Introduction for newbies

spludgey · 30th Nov, 2018

I just sent an email to someone that's interested in property investing.
It gave me the idea that perhaps it might be worthwhile to have a 'sticky' in the Introduction forum with some advice, as I know it can be scary to start as a new investor.
Any opinions on that?
Feel free to reject it, but I thought it was worth at least raising it.

I'm not saying that what I wrote is necessarily what it should be, but something very roughly along similar lines might be of use.

There are a lot of useful resources that I could recommend, but it really depends on what you’re after. The best books on Australian real estate investing in my opinion are by Jan Somers (probably “Building Wealth through Property”, or something like that), but I don’t know how your general investing understanding is.

If you want to look into the general investing mindset to start with (you might already have this), then I’d recommend things like “The richest man in Babylon”. It’s an old book, but I think that’s exactly why it’s good, it shows that the fundamental principles of investing have remained unchanged for centuries. The way you invest will change with things like what’s happening markets and availability of credit availability, but the principles don’t.

Another mindset one would be “Rich Dad, Poor Dad”. It’s at times painfully American and I don’t really like the narcissistic author, but if you can look past that, it’s a good book.

Finally for mindset, there’s “The Millionaire Next Door”. It talks about not only how people became wealthy, but that many wealthy people like to hide their wealth. Often all those fancy cars you see aren’t owned by rich people, but actually bought by idiots (in my opinion) on 10%+ interest car loans.

That kind of takes me to a mindset website called Mr Money Moustache. It’s about financial independence and retiring early, but really it’s about the thing that I think is most important about investing: Contemptment. While this almost touches on Buddhism, the way to financial contemptment (I think it’s a more accurate word than “happiness”) is not about getting what you want or having lots of money or income, it’s about wanting less. If you want to keep up with the Joneses, you’ll never be financially contempt as you’ll keep moving your goalposts and keep comparing yourself with people that are more successful than you. This is something that I’m working on. For my age, I’ve done well for myself, but when I look at other people on investment forums, it’s easy to feel inadequate.

That brings me to the forum(s). I’m active on propertychat.com.au (feel free to try and figure out who I am on there), which I would recommend more than any book. There’s plenty of opposing views, which is actually great, because it doesn’t give you an answer but rather challenges you to think about what you think the correct answer might be. If you sign up, start off with an introduction and ease into it from there.

There is also the old forum around that’s now closed, but you can still read through the posts and if you can’t find what you’re looking for on propertychat, I’d have a search on somersoft.

Then finally, I’ve got some general advice (that you’re free to disregard if you want):

Start with the end in mind. Be very clear why you’re investing and what your goals are. From there you can then work out a path of how to get there.

Stay away from the new best thing. There’s lots of spruikers out there that promise you the world, but they’re actually in the business of making themselves rich, not you. Stick to the slow and steady path.

Investing will be all of those things at times: Frustrating, boring, scary, overwhelming, confusing, emotionally draining. That doesn’t mean that it’s not worth doing, it just means that you should be aware of it before you start and keep the saying in mind “This too shall pass”

Do your homework and ask more experienced investors. I made the mistake of buying a property with an asbestos roof. After a couple of years it started leaking and it being asbestos, the whole thing had to be removed and replaced. $40k out of pocket. Had I asked others’ opinions more, maybe I could have avoided this. But having said that, also don’t fall into the trap on the other side. If you ask people, someone will always tell you that it’s a bad idea to buy. Listen to them, weigh up their arguments, but in the end, make your own decision

This is perhaps the most important one of them all: Don’t wait to be ready! I don’t mean to jump into the deep end before you can swim, but what I mean is that you can do a couple of months of research, read a few books and browse the forums (I used to spend a few hours every night either reading books or on the forums), but don’t fall into the analysis paralysis trap I know quite a few people that have done more research than I have, have been looking for years and still haven’t bought a single property. If you wait to be ready, you never will be

Be honest with yourself. You will make mistakes and experience setbacks. Acknowledge what you’ve done wrong, take responsibility, but then move on and try and get over it.

Get good professionals, mortgage brokers, solicitors and property managers are all important. Good ones can be hard to find, but ask for recommendations.

Click to expand...

Simon Hampel · 30th Nov, 2018

Yes, I think a general investing FAQ with references to books, websites, blogs, etc would be a useful addition along with some fundamental ideas around investing. Something I've been thinking about adding with the new site.

An index to the most useful threads on the site would be good too - particularly those such as @Terry_w's and @David Shih (just for example - there are others too).

(By the way @spludgey - the term you wanted to use was "contentment" not "contemptment" - the latter implies a lack of respect for something, eg: "I have contempt for your opinion" - hence being held in "contempt of court" - ie disrespecting the court or the court process ... but I still got what you were trying to say, so it's not a big deal)

spludgey · 30th Nov, 2018

Oops, you're absolutely right on the spelling part!

David Shih · 1st Dec, 2018

Simon Hampel said: ↑

Yes, I think a general investing FAQ with references to books, websites, blogs, etc would be a useful addition along with some fundamental ideas around investing. Something I've been thinking about adding with the new site.
Click to expand...

I agree this would be so invaluable to all members - an index that allows you to quickly access information in relevant areas.

Right now there are plenty of gold nuggets around each PC sub-forum, but the problem for me has always been there are simply way too much data/posts so it's extremely difficult to access the relevant info I'm after. Search does help to an extent but this is where keyword guessing comes into play and it's really a hit and miss, not to mention you kinda have to troll through each of the search results and sometimes I get to page 2 or 3 before I find something that may be relevant. Of course part of that could be due to my keyword.

@Simon Hampel not sure if this information helps - but I know in Taiwan we have something we called BBS (Bulletin Board System). Very similar to what we have here at PC except in a very outdated user interface (think DOS style and everything to be controlled via keyboard not mouse...anyway that's an aside). In BBS there are sub-forums related to different type of topics, and each sub-forum would have a separate FAQ or "Essence" section where the person responsible for the sub-forum would, as they review each post, mark the post to be put into FAQ area and then compile together at top level an index for easy access of the post/info.

Not saying that should be the way to go, but thought that may help.

Cheers,
David

Log in or Sign up

Introduction for newbies

spludgey Well-Known Member

Simon Hampel Founder Staff Member

spludgey Well-Known Member

David Shih Mortgage Broker Business Member

Log in or Sign up

Introduction for newbies

spludgey Well-Known Member

Simon Hampel Founder Staff Member

spludgey Well-Known Member

David Shih Mortgage Broker Business Member

Useful Searches