i have just been to a financial planner who passed my stringent selection process. however after the first 15 minutes he tells me i have to much money tied up in property investments and i should sell some and buy shares. i tried to tell him that i have confidence in my property investments and the returns i have achieved so far. he then gets irate and tells me that i should listen to him because that what he is paid for, and he has seen the bad side of property and at 29 i haven’t. this has left me a little bewildered and shell shocked. now i don’t know whether i should listen to him or i should stick to what i think is right. the only problem is im pretty new to property investing and have got lucky in my first 4 years, going from nothing to: a house in byron bay that has doubled in value, a rented unit in ballina i got for a bargain off my wife’s boss, and three blocks of vacant land on the beautful bay islands in QLD which have doubled in the 4 months sinced they settled.
i would be grateful of any suggestions and feedback.
im a big believe of diversity and well balance, not just in investments but in life in general.
To be truly succesful, i honestly believe you need a really diverse investment porfolio, doing this then ensures that all your egges are not in one basket, many people will say property property and property, while you will have others telling you shares shares and shares, being diverse, you leave yourself to unlimited success and greater fortunes to you, but also the fortunes of everyday life can give you.
This can also mean, balancing work and study, work and kids, just small things, but learning to have a balance portfolio also helps you balance life.
lol… Internet maybe always connected, but i do go out… lol , but i do try to have a well balance life, just having everything balance, also removes the everyday stress that builds up over time, and just keeps you intact with the world…
damon – im not sure why you went to see a planner. there are only three assets classes open to the average jo. you dont like shares/funds so all you got left is property and cash??? what else do you want to hear??
it sounds like the planner is giving good adevise although he needs to brush up on his salesmanship!
Given that your broker earns his money through ‘selling’ managed investment schemes & shares etc, he sees a nice little earner from the proceeds of your IP. If he has advice to give, pay him for his time. Not a commission based on his advice to put you into shares.
For starters I would be going to see another financial planner – I know a few good ones in Brisbane, if you’d like their details email me at the address below.
For seconds neither shares nor property are homogenous markets ie plenty of people loose money on the stockmarket when the index’s are rising (eg NAB!) and plenty loose money on property when prices are rising (eg inner city apartments in Melbourne). It sounds like you have made wise and ultimately financially effective decisions so far, don’t be too quick to doubt yourself based on the ‘wisdom’ of one person.
I saw a financial planner today – he was frank enough to say if you know what you want to invest in, then a FP’s value is greatly diminished. He also said that FP’s are for those who don’t know how to invest or don’t have time to invest on their own. Funny, a comment he made was that I was light on shares as well, however I took that with a grain of salt because he revealed he was a shares man and was previously a stockbroker. For him he was operating within his circle of conpetence.
Speaking of circle of competence, I heard this phrase reading about Warren Buffett – trust you’ve heard of this great share investor. If you do you’ll know his views on diversification HINT he invests billions in companies/shares, and doesn’t seem to contemplate real estate directly at all.
Your rationale for preferring RE is a very powerful one. This alone was enough to make up my mind when I was making my own mind up. Remember, it is a blessing you can stomach real estate because a lot of people are restricted to shares thinking they don’t have the fortitude for real estate.
Though I am of the same age as you and have made less in RE than you, I will confidently say “focus will outperform diversification in the long-run”, whichever field you may choose to pursue.
Last word – if you feel you’ve been lucky vs astute, then a future bad investment will do wonders for your education! Take it from me, I’ve had it the other way around )
I agree with others about a balanced portfolio, and asset classes. But dont be fooled, there are balances within each category. Eg shares, blue chips only? Tecnology stocks or maybe mining etc etc Overseas markets
Proeprties, commercial? Rental, overseas etc…
I might add I am not THAT diversified as to contemplate overseas.
However, I also consider other assets in my portfolios, eg art antiques collections…..lets me play at other things and not be boringingly singular on IP’s….nothing intended towards anyone on forum.
I like shares for the fact that I can pick up and drop quickly, earn some quick dollars, if not I hold. It is a little more liquid, though the bansk are so keen at times, because of the fluctuations. Markets etc.
The financial planner I went to…..well you need to be aware of HOW they make their money and disclosures are to be given. Eg commissions But you can get planners who charge a fee and will credit you the commission so you know what the go is…it all depends.
I wouldnt mind being a financial planner, thats why I am planning my own investments!
You sound like you’ve got a great start. Why not read some of Paul Clitheroe’s books as I found them really easy to understand and they will explain shares and diversity etc. You don’t need a financial planner if you do enough reading yourself. Trump says Real Estate – Real Estate – Real Estate! But he has enough money to make mistakes!
Personally I think that you should find the area of investment that you like and do that. Diversity for the sake of diversifying is not a good enough reason. You will ultimately keep at it if you enjoy doing it.
Look at all the types of investment reseach them try them out then decide what you like to do.
I also think financial planners are for people who dont want to do the hard yards themselves they just want to be told what to do.
Did your financial planner buy a unit up there in QLD in the early to mid 90’s? Did he lose money hand over fist?
Other than that, if you buy well – which you obviously have done – and hold for the long term, how can you lose?
In my opinion, you lose by selling, in agent’s fees, in CGT, and then in the buying costs of your next investment.
Buy shares/managed funds (that’ll be what he wants you to buy, not direct shares) if you want, but start putting money towards it now. don’t sell your good performers just cos he who obviously has been burnt is telling you to.