The secret to my success

[see_change]

The secret is to be born rich.

My mate just flipped his $2m PPOR he got a year ago, for $4m. Went into CBD bought another building for $5m in cash.

Mr. Gu (often makes papers), just sold his $40m Footscray land for $60m. Bought 3 years ago.

See the common theme? You need to start with a lot of capital.

Sorry , I think that's wrong . There are people on this forum who have started with nothing , with low incomes who have been successful.

It might help the level of success , but it isn't essential .

Given the old rags to riches and back again saying you can argue against it .

Cliff

 

[see_change]

The secret is luck.

As this handy chart from the RBA shows, house prices in real terms pretty much doubled between 2001 and 2008. In nominal terms they'd have increased further.

See Change, and many other investors, were at the right sort of age back in 2001 to have a sufficiently good income to invest in the early stages of a booming market. They were also beneficiaries of government policies to support housing, low interest rates, and the fact that the Australian economy has avoided recession for 23 years.

Given See Change's success, he's played the market well, and his calls have turned out to be right. So kudos there.

But I suspect that there isn't really a secret. Do your own research, don't panic and think for yourself. It's a bit like the Dragon Scroll in Kung Fu Panda.

I've seen property booms before and I think we will see them again . We bought our first PPOR at the peak of the late 80's boom which saw prices double in close to one year . There have been booms in the 60's and 70's .

We missed investing in the boom in Sydney in the early 2000's and only started investing in Brisbane after the central suburbs had moved significantly and logan had been moving for a year , which is less than one cycle ago .

What we did do was recognize what was happening and buy 19 cheapies in fairly quick succession . I think most people in Australia didn't do that . We also recognized what was happening , and bought in top suburbs in Sydney after the GFC hit when no one else was buying.

Was that luck ? My experience is the harder I work , the luckier I get .

Cliff

 

[willair]

Was that luck ? My experience is the harder I work , the luckier I get .

Cliff

So that's what it's all about,the harder you work,the luckier you both have been ,that's why free markets work in free countries because they allow the simple no-rules on investment decisions while you try to mitigate the consequences,or as someone said to me a long time ago..

"Success is a State of Mind"..

 

[devank]

You won't recognise/get 'lucks' if you are not trying in the first place.

 

[see_change]

You won't recognise/get 'lucks' if you are not trying in the first place.

Spot on ( though it's not " the secret " ) . We'd missed out on the growth in Mt Druitt in the previous cycle , but I recognized the drivers and saw which areas would benefit from it.

Cliff

 

[see_change]

So that's what it's all about,the harder you work,the luckier you both have been ,that's why free markets work in free countries because they allow the simple no-rules on investment decisions while you try to mitigate the consequences,or as someone said to me a long time ago..

"Success is a State of Mind"..

Hard work can be important , but it has to have direction behind it . I don't think that the " just do it " attitude on it's own works . It still has to have focus and direction.

Cliff

 

[nhg]

Sorry , I think that's wrong . There are people on this forum who have started with nothing , with low incomes who have been successful.

It might help the level of success , but it isn't essential .

Given the old rags to riches and back again saying you can argue against it .

Cliff

Perhaps,

But to get to a point where you can play on a bigger scale, there is a lot of 'luck' involved and frankly to get anywhere requires a lot of capital. Yes you have to look out for opportunity and have the skill to pull it off, but reality is a lot of the big players, on this forum as well, happened to start just before a major boom (myself included in the 2013 boom, though I didn't capitalise on it as well as I could have).

We all make mistakes at the start, these big booms in the early days help us cover out mistakes and put us in a position to capitalise on the next one.

The other factor is time. There are some very successful people here, but it took years between their first purchase and their second. You do need that equity behind you. I don't know many people that purchased quickly without having started with a PPOR with a huge dent in the mortgage.

KathrynD is the only person who comes to mind that really made it on a low income from nothing.

 

[see_change]

Perhaps,

But to get to a point where you can play on a bigger scale, there is a lot of 'luck' involved and frankly to get anywhere requires a lot of capital. Yes you have to look out for opportunity and have the skill to pull it off, but reality is a lot of the big players, on this forum as well, happened to start just before a major boom (myself included in the 2013 boom, though I didn't capitalise on it as well as I could have).

We all make mistakes at the start, these big booms in the early days help us cover out mistakes and put us in a position to capitalise on the next one.

The other factor is time. There are some very successful people here, but it took years between their first purchase and their second. You do need that equity behind you. I don't know many people that purchased quickly without having started with a PPOR with a huge dent in the mortgage.

KathrynD is the only person who comes to mind that really made it on a low income from nothing.

Not everyone wants to compete in a big scale . For many success is paying the house off and having a comfortable income and spare time to do other things .

I'd say that person is more successful than the aspiring big time player always looking for a bigger deal to be " more successful " than anyone else but in reality has money than they could spend in a life time .

I don't think Success should be judged by some external set of arbitrary financial values .

Btw , that has nothing to do with " my secret " , but in reality is very important .

Cliff

 

[nhg]

Not everyone wants to compete in a big scale . For many success is paying the house off and having a comfortable income and spare time to do other things .

I'd say that person is more successful than the aspiring big time player always looking for a bigger deal to be " more successful " than anyone else but in reality has money than they could spend in a life time .

You sound like one of my mentors, haha.

I had this chat with a friend on the weekend, he aims for $100M, and I don't doubt he will get there. My aim is much much smaller, $5-10M.

You are right, there are those that would consider my friend to be small time, and others would consider me to be over ambitious. To each their own, success is as you said, quite arbitrary.

TBH my financial aims are shrinking and focus on family and community is becoming a much larger priority. One of the guys I mentor reckons I've lost my edge, I feel I've just moved in a different direction.

 

[MTR]

KathrynD is the only person who comes to mind that really made it on a low income from nothing.

I also think that KathrynD is playing in a different market Canada,/US?? where perhaps the houses are worth a fraction of what we pay in Australia. Credit to Kathryn and Bob on their success, but I am just putting it in perspective in terms of portfolio value. For example I spent $500K cash (8 houses) in USA earning around $70K income pa, $500K may get you one nice house in Australia that will be negatively geared.

Cheers
MTR

 

[The Fence]

To each their own, success is as you said, quite arbitrary.

TBH my financial aims are shrinking and focus on family and community is becoming a much larger priority. One of the guys I mentor reckons I've lost my edge, I feel I've just moved in a different direction.

Older you get, the closer to the grave, where money means less as opposed to family and friends as you mention.

nhg, the wise old owl.

 

[nhg]

I also think that KathrynD is playing in a different market Canada,/US?? where perhaps the houses are worth a fraction of what we pay in Australia. Credit to Kathryn and Bob on their success, but I am just putting it in perspective in terms of portfolio value. For example I spent $500K cash (8 houses) in USA earning around $70K income pa, $500K may get you one nice house in Australia that will be negatively geared.

Cheers
MTR

But you did buy in USA. Nothing stopping us from doing the same. Only our own limitations. Eg. My JV partner only wanting to purchase in Sydney. Good luck to him in this current market.

Kudos to you btw, I am really impressed with your portfolio and follow your posts quite avidly.

 

[nhg]

Older you get, the closer to the grave, where money means less as opposed to family and friends as you mention.

nhg, the wise old owl.

Haha, my mentors son pulled me up as I was leaving his house.

Told me not to pay too much attention to his dads words of wisdom, in his words.

"Dude, my dad's made his millions, he forgets he had to be hungry to get there in the first place, he's too relaxed now, we are too young for that".

I don't disagree, but maybe the older they get the more they worked out what really matters. Money never meant much to me, I just play the property game because it's fun.

 

[MTR]

Luck

I think something common with all successful investors is the ability to be able to consistently invest.

Sometimes this is not possible and years can be lost, or go backwards..... life happens - divorce, health issues, business goes belly up, losing job, losing a child etc.

Life is a lotto and to a degree luck plays a part in this.

MTR

 

[The Fence]

Money never meant much to me, I just play the property game because it's fun.

Thats another "secret". It's easier when it's fun.

You'll be right nhg, going well.

 

[see_change]

I think something common with all successful investors is the ability to be able to consistently invest.

Sometimes this is not possible and years can be lost, or go backwards..... life happens - divorce, health issues, business goes belly up, losing job, losing a child etc.

MTR

Had to think about this . From 2004 - 2009 we didn't buy anything . But we did a subdivision , built a new PPOR and sold our old one , so while we weren't buying new properties we were certainly doing things . I also spent a lot of time studying the share market so when we did sell out PPOR and had spare cash to invest in the share market , I recognised that it wasn't a good time to invest ( prices where looking toppy in TA terms ) in the market we were sitting on the sidelines when the GFC hit .

Cliff

 

[Deltaberry]

That's also very true. For most rich families, the glory usually dissipates by the 3rd generation. Unfortunately, I don't think anyone has worked out how to motivate the 3rd generation once the ancestor's assets allow them to rent seek off society.

You only need to look at certain iconic Australian brandnames - don't get me wrong, their family is still incredibly rich, but what have their 5th generations done in life apart from appreciate opera and artwork, and sit on the board of various "government think tanks"?

 

[MTR]

Had to think about this . From 2004 - 2009 we didn't buy anything . But we did a subdivision , built a new PPOR and sold our old one , so while we weren't buying new properties we were certainly doing things . I also spent a lot of time studying the share market so we did sell out PPOR and had spare cash to invest in the share market , I recognised that it wasn't a good time to invest ( prices where looking toppy in TA terms ) in the market we were sitting on the sidelines when the GFC hit .

Cliff

But you still grew your wealth during this period because you had a choice. You also recognised that the market crashed and you were sitting on the sidelines waiting.

I guess I am really talking about investors who suddenly for whatever reason do not have a choice, lost opportunities etc.

 

[nhg]

That's also very true. For most rich families, the glory usually dissipates by the 3rd generation. Unfortunately, I don't think anyone has worked out how to motivate the 3rd generation once the ancestor's assets allow them to rent seek off society.

You only need to look at certain iconic Australian brandnames - don't get me wrong, their family is still incredibly rich, but what have their 5th generations done in life apart from appreciate opera and artwork, and sit on the board of various "government think tanks"?

I have a mate who's family are into the finer things in life. (Actually I have a lot of friends like that). Their parents actively encourage them to pursue nice stuff. Eg. they can't have normal honey, hells no, they gta have that pimp honey made by only the finest bees.

His mum (whos is like my second family) gave me a spiel after I dropped out of ballroom dancing recently because I said it was too expensive a hobby.

She said life was to be enjoyed. I got that, and frankly didn't disagree, but I also enjoy rock climbing and camping. It was an interesting thought.

Hobbies are great, but if your hobbies are art collecting, ballroom dancing and taking full advantage of the ski season at $1000/weekend, you're going to need a lot more cashflow than if you enjoy rock climbing, camping and street dance fighting.

 

[see_change]

I guess I am really talking about investors who suddenly for whatever reason do not have a choice, lost opportunities etc.

Valid point

Cliff