 3.5pc capital growth as an inflation level return.
The index from my observation is almost always a better buy than property, especially if the ability to time well was taken into account for both.
The only difference is with the index, you can't leverage cheaply without being margin called.
The only difference is with the index, you can't leverage cheaply without being margin called.
That is about 3.5% per year growth. Practically the inflation alone
It might be a bit [ say 2-3% or so] above inflation per year averaged CAGR for 10 years. This is on average. Property in above average areas, above average quality, etc may well do a bit more and quicker. Also those below average may do worse.
Property doubles every 10 years!
never quite know what we are saying here, real terms? or nominal terms?
When inflation is running at 15% per annum (or 27% UK 1970s) then of course prices go up.
Doesn't mean to say you get any richer though.
And with various political interests fiddling with the RPI, excluding property etc and including ever cheapening consumer electronics etc, very difficult to get a true picture.
I like the Mars bar index, how many mars bars did it take to buy a house in 1980 vs now? (Mars Bars are 11% smaller now, so has to be factored in)
never quite know what we are saying here, real terms? or nominal terms?
When inflation is running at 15% per annum (or 27% UK 1970s) then of course prices go up.
Doesn't mean to say you get any richer though.
And with various political interests fiddling with the RPI, excluding property etc and including ever cheapening consumer electronics etc, very difficult to get a true picture.
I like the Mars bar index, how many mars bars did it take to buy a house in 1980 vs now? (Mars Bars are 11% smaller now, so has to be factored in)
15%??
I generally ask how much a bottle of coke costs to understand the cost of living in other countries.
15%??
Yeah, hopefully never again, but it can and does get out of hand.
The last ten years here compounds to about 35%.
http://www.onthehouse.com.au/sold/history/173423/
About right according to this.
You said
That is what caught my eye. I thought we were in Zimbabwe for a second
Inflation hit 15% per annum here in the 1970s largely because of the OPEC crisis and crap Government, didn't really get below 5% till the 1990s when the central bank made it an issue. Spent a lot of time around the 8% mark.
Well it does, your debt is automatically reduced in real terms
I don't even know the cost of a bottle of Coke here in Aus...never buy it, except for the occasional "do" at home when we need some soft drinks for the kids.
Price
The other day I paid $4.80 for a 600ml 'buddy' size Coke from 7-eleven.
Great wages in Australia, but the cost of living is ridiculous. At this rate there will be two kinds of coke I can't afford instead of just the one.
LOL.. well mate, you can live without both kinds of coke