Hi,

Inventive title… but I’ve moved your post to this forum as it is better situated here.

Back to Yr 12 Legal Studies… I thought the constitution failed to grant power to make laws pertaining to property to the federal government.

<<steve does some research>>

ooooh, look what I found, http://www.aph.gov.au/senate/general/constitution/par5cha1.htm – it’s the section of the constitution spelling out what rights the Federal Parliament has. See Mr Rhodes (my Yr 12 legal teacher), I did learn something!

As such, the SA government can pretty much do as it pleases in respect to its property laws.

In summing up, it’s the Constitution,
it’s Mabo, it’s justice, it’s law, it’s the vibe and — No, that’s it. … []

Cheers,

Steve McKnight

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Hi,

What brand and model did you buy?

Perhaps come to terms with the PMT function on Microsoft Excel as a step to becoming familiar with the ‘time value of money’ variables.

A good site I found quickly was: http://www.rosilyn.com/page4.html

It’s bound to be tricky… but you should be able to give it a go via trial and error.

A good idea is to have all the variables and the solution and see if you can replicate the result.

Cheers,

Steve McKnight

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Hi,

Just moved this to a more appropriate forum.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi Andrew,

Thanks for your comments about the book and welcome to the community.

Some general figures I allow for are:

5% of purchase price for closing costs
4 weeks vacancy p/annum
8% mngt fees (unless otherwise known)
3 to 4 weeks rent for maintenance

Other costs vary too much to have general guidelines. You don’t want to make your financial analysis too general.

Cheers,

Steve McKnight

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Hi Lioudmila,

Thanks for your post and I hope you are enjoying the book. Nice to know I was under an Xmas tree []

Welcome to the community and thanks for posting. I moved your post to the PropertyPlus area as that is a better spot for it.

I’ve read your situation with interest. Once I went to the bank for finance and they said that they would lend me $X provided I had the equivalent in cash in a savings account.

How much interest will you give me on my deposit… 4% How much interest do I pay on my loan…8% Er, why would I have this arrangement?

I think the same holds true for you. You might find that these days you can find a good cash mngt account that offers higher interest as term deposits are becoming a thing of the past as the financial market matures.

Now, the first thing we need to do is differentiate b/w your home and your IP. One is lifestyle the other is investing.

In terms of your IP, by paying cash you have no leverage which makes your CoCR very low. Still, at least you’ll have +ve cashflow as you have no interest. Nevertheless, your money can work harder for you than what is presently the case.

Some suggestions:

*Take a mortgage against your existing property and then place a large slab of your TD as a 100% mortgage interest account. It will be at call and will allow you to expand similar to a LOC without the need for cash security.

*Once you borrow against your IP and use the cash for elsewhere your property will become -vely geared. As such your property will become a growth asset which means you’ll need to consider your investing strategy moving forwartd. Decide on this b4 you buy anything else and also set your benchmark rate of return against which you can evaluate various investments.

You’re in a good position, but the key will be to maximise your returns from hereonin.

Well, that’s my 2c worth.

Have a great day,

Steve McKnight

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Hi Hissho,

Happy New Year Back…

Well, call me a cynic, but let’s say that you have a property with a maket value of $1m.

I come to you and say “Here’s what I’ll do… I’ll pay you $10 for the right to buy the property for $1.5m, open for the next six months.”

What would you probably say to a boffin wanting to pay 150% of market value? Yep – done!

Then what I do is run a seminar and sell the property I’ve secured the right to buy for $10 on the basis that it will be 5 new A-Grade apartments.

My budget profit, even after paying the inflated price, is substantial – provided I can find the people to buy from me after value-adding. When demand drops what do I do, maybe run some more seminars…???…

The bottom line – I have tied up $1.5m worth of property (after all, if I paid that for it it must be worth at least that) for just $10.

If I can’t sell the concept then all I lose is $10.

Starting to get the picture?

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi again,

Back after lunch…

I’m not a big fan of hybrid trusts. The main advantage is that a hybrid allows you to have a fixed and floating entitlement, yet for most investors all that’s required is a properly set up family trust (fully floating).

In other words, a family trust allows you to share profits however you like and you can just keep the distribution equal or otherwise. That is… what’s the benefit of locking in?

Invariably hybrid trusts are more complicated and thus require more accounting fees to keep compliance under control.

Perhaps the only point of difference is when you are pooling funds from many investors across various families and the idea of setting up partnerships of family trusts is not appealing from a risk perspective.

The product you mention (WealthGuardian) does not venture into into realm of hybrid trusts as I deemed it too complicated and something better kept to professional advice in the right circumstances.

Cheers,

Steve McKnight

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Remember that success comes from doing things differently.
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Hi,

I’ve moved your post to this forum…

I started by reading and attending Kiyosaki events, and then read and studied more broadly.

Seminars

Travelled the world to see:

R. Kiyosaki*
J. Burley*
R. LeGrand*
D. Campbell*
R. Aaron*
D. Kennedy*
R. Allen*

Books

Read a lot (one day I’ll compile a list), but for starters:

George Clason : Richest Man in Bablyon is the best place to start.

For those new to wealth creation, J. Burley’s book “Money Secrets of the Rich” is great value.

These days I’m more into biographys.. such as Packer’s, Lowy’s, Bond’s etc. to try and learn from people who have done it big.

General Comments

I’ll not pull any punches… personally I don’t value the ethics / morals of some of the people I’ve listed above. Others have unashamably ripped me off and thrown daggers at my back. Still, I’m more interested in finding ideas that I can make owrk within my own ethical/moral framework.

I recommend that you spend a lot of money on educating yourself… BUT, and only but, you recoup the cost by taking immediate action.

An academic investor isn’t much use.

Cheers,

Steve McKnight

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Hi Rebecca,

HK came unstuck in a big way because, after an ASIC investigation that didn’t come up with any dirt, he advertised that he was “ASIC Approved” to try and get more people to his seminar.

This, of course, was a stupid play on words and in fact was the ammunition ASIC needed to bring him unstuck. He was made to refund people who attended (or signed up to attend) his courses on the basis of it being ASIC approved.

Indeed, what then happened was a stack of bad press so anyone who had a change of mind about forking out a stack of cash relied on the ASIC refund demand.

Alas for HK, he presumably was running a show that paid for today’s expenses out of tomorrow’s income (seminar in advance revenue) and when people wanted refunds, the white elephant finally died after a death of 1,000 cuts.

It goes just to show that you can’t fool all of the people all of the time.

Cheers,

Steve McKnight

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