Asset Rich Cash Flow Poor

Discussion in 'Investor Psychology & Mindset' started by MTR, 20th Sep, 2016.

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  1. Big Will

    Big Will Well-Known Member

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    Yes things don't go always as planned I had some negative growth (suburb median went down -5%) however over the 5 years my property on a bank value went up by 50% on my purchase price and my holding cost went down significantly and this property isn't in Sydney.
     
  2. ellejay

    ellejay Well-Known Member

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    Hi BW, I wasn't wanting to compare our situations as they'll be completely different. I posted though that my strategy has allowed me to leave work and that this is fantastic for me, I have freedom. You then post that I would do better with your strategy. I don't want to hold these CG properties as you call them. They would cause me to have to go back to permanent work, so unless they come with a complementary crystal ball I'm not interested. I'd prefer to retire in my 40's if I want to than hang on for 10 years to have an extra few million because a) the expected growth may not occur b) I may not live to see it and c) time with family is more important to me than the material posessions I need to buy to spend the extra millions I may make.

    I think the curren market in Aus could be a hard place to make money going forward, but people always find ways. I still think I can find cf+ properties that will have significant growth. IMO the best options for this are overseas, but that's just my opinion. I wouldn't buy in regional Aus (except the 1 I have in Shellharbour) because stamp and land tax would slow me down too much to make money. The example of Broken Hill I don't know anything about but you'd need to check vacancy rates.

    So hopefully that clarifies my points that you do not necessarily have to choose between cf+ and cg and that I go for both 9 times out of 10 because I don't want to wait another 10 years to retire. Just my personal opinions and not interested in arguing them.
     
    Navig8or, Big Will and Indifference like this.
  3. MTR

    MTR Well-Known Member

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    Its not about having a crystal ball I don't have one either. Its about jumping in when we start to see stock tightening we have had 3 booming markets since 2013, don't need a crystal ball for this. Just have to have the courage to buy and persistence to work it out.

    Plenty of posts on potential booming markets on PC, I am only interested in those that are already rising, that is not crystal balling, that is the difference. Nothing wrong either way, just stating how I do it, everyone to their own and as mentioned before many on PC will do way better than 95% of the population

    MTR:)
     
  4. Fargo

    Fargo Well-Known Member

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    Why dont they vendor finance a sale to the kids, possibly at a price they wont pay much CGT. The repayments could be structured so the vendor had enough income until they pass. It could be payments in interest free instalments, or interest only payments which may possibly have tax advantages. You maybe able use equity to help pay your parents or buy income producing assets. If your parents hold a second mortgage on the property and the bank doesn't like it. You may need to but a clause in the contract to allow you parents to live their till the pass, or ensuring you provide for an abode for them until they pass. That way every-one wins the kids may get to make use of some their inheritance with. The parents may even be able to claim rent assistance if it is rented back to them.
     
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  5. ellejay

    ellejay Well-Known Member

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    I agree with you that buying in markets already rising is a no brainer, just bought one in west melb. Not everyone is in a position to jump in to buy a couple though, most would be lucky to buy one then have to wait again until they can finance. So this in itself is unlikely to make you rich. If you can buy multiple when you see it happening then happy days. The more money you have access to, the easier it is to make more. So some may need a strategy that suits them in the meantime.
     
    MTR likes this.
  6. Big Will

    Big Will Well-Known Member

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    You need to have money to make money, otherwise you trade for something (e.g. time) for money.
     
  7. ellejay

    ellejay Well-Known Member

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    Agree with you, and it's a personal decision how much time you want to trade after you've made 'enough.' Quite a few posters here could probably retire but their list of requirements for the perfect retirement keeps them working. Different strokes..
     
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  8. Indifference

    Indifference Well-Known Member

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    Please consider the possibilities beyond needing just financial capital to generate passive income.... rather than rattle off a long list of options, a decent grasp of the possibilities can be found here:

    http://realpassiveincomeideas.com/43-best

    Thinking laterally separates us from the herd

    Enjoy the journey

    Indi
     
  9. Big Will

    Big Will Well-Known Member

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    Not subscribing but it is hardly a long list...

    upload_2016-9-23_15-59-7.png
     
  10. Mumbai

    Mumbai Well-Known Member

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    Subscribed and unsubscribed in 5 mins
     
  11. Indifference

    Indifference Well-Known Member

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  12. Perthguy

    Perthguy Well-Known Member

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  13. Perthguy

    Perthguy Well-Known Member

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  14. Indifference

    Indifference Well-Known Member

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    Of course... but after a nice chuckle, there is actually some thought provoking stuff in there.

    I guess my point was intended to be: chill, think, then think a bit laterally, realise that a little lateral thought is the differentiator.... not all income needs a large capital base.... selling IP (not IPs), licencing products/processes/training, achieving defined benefit incomes, getting into company investment programs (share bonuses etc.), negotiating profit share arrangements at work.... sigh, I'm doing what I tried in jest to avoid
     
    Perthguy likes this.

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