The 'so how many properties do you have?' question and how to deal with it politely

[Jen_PFR]

Love your story Dazz!

And my immediate thought, when the 'why was she there?' question was asked, was - even if you only learn one thing, you can't call something like that a waste of time. Good on her for trying to get a bit more knowledge. So many older people would just throw their hands up and say 'It's too hard' and let their sons manage their properties for 25% of the rent eek: ).

 

[Buzz]

How big is yours?

At the beginning of a property investment journey or to those observing from outside it I think the "how many" question is the most common, because they don't really know what else to ask or how to measure success.

Those who are educated would want to know "when do you plan to start indefinitely leave from work and are you on track to achieve that?" Many people I speak to daily have portfolios that are not getting them to where they want to go, some have portfolios high in number low in equity with no outlook for that to change. The # of properties in these cases does not equate to success.

Having spent so many years, over 20 years ago, working underground in mines with the "mine is bigger than yours" battle raging everyday I soon learnt not to participate in such conversations.

In my opinion often it is not the answer that counts but the quality of the question asked.

So the question doesn't disturb me but it allows me to give an appropriate answer to satisfy the need of the person asking. The need for them maybe to validate they are still OK in some cases (ie mine is bigger than yours), or they are truly looking for some inspiration (ie how can I get mine to be as big as yours?) or they may just be making conversation and trying a subject they think may interest you (ie hi I am attempting to make conversation).

Jane Slack-Smith

 

[Dazz]

Having spent so many years, over 20 years ago, working underground in mines with the "mine is bigger than yours" battle raging everyday I soon learnt not to participate in such conversations.

Jane

Yes, I can see why Jane.

 

[Nemo30]

Yes, I can see why Jane.

Lets not presume...

 

[landlubber]

it's the truth

I tell the truth "I don't own any, they are all owned by the bank". OK ..it's a half truth as you need to know the equity position but that's fine print. Truth is we did own a few outright but we sold most of them, dumped the money into the SMSF and it's now invested in the stock market. Being over 60 ( 62 now) and having the SMSF in pension phase it's a tax free environment. And you think NG is good? (and it is ) With NG you only get a tax credit. With franking credits the ATO actually sends you the money which is ca 40% of the div. if 100% franked. You cannot transfer resi. IPs into a SMSF but you can sell them , use accumulated tax losses ( from NG thankyou ) to negate the CG, dump 100% of the sale funds into your SMSF, invest in stocks that pay franked dividends and sit back and let the ATO cheques roll in. Not only that, you can trade the stocks (if you like) and any CG is also tax free. Of course so are losses !! Well that'll do me for today. Good luck to all . LL

 

[MTR]

I tell the truth "I don't own any, they are all owned by the bank". OK ..it's a half truth as you need to know the equity position but that's fine print. Truth is we did own a few outright but we sold most of them, dumped the money into the SMSF and it's now invested in the stock market. Being over 60 ( 62 now) and having the SMSF in pension phase it's a tax free environment. And you think NG is good? (and it is ) With NG you only get a tax credit. With franking credits the ATO actually sends you the money which is ca 40% of the div. if 100% franked. You cannot transfer resi. IPs into a SMSF but you can sell them , use accumulated tax losses ( from NG thankyou ) to negate the CG, dump 100% of the sale funds into your SMSF, invest in stocks that pay franked dividends and sit back and let the ATO cheques roll in. Not only that, you can trade the stocks (if you like) and any CG is also tax free. Of course so are losses !! Well that'll do me for today. Good luck to all . LL

Thanks for sharing, there is a valuable lesson here

 

[see_change]

hi Land Lubber

My Concern with that approach is that I know several people who ended up having the Retirement F....ed up by the GFC from one of world trips etc , to having to down size their PPOR to have more money to fund their retirement.

Our plan is to have fully paid off properties in our super and use the rental to fund retirement as well as properties external for additional money.

Cliff

 

[landlubber]

hi Land Lubber

My Concern with that approach is that I know several people who ended up having the Retirement F....ed up by the GFC from one of world trips etc , to having to down size their PPOR to have more money to fund their retirement.

Our plan is to have fully paid off properties in our super and use the rental to fund retirement as well as properties external for additional money.

Cliff

If you got f-d up by the GFC then you had most of your assets in stocks and just maybe leveraged to boot. Well, what a f-in idiot !! I can't help you. You deserve every poke up the kyber you got. (1) Have most of your assets in property. (2) Only put in the (stupid) stock market $$ you can afford to lose.
So sayeth me .... Ignore this at you peril .... LL

 

[alexlee]

dumped the money into the SMSF and it's now invested in the stock market. Being over 60 ( 62 now) and having the SMSF in pension phase it's a tax free environment. And you think NG is good? (and it is ) With NG you only get a tax credit. With franking credits the ATO actually sends you the money which is ca 40% of the div. if 100% franked. You cannot transfer resi. IPs into a SMSF but you can sell them , use accumulated tax losses ( from NG thankyou ) to negate the CG, dump 100% of the sale funds into your SMSF, invest in stocks that pay franked dividends and sit back and let the ATO cheques roll in. Not only that, you can trade the stocks (if you like) and any CG is also tax free. Of course so are losses !! Well that'll do me for today. Good luck to all . LL

If you got f-d up by the GFC then you had most of your assets in stocks and just maybe leveraged to boot. Well, what a f-in idiot !! I can't help you. You deserve every poke up the kyber you got. (1) Have most of your assets in property. (2) Only put in the (stupid) stock market $$ you can afford to lose.
So sayeth me .... Ignore this at you peril .... LL

I'm having trouble following.

 

[devank]

I'm having trouble following.

I thought I was the only one pulling my hair out.

 

[attrill]

landlubber has been hijacked?

 

[landlubber]

I'm having trouble following.

Exactly which red tail-light did you fail to follow ? Or are you just asleep at the wheel ? LL

 

[landlubber]

I thought I was the only one pulling my hair out.

#1 You are lucky to have hair to pull out. #2 Do you want to try for a more intelligent post ? LL

 

[landlubber]

landlubber has been hijacked?

Clearly you're not paying for the SS server costs. LL

 

[TPI]

I tell the truth "I don't own any, they are all owned by the bank". OK ..it's a half truth as you need to know the equity position but that's fine print. Truth is we did own a few outright but we sold most of them, dumped the money into the SMSF and it's now invested in the stock market. Being over 60 ( 62 now) and having the SMSF in pension phase it's a tax free environment. And you think NG is good? (and it is ) With NG you only get a tax credit. With franking credits the ATO actually sends you the money which is ca 40% of the div. if 100% franked. You cannot transfer resi. IPs into a SMSF but you can sell them , use accumulated tax losses ( from NG thankyou ) to negate the CG, dump 100% of the sale funds into your SMSF, invest in stocks that pay franked dividends and sit back and let the ATO cheques roll in. Not only that, you can trade the stocks (if you like) and any CG is also tax free. Of course so are losses !! Well that'll do me for today. Good luck to all . LL

Hi LL,
If I recall correctly reading your old posts you were using a LOE strategy with residential property before this right?
Any thoughts on this strategy now that you have moved to a share dividend strategy instead?
Thanks.

 

[landlubber]

Still LOE - just now LOE plus

Hi LL,
If I recall correctly reading your old posts you were using a LOE strategy with residential property before this right?
Any thoughts on this strategy now that you have moved to a share dividend strategy instead?
Thanks.

To be clear ...Our main investments are still resi (20+ IPs) and the LOE strategy remains very much intact and working fine.... But after age 60 ...SMSF in pension phase (no employment/salary) is a tax free environment. No income tax. No CG tax. This seems (to me) to work best with stocks with franked div. But our total assets are still 90% res IPs (all outside SMSF) +10% in stocks (inside SMSF in pension phase). We haven't changed strategy, just modified it to take advantage of "tax free environment". "Free" always gets me !!! My kinda price. LL

 

[devank]

To be clear ...Our main investments are still resi (20+ IPs) and the LOE strategy remains very much intact and working fine.... But after age 60 ...SMSF in pension phase (no employment/salary) is a tax free environment. No income tax. No CG tax. This seems (to me) to work best with stocks with franked div. But our total assets are still 90% res IPs (all outside SMSF) +10% in stocks (inside SMSF in pension phase). We haven't changed strategy, just modified it to take advantage of "tax free environment". "Free" always gets me !!! My kinda price. LL

Aha.. now that is clear & makes sense

I always wondered what we should after retiring. Some people go on about living on equity by borrowing more and more... but I don't think the bank is going to lend you more and more once we are retired and no 'formal' income coming in.
Also why would you want to worry about record keeping, tenant issues and dealing with PMs if you are going to travel around and live worry free?

 

[Aaron_C]

Yes many baby boomers are now moving to the SMSF stage of their retirement. 15% tax on income, 10% on capital gains - it's money for jam compared to the mugs battling it out in the non-super space. Many of the self employed boomers are buying commercial property with their SMSF, then renting to their own business and paying themselves a nice 'rent' to build up the fund.

 

[landlubber]

Aha.. now that is clear & makes sense

I always wondered what we should after retiring. Some people go on about living on equity by borrowing more and more... but I don't think the bank is going to lend you more and more once we are retired and no 'formal' income coming in.
Also why would you want to worry about record keeping, tenant issues and dealing with PMs if you are going to travel around and live worry free?

You have to build up your equity for LOE (now, that's stating the obvious huh) .We bought our IPs from 1986 to 2008. I became "unemployable" in 2008 and we went LOE (after having the IPs valued and getting the largest LOC we could get.) Don't kid yourself devank you still have all the records, tenants etc when "retired" and LOE. But we don't trust anybody else with our money decisions. Simple as that. LL

 

[D.T.]

You have to build up your equity for LOE (now, that's stating the obvious huh) .We bought our IPs from 1986 to 2008. I became "unemployable" in 2008 and we went LOE (after having the IPs valued and getting the largest LOC we could get.) Don't kid yourself devank you still have all the records, tenants etc when "retired" and LOE. But we don't trust anybody else with our money decisions. Simple as that. LL

Post-2008 some cities were fairly flat in terms of growth. Didn't that worry you? Or is it more a matter of withdraw out 10 years worth of living expenses and worry about it at a future date? Are you worried what banks will say when an 'unemployable' guy goes back to them for more funds?


Perhaps some of this stuff should be split into a separate thread?