How to not be average Joe?

[Tyler Durden]

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)

 

[Garpal Gumnut]

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)

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

gg

 

[Tyler Durden]

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

gg

I have always had a crush on Paris Hilton

 

[Garpal Gumnut]

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

 

[Tyler Durden]

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?

 

[Eager]

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)

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.

 

[Tyler Durden]

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.

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

 

[Glen48]

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.

 

[Eager]

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!!!!

 

[Julia]

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.

 

[ROE]

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

 

[MrBurns]

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.

 

[tech/a]

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!

 

[MrBurns]

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.

 

[Calliope]

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.

 

[StumpyPhantom]

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)

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

 

[MrBurns]

(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.

 

[tech/a]

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.

 

[MrBurns]

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

 

[McLovin]

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".