I just thought i’d gather some ideas from everyone in computer land on what they would do if they were me.
I am 22, have $10,000 saved, earn about $45000 per year and am currently renting. My financial education is quite good but have no experience in investment yet. I currently live at home paying $80 rent per week.
So yeah this is a really open question but any insights will be appreciated.
Stay were you are or rent with friends to keep your expenses down and save like mad for your first investment. Stick what you have already saved in a managed fund or at worst high interest savings account(ie BankWest or IMG) and work towards you first property investment. While your doing this educate yourself as much as possible. Read books, start researching areas, prepare yourself to act, and when you’ve got enough cash built up you’ll be ready to go. Good luck.The earlier you start the better.
With my $10k in savings, I’d be getting in touch with a mortgage broker to see what my borrowing capacity was. If nothing else, this will give me an idea about what sort of properties I could afford to buy now or how much more I would need to save to buy a property in the near future. If I weren’t able to buy something now, I’d be making sure that the $10k was being invested in a managed fund of some description with regular, automatic deposits into it from my day to day account. This is what I would do if I were 22y.o.[jealous]
1. Immediately move out of home to give your parents a break (‘cos $80p.w. doesn’t come close to what you cost to support in that environment)…hence why everyone recommends stay at home as long as possible. At 22, you’re a big boy now, especially if you can generate 45K p.a.
2. Purchase the smallest and cheapest hovel you can find in Drossville and get to work fixing it up to a decent standard. Pay it off ASAP.
3. Get rid of all credit cards, mobile phones and expensive transport options.
4. With your savings habits (semi-established to have 10 K already) progress on up.
5. Grow stronger and wiser with your new found independence and property acquisition. Your parents will probably respect you more for it as well. Invite them around to your fully paid off castle for dinner.
6. Shoot for the stars – you’re off and running as a fully functioning productive unit in society.
Second hat…let everyone wet nurse you]
1. Stay at home with Mummy and Daddy ’til you’re 40. You should have a nice big deposit by then.
2. Continue researching and studying and fluffying about, anything but jump in and grit your teeth and learn some of life’s hard lessons.
3. Get those credit cards and mobile phones cranked up to full max like alot of young kids. It’s like – amazing like – what fantastic things you can buy like – nowadays like – live life to the full, you’ll never be like – 22 again.
Agree with Dazzling except on point 1. If you and your parents are happy with the status quo and everyone feels content with the situation – they I don’t see why you should move our just to make a statement that you’re all grown up!
In this day and age when it’s getting harder than ever to get into a home, I’m more than happy to help my son with a “leg-up” by keeping his costs low.
As a mum, whatever we can do to help our children we do. Hopefully, you do the right thing by them too. I can only assume that Dazzling doesn’t have children!
Kudos to you on the attitude. Find a cheapy, do it up and move onto no. 2. With your attitude and record so far, you’re doing well and on track for a good investing future.
Pay off my HECS debt first. If Mum and Dad have paid it off or you don’t have any, then go with the investments. Like Neo said, find out how much you can borrow first.
Actually, when I first got a decent amount of money together, I bought myself a car to get to work in. But getting to the train station at 6.30am and returning at 9pm on a cold night really makes you feel like if you can afford it, you deserve to not freeze to death coming/going to work.
When people start using the word “Drossville” in everyday conversations, I’m sure my life will be complete.
No offence, but some of that sounds like a pretty old fart thing to say. You shouldn’t assume all young people are bimbo yuppies that bludge off the parents. It is a different , more complicated and more expensive world for young people these days.
None the less, There was some good advice there!
“If you and your parents are happy with the status quo and everyone feels content with the situation – they I don’t see why you should move our just to make a statement that you’re all grown up!”
I’m not sure the physical act of moving out of Mummy and Daddy’s place qualifies you as a grown up…that’s just the very first step of many, you’d agree there’s alot more to it than that before you are truly firmly standing on your own feet. Moving out could be just the first inital wobble.
“whatever we can do to help our children we do. Hopefully, you do the right thing by them too.” My wife and I strongly believe that doing whatever we can for our children is definitely not doing the right thing by them. I suppose we have different viewpoints – which is great.
Your assumption on our parenthood status is grossly inaccurate.
No offence taken at all. Actually, I take it as a compliment if people view my opinions (and that’s all they are) as coming from an old fart. Excellent. Give me old fart status anyday. As Warren Buffett was once quoted at his famous AGM’s in Nebraska….”You can’t teach new dogs old tricks”. How true.
Anyone who assumed anything about a large group of people would be 100% of the time wrong. Of course there are exceptions in every grouping. What you say is very safe and correct – but it doesn’t and shouldn’t stop intelligent analysis of habits of large sectors of a population. It’s how the world works and will never change.
If I were you I would stay home, keep saving as much as you can – in the meantime find out as much as you can about investing in property (or the stock market if you are inclined that way – personally I like property!) – practise look for good positive cah flow properties and educate yourself on all aspects of financing and accounting then when you have the equivalent of 20% plus cost sitting in the bank buy !
If you have a great savings record and the 20% plus costs sitting in the bank any of the banks will lend to you.The reason I say save this amount is that you want to keep away from mortgage insurance – very expensive.
Alternatively if you do not want to wait this long and you have any good friends who are in similar positions you could buy earlier if you buy together pooling your resources. At one time I considered doing this with one of my family – what about your parents?? Also I’ve heard there are people around who are money rich time poor who (if you find an great investment opportunity) would buy with you – this would get you stated – don’t know where you find them however other forumites may know more about this ?? as I have never looked seriously at this option.
Hope this assists – good luck
I like your style dazzling and I think your on the right track but I also would stay at home(free rent or nearly free rent)
I’d buy something that will increase, a house.
Use as much equity in the old folks home as possible as long as you can cover the payments and tell them that once you can stand on your own two feet you’ll move.
Use the value added while reducing debt and re finance after 3-4 years, renting all this time if possible pay the equity back to mum and dad leaving say $5,000.00 (leave the loan accessible if possible try not to pay it out as it available funds).
Get 4 mates to do the same with their folks
make sure that the four houses are next to each other and are in a good area and if possible on a possible da unit areas( syd 3a ).
Come to one of us.
Build 15 to 20 units as a jv partner.
You put in your land we build.
Profit split depending on the structure.
Pay for mum and dad to go on a world trip for helping you out.
As for moving out I left at 16 and think that not only is it a financial thing but also you can do what ever you like and when you like( depending on the laws of that state or country).
I’m with dazzling I’d be going for the first hat but use all and any equity possible as its dead unless used.
In the above I’d also organise an accountant and a solicitor from the start its alot easier to organise now then later.
Saving it ok but leveraging and business are alot more fun.
Thanks very much for all your replies. It is always great to get insight from other people.
Dazzling…. I couldn’t but help take offence to your reply as I find your insights to be very narrow minded and perhaps ignorant. Just to let you know I moved out of home when I was 18 as my parents divorced and went travelling ror the last 4 years. I recently moved back in with my mother who is aiding me in trying to eventually escape the rat race. I am in no means some yuppie with a big phone bill who mooches of my parents. Everything I own i have bought, everywhere I have been I have paid for and my savings are my own. So I can see you points but I think you were far to quick to pass jusgements and hance i find your insights very unhelpful. Thanks anywyas.
To everyone else your reply’s have been great. Thanks for your insights and wish me luck.
If you recall Trav, you asked the ‘open question’ for any insights. If you find my response (a question) narrow minded and ignorant…that’s great !! Care factor is pretty low. I fail to see how a question can be classified as such ??
I think it’s a bit rich asking the forum to comment and offer opinions on your financial circumstances when revealing only 3 flimsy lines of scant data, and then beat the respondees about the head later on when by saying they are ignorant and narrow minded ?? Real nice much later on to reveal a tad more data. What else are they meant to do other than make intelligent assumptions ?? What else is there that is relevant to your original question that you also haven’t mentioned.
If you care to read my post carefully, I haven’t passed judgement on anyone – I simply asked you a question – wish hat do you wish to wear ?? From your response, I gather you want all the freedoms and niceities of the first hat, with all of the wet nursing of the second hat…the most common choice made by most (not all) younger folk nowadays.
Frankly I don’t give a rats wish one you wear – it’s neither here nor there to me. To save you the embarrassment and stress, I shall quietly oblige never to respond to any of your future questions.
Yes, these posts can get very interesting; the most interesting are usually the ones in which someone offers his/her blunt, coarse and/or slightly smug opinion (for which they are unapologetic). Then there are all the responses from folks slightly miffed by the lack of tact and then the blunt person defends him or herself with a long and carefully worded justification and we lose the original point of the post.
I say letâ€™s stick to being helpful. Yes good advice is not always what you want to hear but there is something to be said for tact and the way advice is presented. Most posters appreciate that.
I didn’t mean to offend you at all and am not after some sort of post war. I am merely after advice and I agree with you that the information I provided was scant to say the least. In answer to your question I wish to wear the hat worn by not many which is the hat that most of the people on this website would also like to wear.
I did find your response narrow minded because the way in which you worded it placed me in the typical young yuppy category which I believe is narrow minded. No offence intended.
I am on this site to get advice from people that know more than me about investing in positve cashflow property and I think that we should this site as hlepful as it is. I did not find your reply helpful, sorry.
So Dazzling I do not want a message war and do not want to offend, all i want is you to answer my original question if you wish as I’m sure that you have more wisdom than me.
Thanks to everyone for your replies again, others insights are always helpful.
Prophecy, Dazzling gave a very thorough answer to your initial post. I agree completely with what he has to say and am grateful for his willingness to share his insights so fully with less experienced people.