Waiting in cash in the current environment is prudent, there's likely to be significant corrections in the next few years.
Signitificant corrections, go on...
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Waiting in cash in the current environment is prudent, there's likely to be significant corrections in the next few years.
Trey,the way i see it is as soon as i get a place i have instantly got 300k in equity
Trey,
Yep, and then it will start working for you. At the moment it isn't its just ammunition in reserve.
Look at it this way, assuming you buy a $300K property with zero debt to keep it simple...
Cash: 3% interest on $300K taxed at 30% makes it a 2% return after tax.
Property: 3% capital growth (just tracking inflation) not taxed, plus 4.5% rental yield taxed at 30% makes it a 6% return after tax.
I know you're a sophisticated investor, but I'd think 6% beats 2% any day. By 300% actually...
But do your thing mate. You're 24, live a little, there's plenty of time to make some money out of your small change.
Cheers,
Michael
So saving is a prudent strategy and sophisticated investors save!
What an ignorant idiot I have been!
Sophisticated investors buy and sell assets and wait for good opportunities, which requires considerable liquidity.
It is not good to call yourself a ignorant idiot, a young grasshopper is better.
Sophisticated investors buy and sell assets and wait for good opportunities, which requires considerable liquidity.
It is not good to call yourself a ignorant idiot, a young grasshopper is better.
Sophisticated investors buy and sell assets and wait for good opportunities, which requires considerable liquidity.
It is not good to call yourself a ignorant idiot, a young grasshopper is better.
heck if i had 300 large id be reaching for the stars and trying to send the banks broke
Oh, I reckon an grasshopper has more investing knowledge than me!
If all one has is 300k in savings account keeping its liquidity so that he has enough cash to buy a house outright, he is a sophisticated investor, right?
He was being sarcastic. Having cash and no assets is not a sophisticated investor at all; far from it.
I'd be using it as a 5% deposit
MichaelW has actually taken the time out to actually crunch the numbers so they are right in front of you and you still seem oblivious to what everyone is trying to say?
If someone with no Property is considered a sophisticated investor,
then that must make me a property Guru.
heck if i had 300 large id be reaching for the stars and trying to send the banks broke
Hi Singo,
I'm not sure that is what he is trying to achieve.
I think he is doing the most wise thing, protecting his nest egg first and for most, and at the same time trying to educate himself.
Jumping into an investment straight in without understanding the mechanics behind it would not be wise.
A 24 year old working hard, not wasting money, saving well and trying to learn before jumping in, yes, trey is a wise fella.
But with his serviceability, savings and time, he can do wonders. He actually seems to know what he wants. But he also mentions that he has missed out 3 times. That is a lot of misses.