Your best financial decisions...

[Intrinsic_Value]

quite simple:
understanding velocity of returns

In basic English, making sure that returns are constantly compounding by a reasonable rate, which often involves switching between asset classes.

 

[china]

quite simple:
understanding velocity of returns

In basic English, making sure that returns are constantly compounding by a reasonable rate, which often involves switching between asset classes.

Shares and property are less liquid than cash/fixed interest and much harder to switch out of - taking more time and incurring more fees e.g. stamp duty, punitive commissions, etc.

 

[Intrinsic_Value]

Shares and property are less liquid than cash/fixed interest and much harder to switch out of - taking more time and incurring more fees e.g. stamp duty, punitive commissions, etc.

yes but thats what extraction of equity via debt is used for, so long as the return on debt is higher than the cost of debt. The other side of the ledger is that the original asset needs to be disposed of where:

negative movement in the original asset price post timing of equity extraction> the CGT adjusted current price of the original asset.

And since when are shares not liquid????????


And another point: the key to understanding this is transaction costs and taxation effect. Both must be incorporated into the model.

But it can be done.

Anyway, this is my hint, i leave it up to others to interpret it. I dont get financial commissions out of this, so no need to spill the whole game.

 

[Intrinsic_Value]

, business.

If you want something done right, you have to do it yourself. Because no one cares more about your money than yourself.

Totally disagree

Time is money, time is limited, when it comes to business, i hire people, the cost of their hourly wage is of less value than my time for each unit of work.

Hence i create a 'value add'. Of course i monitor them, but even better, where possible i hire people to monitor the people.

 

[Erica]

my best financial decision

Boring I know,- but it was simply buying my PPOR, bought the worst house in the nicest suburb I could afford and slowly renovated while enjoying the area I live in every day! Beach, bike tracks, ovals, playgrounds, near family and friends.

Quality of life is no 1.- don't spend 2 hours of your day in traffic when they can be spent on the couch cuddling your loved ones. (and after the mushy factors it also has gone up in value considerably and enables us to borrow more for shares and IP's)


Have a good day Somersofters.

 

[Mr. Fabulous]

Best financial decision was to leave PAYG employment.

I've just done this, we'll see how it goes.

 

[HotRod]

Buying high CF+ properties 10 years ago.

Was shouted down by all around us saying it was too risky and we'd lose the lot.

Guess what? It's ten years later, we've weathered the GFC, I've "quit" my job and I spend half my day thinking about ways to keep on accelerating making money.

 

[nhg]

Funnily enough I found out later that my maternal grandfather did very well out of property, but that wasn't a path my parents travelled (much). They did well out of a business instead.

Interesting. My parents are anti-investing and my dad who ran a business never talks to me about it.

After i started i learnt my maternal great grandad was a self made property multi millionaire in Peru. Am seeing the ugly side of it now. 3 generations are still leaching of his wealth (my parents excluded who are self made and both black sheep of their families).

They have lost a lot of land through negligence and government confiscating land. Everything was under a trust and they have still managed to screw it up due to greed. Thus trying to figure out the best way to structure it all.

 

[Aaron_C]

I've just done this, we'll see how it goes.

Fantastic! Best of luck. First 2 years are the hardest.

 

[pinkboy]

Fantastic! Best of luck. First 2 years are the hardest.

Ill fix that for you:

It doesnt get any easier - you just get better at it!

pinkboy

 

[Blacky]

Starting!

I was a clueless 20year old when I purchased my first IP. I did very little research, had very little money, earnt bugger all, and had even less of an idea about what I was actually doing. But I did SOMETHING.
It may not have been the best purchase in the world, but it was a start. I think too many people 'wait' - I don't believe there is never a perfect time, so now is as good a time as any.

Blacky

 

[pursefattener]

My best purchase would be all the farm land I have accumulated over the last 25 years as it has been the foundation that has allowed me to build up my business and then invest in residential , shares and a bit of industrial .

Actually , it's a great time to be looking at buying more A grade agricultural land IMO .

I agree with IV . You definitely need good smart people around you . I am not as smart as Dazz on reading and understanding legal jargon . I do read it all but I'm guided by my solly ...

 

[davidw89]

Best financial decision was to leave PAYG employment.

Care to enlighten? I've been feel trapped working too.

 

[Aaron_C]

Care to enlighten? I've been feel trapped working too.

Leaving banking and being a broker instead gave me way more freedom to do whatever I wanted. Not just freedom of time but now I am directly rewarded for the hard work I put in rather than doing it for someone else.

 

[Peter_Tersteeg]

One of the best and worst decisions I made was becoming self employed.

Bad decision because for a few years it killed my cashflow and I missed some great opportunities to invest.

Great decision because having gone through numerous years of challenges, the business is very healthy and now has the cashflow to give me more options than I would have ever had.

But my very best decision ever was to propose to my wife.

 

[geoffw]

But my very best decision ever was to propose to my wife.

But if she was your wife why did you need to propose to her?

If I proposed to my wife she'd have me put away.

 

[Peter_Tersteeg]

Geoff, sometimes your jokes are even worse than my wifes...

 

[geoffw]

I hope that doesn't mean you're going to propose to me?

 

[investor2009]

My best financial decisions have been to buy property in Darwin, it's always increasing in value. Being a CG investor the plan's working well and my current cals are this: 7yrs investing (already..!!) around $60k of my own money used, capital growth of $520,000 - $60k (my funds) so pretty good return. I don't have a calc handy but I bet putting a percentage of return on the $60k would be in the thousands. Not so good when property isn't doing anything (not unlike my southern holdings..)

Not a great story like some others I read here from a long time ago when things were going gangbusters but still pretty good.

 

[Terry_w]

Sometimes the best decisions are the ones which involve not investing.

A friend and I were looking to invest in a chain of Thai restaurants. I pulled out and she went ahead losing about $200k..