Methinks Techno = Michael Whyte in 8 years time. Remarkable similarities…

Resiwealth, nice post too! I’m gonna come see you some day soon. Like your style too much not to.

Cheers,
Michael

WizardfromOz, thanks for the positive feedback. I feel a bit battered here every now and again, but persist with my posts in the hope that it at least lends a little bit of insight for those that may be interested.

I like what See Change has said above. I agree that you need to move with the market, and a balanced approach of growth…[Read more]

See Change,

I agree. That’s why on the other thread I suggested that “If you find this too risky” then just up your equity assumptions until you’re happy with it. My…[Read more]

You miss the point that drawing down equity does not reduce your year ending net equity. The approach is based on drawing equity “in arrears” from the growth in your portfolio. You should never draw more than its growth or you would reduce your net position.

In fact you should never draw more than growth less CPI indexation so…[Read more]

How about a danger of NOT using equity to fund retirement:

1. Paying way too much tax on your income. By living off equity you can get away with paying “tax” at the prevailing cost of capital.

But I recognise that its not for everyone, and that your asset strategy and structure can either be conducive to this or not. You need a…[Read more]

That’s “combined” income. [biggrin]

I’m a supply chain executive in a manufacturing company and I’m on $140K. My wife is a solicitor and she’s on $60K. She’s applying for jobs at the $100K mark as we speak, so maybe I’ll need $240K in passive income in retirement! [blink]

Or then again, maybe $100K would do just nicely thank you very…[Read more]

Some very interesting posts. For me:

Age now 35
Age planning on retiring 45
Age financially free 40

You could argue I’m financially free now, but my net asset worth is still a lazy little over $500K. I want net asset worth of around the $2M mark to “retire” on. But retirement for me is just actively managing my investment…[Read more]

I hear you loud and clear, but I’m a bit more on the Don and Liz kinda approach right now. Property is only one aspect of my structure and as a percentage I’m going to scale it back from where it would otherwise be in a strong growth cycle.

I am however about to buy another property but am picking my sub market carefully. I still like…[Read more]

Amen to that!

I thought I was an exception to the rule in that I detest commercial television. I do love home theatre though as a bit of escapism, so I’m with Turboz on that one. They can be a bit violent of course, but as yet I don’t have any kids and I’m grown up enough to see them as pure entertainment.

And to think that some people…[Read more]

Originally posted by Michael Whyte:Rental income on IPs covers the other expenses not listed below

My example is really rough, but the thing to remember is that the total structure is “neutral” which means cash expenses is covered by cash income. You just live off the equity growth…

Its a rudimentary example, but if the…[Read more]

This is by no means financial advice. But for that price you could pick up a nice new townhouse in or around Mount Gravatt that would rent for around the $250 a week mark. Wouldn’t be CF +ve, but would be a nice yield and a good potential growth area.

You get good deductions on its being new too.

I’m looking at doing just that myself…[Read more]

The main point being overlooked in the discussion to date is the point that the structure is neutrally geared. So, you don’t need to cover the borrowing costs (7%) with your capital growth (5%) to be able to stay ahead. You’re neutral on holding so all of your growth is gain.

I’ll try and illustrate this with a simple…[Read more]

Sounds like you’ve got a good plan to me. I’m a Peter Spann / Jan Somers / Steve Navra kinda investor too and so your particular strategy sits well with me. I do take the point though, that you shouldn’t overcommit yourself. Leverage is great for maximising your growth, but it needs to be done within your comfortable servicing levels…[Read more]

No problem. Below is “my take” on some of the key messages Steve delivered. This is by no means his complete teachings, and in all honesty is probably a misrepresentation of his material. It is just my personal key messages from the day:

Steve Navra Course Summary

The core message from Steve’s course is one of “making your mon…[Read more]

Agree completely, just did his course last Saturday and the best $150 I ever spent. Looking forward to the full blown plan now…

But I think you know this. [biggrin]

Cheers,
Michael.

Apologies for the double post but I didn’t know this topic had moved threads out of the development thread. For me living off equity is certainly the main game and is absolutely what I aspire to do. Let me work a sample scenario through using some simple numbers:

Year1 opening: Net asset worth $2M, total assets employed $4M (50%…[Read more]

I think you missed the point on how this would actually pan out. Terry is correct in assuming a neutral position on the portfolio, so living of your portfolio income is not an option. Let me work one through using some simple numbers:

Year1 opening: Net asset worth $2M, total assets employed $4M (50% borrowings neutral gearing)
LOC: $100K…[Read more]

http://theage.com.au/news/Business/Sydney-becomes-our-sickest-city/2005/05/15/1116095851908.html

Great post and great point!

In some companies, their internet policy explicitly prohibits posting on forums or receiving internet email. Fortunately, my company does not have this strict a policy and so long as I can get my job done I’m free to frequent the forums in between tasks.

But a very good point…

Cheers,
Michael.

Not nice. [biggrin]

In my opinion the idea of a newbie area still hold merit, just conceded that other newbies might be put off by it. We’ll never know as it won’t be implemented. Just trying to get creative to keep the forum on the improve.

How’s that for a pike with a double twist? [biggrin]

Cheers,
Michael.

I didn’t know you were a moderator over here. Good form!!

Particularly liked the content of your last post this thread too. It can be very “daunting” as a newbie, and when you see venomous posts it certainly deters you from posting your thoughts IMHO.

I can see how a newbie board might come across the wrong way too in retrospect. Just…[Read more]

Not a bad idea at all to split out a “Getting Started” forum board. You could even make it such that new members can only post in this sandpit board until they reach 50 posts or some such. They can still read all the other technical stuff but only post in the other boards when they’re off their L-Plates.

I’m sure the mods won’t go for…[Read more]

You need to spread your investments across multiple asset classes to mitigate the risk of any one category stalling. Even if property stalls, you can still make 5% dividend and 5% CG on shares YOY. Steve Navra’s income focussed share fund is a trading fund and makes its money on volatility not on the trend. He makes money even when…[Read more]

I’m with Richmond completely on this one. I spend a lot more time on Somersoft now and have never had one of my posts pulled or even had any one attack any of them either. I’ve had people question my conclusions, but isn’t that what forums are supposed to engender?

I’d much rather have a well constructed meaningful dialogue…[Read more]

You’can’t do this until you reach stage 2 – the capital stage of your investment career.

Imagine you have $3million dollars in properties and $2million in loans.

That leaves you with $1million in net equity.

You borrow $100,000 against this equity to live off. You…[Read more]

Agree with all your thoughts on the 4 P’s.

Of course, if you want just quirky in the name then good old “Whykickamoocau” and the others are always a good fall back.

Cheers,
Michael.

That’s the first rule of marketing isn’t it: STP (Segment, Target and Position). And you position using the 4 P’s of the marketing mix, i.e. product, price, promotion and placement.

In this case the segment is obviously the backpacker set which is youth with fun on their mind. To target this group you position the product to them with…[Read more]

I subscribe to your newsletter and I think you actually have quite a lot of good information to share and do so willingly and with little vested interest. I do, however, see how some people might think that education costing $3500 for 3 days could be overpriced. And, for these people, it is! (if you know what I mean). Even for me, at…[Read more]

What you need to do is get a blank piece of paper, write “I quit” on it and then sign and date it and hand it to your boss. That aughta do it I reckon! Gee, and all that other advice so far and noone addressed the actual question! [biggrin]

But seriously, I’m with the posters that…[Read more]

At least over on SS, most of the posts stay on…[Read more]

I here ya!

And although I was mostly trying to be a little witty and clever, I think the concept still has actual merit!!

Backpackers are pitched at a young liberal demographic. You know, the kind of people that also go on Contiki Tours for all the “obvious” benefits of these…

So, to throw a bit of a quirky sexy conotation in to the…[Read more]

Following on with the nervous sheep angle, how about:

Fukafurryfella backpackers. [biggrin]

Aren’t the mud baths in Rotorua called Wuckawurrawurra (and pronounced fuka-furra-furra in Maori)…

For marketing, I’m picturing a cartoon picture of a farmer in gumboots smoking a cigar leaning on the fence of a sheep pen with a lot of…[Read more]

To be honest we haven’t had it valued yet as its our PPOR. I do intend to do this soon though so I can lock in an LOC on a good valuation before prices drop too far through 06/07.

The land cost me $272K and the house was around $350K, so all up it was around $620K. I know that its currently worth around the $700K to $750K mark…[Read more]

I still bounce back here every now and again, but have now pretty much gone over to the “dark side”, you know the site that cannot be named….

Its a lot more live and the investing strategy is more closely aligned to my own.

Maybe others also come in here via a search engine, find out about alternative forums then drift away to…[Read more]

Or you could do what I did and build a pole house?

My block is a 1500m2 block of subtropical rainforest with a 30 degree slope. We opted for a pole house with bearers and joists with weathertex cladding. You gotta watch the costs though as the house component ended up costing us around $350K. But we did build a gucci house with all the…[Read more]

I just got back from the whitsundays you should have come and seen what’s happening at Laguna. I am planning a hill side sub division next door will let you know later.

Regards Phil

Phil,

Look forward to it… Would have dropped in when sailing up there except had a tight schedule and…[Read more]

Phil,

Maybe I can help, or more accurately, maybe Bill Evans (Global Head of Economics at Westpac) can…[Read more]

I second Derek’s call on Steve Navra being good value. I met him at SIG where he presented his view on financial structures and making your money work three times.

His next course is May 14 in North Sydney and only costs around $170 (he only covers costs as he is independently wealthy and doesn’t like the sprukers who charge a motza for…[Read more]

Phil,

Me too! But, even at current levels there’s enough jitteriness in the market to start opening opportunities. I’m not the deft hand that you are, but I am still looking and will let you know how I get on in the next…[Read more]

??Put your money in the bank???

I think that was exactly my recommendation…

You’d be better off putting the cash in to a fixed interest deposit with a big bank or some other investment option (so long as the after tax…[Read more]

I agree that you can make money out of cash flow alone, but my point is that regardless of which strategy you adopt, CG/CL is far more important than marginal cashflow considerations. Cash flow might make 1-2% difference on equity employed depending on the selected property, but CG/CL can make 10-20% or more difference on your ultimate…[Read more]

Good worked example, and I admit I didn’t factor that it was an IRR return on your money, but considered your money employed, but I think money employed is important as the leverage increases your potential gain/loss.

My concern with the example given is that you’re making only $3.4K on your $100K employed. One of the real benefits of…[Read more]

Jeff, My point is that a 2% net yield on money employed will not cover your cost of capital. That isn’t…[Read more]

And just like that Foundation you become a “Valued forum contributor”. The big 300 hey. [biggrin]

[sarcasm] Despite popular belief, the real estate market really is cyclical! [/sarcasm] [biggrin]

People who say that if you can afford to hold for the long term then why not buy now are not allowing for the current value of money impact. Inflation will erode any negligible medium term returns leaving you…[Read more]

Ciao,
MW