Ideas for establishing a capital base to begin investing - getting past first base

[white_goodman]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Started out working part time in my brothers pizza restaurant at 15. Watched him blow out several times, no respect for money when he had it and not focused on the current business he was in....learnt what not to do!

At 21 I 'd worked two years and had nothing to show for it. Spent on booze, petrol for the V8, partying, petrol,more partying and....petrol...Ahh the good ol days. Realized I had to change to ever get ahead.

Saved 100K over the next 4 years, got married, bought a house paid off in 2 years. Asked my dad (European background) for advice as to what to do next........son buy another house...ok and then what....I don't know buy another house.....

Spent about $10k over the next few years on investment books, seminars etc
Bought, stripped and fully renovated 3 IP's
Kids came along, worked partime and started to learn how to trade

Took 4 years to develop a trading system that I finally jelled with my view on the markets and jelled with my psych........once you develop your own system, trading it becomes easy...

Currently doing two small property developments......moving towards a strategy of purchasing and subdividing existing homes and land into three, selling off the existing house and one of the new properties and keeping one as long term rental.....repeat.
Great strategy to build instant equity, longterm wealth and passive income.

All trading profits are currently re-invested to build account.

Not a very exciting but is working for me.

However, most importantly I've been able to spend most of my time with my wife and two kids.

that is the dream, enough money to live very comfortable and be time rich

 

[michael_selway]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

Started out working part time in my brothers pizza restaurant at 15. Watched him blow out several times, no respect for money when he had it and not focused on the current business he was in....learnt what not to do!

At 21 I 'd worked two years and had nothing to show for it. Spent on booze, petrol for the V8, partying, petrol,more partying and....petrol...Ahh the good ol days. Realized I had to change to ever get ahead.

Saved 100K over the next 4 years, got married, bought a house paid off in 2 years. Asked my dad (European background) for advice as to what to do next........son buy another house...ok and then what....I don't know buy another house.....

Spent about $10k over the next few years on investment books, seminars etc
Bought, stripped and fully renovated 3 IP's
Kids came along, worked partime and started to learn how to trade

Took 4 years to develop a trading system that I finally jelled with my view on the markets and jelled with my psych........once you develop your own system, trading it becomes easy...

Currently doing two small property developments......moving towards a strategy of purchasing and subdividing existing homes and land into three, selling off the existing house and one of the new properties and keeping one as long term rental.....repeat.
Great strategy to build instant equity, longterm wealth and passive income.

All trading profits are currently re-invested to build account.

Not a very exciting but is working for me.

However, most importantly I've been able to spend most of my time with my wife and two kids.

Sounds good

But do you think this will work now in current markets, the property stuff?

"Bought a house and paid off in two years", will that still work now a days with high interest rates & cost of living (inflation)?

Thx

MS

 

[MRC & Co]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

^^^^^

Not to mention, stagnating or falling house prices over multiple years!

 

[Sakk]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

But do you think this will work now in current markets, the property stuff?
MS

For each potential project I factor in the worst case scenario, crunch the numbers and make a decision. There's opportunity in every market condition. Subdividing land into two or more lots at the rear of an existing home creates instant value and a buffer to declining prices.

If you buy well and add value you create a much larger buffer against the downside. Just like trading, you need to be patient and wait for the correct setup, in the property market you stay cashed up and wait patiently for someone to drop their pants on price.

"Bought a house and paid off in two years", will that still work now a days with high interest rates & cost of living (inflation)?

Thx

MS

Depends on your income

 

[tech/a]

Re: Ideas for establishing a capital base to begin investing - getting past first bas

For each potential project I factor in the worst case scenario, crunch the numbers and make a decision. There's opportunity in every market condition. Subdividing land into two or more lots at the rear of an existing home creates instant value and a buffer to declining prices.

As a developer this is a risky stratagy.Corner blocks or rear entrance blocks are best.Land currently in hammer head blocks in SA are very slow sellers.
The value isnt added until the land is sold.

If you buy well and add value you create a much larger buffer against the downside. Just like trading, you need to be patient and wait for the correct setup, in the property market you stay cashed up and wait patiently for someone to drop their pants on price.

True its like paying a larger deposit. Gearing like everything in business deminishes risk.

Depends on your income

Paying off a home may not be the best stratagy for some.Gearing to positive cashflow maybe better and utilising deductions.