Best place to invest for long term ?

Nice to see someone thinking long term
It reminds me of a conversation I had with a valuer.
He said look twenty years ahead not short term.

 

If you only look at your deposit would your property portfolio equal your share growth ?

 

Great! Maybe I'll end up retiring same time as you just maybe 30 years age difference.

 

Properties can be the same if you pay cash and do not borrow.

 

Funny isn't it ..lots of keyboard warriors....has anyone actually met you in the flesh?

How do we know you are real and not some internet troll?

 

Many people on here know I do very well in real estate. I don't need to prove that to you. and I think you know as well. And yes I've met ppl from this forum.

 

No idea and a complete waste of time.

A better idea would be our cash contribution to the portfolio. That is impossible to calculate as the earliest property was purchased in 1992 (26 years ago) and there has been very many cash transactions over that time with withdrawals/deposits to LOCs, loans refinances, use of offset accounts, ...

Our shares are all cash purchases (no debt). Knowing what I know now, I wished I used the equity in our PPOR to buy more shares (with debt) than buy property over the last 26 years.

Not going to change our purchases now.

 

kierank so why are you in property? If I generated that in shares that's what I would specialize mainly in?

 

I bought my first property in 1979, nearly 40 years ago. At the time, I did not understand shares and I thought they were very risky.

I start dabbling in shares about 20 years ago because I couldn’t work out which was better, property or shares, so I bought both. Then I got seriously into both.

Isn’t hindsight a great thing!!! I could write a book on what I would do differently, with the benefit of hindsight.

 

Yes hindsight, I wish I knew then what I know now, but we live and hopefully learn....
There was one share we made 30 times its value, if we only knew that, I would have used leverage too, but then you invested the funds you could afford to lose, right?
I am too emotional for shares now, I just couldn't have 8 digit portfolio in shares (whether cash or some leverage) and sleep well at night, I don't know that's just silly emotional me now! Plus I would like exposure to other markets outside Australia as economies can turn around, I just think our index is too mainly concentrated on fiance and mining sectors unlike US. In addition I was too involved I would spend many hours analyzing and studying the candle sticks and so on, paralysis analysis.
So for now I just help young adult kids to invest into shares, once they have enough, we divert it into investment in property instead. So shares become an income exercise while property their wealth exercise.
Yet, I do sleep easily at night having such large portfolio in real estate, perhaps because over the years, if you bought in fairly well located areas in Australia in capital cities, even if you overpaid you were somehow forgiven for that, I think the longer you held the more you were rewarded (just by even analyzing the median prices in some capital cities).
You see for me it has never been about CF, while yes it is crucial initially to build the asset base and to accumulate with higher leverage say 80%, it was always about CG. In addition I did not understand, compounding growth on growth helps, as it is not taxed until it is realized, similar to shares if CG has been there and you never sold it, right? Income or yields are hence realized and taxed, well unless there are strategies employed to offset.
My 1st property was PPOR bought in 1989 so only 29 years ago and I did not understand much about finances then at all. IP investments only started 18 years ago, but luckily even though we started as passive investors following someone else system, we built the desired asset base within 8 years time so have been fortunate enough to do well there.
I suppose it goes true for saying different horses for courses, but I think we should all specialize in what works for us, as Warren Buffett said, “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
Best of luck to you and your family and thank you for sharing!

 

If you go to the dark side... I'm afraid I may need to pull you back into line..!

 

A summary of my life lessons would be similar to that:

1. Invest in shares for income, especially retirement income. Our strategy now is to only use cash to buy shares (no debt) and we do this via our SMSF.

2. Invest in property for growth from Day 1. Our strategy is to buy using risk-appropriate-leverage to maximise this growth and to never sell (never pay CGT) and we do this via trusts as they have a 80 year life.

3. Invest in oneself so that one can generate the maximum cashflow in one’s working life to execute Items 1 and 2 above. Our strategy was to do this owning businesses, both start-ups and existing businesses.

I was in my forties when my “dumb brain” started to make sense of the above. Imagine where i would be if I was taught this in school or read it in a book 20 to 30 years earlier.

I have no regrets.

Instead I impart this knowledge on my kids (both in their 30’s, both own two properties, both have SMSFs investing in the sharemarket, ...) AND my grandkids (I have a 4 year old granddaughter who owns shares in one company and buys more on a regular basis, soon to diversify to buy shares in a second).

I couldn’t be prouder from an investment perspective.

 

Hahaha, funny I had the opposite experience to you. Had 50% of equity in shares about 10 years ago. another 50 % into deposits for property. My property portfolio has generated a rough return of at least 10 times the ROI by the form of equity withdraw and reinvest. Whereas for the shares, I am lucky to get 3 times including dividend. If I have invested all my equity in property in hindsight, I think I could retire now. lol.

 

It is great that you and your family achieved your set goals. Mind if I ask as to how your share portfolios performed during the Global Financial Crisis from 2007-2013? Thanks.

 

According to Sharesight, my portfolio achieved a return of 15.19% pa in the period from 1st January 2007 to 31st December 2013.

I can’t find where I can split the return into growth and income components .