What a joke! 155k net income yet only saves 6k a year in a 3p family

There is really not much point of taking on much of what is in the media without some questioning (or a hell of a lot), our media not as bad as US esp when it comes to politics, but all these shows are just that, shows, entertainment & really are not much different to reality tv....heavily edited to paint what they want you too see...

So many written things are just rot too, fillers, fluff.....attention grabbers, all so there is a vehicle for ads to be delivered.

 

I don't even know where to start! He is a finance manager???? Perhaps each of those families should be given a book to read, "The Millionaire Next Door".
Now imagine going to him and giving your hard earned money to invest (sorry no offence to financial planners/advisers/managers)?
For those looking for great brokers or traders to invest with or who invest your money with, below is a great extract from a book “The Millionaire Next Door”, on how a successful man, let’s call him Mr. Martin, interviews financial advisers/brokers:
I am a businessman who goes out and test people. Brokers call me a lot. They say, “I have a great deal of experience in Wall Street/Stock Exchange’s best offerings…I have fantastic track record of making money for my clients.”

I always say: “Do you have some good investment ideas for me - really good?” He says, “Absolutely, especially if you’re willing to make trades in your portfolio. I only handle accounts with a minimum of $200,000.”

Then I tell him, “So you’re really good. Well, I’ll tell you what. Send me a copy of your personal income tax returns from last few years and a list of what you have had in your own portfolio for the past three years. If you made more money than I did from investments, I’ll invest with you. Here’s my address.”

When they say, “We can’t show that to you, “I tell them, “You are likely to be full of baloney.” This is my strategy for checking people out. It works. I check them all out this way. I mean it very honestly.

Apparantly according to Mr Martin, “If these guys were really good, they would not spend all their time calling me.”

IMHO, great extract, one we all can learn from, if we ever find a financial adviser who is willing to illustrate that he or she themselves make money taking their own advise that would be the way to go. I suppose same should be applied to property investors. To distinguish from spruikers or speculators or investors check out their credentials same way…do they walk the talk?

 

I don't know who really can truly stick to their budgets? I for one couldn't but I practiced concepts like:
- Learning about finances and taxes, and in particular savings each week
- Never spending all the money received not just earned
- Lived on 70% of all income received and a always saved 30% automatically into a separate account (Practiced delayed gratification and lived on part of income and part was always saved then invested)
- Learned what is 'Bad Debt' (items that depreciate or lose in value as years go by - so car loans, most lifestyle choices like holidays, eating out, clothing, entertainment, credit or retail cards, etc) as opposed what is 'Good Debt' (purchases that generate income or bring money into my pockets - so investment IP, land that can be redeveloped, collectibles that can be resold for more, shares for CG and yield, business that will generate alternative income, etc...)
- Learned to set up an emergency cash buffer for life of at least six months net wages/salary
- Devised a plan first how to save a deposit for house to buy a house, then how to invest into RE or shares for life or other like a business
- Decided never ever to keep up with the Joneses, meaning would go without some things including travel
- Decided to take control of own finances by never trusting my money to others, at least I thought I would have myself to blame if I lost money

I am actually writing a book, to my young niece and just for my family and close friends, so never to publish. She is just starting to earn some money. I did not want her to make the same mistakes her parents or her family members made, most young or mature aged people make too, so I call them SECRETS! But really these are mistakes not to make when you are in your 20s, but can be really applied to any age.

Summary below:

• Introduction
• The Secret to Being Rich
• Secret 1: Learn and dedicate time to finances
• Secret 2: Never spend everything you earn or receive
• Secret 3: Pay yourself first and make it automatic
• Secret 4: Never get into bad debts
• Secret 5: Start and emergency fund
• Secret 6: Make a financial plan for your life
• Secret 7: Never ever keep up with the Joneses
• Secret 8: Never trust others to take control of your finances
• Conclusion
• Nominated Book List

I post each SECRET to her with ACTION STEPS after each and when she is ready I email her the next secret and so on....

Perhaps this man and his family should be given such information to read.
What I truly don't understand.... all of us go to schools and yet no school teaches us such basic fundamental good money habits, why? I had to learn it all from books!

 

I do not think it is so simple.

I know plenty of agents who know what can be made, know the areas they deal in like back of own hand, yet have no interest in having IP's...or some might have one, but they know what to buy and what not too, what is a good price and what is too much....etc etc...

Same as a valuer, broker, etc etc

Not everyone had to have the hand in the pie, or have hand it at the present.

At the same time, if your selling something, you better be prepared to back it up and be able to show why something is good.....TOO ANYONE....not only the ignorant.

 

[/QUOTE]
I post each SECRET to her with ACTION STEPS after each and when she is ready I email her the next secret and so on....

Perhaps this man and his family should be given such information to read.
What I truly don't understand.... all of us go to schools and yet no school teaches us such basic fundamental good money habits, why? I had to learn it all from books![/QUOTE]

Heaps of resources available for the family in the article. However, it's like when my wife went to her GP and told her "i've joined the gym" The GP said "joining's not enough you actually have to go"

Where do we learn our habits/values - in our families and we either accept those or reject them. So what's their child going to be absorbing - always have new cars, go out for dinner/get takeway, etc etc. Delayed gratitude is difficult. I'm great on some things, and poor on others.

 

Many know but how many act? Also, one cannot buy all the deals unless has unlimited cash or finance.
This is similar to the concept of being healthy and eating well, most of us know we need to eat less, healthier food and exercise say 1% of our weekly time, yet how many of us actually do it? We have many people who are obese or overweight in this country, and most would not be ignorant, we know what is required, right?
I agree many know, but how many actually act, like the email from jrc pointed out!
Knowing is never enough if there is no action behind it, hence why everyone who reads books such as "Think and Grow Rich", or "The Secret", never becomes rich or whatever they wish for.
Wishes are just that, wishes if no action is taken, I would even say that affirmations are just illusions if there is no action.

 

Many do not want to act, they do not have same desires as those that do....

The point is, you can listen to mechanic even if they are out of the trade, being out or having no houses as IPs does not render you clueless on a particular thing, that is what I was saying, it is not so simple.

 

I have a simple philosophy, everything is about choices and priorities, assuming you start on the same income for arguments sake,

its all about choices and priorities from that point on, everybody needs to have a roof over their head and to eat, you can choose to live in a nice new shiny house and eat out every day or not

 

Knowing to exercise is not knowing correct posture, how to super-set, and rest times.

Knowing to eat healthy is not knowing what foods meet your macro/micro nutrient needs, how to manage intermittent fasting, and having discipline to ensure you meal prep consistently.

Similarly, knowing a site can be developed because of zoning, is not the same as knowing how much it will cost to build the foundation, the fact that council will require you to buy an easement, and how to negotiate with neighbours or use the law to take it.

Great RE agents are great sales people. You have to train the agents to find what you are looking for. It's like throwing a ball and having them bring back a stick. Takes time, rarely get what you want, yet with time and effort, you may find gold.

Most good deals I've heard of lately have come from the investor/developer letter boxing, door knocking, select targeting properties using RPData.

 

Its Fake it until you make it..

i blame social media and egos.

re finance manager

 

.ditto for three pointed star......................especially if it's a diesel

 

Totally agree.
I like to break it down to wants versus needs. I believe that many people confuse wants with needs and this leads them down the path of overspending.

 

Exactly, a mobile phone is a need these days,

But a $160 a month plan for the latest iPhone with gazillion gig of data plus $20 ipad for someone with low income is silly

 

That's fantastic! I agree re: school. I learned nothing useful financial. I learned all that from my grandparents and parents.

My grandfather was a small business owner and I worked in his business during school holidays when I was in primary school. I didn't get paid but it taught me the value of work. He was also a property investor later, so I learned about property investing from him too.

My parents both worked, managed their spending and became property investors. I learned a lot from them. I was lucky.

Your book idea is great! I hope your neice really values the information in the book. It could seriously set her on the right track for life.

 

Thank you for your kind words... so I presume we hold similar values then?
Ah but my niece, I discovered, is more interested in boyfriends at this stage than money, being such young pretty adult? So as the saying goes you can bring the horse to water but you cannot make it drink.... At least my kids, well at least one keeps reading the books I recommend, latest being "The Millionaire Next Door"....but you know the funny thing, pointed out that we contradict the way we live now with what is in the book. So I explained, eventually delayed gratification can be changed to instant gratification if passive income creates the money now, not the earned income. There also will come a point in time when we can now share and spend some of it with the loved ones or on our wants now not just needs...I hope it makes sense.
So thankfully others have replied and wished they had someone like me advise them earlier.
My reply, I wish I had some one like that too.
You are truly blessed as you had your family teach you by example, I had to learn it all from the books or by doing but like you no regrets!
Like you my family ran their own small business and I too had to work for free from early age for no pay. Like you no regrets at all, actually all those challenges presented along in my life in many ways have actually enriched my life.
Example, they ran their kitchen so I had to peel 10kgs bags of potatoes or carrots, learned and helped out in the kitchen, later all became useful when making food for family as was quite proficient and quick in doing so.
They ran their small business small goods production, again realized turnover was not profit until bills and staff had to get paid, realized running any private enterprise was not just about income.
Did IT degree but via Commerce not just pure Computer Sciences, learned accounting, so later just bought MYOB book and established own accounts for various companies, ran all the paperwork myself, but since then I do now hire a bookkeeper to help out.
Worked in insurance company and did some courses, learned and then applied the knowledge to take total control of finances and own Super as I realized all those fees programmed into managed funds where for passive investors.
So without realizing... every little or hard milestone then, has benefited and enriched my life now! I am for ever so humbled by that and so grateful. BUT, that is so hard to pass to our younger future generations...why?

 

@MWI I also did an I.T. degree via Commerce. That's a strange coincidence!

 

You are kidding, right?

 

Not at all! I tried to get into computer science but I didn't have the math. So I enrolled in Bachelor of Commerce (Information Technology).

Mind. Blown!

 

You know what would be interesting, how many investors here have a background in I.T.? I attended some time ago a meeting and I think there were around 20 of us. We were asked to introduce ourselves and say few words what we do. What I remember from this was that at least 90% were actually from an I.T. background!
Perhaps, our analytical ability or we are open minded or we can follow makes us so many enter into real estate as investment? Would be interesting to know what professions leap into property investing?

 

True, true. But I wonder how many worked in a family shop at a young age?