Kudos to this young man

jonojpsg · 14 July 2009

Can we try and keep the maths right please people!!?? A median increase from 30k to 400k between 1982 and 2009 corresponds to approximately 10% compound per year which carried through to 2030 would imply a median house price of around $3m, NOT $18-20m!!!!

If you assume a more conservative 7%p.a. increase, median prices will be $1.6m. Still if he manages to make it through, he will have paid about $300k interest and made a $1.2m capital gain so that looks pretty reasonable IMO.

skyQuake · 14 July 2009

jonojpsg said:
Can we try and keep the maths right please people!!?? A median increase from 30k to 400k between 1982 and 2009 corresponds to approximately 10% compound per year which carried through to 2030 would imply a median house price of around $3m, NOT $18-20m!!!!

If you assume a more conservative 7%p.a. increase, median prices will be $1.6m. Still if he manages to make it through, he will have paid about $300k interest and made a $1.2m capital gain so that looks pretty reasonable IMO.

lol, cant believe no-one noticed that. Need 20% p.a. for 21 years compounded to be 18 Mil.
Obviously giving buffett a run for his money

Mr J · 14 July 2009

jonojpsg said:
Can we try and keep the maths right please people!!?? A median increase from 30k to 400k between 1982 and 2009 corresponds to approximately 10% compound per year which carried through to 2030 would imply a median house price of around $3m, NOT $18-20m!!!!

If you assume a more conservative 7%p.a. increase, median prices will be $1.6m. Still if he manages to make it through, he will have paid about $300k interest and made a $1.2m capital gain so that looks pretty reasonable IMO.

Most of which is inflation. The real benefit is that he's effectively paid rent to himself, rather than someone else, so it's more about capital preservation than capital growth. There are other potential benefits of course, but my point is that a house alone won't achieve much real growth.

data · 14 July 2009

jonojpsg said:
Can we try and keep the maths right please people!!?? A median increase from 30k to 400k between 1982 and 2009 corresponds to approximately 10% compound per year which carried through to 2030 would imply a median house price of around $3m, NOT $18-20m!!!!

If you assume a more conservative 7%p.a. increase, median prices will be $1.6m. Still if he manages to make it through, he will have paid about $300k interest and made a $1.2m capital gain so that looks pretty reasonable IMO.

You must be right. My math is way out.

I bought a home in 2004 for an expensive 138k (at the time), 4 bed 2bath, DLUG, 1100 sq block, <8k from CBD. Current val on refinance done in March 2009 by the bank is 560-570. Maybe the growth is exponential. I dunno??

tech/a · 14 July 2009

Hmm

I dont know.

He's a machine operator.

Now I have 4 of these guys operating 4 of my machines.
For $150-200K he'll get a machine (excavator) which will return $120/hr without attachments and for another $30K $200/Hr with a Rock breaker.
All my machines work 45-55 hrs a week.

Anyone who does even a bit of homework and is experienced would have any of their machines working similarly.

His 20K down would have seen him with a potential $3/4000/week nett return on his small business.

Wouldnt take long to get in the position to buy a house with a far better servicability.

data · 14 July 2009

C'mon surely there are ppl here with some real life experience. Whats the point of flaming n flexing your just pissing in the wind.

johnnyg · 14 July 2009

tech/a said:
Hmm

I dont know.

He's a machine operator.

Now I have 4 of these guys operating 4 of my machines.
For $150-200K he'll get a machine (excavator) which will return $120/hr without attachments and for another $30K $200/Hr with a Rock breaker.
All my machines work 45-55 hrs a week.

Anyone who does even a bit of homework and is experienced would have any of their machines working similarly.

His 20K down would have seen him with a potential $3/4000/week nett return on his small business.

Wouldnt take long to get in the position to buy a house with a far better servicability.

I like this....

tech/a · 15 July 2009

data said:
C'mon surely there are ppl here with some real life experience. Whats the point of flaming n flexing your just pissing in the wind.

Ke??????

jonojpsg · 15 July 2009

johnnyg said:
I like this....

Me too - Great alternative tech and one that more people should be looking at, spread the joy (of making money for oneself rather than someone else)

warezwana · 15 July 2009

LeeTV said:
If he holds on to the house till the market has another boom in years to come, reinvests the profits in to shares and waits another few years. When he finally gets married, settle down with his new found wealth, then divorced a few years later, his ex-mrs will have made quite the investment :

ha ha seems only you and I think of this (X)factor
it should be called the '7 year factor'...

Y + ($ * yrs) = $ =
(Y * yrs) + X = ... (enter 7year factor)
(X * ) + (Y * ) = +
(X = $) + (Y = ) =

ok so the redbull breaks over with, time to get back to the books/AFL, stop playing around and see what interesting stuff is being posted...

kincella · 15 July 2009

so for my 2 cents worth....this kid seems to have the necessary determination to make things happen.....ie he is not sitting back waiting for the gold bag at the end of the rainbows.....
I would have preferred to hear him buying a much less expensive property...under the 250k...not the over 450 k.....

and the other side of the conversation....
the males who are unhappy the spouse might receive half of the assets...is because the same males do not believe the spouse brings any value to the home...
she can raise his kids, do all the housework and cooking, laundry aka do everything for him like a slave....without any value attached...by said male
put a dollar value on it...on call 24/7.....pay a lousy $15.00 per hour for all the chores....and in 50/50 of the cases....the spouse...female...has given up her job or career, to raise your children and look after you....

ask any high powered CEO...most say they could not have done their jobs as well, if it were not for the spouses, in the background, providing all the support...

and thats what the courts do....hence the splitting....
so maybe a pre nup would be better, if it stated the value attributed to the female for her housekeeping and child raising functions...on a year by year basis....say mv 50,000 pa with cpi increases.....for a start
food for thought

Mr J · 15 July 2009

Kincella, you assume the spouses are 'just' housewives? These days the parenting and household duties are more balanced, even if it's because neither parent is actually parenting (nanny/daycare, clearner once a week etc).

Also consider that the ruling will scale with the income, and not be static. You really think a housewife is worth 50% to a bigshot ceo? I'm not just having a go at women here, I make the same argument for husbands who receive more than their fair share in divorce settlements.

so maybe a pre nup would be better, if it stated the value attributed to the female for her housekeeping and child raising functions...on a year by year basis....say mv 50,000 pa with cpi increases.....for a start

"I love you darling, and this is what you are worth to me...".

awg · 15 July 2009

tech/a said:
Hmm

I dont know.

He's a machine operator.

Now I have 4 of these guys operating 4 of my machines.
For $150-200K he'll get a machine (excavator) which will return $120/hr without attachments and for another $30K $200/Hr with a Rock breaker.
All my machines work 45-55 hrs a week.

Anyone who does even a bit of homework and is experienced would have any of their machines working similarly.

His 20K down would have seen him with a potential $3/4000/week nett return on his small business.

Wouldnt take long to get in the position to buy a house with a far better servicability.

Good post Tech.

Thing is I strongly suspect that his family have probably thought of this first.

As I mentioned in post #29, I have seen several families work in exactly this manner. ( he has 3 other siblings who have done the same thing)

example; Father is in Construction, sons are chippies, plumbers, elecs etc.

They build the biggest house they can, for capital gains free, and repeat.

sure you have seen this too

the only other observation is that, around here, construction equipment hire/work is rather difficult and risky to get a foothold into, as it is under the influence of some major players, and they squeeze the hell out of competition in some ways that would give the ACCC a heart attack:bandit:

kincella · 15 July 2009

its an incentive then, to stay married, do not divorce...look at Richard Pratt...with girlfriend and child....

Mr J · 15 July 2009

It's also an incentive to not marry at all.

kincella · 15 July 2009

of course...and choices....I was married years ago.....love my single life...of course I made most of my money after divorce...so I do not have to share...

awg · 15 July 2009

Mr J said:
It's also an incentive to not marry at all.

Hi Mr J,

here's an idea for you.

marry a girl with more dosh than you

then if it doesnt work out, you can asset strip her!

seriously though, if you ever want to own the roof over your head, it really helps to have 2 wages, so a lady with professional qualifications is ideal.

Its older kids that really shred your wallet, or divorce.

Mr J · 16 July 2009

then if it doesnt work out, you can asset strip her!

Not my style. I'd still leave with what is mine, and she can keep what is hers.

so a lady with professional qualifications is ideal.

Many of these take their jobs too seriously, but I suppose my opinions are no match for when my brain starts releasing chemicals and doping me up .

Its older kids that really shred your wallet

Yes, I'm guilty of that myself!

jono1887 · 16 July 2009

kincella said:
so for my 2 cents worth....this kid seems to have the necessary determination to make things happen.....ie he is not sitting back waiting for the gold bag at the end of the rainbows.....
I would have preferred to hear him buying a much less expensive property...under the 250k...not the over 450 k.....

He was on today tonite last night... I dont think he took out a 450k loan, I think its just for the land and he's building the house himself

Mr J · 16 July 2009

I don't imagine the materials to be cheap, and he's doing this on top of 56hrs work a week? If the land is $265, anyone care to guess other costs? It may not be so much of a risk financially, but burn-out appears that it could become an issue.

Kudos to this young man

jonojpsg

skyQuake

Mr J

data

tech/a

No Ordinary Duck

data

johnnyg

tech/a

No Ordinary Duck

jonojpsg

warezwana

kincella

Mr J

awg

kincella

Mr J

kincella

awg

Mr J

jono1887

Mr J

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