Ok,
Forgive me for being a philistine however I have to ask:Married with 1 dependent, household income of about 100k gross. Personal loan of ~27K (to be paid off in 3 years and 1 year quicker than expected) Rent our current home (no assets or savings – all spare $ going to loan) so :
1. What can I realistically expect to achieve in my current situation considering this debt?
2. Is there anything I can start NOW to get going without any savings and having this debt?
3. I want to start planning to be in a good position to purchase IP by end of 2006 when property prices are hopefully set to slump in Tas.I am reading everything possible, have great motivation, time to get organised and feel like it is NOW OR NEVER!
Any suggestions?
Thanks[blink]Hi welcome to the forum
sorry to be very blunt but if you want to get ahead you need to cut back your spending.
with an income of 100K who guys should be knocking that personal debt off in 1 year.
how did you end up with personal debt of 27K, (you don’t need to answer this) maybe you are living way beyond your income. Cut back the spending and reduce debt then when you have control of your money move forward and up.
regards westan
I live in New Zealand and for a fee find cash positive deals there, email me at [email protected] to join our database
Hi Olivereindeer (nice alias!),
I agree with Westan, since, from my experience it is better to solve a prior spending problem than it is to seek more money.
Having said that, books such as ‘The Richest Man in Babylon’ (which are a great read) suggest that you should pay off your debts at the same time as building your wealth.
To answer your questions though:
1. What can I realistically expect to achieve in my current situation considering this debt?At least moderate results, provided you cease the behaviour that landed you in debt in the first place. It’s the old adage – to get out of a hole you first have to stop digging.
Borrowing may be difficult (given that your serviciabilty will be affected by your current debt). That leaves two choice:
1. Repay the debt
2. Establish another entity to borrow through and sign as a guarantor rather than the borrower.This second option may still prove problematic.
Honestly though, I can’t promise beer and skittles, yet if you work hard there’s no reason why you can’t win.
2. Is there anything I can start NOW to get going without any savings and having this debt?Yes – get out of debt asap, especially if the interest on your debt is non-deductible.
That is, you may find that the best use of your money (talking after-tax returns) is to repay debt, as to repay $100 of non-deductible interest you will need to earn more in gross pay.
On top of that, also start saving at least 10% of your gross income so that you have some cash to get going once your financial situation improves.
3. I want to start planning to be in a good position to purchase IP by end of 2006 when property prices are hopefully set to slump in Tas.Well, that’s a good starting point, but be more specific with your goals. For example:
* Who much cash do you want to have saved up?
* How much debt will you have owing?
* Where will you be living?
etc. etc.Finally, now or never indeed! Cease the motivation to take drastic action, as there is never a better time to get started than right now.
Regards,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hello Olivereindeer , just curious ….why do you say “property prices set to slump in tas at the end of 2006” ? Cheers, MLV
Thanks for the advice:
Debt consists of a car, x2 overseas holidays including a wedding and consolidation of credit cards which were out of control and now closed.
I agree, we have cut back remarkably on spending -better than I thought. I also save $75 per week but have recently put those savings towards my loan.
Tasmania has had a huge property boom over the past 2 two years where we have seen property almost triple in value. It was quite plausible to purchase a decent, livable property in Tas within 10 k of the CBD for 60k around 5 years ago. Prices peaked and are now falling slightly with many more properties for sale than 12 months ago. So I figure that with a recession predicted and a rise in interest rates homeownwers who purchased during this boom may not be able to meet their repayments and will sell, the market will slow considerably and housing prices will settle back again (but not to their previous level) and there will be more bargaining power for the purchaser. This seems to be the talk around town with real estate people.
Now, forgive me..I am just a nurse not mega financial wizard obviously and have just been thinking about this and am probably way off track but…it is what my brain tells me. (I am a way better nurse than a financial predictor!!)
I am considering purchasing in my daughters name (she is 18) who is eligible for the FHO grant and I think a reduction in stamp duty. We can save 10k fairly easily between us.
Thanks for your replies. Got to start somewhere and here I am.
Your dauhter will have to live in the property to be able to claim the FHOG. Also she will have to work and have 6 months of savings.
Use http://moneymanager.smh.com.au/tools/calculators/borrowingpower.html to check out how much you can borrow.
Please be aware that debt is like a double edged sword. It cuts both ways – and it can cut deep.
As for wether properties will crash or not… thats cyrstal ball gazing. And if you wait for the crash, eventually it will come – the question is who much of your most valuble resouces did you waste (your most valuble resouces is time – and if it takes 5yrs until the next bust thats 5 yrs. of time wasted).
I do see gorwth slowing, but I don’t see any high interest rates in 2005/2006, mainly because inflation is low, and spending has slowed. Look at long term interest rates there is much difference between the price for money now (variable interest) and the price of money 5 yrs fixed (fixed interest).
Of course on my side it’s crystal ball gazing – All I’m saying is that you don’t let your OPINON dictate wether you will start looking for investments know or in the future….
Hope this helps.
Rgds.
Lucifer_au
You must be logged in to reply to this topic. If you don't have an account, you can register here.
