Young Investor - at the crossroads...

[skater]

I, also, believe you have made the right decision. I am opposed to the way it seems to be these days that everyone and their dog go to uni. Uni is certainly not for everyone and it will land you with a huge debt to pay off. IMHO unless you know what career you want to pursue DON'T GO.

Go out and get a job and some real life experience and maybe you will find something you love, or you may find an area that you enjoy, but to move ahead you need qualifications. If that is the case, you can always study as a mature age student, some Company's will even pay your Uni fees for you.

This is exactly what my Husband did and found that the course he wanted to do would take 3yrs part-time as a mature age student (1 subject per term). In contrast if he had done the same course straight from school it would have been 4yrs full-time.

 

[Rickardo]

Hi everyone, my first post.

Some background, I am 19 years old, currently doing IT at uni and basically earn enough money to get myself to the next paycheck. Im not enjoying my course and dont believe I find it "totally rewarding".

I am deciding to deffer uni for a year (or longer) to persue fulltime work to save enough money for my first IP. I know I want to be in the IP game, and my goal is to own 10 properties by 25, which I feel is possible IF i start now. I eventaully plan on finishing my uni course. University doesnt seem like the "solution" to my problem, I only did it because it seemed to be the thing to do after high school. I know a degree can open doors and is worthwhile to have, so I plan on having one eventaully. But I believe working hard now to set myself up while I am young seems more rewarding....what are your thoughts?

So the question is, what advice would you give to the budding young investor. do you think it is worthwhile to work fulltime now (mind you Im basically starting from nothing) and get into the game as early as possible and dedicate myself to it. My reasoning for this is I am learning and gainging the knowledge everyday, have no dependants, I have only a smallish hecs debt and believe I am in a great position to start young once I start earning a decent salary.

Any thoughts, suggestions, feedback would be great!

Hi Jun,

I am also 19, at uni, and was in a similar situation to you in my first year. I thought I wanted to get into IT, and enrolled in a course, and in the first week I decided it really wasn't for me so i cancelled my enrolement. You may say a week isn't long enough but I just knew that the course wasn't right for me.

At this point I was trying to decide whether I wanted to defer uni and give it a go the next year, look for another course or start full time work.

After thinking about it for a while I ended up choosing to try another course, Commerce. I honestly didn't really know whether I wanted to do this, but had always liked finance and thought this would be a decent option for me. I’m now in my final year and am really glad I chose the course as I have really enjoyed it.

Here was my rationale for deciding to continue with uni instead of try full time work just after I cancelled my enrolment in the IT course –

- I was still really young after I finished high school (17 and a half), and really didn’t think I wanted the responsibility of full time work.

-I thought I’d give uni a try, if I didn’t like it the most would have lost was 6 months or a year, and a relatively small amount of money in HECS/lost income.

-I know I will be a very committed investor in the future, but I think you always need to balance investing with the other aspects of life. Uni can be hard but it’s not as stressful as a full time job. If I chose to work full time instead I wouldn’t have been able to go out as much, have fun with the people I’ve met, or get the university experience. True I now have less money, but there is so much time to work hard in the future, but you’re only young once and I was willing to delay my road to financial independence by a few years for this.

-If you go to uni you will probably graduate by the time you’re say 21-22. Then you can start looking for a job on much better pay than if you didn’t have a degree, in the mean time you’ve experienced the good times of uni life. You may think 3 or 4 years is a long time, but uni goes so fast it's unbelievable, time will pass and you'll be finished before you even know it.

Everyone is different and I’m not trying to persuade you either way, because ultimately it will be your decision where you end up and you need to do something you enjoy. I’m just giving you my perspective from someone who was recently in a similar situation as you. Hope i've been of some help.

 

[XBenX]

Im another young? investor although Im rapidly getting old !!!

Thankfully everyone around here keeps things in perspective for me, Im still young

IMHO I dont think completing uni is the way to go but it all depends on the level of risk you are willing to take.

Ive completed an undergrad degree - graduated w/ good averages and got a good job (come on us actuaries arent all that bad!)

I started a double degree (postgrad - MBA/MFP) but half way through this Ive realised its not what I want... sure its a safe way to decent income but its also just a path into another J.O.B.

So Ive taken sometime off to think, done a world tour, blown some $$$, been a skibum (my passion) f/t for a while...

Now Ive had a bit of balance Im back at work... P/T (3days a week - negotiated before my career break) - the rest of my time is spent on my business ideas.

Thats just what Ive done - if I had my time over Id skip to this point straight away... but Im just a cynic =)

 

[XBenX]

I wanted to add as well - why are you saving such a big deposit?

 

[Jun]

well as someone before said before a 20% deposit was ideal, and I asked the same question, why is it 20%? I thought 10-15% would be fine

 

[peelsman]

but the difference is Ben you can always fall back on being an actuary and they earn a sh@$ load. Even your p/t work would be as much as the average wage..
HT

 

[Peter Parker]

well as someone before said before a 20% deposit was ideal, and I asked the same question, why is it 20%? I thought 10-15% would be fine

10-15% would be fine but you'd probably be up for LMI. This is approx $1-2k and protects the bank (not you). But it might be a small price to pay if you are eagar to start now, find a bargain or wish to leave enought deposit monies available for IPs 2, 3, 4.....

But if you're aiming for cashflow positive, you will need a higher yield to make it positive if you're borrowing 90% than if you're only borrowing 80%. You pay more interest, get more tax deductions, but as your payments are higher your serviceabilty is degraded.

A 90% LVR across your whole portfolio would be considered high risk. Also if property prices were to fall 11% you'd have negative equity, ie owing more than the IP is worth.

So yes you can easily borrow 90% on an IP but whether it is sound or not depends on your risk profile, available funds for contingencies and the equity you have in other properties or investments.

Regards, Peter

 

[wish-ga]

I, also, believe you have made the right decision. I am opposed to the way it seems to be these days that everyone and their dog go to uni. Uni is certainly not for everyone and it will land you with a huge debt to pay off. IMHO unless you know what career you want to pursue DON'T GO.

I started uni studies at age 30. I am doing what I am passionate about and paying my fees up front and hope to come out with the prospect of a different career. But I also work with people who have a HECS debt and are in a job that doesn't use the degree they worked hard to get.

I agree with getting an education but make sure if you are paying all that money for a qualification that it is going to assist in your job prospects. So if you want to work as a history teacher {insert other profession here, eg accountant, CSIRO research assistant etc} then by all means do the degree.

So like others have said if it is a means to an ends (ie particualar career path you are interested in) then go for it but don't go just because you think it is the only option.

Lots of ppl do this and quit after a few years. They have changed degrees a few times and come out the other end with no qualification and thousands of dollars worth of debt.

Keep us posted and all the best for whatever you decide!!!

 

[XBenX]

but the difference is Ben you can always fall back on being an actuary and they earn a sh@$ load. Even your p/t work would be as much as the average wage..
HT

I wish that was the case =)

My salary sucks, but half of that is my fault, I dont make a good employee.

 

[XBenX]

I started uni studies at age 30. I am doing what I am passionate about and paying my fees up front and hope to come out with the prospect of a different career. But I also work with people who have a HECS debt and are in a job that doesn't use the degree they worked hard to get.

I agree with getting an education but make sure if you are paying all that money for a qualification that it is going to assist in your job prospects. So if you want to work as a history teacher {insert other profession here, eg accountant, CSIRO research assistant etc} then by all means do the degree.

So like others have said if it is a means to an ends (ie particualar career path you are interested in) then go for it but don't go just because you think it is the only option.

Lots of ppl do this and quit after a few years. They have changed degrees a few times and come out the other end with no qualification and thousands of dollars worth of debt.

Keep us posted and all the best for whatever you decide!!!

When I last had a look for a friend a HECS debt is one of the cheapest loans you can get...why not invest those $$$ instead?

 

[Aceyducey]

I agree with XBenX here.

HECs is a low interest loan. Don't waste your dollars on repaying it until you have to!!!!

Spend your money where it grows your asset base.

Cheers,

Aceyducey

 

[np2003]

University isnt fun, unless you like the subject you do, even then there are a lot of boring times. However, what university has taught me is hard work, dedication and determination... If you set out something, make sure you finish it, I've seen too many examples of failed businesses, startups because people change their minds mid way. Unless you have a very good job or business that is already making you good money, I'd recommend you goto university, however in saying that I've seen a lot of people who think that just because they goto university they are deemed 'smarter and better' than the others. Infact a lot of university students have this 'idea' that they will instantly get employed in a well paying job after leaving university... which is not the case!!

IMO you can be successful whether you go to university or not. It just depends on your passion, determination, patience, knowledge and luck, which usually comes with the whole package.

 

[wish-ga]

XBenX, I will take a look at doing that.

I was trying to avoid debt and thought that if I had HECS debt it would affect the PPOR loan I just had preapproved. I may restructure things for the next semester.

My motivation was the 25% discount you get for paying up front.

Thank you for that...I will take a closer look now.

Anyone else got some figures or scenarios?

 

[Bill.L]

Hi all,

Ahh, to turn back the clock to the decision making times of life, when 5 years is a long time and 30 is just old age!

Despite all the pros and cons discussed so far, the decision comes down to a simple fact, IF YOU DON'T LIKE WHAT YOU ARE DOING, THEN CHANGE TO SOMETHING YOU DO LIKE.
sorry for shouting.

Jun, typical of me to try to think outside of the square, have you considered doing some type of apprenticeship?? The trades(electrical,plumbing, building etc) would come in handy for gaining a property portfolio. You would also get to know many contacts.
As the population ages and the number of apprentices declines, the only thing that could happen to the trades is that the wages(price) will rise.

Good luck with your decision.

bye