Jan Somers - Creating Wealth

Discussion in 'Living Room' started by MTR, 7th Jan, 2022.

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  1. MTR

    MTR Well-Known Member

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    Is Jan Somers investment strategy still relevant today???

    Pros and Cons

    For discussion, play the ball, not the person

    I think buy and hold, accumulating property is a great strategy, however with servicing/lending policies tightening etc, it will be harder to accumulate properties today. We probably need to tweak it ?

    Also today seeing a shift where investors are diversifying into higher performing assets, in terms of returns/yield.
     
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  2. kierank

    kierank Well-Known Member

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    I believe their strategy still works. It was never a get-rich scheme.

    The strategy was simple to understand, low risk, low stress, …

    Jan and Ian (Mr Jan Somers as he called himself) are lovely people and very willing to help everyone interested in investment property. Ian was the sponsor of BIG (Better Investment Group) and regularly came to our meetings and social events.

    I based my Financial Independence Plan (developed late 2003/early 2004) on the information in Jan’s books and I still use Ian’s PIA software today.

    I am totally indebted to both Jan and Mr Jan.
    Such as?
     
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It is - but needs to be modified. Offset accounts weren't around then, and IO loans were easy to get.

    Its amazing that younger people from this forum don't even know of her.
     
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    These days the simple buy and hold strategy still works. It can take most of a persons working life to execute and will result in a comfortable retirement (not wildly wealthy), but it's simple and reasonably risk free.

    Almost anyone can do it if they're willing to work for it. The trick is staying the course of the long term. I know a lot of people don't see the results within a year or two, but see the bills so they cash out, never to return. In my case it took almost a decade to really see and understand the results (a full investment cycle at the time).
     
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  5. Trainee

    Trainee Well-Known Member

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    I view it as it worked better when lenders assessed based on actual payments. Thats finished for now, but it wasnt always the case in the past either.

    the standard buy one or two ips on top of the ppor still works. And probably better than most other plans for the average person.
     
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  6. geoffw

    geoffw Moderator Staff Member

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    Her strategy was just to buy some investment properties, and let leverage and growth do the rest. Beyond that, it's people pushing the techniques further to achieve more.

    This seems to be people who have already accumulated an asset base. The capital growth achievable just by using existing equity to buy an investment property is not as easily achievable investing cash in shares imo. Once having built an asset base, other investment vehicles are possible.
     
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  7. willair

    willair Well-Known Member Premium Member

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    I Think it would work today as it did 25 years ago,as i don't think they both had a inordinatley luck streak just a simple plan that worked very well..
    I walk past a set of beach front units on ''$Hastings st one the beach the other side every time we go for a walk in the Noosa National Park ..
    Ian was saying one night at Salisbury a long time ago to maybe 9 people..That they were walking down hastings st --bought a ice cream saw the for sale and bought 2 units on the fit-off alone ..
    Most people sitting around that table that night walked away with''Optimism ,it is said ,is predictive of success ''..
     
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  8. kierank

    kierank Well-Known Member

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    I believe your comment applies to every investment for laypersons.

    Take another investment, starting a business. I started out as a one-person band. Fifteen years later, I started to see some decent returns; 20 years later, I retired very comfortably.

    It is called the magic of compounding - the compounding of effort in a business, the compounding of total returns (growth and income) in shares/property, …

    But compounding takes time, serious time!!!
     
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  9. Piston_Broke

    Piston_Broke Well-Known Member

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    The strategy was always and stil is a good starting point and was a good read.
    Could've been tweaked for much better results then as now though this depends on many factors.
    As usual it's an > 20yr plan.

    insert "buy some cheap properties"

    This is after they made money buying and holding for many years or decades.
    Once a certain amount of wealth is reached economies of scale and types of opportunities change.
    Also as the investment income exceeds wages, in today's lending climate lending ability also decreases.
    You can't borrow anywhere near as much on 200k pa divs as 200k payg.
     
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  10. MTR

    MTR Well-Known Member

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    share
    Efts
    Reits
     
  11. kierank

    kierank Well-Known Member

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    From my conversations with Ian, I am pretty sure they are invested in two if not all three of these.

    Jan’s books were about property investing, not their complete investment portfolio.

    As another example, I have been investing in all three of the above just as long as I have been (seriously) investing in property, ever since the early 1990’s :D
     
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  12. geoffw

    geoffw Moderator Staff Member

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    I've taken a lot more out of efts than I've invested.

    But I do have more in etfs ;-)

    I would not have had the funds to invest now if I had not bought properties. I had very little spare cash, but I did have equity.
     
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  13. MJS1034

    MJS1034 Well-Known Member

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    Which has been the best performed asset class over this period?
     
  14. kierank

    kierank Well-Known Member

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    No idea and I don’t care.

    I invest equally in property and shares, with a lesser amount in cash.
     
  15. MJS1034

    MJS1034 Well-Known Member

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    Cool, great input
     
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  16. skater

    skater Well-Known Member

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    I believe when they started out they were accidental investors. Moved house, but kept the old PPOR and rented it out.

    I agree. From memory (it's been years since I've read their books), and looking at things with today's, more experienced eyes, there are things that they could have done to supercharge it, but the key thing is that they bought and held on for many years, unlike other investors who decide to cash out as soon as there's a small CG, or get tired waiting and sell because 'this doesn't work'.
     
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  17. Scott No Mates

    Scott No Mates Well-Known Member

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    The (finance) world has changed dramatically.
    • Interest rates are lower than previous generations
    • More intrusion/regulation by APRA
    • Longer loan terms (increased from 25 to 30 years)
    • Greater availability of LMI
    • Lower deposit required (for some employment categories)
    • Reliance on household income rather than highest earner
    • Use of SMSF for investment vehicle (though rules keep changing)
     
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  18. Noobieboy

    Noobieboy Well-Known Member

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    Therw is much debate about this. Overall, it does seem that shares win hands down.

    Dollar for dollar. When we take leverage though the waters become much more murky :p
     
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  19. MTR

    MTR Well-Known Member

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    Getting timing right can be very lucrative;)
     
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  20. MTR

    MTR Well-Known Member

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    People holding 3+ properties is very low, not sure why??
     

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