Reply: 3.1.1.1.1.1.1.1.2.1
From: Dave
Eric,
My pleasure re: my post. I've never been linked to anything remotely
eloquent, so thanks for that - this is one day I'll remember. Despite
our obviously contrasting views, you're ok when it comes to a descent
(well, sort of) discussion. I hope you hang around.
The definition of success is altogether another subject, which I won't
dwell on too much. Success is relative. For one person, it's saving
for a deposit to buy their first home. For another, it's being promoted
up the corporate ladder. Whatever...
Don't think for a moment I'm suggesting I pick my friends on the basis
of their wealth. That's ridiculous. What I am saying is that you are
more likely to achieve a certain financial goal when you associate, both
personally and professionally, with like-minded people who have
attained, or are in the process of attaining, an outstanding financial
goal.
Of course 32% annual return is good. I'm not saying it's not. For an
investor who is used to conservative returns, 32% is great. However,
much higher returns are possible through residential property. Paul's
example is a good one...and I'm sure there are thousands more like his.
You see Eric, a certain stock's value can plummet overnight by for
reasons beyond anyone's control, leaving shareholders gasping for
breath. I recall an incident early this year where the CEO of a major
US corporation sent a confidential and rather frank email, sternly
rebuking 300 of his most senior managers for poor performance. This
email was forwarded on to others, and within 48 hours the company was
worth 35% less because the market lost confidence in this CEO to
positively run this organisation.
If due diligence and market research is done, this would never happen
with residential property. There are too many constants that are
unchangeable, ensuring it remains a secure investment.
You amuse me by describing the use of deposit bonds as a trick. That's
just it. Those who are unaware of certain strategies simply dismiss
them as either too risky or 'tricks'. To compare is to paying for a
lottery ticket is not only highlighting your lack of knowledge in this
area, but also suggestive that investors using this method are rather
stupid.
The one CRUCIAL advantage of residential property over shares is in the
buying process. You can negotiate anything in real estate. And, as we
all know, you make your money when you buy..just realise it later. I'll
use a recent example of mine. Some in this forum will know of a recent
purchase I made in the Melbourne inner city suburb of Footscray. After
bypassing the agent, I was able to very quickly find out just how
motivated the vendor was in selling. He was asking for $235k each, for
two, off the plan 3 bedroom homes. I had the properties independently
valued and found that to be just under the market price. I signed
contracts 10 days later for $200k each. The great thing is this, and
here I emphasise the beauty of negotiating when buying real estate, I
paid ZERO for it. That's right - no deposit. The $400,000 is payable
upon completion. Since signing the contract, I have already had offers
for $240k each. What's the ROI here?? Impossible to calculate. How do
you work out the ROI on zero $$ down earning $80,000 in four months??
Try doing that with shares Eric. If someone can show me how, I'll be a
stock market convert.
Cheers,
Dave
p.s. A 'Bunnings' store is a hardware store...like a 'Mitre 10'....you
know, Peter Spanns favourite store....maybe Michael Crofts too. *grins*
