What is your backup plan??

Listed investments ; Fundamentals based long term investing in businesses with durable business models, low debt and reliable earnings and then investing dividend income back into the portfolio. "just buy and hold" has a connotation that one isn't managing the portfolio and keeping on top of things. Most traders I have ever come across are former traders for one reason or another, whereas I know a few investors who have compounded large sums following a long term approach. Just my observations.

Unlisted investments ; same as Sanj. I hold stock in 3 private companies (28.6% / 50% / 20% respectively). This is where the real cash is generated.

 

Interested in this mate. Could you tell me a little more about it. Do you seek companies that need finance or go looking for them ? or something else?

Thanks.

 

I am co founder of two of the companies, the other I saw an opportunity to get a key man out of an existing business and help him start up. Once you are in business you see all kinds of opportunities, often they relate to your first business but branch off into different areas. If you are any good you can quickly assess which ones are worth your time and fit your areas of expertise.

 

Agreed and you're constantly learning and realising how you can do things better.

Once you get into this space I find there are endless opportunities and a huge skill lies in working out what to say no to (as you alluded to) and how much you can take on before it starts to affect other existing interests. That last bit is something I'm constantly working on and trying to improve.

Natural instinct is often to want to get into something if an amazing opportunity is presented but sometimes you have to say no.

My most painful one was saying no to buying up to 10% of a company at a $1m val and loaning them a bit of cash. That company just a few years later is worth around $20m, could hit $40 within 3 years and pays out outstanding monthly dividends like clockwork.

Unfortunately what I chose not to pull money out of only doubled, cant win them all I suppose.

 

@The Falcon for the companies you do not run entirely or work full time in do you tend to charge for consulting or get directors fees?

Also, do you insist on being a director? I used to but have recently asked not to be for a new venture, i think its the right decision but time will tell

 

Geez that would be painful.

Now on the bold part, yes spreading yourself too thin is a risk, as is just going far too hard and running out of steam and or neglecting other areas of your life. I am guilty of the second part but now trying to address that. For mine, I think 3 ventures is enough, I really don't have time to go beyond this.

 

3 does seem to be the magic figure. I've always been someone who needs to work on multiple projects/businesses at once or I get bored but ive also trimmed it down to 3/4 for anything that requires a certain level of involvement by me.

Thanks for sharing your thoughts/experience btw, much appreciated.

 

If I am not working in them day to day - ie. making risk related calls, and on top of things I choose not to be a director. This is the case in one of my three holdings, in this case I was able to draft a shareholder agreement that allowed myself and business partner to exercise the same level of control as a director but without the risk. There is a lot you can do with shareholder agreements....but obviously this needs to be done at foundation.

Re fees, one of the businesses is my 9-5, so that pays salary, no fees. Divs twice a year. In the 50% business that is half owned by my business partner and we both work it equally (not hard) so we just take dividends monthly rather than fees. In the other business as its a new venture we aren't drawing fees but will do so when the business can support them.

 

Agreed, that's something I took a bit of time to realise the importance of but now insist on it every time ( re shareholders agreemrn).

I've got 2 separate partners I do things occasionally informally or on a handshake but that's pretty rare and only after a fair bit of personal and professional dealings

My thoughts echo yours re directorship, i dont want to get burnt if the people running the company day to day don't fulfil legal obligations and I definitely don't want to be giving out directors guarantees at any stage but especially if I'm not running it

 

Some sort of confidence scheme involving government contracts, or release my debut gangsta rap album

The stock market isn't for me. I'm not disciplined enough to treat it as anything other than gambling. It has hurt me too much before.

Truthfully I haven't really considered it. The boss has just started her own business, probably help her focus on growing that and transition into my life goal a little earlier, that being daddy day care

There is always money to be made out there. I'm sure it wouldn't take that long to find other ways if I had the time/need.

 

@WilliamB love your attitude mate.

btw sent you an email re the 14k dilemma i recieved. I hope thats correct and no more! Boy that would be nice!

 

Actually super is a great vehicle to park some cash...in about 11 years time I can pull it out tax free. Once you have able $1m in ...you can pretty much get about 45k-50k/pa tax free...assuming the govt does not change rules. Even if they do it will still offer some great benefits.

 

And youll still get some pension with so much super?

 

Hi mate wil look now.

 

Assuming the 11 years time you're referring to is the pension phase of your super you'll have to withdraw minimum 4% yearly anyway.

I agree that super can be a fantastic vehicle and one that is seriously underused by many. People try all kinds of schemes and scams, often illegal, to try and avoid paying tax or having offshore accounts etc when every citizen over 60 here can have their own tax free haven

 

Just responded to email. Not good news I'm afraid.

Bottom line is both BCC and QUU take their pound of flesh. Looks like you've only seen BCC so far.

 

"Bottom line is both BCC and QUU take their pound of flesh"

@WilliamB i better lose weight then mate.....

 

I'd invest in shares, applying the same buy and hold prinicpals as I do to property. A reason why many share traders come unstuck is simply because they trade, rather than buy and hold.

Good quality shares, with good dividends. Buy them when they're obviously cheap, hold them forever. Not an overnight wealth strategy, but it does work over time.

If property had the same leveraging as shares, this would probably be a better investment strategy for most people already.

Building your own business is also a great investment strategy, the trick is figuring out what type of business.

 

Well it does, doesnt it..like via CFDs?

 

Different risk profile. I'm fully aware that equities markets can be leveraged, in some cases far more than property. It's certainly not a buy and hold strategy.

All things considered, if I was entirely comfortable with these strategies, I wouldn't bother investing in property at all.