For those who think they missed the boat

Too many youngsters do not know importance of savings....they are after instant gratification...best way to start is to follow Barefoot Investor book as soon as they start earning or about to to start to earn. Do not buy brand new car, get 3-4 year old one with less km on board, do not buy latest phone for 1500$ or so, get 500$ one or so.

Once above basic things are taken care of, in 2-3 years they will have substantial savings built up and then can buy into regional areas after researching market thoroughly or ask here on PC forum where they should buy for their capacity. Also, they should educate themselves as much as possible on about investments in general and shares and real estate in particular.

 

Yes
You have children??
This is what you are teaching your children.... follow from example

 

Yes, i have one son. He is in year 11. He is getting this education already. I m going to get him to work with a real estate agent in his year 12 vacation. He is already excited about it.

Actually, i am so impressed with Barefoot Investor book that everyone i know who have teenage kids, i advise them to gift this book to their kids. I feel that it should be part of compulsory curriculum in first semester in University.

 

Heard of the Barefoot investor book but haven't read it. What's it say (in a nutshell)?

 

Ok... will appeal .....or be good for newbies.... similar to Noel Whittaker books

 

I'm not sure what you mean @MTR , I was only asking what the gist of the book was about as I haven't read it.

 

ok
Similar to Noel Whittaker’s book imo.... good start

 

I didn’t realise people would categorise NW as a newbie!!!

 

his books are good guide for those starting out, newbies is what I meant

 

???

 

It talks about having basic financial awareness. He recommends splitting your income inton3 buckets - day-to-day spendings, savings and for some oneoffs like holiday etc.

But more importantly he shows importance of not paying credit card fees or interest, using accounts with no fees, using super with minimum fees, importance of salary sacrifice in super etc. Basically, if his advice in book is followed - and nothing its not that hard to follow - person with basic skill jobs like checkout operator etc can also have good secure financial future.

 

Couldn’t agree more. Actually, this book made me get into shares.. I dabbled in shares before in my 20s, but as @dunno has pointed out, I treated it like a casino. This made me understand the long term options of LICs and ETFs.
I recommended the book to my family and friends, most of whom have all started buying shares.

There’s a list of steps.
- clear debt
- save
- buy PPOR
- salary sacrifice into super
- invest (shares. He isn’t property focused)
- give back into society

It’s not rocket science, but there are some good tips there. Great for beginners.

 

also a good accountant can give this advice.....just saying

 

Don’t disagree.. but we are talking about beginners right? I would think that most are still trying to sort out their team and potentially may not have a good accountant to work with.

 

I think all those points are good and certainly has a lot of benefits. Only thing I take issue with in the list is not looking at real estate (IPs) as a vehicle for wealth. Personally I think that's a big mistake. But otherwise the list makes sense.

 

I agree. The book is more targeted towards the lowest common denominator and emphasises to not overstretch yourself - it’s about living comfortably without financial stress. For many people I think it’s a great book. For those who want to go further and/or have a high income it would be a good starting point but you’d need to look elsewhere for wealth building strategies.

 

I disagree with the first step, “clear debt”, unless it means “bad debt”.
I am a big believer of using OPM, especially when one can generate total returns (a lot) higher than the cost of that debt.

As an example, why wouldn’t one borrow funds at say 2% pa to generate returns of 13% pa?

Same here.

 

I think most/all investors on PC use OPM? Though it got a tad harder after APRA

leveraging is one of the best ways to create/increase wealth

 

It is bad debt (CC, car loans, personal loans, etc). Does not include mortgage or HECS/HELP debt.

 

Hands down agree. Would also add RE allows high levels of leveraging to be taken relatively 'safely' when compared pretty much across all other asset classes.

The relative safety of leveraging psychologically allows most investors to pull the pin and buy 80-90% lvrs.

Imho, overcoming the psychologically challenges is massive and I've been arguing from day 1 on these forums, is key.