Hi,

I can vouch for Compassion as a great organisation. We regularly recieve personal letters and drawings from our sponsor child – it’s great to hear from her and to read about her life and progress.

Regards,

Steve McKnight

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Helen,

All I can say is that I think your pre-judgement of me is misplaced.

You think it can’t be done with the resources I have budgeted to use, I think it can. Let’s agree to disagree and move on with the results being the true test.

As mentioned, I take your points on board. To prevent any confusion or misconception, I will send an email to all those who have pre-registered advising them of the current situation and also my plans to recruit further mentors as the program develops / as required by participants.

Regards,

Steve McKnight

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sarge_80,

There’s quite a detailed plan behind this concept.

It raises an interesting question… as a business owner, would you hire 30 employees without any customers, or wait until you have customers and then hire employees according to their needs?

Regards,

Steve McKnight

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Hi there,

Thanks for making the post. I appreciate the time you have undertaken to write it, and for the feedback you included.

I have received a lot of similar feedback from others who have read my first book. I find this very rewarding, as I wrote that book with the goal of getting people to think and challenge the conventional wisdom of real estate investing (i.e. negative gearing buy and hold).

I regard having to work, caused as a result of poor money habits, as a form of 21st century slavery. The first step to breaking those bonds is to strike a vision for a different life.

Thanks again for your post and best wishes for a rewarding investing future.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

While the templates have been disigned for Australia, they are still relevant for NZ.

The only difference is in the financial template where we make allowances for stamp duty which you do not need to worry about.

Remember, you can always trial the product and then send it back within 14 days of rceiving it if you don’t feel it is what you are after.

Regards,

Steve McKnight

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Hi,

I’m most worried about the following issues:

1. Negative Savings

As nations, Aust and the US (incl. our governments) spend more than they earn. At a household level, this is only sustainable once the credit card has gas and then, once maxed out, life becomes a lot harder.

We have been inching closer to our credit limit for a while now and I fear that we are using one credit card to pay off the other rather than solving the spending problem through controlling our desires.

2. Retained Wealth

Following on, it seems to me that the recent property boom changed the mix in the way that households held their wealth from ‘realised’ to ‘unrealised’ means.

That is, previously households had wealth in the form of cash or ‘real’ equity in the form of homes with low debt.

Now however, after a property boom, a lot of wealth is tied up in unrealised property appreciation that is underpinned by high equity redraws where the funds have been used for consumption.

This is again not sustainable given falling property values will expose over borrowings and result in a net asset deficit situation.

In summary, instead of owning ‘real’ wealth, people have ‘perceived’ wealth held in a notional sense.

I don’t know if a crash will occur, but the conditions are such that our available credit won’t last forever.

What should we do then:

1. Try to change the way we structure our portfolios away from a highly leveraged position into a more moderate position (well under 80% LVR)

2. Monitor world events very closely

3. Avoid enmasse long-term buy and hold positions in property given the uncertain times.

My final comment is that it is okay to predict doom and gloom, but you must also try to assist people to find safety.

Oh, and very finally, it won’t be an event that causes a crash, it will be the panic reaction to the event that causes widespread financial losses.

Regards,

Steve McKnight

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Hi there,

The mortgage of $96k comes from:

1a. Value of house one: $80,000
1b. Loan (80%) = $64,000

**Note $40,000 house increased in value to $80,000**

2a. Value of house two: $40,000
2b. Loan (80%) = $32,000

**Purchased by refinancing equity of house 1 back up to 80% of $80,000**

Total Loan: $96,000

Hope this helps.

Bye,

Steve McKnight

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Hi,

I think you’ll find it’s “Ko Huna Beach Resort”.

In fact – that’s where I had my wedding reception [rolleyes] and where all the Melbourne guests stayed and had one heck of a three-day party.

As for it as an investment – I’d be doing my numbers very carefully. Generally speaking this sort of managed investment can be loaded with fees, fees, fees.

Also, I stayed there a few months back and two things caught my eye:

1. The vacancies; and
2. The mozzies (as big as coconuts they were!)

There’s no doubt that Mackay is going through a huge property boom, but that hasn’t seemed to have hit the holiday market just yet.

Having said that, if I was a location investor then Ko Huna is right on the beach and i must say the pool is one of the best I’ve swum in anywhere in the world.

Still, $120k sounds cheap even if you did pay cash for it out of your Super Fund. Can you go up for a holiday? If you can, then late Spetember would have to be the best time of the year in my book.

Cheers,

Steve McKnight

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Hi,

Well, if there are no funds available then there is insufficient security to underpin the loan.

This doesn’t mean that the debt ceases to exist, it’s just that there was insufficient collateral to repay it.

The 2nd mortgage holder would then seek to have the money repaid by other means through perhaps a debt collection agency.

Regards,

Steve McKnight

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Hi there ozsparky,

First up, if you’d like us to shorten your UserName then please send an email to [email protected] and we’ll see what we can do.

As for the personal tax issues – I accept that, in some cases, this would be very useful however we sidestepped this issue on the basis that it would have added a lot more cost which took us away from our original vision.

Our goal was to focus on the outcome of the property as an investment, and thereby distinguishing between the value of the property as an investment and the value of the property as a tax tool.

True enough though that sometimes one runs into the other, however, there are other software packages that offer this feature at a much higher price.

Thanks for your feedback though.

Regards,

Steve McKnight

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Remember that success comes from doing things differently.
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