Ive just joined the site and seems i have lots of reading to do! A bit about me..
Im 39yrs old, wife and 2 kids and have just built our first home. As this is our dream home, we have gone into quite a bit of debt to attain it which will make me a weaker investor (i do have a pretty good salary though) but nonetheless, i am keen to start my investment portfolio.
My question is am i too old?? My proposed strategy is to buy a house (not interested in units and im not sure why) with the aim of using capital growth as an equity builder which i in turn use as leverage for new properties and so on.
Some of the posts i have already read are from people who have started in their 20's am im worried that im just too old
Opinions and thoughts muchly appreciated
Robred123nzMember@red123nzJoin Date: 2007Post Count: 73
Given your age you would have to consider your ability to service the debt and also if things were to turn pear shape did you have a safety net in place. You are relying on capital growth to fund your expansion. Obviously those who are younger have time on their side to pick up if things fall to peaces. You will have to be careful to make sure you take calculated risks. The key thing you will have to be aware of is that although you have built your dream home ( fantastic btw!). Your ability to borrow may be made difficult as its not able to be deducted from a tax perspective or taken into perspective from a debt servicing calculator ( i.e. the banks) . Hence the debt you currently have is considered not so good. Hope thing has given you food for thought.red123nzMember@red123nzJoin Date: 2007Post Count: 73
Double post – timed out
Wish i did this 10 years ago when i first thought of it… It was actually the bank themselves that suggested i look at another property (said when they were checking my serviceability of current home loan). Will continue to read to see if there are better strategies than what i outlined above.xdrewParticipant@xdrewJoin Date: 2010Post Count: 479
Rob I just prepped a 43 year old into her own format of self sufficiency.
The only difference that I would suggest for a later start is that you diversify your risk component. If that means houses over units .. then that means a couple of houses rather than a single one .. even if it means at a lesser value.
As you get past a certain age the chances of having a period of greater unemployemnt or gap in work .. become greater. This is why you must balance your risk with having a greater number of sources of income rather than a singular source. Its a reasonable advice at any age, but it becomes more necessary the greater your risk component is. And age provides that additional risk component.
Doesnt stop you from doing your research and qualifying your investments. It just means making sure they are less risky to start with.
Start now. In fact grab a couple of investment magazines and read other people's stories. There are a lot of people who reached near to or close to retirement age and HAD to do something.
There is no age where you cant reach out to take control of your future.PakGirlMember@pakgirlJoin Date: 2012Post Count: 2
Have you considered using your superannuation to invest in property? Depending on how much you and your wife have in super, you could consider establishing a Self-managed super fund (SMSF) and invest in property using the funds you have in super. Banks offer special types of loans for borrowing through superannuation, and this can be a tax effective strategy. Only downside is they generally only look at lending around 60% of the value of the property.
You would be in control of the SMSF (just need an accountant to do the financials and annual reports for you) and you still get to choose what properties you wanted to invest in.
I think it would be a good idea for you to seek some guidance from a Financial Adviser, especially on who has a lot of knowledge in the SMSF area.
I work for an Adviser and we have had clients start establish SMSF with as little as $100K and started their investment portfolios.Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Hi Pak Girl
Great maiden post advertising your services…..thanks.
You can actually go upto 80% on a SMSF loan and start the fund with anything over $60K.
You don't need an Accountant to the Financials however it is wise given that the fund needs to be Audited.
If Ford Fairline is looking to buy in her Super i can email her a copy of my Ebook i wrote on the subject for forum clients.
Yours in Finance
Richard Taylor | Australia's leading private lenderCatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
Not too old.
I started later than you. Like you, wish I had started much earlier. I'd be retired now. I've been buying like crazy (according to my friends) in the last 4 years and I'm going part time next year.
The buy, wait strategy won't get you there in a hurry though.
Thanks guys, i have never considered using Super as i didnt know it existed (the option to use it).
@qlds007 – would love a copy as ive never considered this option. I have about 70k in super so its definately an option!
@catalyst – what do you suggest instead of my strategy of buy and wait?
So much to consider but im determined to build a portfolio!
RobTheFinanceShopParticipant@thefinanceshopJoin Date: 2012Post Count: 1,271
Thumbs up on the decision to purchase house rather than units particularly if your strategy revolves around Capital Growth. There are a few strategies you can implement, i.e. development, subdivision, GF's, and the good old renovation. Which areas have you been targeting?
Well, after just finishing our build (with a project builder) im not sure that subdivision or development are the angles my nerves can handle. Not sure what a GF is (sorry dont have the lingo yet) but definately looking at something a little cheaper that needs not too much work, (ie maybe update floors and kitchen for example) for immediate capital gain..
Not to cash it in but to rent out and hope that a little bit of time will also contribute to the capital gain. Use the gain to leverage second investment, rinse and repeat! lol.. im sure its not that easy, but its the crux of my strategy which is admittedly only hours oldRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Sure happy to send you a copy.
Would you like to shoot me an email and i can respond to you with the PDF attachement.
Yours in Finance
Richard Taylor | Australia's leading private lenderJT7Member@jt7Join Date: 2010Post Count: 286
I'm no expert mate but you are certainly not too old. There's been some great advice on this thread, besides those first time posters advertising their wares lol.
As already mentioned, educate yourself and develop a strategy that suits your goals then act. There are many fantastic sources of information that are available to you to develop your knowledge in all facets of investing to ultimately achieve financial freedom. Develop that unstoppable desire to achieve those goals and you are half way there!
Surround yourself with a team of independent specialists that support you along the way. There is no such thing as can't….you've just got to think differently to achieve the goal. Someone like Richard Taylor (see above) has an impressive track record and provides a professional independent financial service that will help you achieve your goals. I know this for a fact because he is on my team.
39 to old? Are you serious….I'm 39, wife and 3 kids!
Education, consolidate and manage your debt, focus, set your goals and stop at nothing to achieve them.
Plenty of people here Rob on the same journey willing to share mate.
JackDerekMember@derekJoin Date: 2004Post Count: 3,544
At 39 you have the potential to be well and truly in the game.
If you plan on retiring at 60 (for example) you have 21 years of investment fund in front of you. This is about the same amount of time you have spent in the workforce (allowing a bit of wriggle room for higher studies etc). This means you have as much of your working life in front of you as you have left behind you – you are at the halfway point.
While 21 years (approx) is a fairly long period of time it can go quickly if you fluff around pretending. That is not to say be foolhardy and make rushed decisions – rather it as a reminder that time can be eroded pretty quickly if you take your eyes off the ball.
But all of this is irrelevant if you don't know what you borrowing position is. Grab yourself a decent broker and start a conversation with him/her. I recommend steering clear of many of those major franchised brokerages but rather look for a broker who owns and runs the store and, importantly, is an investor themselves.
In the meantime start refining how you intend using your property in retirement. The answer to this simple question will help you work out what strategy you need to employ which, in turn, helps to determine which property and where.
Be interested to hear why it has taken so long to build your first home. That is not being disrespectful, rude or condescending – rather it may help you identify roadblocks you and your wife have which has stopped you getting on the property road so far.
Hope this helps.
My current bank based on my current salary were prepared to lend me 860 odd thousand (no i didnt go for the lot but a fair chunk). We have owned houses before and this is our first build but have never gone for investment properties. I guess the reason why we havent invested before was my salary was always quite low, until now. I know i cant go for higher end properties and dont really want to. My plan is for 1 or 2 regional properties, wait for some capital growth and add to the portfolio after that
My aim is to retire with an income stream being a landlord. Nothing too flash but i do want to retire before 60DerekMember@derekJoin Date: 2004Post Count: 3,544
Ha – I didn't differentiate the build and own property previously hint.
Congrats on moving up the salary scale – that will make it easier to service loans.
Do you have any equity in your property? When a bank assesses your borrowing capacity they will look at your income levels and your nett asset base. As I said in my earlier post grab yourself a decent broker and start the 'how much can I borrow?' discussion.
Armed with this information you'll be able to refine your strategy and work forwards from a know position.
I suggest only focussing on the first property. Some people get too overawed when they think about multiples of property. One at a time is enough at this point of time. As your portfolio grows your broker (who'll become your next best friend – if they are any good) will be able to guide your purchases with future borrowings in mind.
While property is the vehicle – finance is equally/more important.
Hope this helps.
Great advice from everyone here! Will definately engage a broker and see what i can borrow and take it from there. Without finance, the idea is dead in the water.
Thanks all, will definately hang around and absorb all the info/advice i can get
RobmattstaParticipant@mattstaJoin Date: 2011Post Count: 604CatalystParticipant@catalystJoin Date: 2008Post Count: 1,404
Hi, we do buy, reno, rent. It just gives you equity straight away. Plus ours are at least CF neutral from day 1 which means we can keep buying.
As mentioned, there are many other ways to get CG faster.
As mentioned also, you have 20 years (that's if you want to keep working until you're 60. We were in a bit of a hurry as hubby was nearing 60 and we thought the banks might start questioning our borrowing.
I'm wondering about your plan to buy regional for CG. Seems like a bit of a contradiction.JpcashflowParticipant@jpcashflowJoin Date: 2007Post Count: 575
39 your still young, there are people who do no nothing in their whole life, so starting now is not a bad idea at all.
Risk is the only thing you need to consider but also there are other types assets you can build on.