20% Returns

Discussion in 'Investor Psychology & Mindset' started by MTR, 4th Jul, 2017.

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  1. MTR

    MTR Well-Known Member

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    Me too:)
     
  2. MTR

    MTR Well-Known Member

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    Sounds good.
     
  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    What the exchange rate risk for investing is US property ? A 20% return when the dollar moves 8% could be a disaster in $AUD terms

    I suspect thats where this is going.
     
  4. Ace in the Hole

    Ace in the Hole Well-Known Member

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    If an annualised return on a safe investment, who would say no?
    Turn 1 mil into 6 mil in less than 10 years.
     
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  5. MTR

    MTR Well-Known Member

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    Its not about FX rate

    Trying to establish what is acceptable/expected return on investment ie property/shares other asset classes
     
  6. Ed Barton

    Ed Barton Well-Known Member

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    It's not a simple question. Is the investment US treasuries, an olive farm or a commercial building in downtown Chicago?
     
  7. Beachman

    Beachman Well-Known Member

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    The 'acceptable rate' is the risk free rate (sub 5%). If that's not acceptable to one, you ramp up the risk and chase more with downside to match.. Otherwise it's all ambiguous as per others comments.
     
  8. Phase2

    Phase2 Well-Known Member

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    Seems pretty simple to me. If I was making 20% return on my investments. I'd be retiring/travelling right now.
     
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  9. chylld

    chylld Well-Known Member

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    I would consider 20% to be extraordinarily good. 10% would be a happy target for a safe investment.
     
  10. Bayview

    Bayview Well-Known Member

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    The other factor is the comparison of what the ROI is based on; if it is on borrowed funds; then your ROI (based on a PAYE after tax cash investment) is infinity, because you have not actually used any of your own cash.
     
  11. chylld

    chylld Well-Known Member

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    By that logic, you could borrow $10m for the most mediocre investment and retire immediately :)

    Where borrowed funds are used, I calculate the ROI as the gross investment ROI minus the tax-deducted interest rate of the borrowing. You have not used your own cash but you have created an obligation to the lender to repay that same amount of cash.
     
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  12. Big Will

    Big Will Well-Known Member

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    If it was guaranteed and to be 20% year on year yes but there is a lot of information missing, so would need to understand more.

    As it could be put it on red and if correct you get your original stake + 20% then no as I could get get 100% return for the same risk.

    If the 20% return which is profit (from you post) not just earnings it would likely mean this is a risky venture also should be eyes wide open as people should know if something is to good to be true it likely is.
     
  13. Ouga

    Ouga Well-Known Member

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    "Trying is the first step towards failure" Homer
    Just thought of a new thread idea
    25% returns
    Reckon it's gonna be informative :cool:

    The question is meaningless really: how long is a piece of string? Happy with 100% returns? Happy with 5% returns? There are no right or wrong answers to these questions. Too wide to debate really
     
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  14. wategos

    wategos Well-Known Member

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    5% growth + 5% income is enough for me.

    At 20% there is obviously a lot more risk involved and it is long term unsustainable. The exception is in a high inflation environment where safe investments could easily return 20% (I recall getting 17.5% interest on a fixed term deposit in Australia 25 years ago).
     
  15. MTR

    MTR Well-Known Member

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    Bank interest fixed, about 3-4% now... that's like someone kicking you in the stomach, not nice
     
  16. joel

    joel Well-Known Member

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    Anyone can make 20% before tax... Just stick it in the bank for a decade..
     
  17. MTR

    MTR Well-Known Member

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    So everyone should sell all their assets and stick the money in the bank???
     
  18. Beachman

    Beachman Well-Known Member

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    Hope this is sarcasm....and can we close this thread zzzzzz
     
  19. MTR

    MTR Well-Known Member

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    of course
     
  20. MTR

    MTR Well-Known Member

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    of course
    You need to ask the mods to close thread and why???
     
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