Everyone thinks I'm a property tycoon, yet I feel like a failure

This is not supposed to be one of those "poor me" threads, because objectively, while I'm not doing fantastic with property, I'm doing okay with it.

Non investors sometimes ask me how many IPs I own and when I tell them, they think that I'm this great multimillionaire and even if I tell them that the bank actually owns most of it, they don't seem to change their minds about me one bit.

I'll summarise my position:

• I have 10 low value IPs. Total IP value around $2.8M and a total debt (this includes PPOR though) of a similar level.
• PPOR worth around $1M
• $100k in offset

Now while that's an okay position to be in (I'm nearly 36, for reference), there have been a few curve balls (some possibly of my own doing) haven't made me feel like a success at all:

• Had a leaking asbestos roof and it cost me $40k to get replaced (this is a couple of years ago now, but it feels more recent)
• Had a child, so lost one salary plus had additional expenses
• Spent $3k on a back deck that needed to be replaced. The guy that I had found on Gumtree did a terrible job and it had to be demolished again. He did a runner, I had to spend over $3k to replace it with a landing.
• I didn't realise that IO periods ate into the total life of the loan, so recently most of my loans went from IO to P&I and I'm now paying over $30k more than I was previously. This has seen my savings in the offset slowly being reduced.
• Had a bank nearly cancel my mortgage after the IO period was up and only changed their mind after I threatened to go to the FOS.
• Got declined for a credit card recently. I know not a huge issue, but it's on my credit report and just adding to everything.

Again, while my position isn't great, I'd still think objectively it's good. If I sold all my IPs, I could pay off my PPOR and be debt free.
But ever since the birth of my son 10 months ago, it just hasn't felt that way. It's been feeling like I'm not doing enough and I need a way out. Now I don't know if this is because of the loss of an income and the added expenses or my paternal instincts kicking in, probably a combination of both.

Has anyone else been in this position, where they feel like they're doing terribly when they weren't?
Maybe seeing how extremely successful many of the people on here have been hasn't really helped this either...

 

My ex husband felt the same after our first child was born. His way of dealing with the bad feelings was to sell everything and buy a nice house for us to live in forever. However I got in the way and didn't agree with it.
Don't make any rash decisions now. Life has changed massively for you so just ride through the storm for a bit. It may not seem so dire in a few months.
Perhaps look at your portfolio and if there is a property really standing out that has been a money put or doesn't have much going for it in the future, consider selling vs keeping.

 

When I feel like the wheels are spinning and I'm not going anywhere I look back at the progress made so far and the small wins along the way... looks like you have plenty... is your partner going back to work soon?

 

It is a delicate balancing act to juggle a property portfolio, a growing family, unexpected surprises (sAPRAises?) and others' expectations.

While many here would understand your position and strategy, those less inclined would assume that because you can afford nearly $4m in property, you can buy anything you want. Of course they're only looking at one side of the balance sheet.

Having come from a similar size portfolio, I found it very helpful to decide what my endgame looked like i.e. what assets I need to hold in order to retire on passive income. That led me to diversify into other asset classes and I no longer doubted my position as I knew I was closer to my goal.

 

People used to ask me that too, but I just tell them "more than a few" now, and smile. People can think what they like, but I just don't go out of my way to tell them anything, anymore, so the subject just doesn't come up, much.

• So in summary you have $3.8M of property & $100K cash against debts of $2.8M. You do realise you are a millionaire right?

So you're a millionaire at age 36 and you are "just OK". You my friend are in the top probably 5% of the world's population. That' better than OK. What you have is stinkin' thinkin'.

• None of these things are a reflection of who you are and what you have achieved. These are the "problems" rich people deal with. I'd rather have these problems than where I was going to get my next meal from or how to fix the one and only HWS on my PPOR that just broke and I cannot afford to fix. Lots of people would be happy to exchange places with you.

Do you think you could just be suffering 'baby blues'? You have some challenges ahead of you for sure. You need to address cash flow issues on loans going from IO to P&I, BUT look what you've already done! If you cannot see that or feel better about yourself and your achievements, then you might need some medical intervention to help you through this period. It's no shame in that. It is just one more thing to overcome and I'm sure you can do it!

 

Thanks, good to see that this is a somewhat “normal” feeling.

Objectively, there are two Rockhampton properties that are dogs and I should maybe get rid of, but the things holding me back are the fact that I’m in negative equity for them (had 95% LVR plus LMI and then prices dropped), plus there’s some whispers of the market picking up there.

Thanks, I’ll try and do that.

She’s going back in a couple of months, but only two days a week. So we’ll pretty much have the same money as we do now (her Centrelink maternity payments just finished up).

I know and it only seems to work one way. How often do we compare ourselves with those worse off? For me, not nearly as frequently as with the much smaller number of people that are better off.

Thanks mate.

As I live in Sydney, people actually assume that I’m able to afford $10M+ in property. And even if I tell them that none are in Sydney, they don’t seem to revise their estimate too much.


Slightly off topic, but the plan is to develop my two Central Coast properties and put a total of 7 low energy townhouses on the blocks.

I’ll only be able to do this once lending rules are loosened again though.


And then the final endgame is to borrow against my residential RE and purchase a $3M or so commercial RE. If it pays 2% more than it costs me, it’ll be an income of $60k, which by itself will be enough to retire on once the PPOR is paid off.

Thanks, I learnt something today!

I think I should start doing that as well.

Well, it’s me and my wife (though I do all the investing), so you have to divide it by two.

I also subtract the PPOR from any wealth calculations, as it’s a necessity and won’t help me get a retirement income (other than being able to borrow against it).

“More money, more problems”

Or as Robert Kyosaki(?) put it: There are only two types of money problems, not having enough or having too much.

Maybe a little bit of baby blues with a tiny bit of existentialism thrown in, yes.

As for the cashflow, we’ll be okay with our cash reserves for at least a few years, by which time my wife should be earning more again (unless number two arrives in that time, but either way, we should be okay). So barring significant falls in rental income or big increases in cost of borrowing, we’ll be okay. Might be a lean couple of years, but hopefully they’ll pay off eventually.

Medical intervention isn’t needed at this point in time, but I won’t discount it as a possibility for the future, should things get worse.

 

@spludgey I'm glad it isn't needed at this point. Something to consider if you do go down this path is that it can affect any future applications for life or income protection insurance cover.

 

@spludgey

It all good dude!

We are in almost the same position at the same age.
I have less properties than you, but total is value about the same and debt levels are similar.
I don't have a PPOR yet, but we are 'saving' for one. Its a strange feeling, as I'm not used to having to save.

Mrs Blacky finished work a few years ago. While this shouldn't have mattered, mentally it certainly had an impact given:

• we got married
• had a kid
• moved countries
• maintained our lifestyle/spending habits

so for about 12-18months we were 'treading water'. That feeling really sucks, as we should be 'exceptional' not average... right?
Sometimes I struggle with our position as we 'should' be wealthier. However, we have never sacrificed lifestyle for wealth.

I feel like we 'struggle' for a number of reasons, however, its ultimately due to significant debt levels, whereby I can't stop working if I wanted to. And that handcuff is a significant mental challenge for me - especially as almost all our property is in WA, which has not increased in value in the last 5years or so. So 'hanging on' has been for pretty well for nothing.
And its largely for this reason we are diversifying into an LIC portfolio, and working to clear off debts (paying them off will be too slow, so we will liquidate some property as required).

So yeah, keep the end game in mind, have a strategy and stick to that strategy.
I also had to work to reduce our general living costs to ensure we could keep spending on the fun stuff. Believe it or not "barefoot investor" actually helped with this one!

Blacky

 

1. ask yourself, who are you trying to prove yourself to and why?

2. Look at your baby and appreciate the innocence and smile.

 

Reading this forum doesn't help. I speak with a lot of people who have the perception that everyone that posts here owns multiple investments and is a multi millionaire. The disclosures on this thread are actually re-enforcing this belief.

The truth is that most people don't have as much as others think they do. There's a lot of people that might have their own home and one or two investment properties. Very few people here own five or more, especially amongst the younger investors. There certainly are a few people here with hummus portfolios but not that many. The truth is most investors make their lives better and more comfortable in the long run, but very few become property tycoons.

Furthermore most people do take a break from investing at some point. People might say that if you're not moving forward, you're going backwards but I think that's rubbish. People take a break to raise children, change careers, deal with other challenges or just to take time off.

The number of properties you own, your net worth, how quickly you accumulated, it's your story not anyone else's. What really matters is what you can do with it. If what you're doing will achieve the outcomes you want, then there's really no point in comparing yourself to others. People come here to get out of the rat race, not to enter another one.

 

Firstly, I suggest you have a chat with your doctor. The birth of your child should be celebrated as one of life’s greatest joys, yet you only refer to it in terms of lost income.....

Secondly, why tell anyone about your personal financial affairs? It is your and your wife’s private business, no one else’s.

If, as you say, you can sell all your IPs and be mortgage free at the age of 36 owning a PPOR worth $1m, that may well be worth considering, particularly if it is affecting your health.

We didn’t start our investing journey until we paid off our PPOR (not worth today as much as yours) aged around 40. We are now retired on a more than comfortable income.
Marg

 

I'm a little younger than you (26) - but we've had some rough patches that I assume most 20 somethings don't even face. Happens when you're a young starter I guess?

I often feel the same, I have worked very hard and have accumulated what many would consider a very decent asset base particularly for my age. From my side though, it's just "okay". I'm not impressed with anything I've done, in fact I think it's all quite average. It's not necessarily bad or awful, but it's not my perception of success yet.

@Propertunity said something above that I thought is clever, despite the debt, despite what you feel - you are still a millionaire. You are what some people (myself included) would say is very successful. I also know though, if you are in a bit of a down period anything anyone says is probably not going to make you feel much better.

I think if you're feeling down, it's worth chatting to someone to get some clarity. It's very possible there could be underlying issues there that you might need some help working through, if there is - that's cool, if there's not - great. I don't think people talk about mental health with men enough - but it's a thing and needs to be looked at if it's even a remote possibility.

 

I suggest you read some of the polls on net worth, this may put everything in prospective.

 

Boom!

Your position is awesome! Next time you're feeling down about the financial situation - take comfort in knowing that you could sell up and have an unencumbered PPOR worth $1m.....at 36! That's no easy feat!

Run your own race - you're doing sweet by the sounds of it anyway. I'm sure there are some ppl reading your post wanting to be at your level

Haha - I can relate to this. My wife got sick of my spreadsheets and "what if" plans for financial catastrophes that never came close to eventuating after we had our first born. It's understandable - you've had a new kid and you want to provide as best as you can. It's probably quite normal - or we're both just a bit weird...I don't know

Cheers

Jamie

 

This just appeared on my LinkedIn feed...

 

You're in a great position. Given you've got a 10 month old young one you're probably just sleep deprived... (disclosure: I'm not a real doctor )

If I were you I'd get clear on what you want to do. There is a reason you bought 10 IPs. What was that? Where are you going to be in 20-30 years? What was your original exit plan? Sure you could cash out at significant transaction cost but then what?

The rest is just noise. Things go wrong. We all make mistakes and learn as we go. It is all about how you bounce back rather than what happens. Don't be too hard on yourself... (unless you keep making the same mistakes then give yourself an uppercut )

 

If you wanted to sell some IPs to pay off the PPOR, your job becomes a source of interest and pocket money and you may feel freer. If I had a baby and wanted more, this would be a good way to go for me. You would need to value time and lifestyle over potential CG that you might miss by selling.
There's no right and wrong and sometimes I find myself asking what the hell I'm doing too. You are way ahead of most people and you did it yourselves.
You're young, in a good and committed relationship, have a baby, have a job and the possibility of paying off PPOR. Amazing.

 

You're doing well. Better than most. It might not feel like it but that's the truth.

A child is a massive change. Hopefully having a child helps you figure out what is important in life.
They can be exhausting too.

It concerns me that the mother of the child is only mentioned for her lack of income producing capacity. Maybe it's time to focus on something other than wealth creation? Like a happy and healthy family life?

You can sell your IPs if the debt is doing your head in. Or you could sell half of them and reconsider.

Either way, assuming selling the IPs is doable, you are a millionaire. That's as an enviable position any way I look at it.

Once the basics are sorted, money does not buy happiness. I could hand you five million today and you would be as happy, or not, 12 months from now. So I'd find something else to focus on. Do some charity work? Start a vegetable garden? Spend some time getting to know the neighbors?