Having a nicer PPoR now vs having IPs/investments for the future

Discussion in 'Investor Psychology & Mindset' started by KayTea, 17th Sep, 2017.

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  1. KayTea

    KayTea Well-Known Member

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    I'm often wondering what sort of PPoR I could live in now if I wasn't dealing with financial stranglehold of trying to get ahead through investment. I know that, one day, the portfolio should be CF+, and actually contribute a reasonable income, but that's still quite a few years away. In the meantime, I can't afford the basic home improvements I'd like to make on my own place. I have to budget for everything, and feel like I'm having to 'manage', while many colleagues (who 'married rich', are well and truly living the high life, and working a lot less than I am). And, while it's not all about 'keeping up with the Jones' ', it would be nice to think that I actually have something nice to show now for the last few decades of working myself into the ground, rather than a half-finished dump.

    In the meantime, I feel like I'm working my butt off now, so that 20 years from now I'll be in a better position (but worried I won't actually live long enough to enjoy it). I'm delaying a lot of gratification now, hoping it will benefit me later - but, with no guarantee I'll get to that point, I often wonder if it's worth all the sacrifices now. My dad delayed everything until retirement, and ended up in surgery for terminal brain cancer on the day he was due to fly out on his first-ever OS holiday! Hardly seems fair.

    Anyone else ever tempted to sell all their investments, and live the high life now, while they're still alive?
     
  2. ellejay

    ellejay Well-Known Member

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    Really sorry to hear about your dad. Alot of investors do invest and talk assuming that they'll still be around in 20-30 yrs or so when their portfolio is finally producing an income. Are you just doing long term buy and hold? Could you develop, reno or use other ideas to create equity then sell to pay down your best performing ips quicker? Do you have some higher yielding ips you could start to pay down?
     
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  3. Sackie

    Sackie Well-Known Member

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    Can you try to find some compromise so you can enjoy more things now while still planning for your future?
     
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  4. KayTea

    KayTea Well-Known Member

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    Thanks @ellejay. I had thought of that, but trying to develop and/or reno needs money. Not an option (otherwise I would have already done it). Short of a lotto win, our options are limited.

    I'm trying to do what I can myself (re: painting etc), but working full time, combined with parenting demands, doesn't leave a lot of time to get much done. I've been painting the fence for almost 12 months now :(
     
  5. Trainee

    Trainee Well-Known Member

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    Its a gamble either way. What if you live until your 90?
     
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  6. ellejay

    ellejay Well-Known Member

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    Total respect to you, it WILL be worth all the sacrifice :D I know it's not much but help but take a good look at what you already own. If it's viable and you want to you could consider a JV partner and increase equity, sell and put money into next project or to pay down debt on your best performer. This will create cash flow alot quicker than holding for 20yrs. I'm a fan of looking for instant equity and/or good cash flow and selling an existing ip if needed to bring in another with more upside.

    As for what anyone else has investment wise or ppor wise, so what? :p Thinking about it gives you pressure you don't need.

    Keep going, you'll get there.
     
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  7. KayTea

    KayTea Well-Known Member

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    Murphy's law = the best performer is the property held within the SMSF. I'm hoping that the much-promised 'Brisbane boom' kicks off soon (and by Brisbane, I mean Ipswich area), as this should help one of the IPs.
     
  8. Stoffo

    Stoffo Well-Known Member

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    Had the same thoughts for many years.
    Others & friends "living it up/hols" whilst i went without
    When i finally got a chunk of equity in my PPOR to buy my first IP I started looking, in the time it took to find that IP i had enough equity to also go on a great holiday (so I did :D).
    Dramatic near miss at work a year later, bought a Mercedes SLK (enjoyed it for 12 months and sold, great fun for a $5k loss)

    Small rewards along the way for me ;)

    Its like kids and pocket money, trying to teach them to save some and spend some :confused:
    How many just "blow it all" o_O
    (this is why we have compulsory superanuation, most just SPEND)

    It will ALL be worth it
     
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  9. Gockie

    Gockie Life is good ☺️ Premium Member

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    Hey @Stoffo, great car idea...

    @KayTea, delay throwing it all in for a bit longer.... Brisbane has got to boom sometime and you don't want to have sold out just before it happens.
    In the meantime, can you rent out any spaces of your house to help ease the cashflow?
     
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  10. Barny

    Barny Well-Known Member

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    How bout a change of strategy.

    If you have an investment property that's performed well and not going to do much in the future, sell and take the profits. Or offload those lemons. Buy a ppor in a great location, use additional funds to renovate it. Enjoy it, live in for a few years during the upswing and sell it prior to peak.
    Rinse and repeat. At least you get to live in a home you love, adding value, no taxes as it's your ppor, no tenant issues and waiting for the magic growth that doesn't seem to happen sometimes.
     
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  11. KayTea

    KayTea Well-Known Member

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    Definitely no spare room - we would ideally need a bit more space (not for cosmetic reasons - just too much noise in a small house).
     
  12. KayTea

    KayTea Well-Known Member

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    Not enough equity in anything yet to justify selling (don't worry - I had already considered that). I think I need to wait for a few more years for that to happen.
     
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  13. ellejay

    ellejay Well-Known Member

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    Not having a go at you at all but that's the problem with buying neg geared property in the hope that it grows enough to cover all your costs and produce a profit. It's not a great strategy unless you have the resources to comfortably hold without impacting your lifestyle too much, or you can see the market is moving quickly and you're pretty much guaranteed to make some money. You may have been better buying cheaper neutral/poss geared but with the option and cash buffer to reno and/or subdivide, sell and move to next project.
     
    Last edited: 18th Sep, 2017
  14. Hodor

    Hodor Well-Known Member

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    I Think it is about finding a balance. Totally ignoring the future and living for today is a road that isn't going to provide the life I want later.

    You need to give yourself a life now as well, a lot of investing is about buying yourself time (and lifestyle) later, if it takes 20 years you don't enjoy was it a good buy?

    Think about what's important and will add to your life and what is a meaningless expense.

    We adjusted our priorities over the past couple of years to achieve present and future goals.
     
  15. Sackie

    Sackie Well-Known Member

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    +1
     
  16. KayTea

    KayTea Well-Known Member

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    It's quite the balancing act, huh?:rolleyes:
     
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  17. lightbulbmoment

    lightbulbmoment Well-Known Member

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    Is that you or zoolander in the pic?
     
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  18. Sackie

    Sackie Well-Known Member

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    zoolander-2-black-coat-265x350.jpg

    I wish I was as cool as him. Just plain ol me I'm afraid.
     
    Last edited: 18th Sep, 2017
  19. Jingo

    Jingo Well-Known Member

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    Hi KayTea,

    Without knowing anything about your situation, would it be possible to re-evaluate your investments? Perhaps moving your portfolio to being +geared by selling down an IP or two may help you to be able to afford the home improvements you'd like to make to your PPOR.

    Have you considered other asset classes (shares) that may produce a higher income stream than the IP's?

    Its difficult to get the balance right between investing for the future and enjoying life now.

    Kind regards

    Jason.
     
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  20. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    A very beneficial tax environment in terms of CGT.....
     
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