How so? With the exception of the word "fabulous" lol.
3% isnt a great rental return, now if 'you' (anyone) bought at a price where your actually getting between 7%+ then id agree
Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
How so? With the exception of the word "fabulous" lol.
Economists are fools. .......
3% isnt a great rental return, now if 'you' (anyone) bought at a price where your actually getting between 7%+ then id agree
I'm just not sure that it would be appropriate for Scott to recommend highly leveraged speculative property investment to the masses who read the Herald Sun, because I view it as something quite specialised and risky. I think it's quite sensible for him to recommend things such as index funds which don't involve leverage. That is pretty much all I was trying to say.
No one here is saying property always goes up and there is no risk in leveraging, there certainly is.
Just as an example;
If I invested $40,000 in the stock market and the market dropped by 50% I'd lose $20,000.
If I invested $40,000 and borrowed $360,000 to invest in a $400,000 property and the real estate market dropped by 50% I'd lose $200,000.
Most people who invest in stocks understand that CFDs are one of the riskiest ways you can trade because the leverage increases your gains and your losses. I think sometimes people forget how leveraging in the property market increases our risk and our exposure to losses. For whatever reason people consider it as a much safer investment. I suppose it's because property has performed so well in Australia in recent history.
I still think understanding the impact of a property crash is very important. I'm confused as to why people here disagree with what I'm saying? I think what I'm saying is very reasonable.
And you are?
A very brief resume' will do.
I checked and you have been a member here for just a year. Why do you feel qualified to say this:
Somersoft's phylosophy is exactly that: Property does indeed always go up and leverage is a one way street.
A 6% gross yield
With my example I was trying to highlight how all things held constant leveraged property investment is riskier than non-leveraged investment in the share market.
....highlight something we don't know. leverage always increases risk, which is why we manage said risk with dividends, tenants, options, research and buying below intrinsic value.
Had Scott advised people to get into the property market he is essentially advising young people to take on a huge amount of debt and invest in the most risky way (leveraging!). Property in most cases is a very expensive investment, whereas you can start out in the share market with only a few thousand dollars without having to borrow.
i got started in my first house with a "keystart" loan for a sh_tbox 2 bedder - no deposit, funded by the government and now i live in a beachside suburb and i only turned 30 last year - where exactly was it "hard" for me to get started? all i had to do was stump up the goolies and put a bit of risk on the table.
That is the reason I don't think his argument about people staying out of property is that bad or "risky" as some others have said. Someone here said that their friend was wiped out in the stock market, but at least they only lost their own money! That was the only point I was trying to make!
ever heard of a brokers' margin? 1:2. ever heard of a derivative? 1:5 up to 1:20. ever heard of forex margin? 1:400. define the "stock market" they got wiped out of, please.
You're correct that losses aren't crystallized until you sell. However if the value of property halves how many people would continue to pay a $400,000 mortgage on a $200,000 house?
about 80% of the population, because they don't care.
Many owner occupiers and some investors would choose to default even if they have the capacity to pay. Many would simply go bankrupt out of choice. I think they're called "forsaken" defaults. This is how the domino effect happened when the property market crashed in America. I know that the Australian bankruptcy laws are quite different to the US so this may not happen to the same extent as it did there.
you cannot be f____ing serious? surely....? are you aware of what bankruptcy does to someone in Australia? ever had to apply for ANY credit? TV, CC, House, Car, Myer One card, Woolies Everyday rewards card....all have to declare if you've been bankrupt. Christ, next they'll have it on your Departure Card. You can't even own a car over "x" value. My mother was bankrupted by her estranged ex-husband and trust me it's not just a case of "walking away". you bleat about being taken seriously and then post crap like this?
all "those developers" that "went bust" just lot a lot of money and collateral assets - but ANYTHING - ANYTHING - to avoid bankruptcy - and these are people who play the financial game. Christ even Bondy has a hard time borrowing and his bankruptcy was 20 years ago.
You're correct that a downturn produces buying opportunities, but the credit markets would probably freeze up and banks would stop lending out money. We also saw that in the US.
Uh huh. what about those who aren't relying on finance? what about those who have stupid low LVRs like a lot of folk do, and maintain, after the last bull run? not everything and everyone is credit-centric.
I was speaking to some of the international students at uni and they were telling me how many of their friends and relatives have left Australia and begun university in the United States and Canada this year. Japan and China won't unpeg their currencies from the US because they own so many US treasuries and rely on exports to the US. So as the US currency falls because of their money printing and inflation so will the Asian currencies. I think this is going to make the AUD appreciate more and more and it's really going to hurt us! When they finally do unpeg their currencies and stop lending money to the US we will probably see a major depression.
are you honestly going to sit there, behind the safety of your keyboard, and tell me that the Yuan is officially pegged to the US dollar?
I don't mind people disagreeing with my arguments. I just hate it when people don't write WHY they disagree with me and say something like "Oh, you're too young and inexperienced so you don't know what you're talking about!"
Keep posting inexperienced crap like the above and it's about all you are going to get, i'm afraid.
Where did this come from?I'm just not sure that it would be appropriate for Scott to recommend highly leveraged speculative property investment to the masses who read the Herald Sun,
i could name ten posters who only talk post about the market going down. i couldn't name one who only talks about it going up and that leveraging is bullet proof.
I checked and you have been a member here for just a year. Why do you feel qualified to say this:
Bigtone said:No one here is saying property always goes up and there is no risk in leveraging, there certainly is.
Sounds like you have a grunge. Maybe you are a FA and are sick of potentially clients knocking you back because they chose property ahead of stocks?Somersoft's phylosophy is exactly that: Property does indeed always go up and leverage is a one way street.
You'd lose 40K and the bank and/or mortgage insurer would lose 160K - IF you sold.
3. I can't vouch for Bigtone but I have similar views. After 10+ years of successful investing I believe I qualify.
not saying this is you but...
it always amazes me how people put down success to their own market expertise and superior knowledge blah blah without ever acknowledging the general market trend itself,
does a person that makes money buying in a market that proceeds to go up for 20 years in a straight line have anymore investment expertise then someone who is just starting out?
people always discount randomness it seems
exactly my point