The KISS principle - my take on applying it to property investing

I'd be surprised if anyone hasn't heard of the KISS principle . Keep It Simple , stupid ...

Thought I'd mention what I saw as the biggest trap people fell into in the last Cycle .

Back in 2002 , The biggest , baddest Monster in the playing field was Tyrannosaurus Kiyosakis .

There were regular somersoft gatherings where disciples would play games and worship as the high altar of TK , Cashflow .

I myself had several such gatherings at my house , and although I said the words and participated , I had my doubts .... could it be that simple .

The holy grail was to own a business.... Joint ventures were desirable . Highly cash flow positive properties .... nirvana .

I was approached by people to go into joint ventures , fund wraps ( it took me about one minute to work out there was alot more profit in it for them .... I'm not that dum RF .....) , put money in a Five acre subdivision in airley beach ( 800 for five acres waterfront at airely , sounds tempting , but it f....ed the three people who did go with it ) , invest in a realestate agency ( paper presentation very professional , and they were told by the bank that it was one of the best presentations they'd ever seen , but the reality was the principle had never run a business and ( my wife was quick to point at the time ) spent too much time in the chat room ... you could buy 1/20 shares and we contemplated buying one , but some one rushed in and bought all of them . (sorry to bring that up :eek: )

I was also told I could make my money work for me 7 times ...... many of the people who believed that line still regret listening.

Off forum by ex brother in law has never recover from getting involved with Henry Kaye and one of my song writing friends spent many years in financial limbo waiting to get out of a " capital guaranteed " loan with a major investment bank. The capital was guaranteed , but they still had to make the repayments when the market went south and they made no return.

The reality , I can't recall one success story from any of these " Smart ways " to make money.

The people I know who made money , found a formula that worked for them and went for it.

Nivia was the king of the deal . She would see a deal that no one else saw and made it work for her ( probably the best I met on the forum ) .

Micheal Croft and GCC were builder developers , stuck to what they did and did it well .

Waverley Bay could smell a bargain at 1 Km and negotiate the owner into a slobbering wreck or walk away and go straight on to the next one until he found it ( I know pne agents who he bought though and he hated him with a vengeance ... I'm not joking ....we got one deal because the agent didn't want to go with him ... ) but most of the time they still delt with him .

Ross V was the king of the Cheap reno , hands on and did everything himself.

They found a nichee and did it well.

Most people are lucky to master one set of skills in life.

You don't need to " master " property investing in order to do well at it .

The basic are simple . If you get these right , you will do much better financially than the majority of the people in Australia .

By getting the Basics right for Half a Cycle I've gone from a position of financial frustration to one of relative ease.

Running a business is a complicated frustrating time consuming thing. I did it for 19 years. I'm glad I'm not doing it now .

Joint ventures are time consuming and risky . You have to rely on other people who's number one interest IS NOT YOU....

If you rely on advise from advisers , who is getting the most benefit from the structure they set up ? When I saw one proposed structure my reaction wasn't " wow , that's a good system " , it was " wow that's a good system for the advisor " ... The up front commissions were impressive , why didn't I think of that ... If I had though of I might have used it for myself , but I wouldn't have turned it into a business model .

I have a couple of what I think are different approaches to property investing that I'm going to look at developing , but I'm going to run with them myself and if they work , get my kids to do them so they can get an ongoing benefit from them.

If something is that complicated that someone has to spend time explaining it to you , it is not for you.

You need to understand what you are doing why you are doing it.

My pet hate , " it's tax advantageous " . If an investment needs a tax set up or some sort of scheme to make it work , to me that indicates it is basically flawed. Fine for Canberra but not for me.

This may sound unkind to fourmities , but I think it's true . If you were the type of person who was going to set up a highly successful business and make a Mega Fortune running it , you wouldn't be hanging around an internet forum chatting about property investing .

I doubt the Harry Trubahofs and John McGraths of the future are here . They're out there already making plans or, like the school friend of my nephew who made a fortune in an internet start by the time he was 30 , you're relaxing on a beach in Mexico . ( if you want an interesting job , my nephew worked for him for a while on this guys next project . His job to chaperon the girls who were appearing in the " beach babes of mexico " calendar :eek: )

Property investing is simple .

It takes imagination and creativity to f..... it up

Cliff
 
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By getting the Basics right for Half a Cycle I've gone from a position of financial frustration to one of relative ease.

Running a business is a complicated frustrating time consuming thing. I did it for 19 years. I'm glad I'm not doing it now .

What sort of business were you running? If it was complicated, frustrating and time consuming, why did you conduct it for two decades?

Is property investing far more rewarding per time spent in terms of financial and personal satisfaction?
 
Property investing is simple .

It takes imagination and creativity to f..... it up

That's a great way of putting it see change. It can be very simple if you want it to be. I bought basic buy and hold expensive -ve geared properties many years ago as I could afford them. I still hold them today in Sydney and they keep paying me back. I also simply DCA into an indexed share fund, and the most extravagant thing I've ever done is buy a few Atlanta properties, which in hind sight, have been the simplest since my trusted agent has done all the work for me from buying to leasing. Couldn't get much simpler and would take a great deal of thought and a conspiracy to f..... it all up...
 
I'd be surprised if anyone hasn't heard of the KISS principle . Keep It Simple , stupid ...

Thought I'd mention what I saw as the biggest trap people fell into in the last Cycle .

Back in 2002 , The biggest , baddest Monster in the playing field was Tyrannosaurus Kiyosakis .

There were regular somersoft gatherings where disciples would play games and worship as the high altar of TK , Cashflow .

I myself had several such gatherings at my house , and although I said the words and participated , I had my doubts .... could it be that simple .

The holy grail was to own a business.... Joint ventures were desirable . Highly cash flow positive properties .... nirvana .

I was approached by people to go into joint ventures , fund wraps ( it took me about one minute to work out there was alot more profit in it for them .... I'm not that dum RF .....) , put money in a Five acre subdivision in airley beach ( 800 for five acres waterfront at airely , sounds tempting , but it f....ed the three people who did go with it ) , invest in a realestate agency ( paper presentation very professional , and they were told by the bank that it was one of the best presentations they'd ever seen , but the reality was the principle had never run a business and ( my wife was quick to point at the time ) spent too much time in the chat room ... you could buy 1/20 shares and we contemplated buying one , but some one rushed in and bought all of them . (sorry to bring that up :eek: )

I was also told I could make my money work for me 7 times ...... many of the people who believed that line still regret listening.

Off forum by ex brother in law has never recover from getting involved with Henry Kaye and one of my song writing friends spent many years in financial limbo waiting to get out of a " capital guaranteed " loan with a major investment bank. The capital was guaranteed , but they still had to make the repayments when the market went south and they made no return.

The reality , I can't recall one success story from any of these " Smart ways " to make money.

The people I know who made money , found a formula that worked for them and went for it.

Nivia was the king of the deal . She would see a deal that no one else saw and made it work for her ( probably the best I met on the forum ) .

Micheal Croft and GCC were builder developers , stuck to what they did and did it well .

Waverley Bay could smell a bargain at 1 Km and negotiate the owner into a slobbering wreck or walk away and go straight on to the next one until he found it ( I know pne agents who he bought though and he hated him with a vengeance ... I'm not joking ....we got one deal because the agent didn't want to go with him ... ) but most of the time they still delt with him .

Ross V was the king of the Cheap reno , hands on and did everything himself.

They found a nichee and did it well.

Most people are lucky to master one set of skills in life.

You don't need to " master " property investing in order to do well at it .

The basic are simple . If you get these right , you will do much better financially than the majority of the people in Australia .

By getting the Basics right for Half a Cycle I've gone from a position of financial frustration to one of relative ease.

Running a business is a complicated frustrating time consuming thing. I did it for 19 years. I'm glad I'm not doing it now .

Joint ventures are time consuming and risky . You have to rely on other people who's number one interest IS NOT YOU....

If you rely on advise from advisers , who is getting the most benefit from the structure they set up ? When I saw one proposed structure my reaction wasn't " wow , that's a good system " , it was " wow that's a good system for the advisor " ... The up front commissions were impressive , why didn't I think of that ... If I had though of I might have used it for myself , but I wouldn't have turned it into a business model .

I have a couple of what I think are different approaches to property investing that I'm going to look at developing , but I'm going to run with them myself and if they work , get my kids to do them so they can get an ongoing benefit from them.

If something is that complicated that someone has to spend time explaining it to you , it is not for you.

You need to understand what you are doing why you are doing it.

My pet hate , " it's tax advantageous " . If an investment needs a tax set up or some sort of scheme to make it work , to me that indicates it is basically flawed. Fine for Canberra but not for me.

This may sound unkind to fourmities , but I think it's true . If you were the type of person who was going to set up a highly successful business and make a Mega Fortune running it , you wouldn't be hanging around an internet forum chatting about property investing .

I doubt the Harry Trubahofs and John McGraths of the future are here . They're out there already making plans or, like the school friend of my nephew who made a fortune in an internet start by the time he was 30 , you're relaxing on a beach in Mexico . ( if you want an interesting job , my nephew worked for him for a while on this guys next project . His job to chaperon the girls who were appearing in the " beach babes of mexico " calendar :eek: )

Property investing is simple .

It takes imagination and creativity to f..... it up

Cliff

This is fantastic! Thanks for the reminder and advice, I particularly liked the Tyrannosaurus Kiyosakis reference!
 
KISS principle

Absolutely agree with sea change. I could never understand why investing needed to be complicated In hindsight having confidence in your own decisions was a big factor. What does it cost, what does it return, what are the upsides? is my Kiss principle.
 
This is fantastic! Thanks for the reminder and advice, I particularly liked the Tyrannosaurus Kiyosakis reference!

RK was the person who changed my outlook . I heard him being interviewed on ABC radio about three days after my 40th Birthday.

I never followed any of his specific advice , however , reading Rich dad poor dad , made me question everything I'd been doing or advised to do and lead me to Somersoft .

Cliff
 
RK was the person who changed my outlook . I heard him being interviewed on ABC radio about three days after my 40th Birthday.

I never followed any of his specific advice , however , reading Rich dad poor dad , made me question everything I'd been doing or advised to do and lead me to Somersoft .

Cliff
Same here.

His greatest message is about changing your spending from a consumer to an investor.

One small example; the average person will spend say; $30k on car. No reason for $30k - just for the sake of the argument.

The RK mentality is to spend say, $20k on a slightly older version of the same car, and invest the $10k.

John Burley also espouses this mindset very well in his books.

Look for ways to minimise consumer spending as hard as you can so you can maximise investment spending.

Still consume - because you still need to live and have a life - but consume smarter with another purpose for the saved funds (other than saving for another doodad).
 
For those of an academic bent , The millionaire next door is a very good read. It's based on research into the wealthy in the USA.

Cliff
 
Same here.

His greatest message is about changing your spending from a consumer to an investor.

One small example; the average person will spend say; $30k on car. No reason for $30k - just for the sake of the argument.

The RK mentality is to spend say, $20k on a slightly older version of the same car, and invest the $10k.

.


But with balance .................. another classic I heard from RK in 2001 live for 15 bucks :)

Paraphrased

"Dont get wealthy by being cheap, because when you do get there you will still be cheap"

I took from that, if our focus is ONLY on the save and accumulate side, it will be really tough to make common sense financial decisions once you have "money".


ta

rolf
 
Great post. The KISS principle is (IMO) the best way to get anything done.

I think the reason that people like to complicate things is to make it seem harder, and therefore are able to offer a solution ("here, give me $10,000 - come to our seminar and we will show you how"). Give things a fancy name and make it look exotic -charge more punters think they are clever.
 
For those of an academic bent , The millionaire next door is a very good read. It's based on research into the wealthy in the USA.

Cliff

This landmark book is about two decades old and I think it is due for an update. Originally published in 1996, we are talking about research that pre-dates widespread use of internet.

For example, it does not take into account recent developments such as social media billiionaires - Zuckerberg and friends nor the rise of other online billionaire moguls.

It does not talk about the adult spending habits of Gen Y - born in the late 80s and beyond.

Otherwise, a good historical snapshot of moderately wealthy people in the early 90s.
 
For those of an academic bent , The millionaire next door is a very good read. It's based on research into the wealthy in the USA.

Cliff

Agree. It is a great read and puts some perspective on the notion that it is not necessary to look rich in order to be rich in a monetary sense.

Inconspicuous wealth is far more tasteful IMO than ostentatious poverty (big hat...no cattle).
 
This landmark book is about two decades old and I think it is due for an update. Originally published in 1996, we are talking about research that pre-dates widespread use of internet.

For example, it does not take into account recent developments such as social media billiionaires - Zuckerberg and friends nor the rise of other online billionaire moguls.

It does not talk about the adult spending habits of Gen Y - born in the late 80s and beyond.

Otherwise, a good historical snapshot of moderately wealthy people in the early 90s.

There was thread where RW posted a link re:investing from the 1930's.
Points still applicable today.
 
Great post and SS review Seech

It was before my time, but I thought Michael Croft was a renovation guru, did he get into building/developing also?

Buffett said "Investing is simple but not easy" and from Somersoft Kristine said "Buy Houses Make Money", we can now add See Change said "Property investing is simple - It takes imagination and creativity to f..... it up" ;)
 
This landmark book is about two decades old and I think it is due for an update. Originally published in 1996, we are talking about research that pre-dates widespread use of internet.

For example, it does not take into account recent developments such as social media billiionaires - Zuckerberg and friends nor the rise of other online billionaire moguls.

It does not talk about the adult spending habits of Gen Y - born in the late 80s and beyond.

Otherwise, a good historical snapshot of moderately wealthy people in the early 90s.

Hi China

As with many things on the forum at the moment , IMHO , you are missing the point .

That book contains simple commonsence advice which is timeless. Along the lines of
  • The richest man in babalon
  • How to win friends and influence people
  • Who moved my cheese

That book has absolutely nothing to do with social media and has everything to do with the spending habits of Gen Y and why some will become wealthy and most won't .

Just because it was written in the 90's and the research might be outdated , it is actually fairly unique in this area in that it does have research , and unlike most isn't just based on opinion. But that just my opinion .

Cliff
 
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