# How to not be average Joe?



## Tyler Durden (21 April 2012)

I have this preliminary plan of saving up for a home deposit by accumulating shares throughout the next 2-3 years. 

But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.

So I was wondering, is there any other way of owning a property without being like every other average person and working the rest of their lives to pay it off?

I see a lot of my colleagues who are tied to their jobs and will be probably until retirement as they have a mortgage to pay. I don't really want that type of life, but ultimately see no other choice? (if I want to own a home)


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## Garpal Gumnut (21 April 2012)

Tyler Durden said:


> I have this preliminary plan of saving up for a home deposit by accumulating shares throughout the next 2-3 years.
> 
> But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.
> 
> ...




Marry a rich woman mate, or a rich man's daughter.

gg


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## Tyler Durden (21 April 2012)

Garpal Gumnut said:


> Marry a rich woman mate, or a rich man's daughter.
> 
> gg




I have always had a crush on Paris Hilton


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## Garpal Gumnut (21 April 2012)

Tyler Durden said:


> I have always had a crush on Paris Hilton




lol mate.

I don't know any quick way to owning a home and accumulating wealth unfortunately. Buy low sell high, be contrarian, e.g I'm looking at retail stocks atm, I don't really know though.

Best of luck in your quest and if you marry Paris buy some Ansell stock.

gg


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## Tyler Durden (21 April 2012)

Garpal Gumnut said:


> be contrarian




Well I suppose that is what the purpose of this thread is all about (you've managed to succintly summarise it with those two words).

Do people work their whole lives to pay off a property because it's the best thing to do, or do people just do it because it's what everyone else does and it's the "accepted" way of life?


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## Eager (21 April 2012)

Tyler Durden said:


> I have this preliminary plan of saving up for a home deposit by accumulating shares throughout the next 2-3 years.
> 
> But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.
> 
> ...



You must appreciate the difference between good debt and bad debt.

Bad debt is when you borrow money for a depreciating asset such as a car. Good debt is when you borrow money for an asset that will basically be worth more than the purchase price after the debt is paid off. Normally, property falls into this category. Even 'gooder' debt is if the asset that you spend the debt on earns income along the way besides increasing in its capital value, and you can claim the expenses along the way, but there is an inherent risk there (rental properties etc).

If I were you, stick all of your spare money in Ubank. It will give you 6% without the risk of your capital falling in value.

DO NOT fall into the category of keeping up with the Joneses of the past, feeling that you must buy a property and pay it off ultra-quick. The Average Joe nowadays probably will not even own property.....you will always be in an advantageous position in the years ahead by having a property in your name.

Good luck.


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## Tyler Durden (21 April 2012)

Eager said:


> You must appreciate the difference between good debt and bad debt.
> 
> Bad debt is when you borrow money for a depreciating asset such as a car. Good debt is when you borrow money for an asset that will basically be worth more than the purchase price after the debt is paid off. Normally, property falls into this category. Even 'gooder' debt is if the asset that you spend the debt on earns income along the way besides increasing in its capital value, and you can claim the expenses along the way, but there is an inherent risk there (rental properties etc).
> 
> ...




Thanks mate, appreciate your input. I do have my savings in Ubank right now, but am always on the lookout for better returns on the market (hoping for a tank due to the Euro).

Maybe I am just being greedy, wanting a property but not wanting to spend my whole life paying it off


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## Glen48 (21 April 2012)

I would be keeping cash on hand for a good deal but not RE as yet it has along way and time to go yet, gold is suppose to go down to 1500 or less and silver 22- 20 or less so wait and see.  
 Just like every one else is doing.


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## Eager (21 April 2012)

Tyler Durden said:


> Maybe I am just being greedy, wanting a property but not wanting to spend my whole life paying it off



Take it from me, your life will not be wasted paying off a mortgage. It is amazing how young you will still feel 20 or 30 years from now!!!!


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## Julia (21 April 2012)

Tyler Durden said:


> Do people work their whole lives to pay off a property because it's the best thing to do, or do people just do it because it's what everyone else does and it's the "accepted" way of life?



 Tyler, for most people owning their own home is about much more than just the financial implications.  It's for that sense of pride of ownership, being able to do what you want with the house and garden, not being at the mercy of a landlord's whims etc.

I've made decent money out of every home I've ever lived in, but I consider that absolutely secondary to the pleasure and security I've had from owning these homes.


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## ROE (21 April 2012)

The sooner you can afford to buy a house the better off you are..
I bought it in my early 20's my kids will do the same when they reach that age.

Ignore the doom and gloom guys, most of these guys just talk,  and has no concrete plan in place ...

Price is a consideration but not the only consideration....

once you set on owning a home, research, work out your finance, save, discipline, live cheap and a house is very affordable at most point in your life


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## MrBurns (21 April 2012)

Buy the worst home in the best street and devote all your efforts to paying it off.

Remember the fool rents his house and owns his car.

The smart man owns his house and rents his car.
(well thats mainly for people who can claim car leases as a deduction)

The sooner you pay off your house the better, you can then borrow on it again to finance other investments.


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## tech/a (22 April 2012)

Your thinking like Joe Average.

Firstly if you bought a house today
What do you think it would be worth in 30 yrs time ( trust me you won't be in one house for 30 yrs)
What do you think your wage will be in 30 Years? ( 30 years ago my wage was
20k a year and wasn't considered too bad ----- today it's at worst 10 x that dependent on profits).

The trick to being well above JOE is the use of your equity in creating more opportunity.
You only need to recognize one opportunity and with excellent risk mitigation in place and enough capital--- compounding your results--- can change your life.

It's really about understanding how to think differently to JOE.
Most JOE'S see opportunity and most JOE'S see it way too late.

Most don't know how to take advantage of opportunity and don't get themselves in the position to be able to take advantage of opportunity.

Further most JOE'S that get to this level DO NOTHING

BUILD your positioning!


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## MrBurns (22 April 2012)

Most people ARE Joe Average, thats my advice to most people.

You've made a very nice speech about how you are above average but don't mention anything about how to do it.

Your advice is useless, in fact it's not even advice it's a rant on how good you are - everyone knows if you see opportunities in advance you'll win but not everyone can do that, buying a house you can afford and paying it off ASAP is the way to financial security for most people...........Joe Average.


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## Calliope (22 April 2012)

MrBurns said:


> Your advice is useless, in fact it's not even advice it's a rant on how good you are - everyone knows if you see opportunities in advance you'll win but not everyone can do that, buying a house you can afford and paying it off ASAP is the way to financial security for most people...........Joe Average.




Millions of Joe Averages in America were suckered into mortgages that were way beyond their means. It didn't take long for the inevitable housing slump to devalue ther houses until thay were unsaleable. Beware the sub-prime mortgage. 

I would advise you to accumulate at least a 10% deposit ( I am not talking about the first home-owners grant) before taking out a mortgage. A saving program would at least indicate that you can discipline your spending and saving.


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## StumpyPhantom (22 April 2012)

Tyler Durden said:


> I have this preliminary plan of saving up for a home deposit by accumulating shares throughout the next 2-3 years.
> 
> But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.
> 
> ...




Tough one, Tyler.  No easy answer there, especially for the Sydney property market.

Lots of Gen Y's today don't want to own a home and are content to rent (the same amount of dead money going out in rent as compared to the interest bill).  But it's not always that easy if you have plans to start a family etc.  So let's assume by starting this thread you DO want to own a home.

Your one advantage now is you're young (presumably) and you don't have kids (but a better half from time to time).  The point here is that you have the advantage of 'roughing it' somewhat.

There are various views about the Sydney housing market but one I read suggested it has (or is starting to) bottom out.  That may be so, but I can't see it rising for awhile because the overall economic climate here and overseas is so dull, so you're pretty safe accumulating that deposit for a couple of years yet.

In the late 80's and early 90's when I was in the market for my first home, prices were rising 3 times faster than I could save, so it made sense to jump in quickly.

When I did buy my first home in 1989 (in Canberra), I rented out two rooms and so it wasn't all dead money and I could do up the place a little.  From 1989 to when I sold in 1994 it went from $82k to $124k so I'm not expecting capital appreciation like that in the next 5 years.  But the point of that is that became my 'base equity' for every home changing experience since then (some good, a couple of really bad ones).

I'm 50 this year and I've decided I have to resolve all remaining debt in the next 5 years as I prepare for retirement.  I'm trying to imagine what the last 20-plus years would have looked like without home ownership and I probably would have bought shares in a removalist company.  It's a very unsettling experience.

But in this version of my life, I'll have a substantial asset to enable me to downsize in  couple of decades' time and a bit also for my kids to get them started.  So it's been a worthwhile experience (I'm also a terrible saver and might have frittered it away if it hadn't been in bricks and mortar).

Hope this helps


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## MrBurns (22 April 2012)

StumpyPhantom said:


> (I'm also a terrible saver and might have frittered it away if it hadn't been in bricks and mortar).
> 
> Hope this helps




Good point many people wouldn't know where there money went if they weren't paying a house off, it's forced savings and over time the house value improves and everything's good, 
Tyler try paying extra each month, that brings the term down dramatically. let the bank do the figures for you.


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## tech/a (22 April 2012)

MrBurns said:


> Most people ARE Joe Average, thats my advice to most people.
> 
> You've made a very nice speech about how you are above average but don't mention anything about how to do it.
> 
> Your advice is useless, in fact it's not even advice it's a rant on how good you are - everyone knows if you see opportunities in advance you'll win but not everyone can do that, buying a house you can afford and paying it off ASAP is the way to financial security for most people...........Joe Average.




Hell Burnsy that the best you've got to offer.
What every JOE AVERAGE including you think is the way to financial freedom.
Mine came from business/property/trading. Where you get this rant about how good I am comes from has me beat.---- tall poppy syndrome.

In this day and age find something you can become an expert in go into business.
Buy that house with potential ---- do it up and either use the equity or sell and do again. Timing/position and potential are everything.I know a 23 yr old who started this way. Now 30 he builds for profit as well as working full time. He rents one and lives in the other.12 mths later he sells one and lives in the other. 12 mths or so later he sells that and moves into his new one--- rinse and repeat.

He's no JOE AVERAGE.

Another young guy I know sells wine over the net.
Another imports and on sells imports from all over the world.
Both under 30

Not AVERAGE JOE'S

From 2001 to 2007 quite a few ABOVE AVERAGE JOE'S did extremely well.
My results are public knowledge with Techtrader.

So Burnsy
What was it you'd like to add? Errr rant.


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## MrBurns (22 April 2012)

tech/a said:


> So Burnsy
> What was it you'd like to add? Errr rant.




My point was you're expecting everyone to be wheeler and dealer such as yourself and it just doesnt happen the AVERAGE bloke buys a house pays it off and thats where his wealth lies.

I was in real estate agency for 20 years, also developing office buildings, buy refurbish strata and sell. 

Building houses living in them for a year then selling is good for builders, no capital gains tax but try it when the market isnt booming you might find it a little more difficult to turn a profit.

So there you go big shot


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## McLovin (22 April 2012)

Tyler Durden said:


> I have always had a crush on Paris Hilton




A mate of mine (who's a model and was living in NY at the time) woke up next to Paris Hilton after a pretty big night, not remembering who she was (or likely where he met her) he complimented her by saying "has anyone ever told you, you look like Paris Hilton".


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## Julia (22 April 2012)

StumpyPhantom said:


> Tough one, Tyler.  No easy answer there, especially for the Sydney property market.
> 
> Lots of Gen Y's today don't want to own a home and are content to rent (the same amount of dead money going out in rent as compared to the interest bill).  But it's not always that easy if you have plans to start a family etc.  So let's assume by starting this thread you DO want to own a home.
> 
> ...



Great post.



tech/a said:


> Hell Burnsy that the best you've got to offer.
> What every JOE AVERAGE including you think is the way to financial freedom.
> Mine came from business/property/trading. Where you get this rant about how good I am comes from has me beat.---- tall poppy syndrome.
> 
> ...



Tech, sometimes there's much to be said for being average.  I don't expect you will agree.  But not everyone needs to feel 'top of the pile' and can do without the stress of competitive and ever-striving environments.

It obviously suits your personality to keep building wealth.  Others will be content with less.  That doesn't make them lesser human beings.


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## Julia (22 April 2012)

McLovin said:


> A mate of mine (who's a model and was living in NY at the time) woke up next to Paris Hilton after a pretty big night, not remembering who she was (or likely where he met her) he complimented her by saying "has anyone ever told you, you look like Paris Hilton".


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## tech/a (22 April 2012)

MrBurns said:


> My point was you're expecting everyone to be wheeler and dealer such as yourself and it just doesnt happen the AVERAGE bloke buys a house pays it off and thats where his wealth lies.
> 
> I was in real estate agency for 20 years, also developing office buildings, buy refurbish strata and sell.
> 
> ...




I maybe wrong but I thought the thread title was
" How NOT to be an average Joe"

Your right about difficulty in a depressed market.
But it's only another difficulty.
If we all had your attitude EVERY builder in Australia
Big and small would be broke or well on the way.
EVERY investor would be out of the market because of
The GFC
They're NOT.

Now your suggestions are???
Ahh I see you don't have anything
Above average to offer.


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## MrBurns (22 April 2012)

tech/a said:


> I maybe wrong but I thought the thread title was
> " How NOT to be an average Joe"
> 
> Your right about difficulty in a depressed market.
> ...




Sure glad the help - 

Many builders DO go broke because the market proves they aren't brilliant after all , I've seen it .....you may have even experienced it.

They are boneheads who just keep building (badly too often) and dont know when to stop until they find they are overloaded with stock and the bank wants a chat.

The title of the thread is How to not be average Joe but you havent offered anything other than blowing your own trumpet.

_Deleted because it was uncalled for_


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## tech/a (22 April 2012)

Ok
I'll keep out of It.
Actually thought I was helping out.


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## MrBurns (22 April 2012)

tech/a said:


> Ok
> I'll keep out of It.
> Actually thought I was helping out.




Sorry I didn't mean to offend you I was just defending myself, it's very easy for things to go out of whack on internet forums.
I admire those who have a go and win, but as you know the first thing you have to do is have the confidence to actually have a go, many don't realize it's not as hard as it looks and you learn a lot as you go (note to self - I should get back into it)


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## StumpyPhantom (22 April 2012)

McLovin said:


> A mate of mine (who's a model and was living in NY at the time) woke up next to Paris Hilton after a pretty big night, not remembering who she was (or likely where he met her) he complimented her by saying "has anyone ever told you, you look like Paris Hilton".




Would he recognise his own body parts if it appeared in a video with Paris?


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## burglar (22 April 2012)

Tyler Durden said:


> ... I don't really want that type of life,




John Lennon "Life is what happens to you while you're busy making other plans." ,"Beautiful Boy"


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## McLovin (22 April 2012)

StumpyPhantom said:


> Would he recognise his own body parts if it appeared in a video with Paris?




I think it was strictly sans cameras. He never actually bragged about it, it was only I saw he had someone in his address book called "Paris" and I asked who that was and the story came out.

You should see our pub trivia team, it's like a Victoria's Secret fashion show.  And they're not there for their trivia knowledge!


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## Bill M (22 April 2012)

Tyler Durden said:


> So I was wondering, is there any other way of owning a property without being like every other average person and working the rest of their lives to pay it off?




Yes there is! Mate honestly, been through everything you are thinking right now. I realised that the one thing in life that chews up 50% of your salary is your rent or mortgage. How can I beat that, I thought. My wife and I at the time were DINKS. We just both worked as hard as we could for 5 years, all the O/T and second jobs we could get. We saved our annual leave and took no holidays as long as we legally could. Then one day, bingo, it was all over, mortgage paid. It was done in 5 years. Really even if you have basic jobs, both of you together can make 100k a year these days. It wouldn't take that long to knock a loan on it's head, even in todays $$$.

Sacrifice a few years when you are young in order for a long term, less stressed lifestyle. My wife and I beat the average Joe at a young age, our house was paid off early through plain and simple hard work, not many people talk about that concept these days but it still works.


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## MrBurns (22 April 2012)

McLovin said:


> I think it was strictly sans cameras. He never actually bragged about it, it was only I saw he had someone in his address book called "Paris" and I asked who that was and the story came out.
> 
> You should see our pub trivia team, it's like a Victoria's Secret fashion show.  And they're not there for their trivia knowledge!




Epic story though, he can spend the rest of his life telling that one.


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## MrBurns (22 April 2012)

Bill M said:


> Yes there is! Mate honestly, been through everything you are thinking right now. I realised that the one thing in life that chews up 50% of your salary is your rent or mortgage. How can I beat that, I thought. My wife and I at the time were DINKS. We just both worked as hard as we could for 5 years, all the O/T and second jobs we could get. We saved our annual leave and took no holidays as long as we legally could. Then one day, bingo, it was all over, mortgage paid. It was done in 5 years. Really even if you have basic jobs, both of you together can make 100k a year these days. It wouldn't take that long to knock a loan on it's head, even in todays $$$.
> 
> Sacrifice a few years when you are young in order for a long term, less stressed lifestyle. My wife and I beat the average Joe at a young age, our house was paid off early through plain and simple hard work, not many people talk about that concept these days but it still works.




Thats the way to do it unless you're a stock guru or entrepreneur of some sort, most aren't so Bills advice is the best you'll get outside of the winning lottery numbers.


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## IFocus (22 April 2012)

How to not be average Joe? 

Make more money........

Move to better employment opportunities, move state, city suburb what ever. 

Lower living costs, stop spending money on crap and start spending on your development.

Buy property (acres) in paradise thats not on the radar, Australia's population will only increase. Think about that Australia's population will only increase.

Oh and don't sell at the 1st hint of profit.

As for stocks........ trading will not make you rich ever (if you are on ASF it aint going to happen) but buying top shelf stocks in down turns like the run down 2008 / 09 will make you wealthy over a life time...........BTW 2008 /09 was a generational opportunity.

My


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## Tyler Durden (22 April 2012)

Bill M said:


> Yes there is! Mate honestly, been through everything you are thinking right now. I realised that the one thing in life that chews up 50% of your salary is your rent or mortgage. How can I beat that, I thought. My wife and I at the time were DINKS. We just both worked as hard as we could for 5 years, all the O/T and second jobs we could get. We saved our annual leave and took no holidays as long as we legally could. Then one day, bingo, it was all over, mortgage paid. It was done in 5 years. Really even if you have basic jobs, both of you together can make 100k a year these days. It wouldn't take that long to knock a loan on it's head, even in todays $$$.
> 
> Sacrifice a few years when you are young in order for a long term, less stressed lifestyle. My wife and I beat the average Joe at a young age, our house was paid off early through plain and simple hard work, not many people talk about that concept these days but it still works.




Thanks Bill, guess I'll just put my head down and do the hard yards. I'm turning 30 this year and single, so hopefully I get that raise I've been looking for.



IFocus said:


> How to not be average Joe?
> 
> Make more money........
> 
> ...




Thanks, yes I'm waiting for another opportunity!!!


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## Tyler Durden (22 April 2012)

MrBurns said:


> Remember the fool rents his house and owns his car.
> 
> The smart man owns his house and rents his car.
> (well thats mainly for people who can claim car leases as a deduction)




Funny you say that, I have two friends right now who are renting yet looking to buy brand new cars. I've advised them they'd be better off buying a second hand car, but it's like talking to a wall.


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## Starcraftmazter (23 April 2012)

Tyler Durden said:


> I have this preliminary plan of saving up for a home deposit by accumulating shares throughout the next 2-3 years.
> 
> But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.
> 
> So I was wondering, is there any other way of owning a property without being like every other average person and working the rest of their lives to pay it off?




Quite correct. Never get rid of income generating assets (shares, etc) for depreciating assets which must also be serviced with interest (property).

When buying a property ask yourself, can you get a better ROI on your money in stocks or whatever other invests you choose to make, then the interest on a mortgage. If so, you would be mad to give up a cent more than is necessary to buy a property. That is, put the smallest deposit you can and invest the rest of your cash. Of course mortgage insurance comes into it as well - but you can likewise calculate the opportunity cost of a bigger deposit versus not having to pay it.


But let's face it - property is for chumps, for people who want to live a life of slavery to the debt of the central banks. With the money you save in 2-3 years, you should be easily covering rent and generating a decent income, so why bother buying property when Australia is past the biggest property bubble in the entire world, and the only direction prices are going to head for at least 1-2 decades is down? Pfft.

Why pay interest on depreciating assets, and be locked into a particular geographical location (and god forbid your neighbours suck)? Why settle for crap quality or have a nightmare mortgage? Why buy a property at all? Rent a higher quality premises that you would otherwise buy and service with interest, live in complete freedom knowing you can easily move anytime, grow your wealth through investment, and laugh at your colleagues drowning in mortgage debt while you have all the opportunities they don't. You can live in a new capital every few years. Hell, you can travel abroad and work in your favourite countries.

When you buy - you are a slave, when you rent - you have all the power.

If you want to invest in property, better do it somewhere like USA where you can easily get double the yields here, with very little downside in prices (in 2-3 years time).


The world is screwed economically - who knows what will happen. Why sign your life away to some bank, not knowing if you will ever be able to fulfil the obligation.


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## ishakeel (23 April 2012)

Interesting thread


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## wayneL (23 April 2012)

Starcraftmazter said:


> When you buy - you are a slave, when you rent - you have all the power.




Not without the security of tenure they have in Europe you don't.

By the way, it's a bit of a stretch to categorize property as a depreciating asset. In fact only the improvements depreciate, the land itself is a potentially appreciating asset.

Even the depreciation on improvements is on the appreciating cost of replacement.

For instance a 240sqm house cost around $25,000 to build in the 80's. Though there is theoretical depreciation and most certainly maintenance costs intervening, the value of such a building (sans land value) would be much higher than the initial cost.

Even if only valued at half replacement cost, that still represents marked appreciation for a purportedly depreciating asset.


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## Tink (23 April 2012)

Julia said:


> Tyler, for most people owning their own home is about much more than just the financial implications.  It's for that sense of pride of ownership, being able to do what you want with the house and garden, not being at the mercy of a landlord's whims etc.
> 
> I've made decent money out of every home I've ever lived in, but I consider that absolutely secondary to the pleasure and security I've had from owning these homes.




Agree Julia.

Great posts here

I really dont understand the concept of people that rent, at least paying a mortgage there is an end.

I have had this conversation with a few people through the years, and it just baffles me, so I say, each to their own.


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## MrBurns (23 April 2012)

Starcraftmazter said:


> But let's face it - property is for chumps, .




A mate of mine has been buying property since the 70's inflation and a couple of re zonings over the years means he's now worth around $20m

He's no chump.

I understand where you're coming from though, all things being perfect and the stars being aligned and if you have the right information you can make a lot of money with shares but for all those who try I'm betting the majority fail. 

Generate as much income as you can and pay property off ASAP then do it again, cant fail if you dont over borrow and can service the loan/s.........even in bad times and there will be bad times do be conservative and work like a man possessed.


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## prawn_86 (23 April 2012)

I have had very similar thoughts TD. Paying interest does seem like a huge portion of a loan and possibly a potential waste in a market that is very flat. I think what you also have to do is focus on what you currently have intead of always wanting more.

Compared to a lot of my colleagues i have WAY more money (circa 50k and should be >6 figures in 2 more years)) saved than 95% of them and am disciplined with this saving meaning that it can only be used to buy assets (house, land, shares business etc) and for us now it is just a matter of continually adding to that and then waiting for the right opportunity.

Personally i am fairly resigned to the fact that a house will take a long time to pay off if bought in Australia, but if the right opportunity came along (positive geared rental property) then i would think long and hard about buying it.

At the moment though i think as long as you have a dedicated savings plan in place you will be OK. Or as MB says, if you aren't dedicated enough, a house can be a good forced savings plan


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## MrBurns (23 April 2012)

And ........when it's all said and done I think of what a wise man once told me...


"If you're happy with what you've got you're a wealthy man"


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## Pager (23 April 2012)

Tyler Durden said:


> But I am thinking...if I do manage to accumulate a sufficient deposit, I'd be effectively selling my income-generating assets to buy an asset that doesn't generate my income, *and then* I'd have to spend the next 30 years paying it off.




I’m assuming if you don’t own your home you are renting at present ?, surely you need to add that into the equation ?, yes you will have sold your income producing assets but if you are going to live in the property you are not paying rent.......

That essentially dead money we pay when renting becomes for most of us the bulk of the interest we pay when we buy, still dead money in some ways, hopefully though the value of the property will increase, so far history suggests it will but nothing comes with a cast iron guarantee, only death and taxes have such.........


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## tinhat (23 April 2012)

I haven't read all the posts in this thread. I've dipped in a couple of times. If your aim is to have a deposit for a house in a two to three year time frame then I'd be looking to keep most of your savings in pursuit of that objective in cash (say a uBank account) and take a chance at risking only a small portion on the stock market. If you are an active trader already and your market time frame is a matter of hours or days or a few weeks well you might want to deploy more of your savings into trading. If you are not a trader then two to three years is a short time frame on the market. You run the risk of seeing your capital  fall in value over that period and you have to decide is it worth the risk of losing say 20% of your capital over that period and what would that do to the aim of saving for a house deposit.


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## Glen48 (23 April 2012)

IF you don't want to be an average Joe keep right out of the RE market for years.


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## Starcraftmazter (23 April 2012)

wayneL said:


> Not without the security of tenure they have in Europe you don't.
> 
> By the way, it's a bit of a stretch to categorize property as a depreciating asset. In fact only the improvements depreciate, the land itself is a potentially appreciating asset.




You don't need any security of tenure; it's just irrelevant. Worst comes to worst, they can't kick you out by law if you have nowhere else to go anyway.

As for depreciating assets, historically that is the case. It obviously is not the case in a big bubble boom - but we are past that, and such it is not worth talking about appreciating land prices anymore.



MrBurns said:


> A mate of mine has been buying property since the 70's




If the only argument people can make about property is what happened many many decades ago, then it is quite obvious there's nothing going for property in the future.


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## wayneL (23 April 2012)

Starcraftmazter said:


> You don't need any security of tenure; it's just irrelevant. Worst comes to worst, they can't kick you out by law if you have nowhere else to go anyway.




That is just plain incorrect. Sorry, you have no idea what you're talking about. 



> As for depreciating assets, historically that is the case. It obviously is not the case in a big bubble boom - but we are past that, and such it is not worth talking about appreciating land prices anymore.




I have some sympathy with that point of view, but there is just as much probability that currencies will continue to be undermined, resulting in higher inflation. You don't need a 'boom' for property values to appreciate.


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## Starcraftmazter (23 April 2012)

wayneL said:


> That is just plain incorrect. Sorry, you have no idea what you're talking about.




Actually it is plain correct. Buy a unit in a bogan suburb, rent it out to a bogan family, and try and ask them to leave - see what happens.

I don't know whether you imagine the police will break in, arrest them and throw their crap out - but the reality will not match.

Although this is NSW I am talking about here, I am unsure if other states will be the same.



wayneL said:


> I have some sympathy with that point of view, but there is just as much probability that currencies will continue to be undermined, resulting in higher inflation. You don't need a 'boom' for property values to appreciate.




You do in real terms.


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## wayneL (23 April 2012)

Starcraftmazter said:


> Actually it is plain correct. Buy a unit in a bogan suburb, rent it out to a bogan family, and try and ask them to leave - see what happens.
> 
> I don't know whether you imagine the police will break in, arrest them and throw their crap out - but the reality will not match.
> 
> Although this is NSW I am talking about here, I am unsure if other states will be the same.




Eventually, though they won't be arrested, that is exactly what happens.


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## IFocus (23 April 2012)

wayneL said:


> I have some sympathy with that point of view, but there is just as much probability that currencies will continue to be undermined, resulting in higher inflation.




I wonder where the tipping point is as the central banks over reach?


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## Tyler Durden (23 April 2012)

Pager said:


> I’m assuming if you don’t own your home you are renting at present ?, surely you need to add that into the equation ?, yes you will have sold your income producing assets but if you are going to live in the property you are not paying rent.......




I am living with my folks. I pay board and am currently helping them pay off their mortgage.



tinhat said:


> I haven't read all the posts in this thread. I've dipped in a couple of times. If your aim is to have a deposit for a house in a two to three year time frame then I'd be looking to keep most of your savings in pursuit of that objective in cash (say a uBank account) and take a chance at risking only a small portion on the stock market. If you are an active trader already and your market time frame is a matter of hours or days or a few weeks well you might want to deploy more of your savings into trading. If you are not a trader then two to three years is a short time frame on the market. You run the risk of seeing your capital  fall in value over that period and you have to decide is it worth the risk of losing say 20% of your capital over that period and what would that do to the aim of saving for a house deposit.




I know it's risky, but I am willing to take that risk. I'm not saying I'm just going to blindly buy whatever shares at whatever price - but if the market tanks (in hindsight, should've bought in when the whole Greece thing first came to light) or some particular stock presents an opportunity (see Cochlear) then I will go in.


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## Calliope (24 April 2012)

Be an Average Joe and buy Telstra shares and you will be sitting pretty.


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## tinhat (24 April 2012)

Calliope said:


> Be an Average Joe and buy Telstra shares and you will be sitting pretty.




Actually, I agree with you there. Better be quick though. My average buy price is 3.20 (between Oct-Dec 2011). Should have bought more last week. Will happily buy more if the price pulls back below 3.40

Dividend of 28c good until 2014 then will rise as franking credits are available to pay out excess capital from NBN income stream.


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## tigerboi (24 April 2012)

already picked out a 5 acreage 3 bed home for $692,000...

had my operation on the 31st of march & seen my neurosurgeon today & i will only ever be able to do part time light duties.which means i cant work.

start physio next week & am expecting workers compo by october/december.

i like this property as its away from everyone but still only 1 hour ish from sydney.tigerboi

however if i get enough ive always wanted to buy a house in MY street...


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## overit (24 April 2012)

Get a fly in/ fly out job. Food and accom paid for. No rent if your crashing at your oldies place when your on RNR. Here on Barrow Island housekeepers are on about $108k + extras. Trade Assistants and peggy's (both glorified **** kickers) getting about $180k with all the bits and pieces (not including super.) 26days on/ 9days off. 10hr days.

Everyone tries to get onto operating mines driving trucks and stuff. But as you see some very good money in the construction side of things. I dont like my job but you can stash some cash very quickly.


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## CanOz (24 April 2012)

Tyler, why don't you learn to code. If you can learn Easy Language, or C#, you could make a few bucks coding up trading systems.

I haven't got the 'right' brain for it, but yo might.

CanOz


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## Eager (24 April 2012)

overit said:


> Everyone tries to get onto operating mines driving trucks and stuff. But as you see some very good money in the construction side of things.



More people have made more money servicing the mining industry than the miners themselves - FOREVER! It goes back to the gold rush days, and continues today.


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## Julia (24 April 2012)

With apologies for diverting the thread:  Overit's photos are far from those of the Average Joe.

Any more to show us in the appropriate thread, Overit?


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## Smurf1976 (25 April 2012)

Tink said:


> Agree Julia.
> 
> Great posts here
> 
> ...



Rent will increase gradually with inflation and this process is endless. 

Mortgage repayments are constant apart from changes in interest rates and are finite by their very nature.

Even ignoring the underlying economics, from a pure risk management perspective I'd rather have my housing paid for now than to be making an assumption that I can still afford the rent when I'm 70.

And there's the other huge downside of renting. You live on the landlord's terms, something I quite often hear mentioned in various contexts by friends who rent. 

Thankfully I'm my own landlord - if I want a dog in the house then I'll have a dog in the house. If I want to paint the walls then I'll paint the walls. If I want to do this, that or something else then I'll damn well do it.

I don't doubt that there are more profitable investments than suburban houses. But there's a non-financial benefit to owning your own residence which, for me at least, is worth more than any profits I could have made elsewhere with the same capital.


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## chrislp (25 April 2012)

Smurf1976 said:


> And there's the other huge downside of renting. You live on the landlord's terms, something I quite often hear mentioned in various contexts by friends who rent.




It's not that big of a downside IMO. So I can't paint the walls pink, big deal.

I can afford to buy a unit but I prefer the freedom of choice if I want to move & I prefer my capital to be free. 

With a mortgage my capital is.... .


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## Tink (25 April 2012)

Great post Smurf and agree.
I could go on and on about the good side of property but this isnt a property thread, but just have to ask --

Starcraftmazter, do your parents own a house?
Are you renting?
You may have said it in another post and I havent seen it, sorry.

Just curious.


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## young-gun (25 April 2012)

chrislp said:


> It's not that big of a downside IMO. So I can't paint the walls pink, big deal.
> 
> I can afford to buy a unit but I prefer the freedom of choice if I want to move & I prefer my capital to be free.
> 
> With a mortgage my capital is.... .




+1...i am far happier renting than any other option at current. $340 a week, no rates, a tiny water bill, a small power bill, and thats it. i never hear from the landlord, we look after the place, and hes already painted everything and polished the floors before we moved in *winning

and tyler i think to avoid becoming an average joe you just have to do SOMETHING. do your research, explore different investment possibilities, think of business ideas, always be thinking of ways you can make yourself successful, at the end of the day only you yourself know what your capable of. average joes buy one house, pay it off over 30 years, only pay what they are forced to into super, and thats it. fine for some, but i want more than this.

i personally am just aiming to be quite well off, i dont need money dripping out from every corner, so have set myself up accordingly to what i want to achieve. its all about you.


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## tech/a (25 April 2012)

chrislp said:


> It's not that big of a downside IMO. So I can't paint the walls pink, big deal.
> 
> I can afford to buy a unit but I prefer the freedom of choice if I want to move & I prefer my capital to be free.
> 
> With a mortgage my capital is.... .




Chris
Most of the younger people think this way.
But let's say you've just retired at 60.
You don't own a home you are healthy and 
You expect to live until 85 ish
Your Joe Average worked all your life and are 
Frugal . So at your current rent of $300 / week
You'll need $375000 just for rent let alone anything else.
Over that time you can expect rent to rise considerably
So let's say $ 500000 k

Your pension is $ 350 ish and doesn't keep up with inflation.
Your car takes $50 a week just for petrol.

THINK NOW
OR when your 50 and Joe Average it's too late.


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## young-gun (25 April 2012)

tech/a said:


> Chris
> Most of the younger people think this way.
> But let's say you've just retired at 60.
> You don't own a home you are healthy and
> ...




alot of assumptions there tech.


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## MrBurns (25 April 2012)

young-gun said:


> alot of assumptions there tech.




Not really.

If you think you can make more money TAX FREE by investing instead of living in your own home then go right ahead but you better be right or you'll be renting for the rest of your life and paying off someone elses house.


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## Glen48 (25 April 2012)

If you marry you need to keep nest egg hidden just in case , with about 50% or marriages failing  you need some security if nothing goes wrong you can break it out on retirement.


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## Ves (25 April 2012)

Glen48 said:


> If you marry you need to keep nest egg hidden just in case , with about 50% or marriages failing  you need some security if nothing goes wrong you can break it out on retirement.



God, what an awfully pessimistic view. Any wonder people fail at marriage so often; they look for the _negatives_ and completely forget the _positives_.


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## breaker (25 April 2012)

Ves said:


> God, what an awfully pessimistic view. Any wonder people fail at marriage so often; they look for the _negatives_ and completely forget the _positives_.




Positives ?


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## MrBurns (25 April 2012)

breaker said:


> Positives ?




You know when she says she's wanting to experience new things and has no further use for you and thanks for busting your guts all your life but I'll take half the proceeds and I'm going to live with another bloke....byeee .........err sorry thats a negative isnt it.


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## breaker (25 April 2012)

MrBurns said:


> You know when she says she's wanting to experience new things and has no further use for you and thanks for busting your guts all your life but I'll take half the proceeds and I'm going to live with another bloke....byeee .........err sorry thats a negative isnt it.




I once asked a girl to mary but she declined,now I go fishing drink till daylight go out with her mates and fart at the table ,I wish she had said yes.


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## young-gun (25 April 2012)

MrBurns said:


> Not really.
> 
> If you think you can make more money TAX FREE by investing instead of living in your own home then go right ahead but you better be right or you'll be renting for the rest of your life and paying off someone elses house.




yes, im happy to pay off someone elses asset that is falling in value at the moment. just because young people don't choose to buy now doesnt mean we are going to wait until we are 60.


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## Julia (25 April 2012)

tech/a said:


> Chris
> Most of the younger people think this way.
> But let's say you've just retired at 60.
> You don't own a home you are healthy and
> ...



+1.



young-gun said:


> alot of assumptions there tech.



Or perhaps realistic considerations.


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## Glen48 (25 April 2012)

Agree Mr. B nothing wrong with looking at the facts. I said if it all works out later you have a cash cow but be warned they can still take off in their 80"s.
Wish some one had of told me $1m would be !m richer.


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## MrBurns (25 April 2012)

young-gun said:


> yes, im happy to pay off someone elses asset that is falling in value at the moment. just because young people don't choose to buy now doesnt mean we are going to wait until we are 60.




Whooh hang on there Young'n I didnt say buy NOW in fact I wouldn't, hang on in case of a crash, it's looking pretty dim now despite the RBA being ordered to drop rates to help Gillard....errr I mean the economy.

Wait and watch, within a year or 2 it should sort itself out....


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## Ves (25 April 2012)

breaker said:


> Positives ?



Gee, the fact that you married your best friend? I couldn't think of a better way of adding meaning to your life, especially in this day and age where it is few and far between. If you think of marriage as some kind of financial pact or the necessity brought upon by a crisis of having to belong, or even a conduit for the realisation of endless sexual fantasies then you're probably like average joe and will be losing all of your pennies in a divorce court.


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## MrBurns (25 April 2012)

Marriage ruins everything, all of a sudden you're sleeping with a relative.


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## robusta (25 April 2012)

MrBurns said:


> Marriage ruins everything, all of a sudden you're sleeping with a relative.




That's just fine with us Tasmanian's


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## McLovin (25 April 2012)

Ves said:


> or even a conduit for the realisation of endless sexual fantasies




Yes, only missionary, as Jesus intended.


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## MrBurns (25 April 2012)

Now that food has replaced sex in my life, I can't even get into my own pants.

Is this off topic ?


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## Ves (25 April 2012)

McLovin said:


> Yes, only missionary, as Jesus intended.



Haha, I'm sure you could put your arms out perpendicular to the side in his honor too.


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## Eager (25 April 2012)

Glen48 said:


> If you marry you need to keep nest egg hidden just in case , with about 50% or marriages failing  you need some security if nothing goes wrong you can break it out on retirement.





Missus & I had a shared bank account from when we got engaged. Back then, 25% deposit in the names of the borrowers was required for a house, so since the house was always going to be in both our names, we had no qualms about saving for it together. There wasn't much of a nest egg back then, but if there was, it would have been OURS! How can you share a life together and NOT share finances??? :dunno:

If someone was to enter marriage with the sort of deception that Glen48 mentions, they bloody well deserve to break up!


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## MrBurns (25 April 2012)

Eager said:


> If someone was to enter marriage with the sort of deception that Glen48 mentions, they bloody well deserve to break up!




I agree BUT you need to be very careful to marry for the right reasons in the first place otherwise a bad choice will become your biggest nightmare as the years roll on.


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## wayneL (25 April 2012)

Eager said:


> Missus & I had a shared bank account from when we got engaged. Back then, 25% deposit in the names of the borrowers was required for a house, so since the house was always going to be in both our names, we had no qualms about saving for it together. There wasn't much of a nest egg back then, but if there was, it would have been OURS! How can you share a life together and NOT share finances??? :dunno:
> 
> If someone was to enter marriage with the sort of deception that Glen48 mentions, they bloody well deserve to break up!




Jesus Eager! Something I can agree with you on. 



MrBurns said:


> I agree BUT you need to be very careful to marry for the right reasons in the first place otherwise a bad choice will become your biggest nightmare as the years roll on.




Also agree with this. 

I was given this advice from a Greek gentleman when I was nineteen (athough stated in more positive terms). He was observing me and my then girlfriend at the time and thought we made a great couple...

...we just celebrated our 27th anniversary.


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## MrBurns (25 April 2012)

We could do with a thread on how to choose a partner, as another way to preserve wealth - Here's a start  - 

1) must be kind hearted...any evidence of harshness or cruelty, forget it
2) similar intellectual capacity
3) matched sex drives
4) similar assets
5) know the person for long enough for initial chemistry to wear off


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## Calliope (25 April 2012)

MrBurns said:


> We could do with a thread on how to choose a partner, as another way to preserve wealth - Here's a start  -
> 
> 1) must be kind hearted...any evidence of harshness or cruelty, forget it
> 2) similar intellectual capacity
> ...




And preferably of the opposite sex.


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## breaker (25 April 2012)

MrBurns said:


> Now that food has replaced sex in my life, I can't even get into my own pants.
> 
> Is this off topic ?




ROFL


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## burglar (25 April 2012)

MrBurns said:


> You know when she says she's wanting to experience new things and has no further use for you and thanks for busting your guts all your life but I'll take half the proceeds and I'm going to live with another bloke....byeee .........err sorry thats a negative isnt it.




I'd say that was a fresh start.
Glass half full!   !!!


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## MrBurns (25 April 2012)

burglar said:


> I'd say that was a fresh start.
> Glass half full!   !!!




Good attitude


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## Glen48 (26 April 2012)

Pete Slipper is trying both side so we should sit back and see the results.....maybe


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## Starcraftmazter (26 April 2012)

wayneL said:


> Eventually, though they won't be arrested, that is exactly what happens.




Do you have any personal experience with this? Or someone you know?

If you do get physically removed from the premesis - it will not be for quite some time. Ie. there is a minimum amount of time the landlord must give you (30 days at worst), and they cannot do anything to physically cause you to leave.

The law enforcement authorities will not get involved in this for quite some time - if at all.

So the point I was making once again, that if you are renting, you *do not* need to worry about having to leave in a hurry, you should have at least a few months to find a suitable replacement rental premises. I do not see a problem with this at all from the perspective of residential security.



Tink said:


> Starcraftmazter, do your parents own a house?
> Are you renting?




Yes & Yes.



tech/a said:


> THINK NOW
> OR when your 50 and Joe Average it's too late.




Not if property drops by 70% by that time 

Buying a property at the peak of the bubble when you are young so that you don't live in rent by the time you retire is not sensible, it is not calculated and it is not prudent.

It is downright retarded.


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