Don't buy a house. Buy shares. $20,000 to $7,400,000 in 30 years

Don't buy a house. Rent. Put the money you save into shares..

Start with $20,000 in your Account in highly successfull large companies that are near monopolies, they make large increasing profits and pay good increasing dividends and have a good future ahead of them.

Westfield, Fosters, Brambles etc.

Diversify, and avoid selling if you can purely for tax reasons, let what you owe in tax compound for you not the government.

Each year you buy $20,000 (+ $1,000 for each year) worth of shares . So on the 10th year you are adding $30,000 etc.

Reinvest dividends.

After 1 year you should have $20,000 + $21,000 +$2,400 = $43,400.
After 2 years you should have $70,608.
After 30 years you should have $7.4 Million.

Then move to Bermuda....

If you wanna tinker try and pick house price spikes before they happen - or if you can postively gear some investment properties go for it. I'm not against property but by using this method you will be alot wealthier than a property investor without all the effort.

Thoughts?

You are asking for trouble posting this thread....watch the headstrong property gurus get stuck into you now....

The filthy greedy property hoarders who see nothing wrong with buying up stacks of property (a basic human need) are coming after ya...better run and hide

Ohooh

:hide:

Stop_the_clock said:

You are asking for trouble posting this thread....watch the headstrong property gurus get stuck into you now....

The filthy greedy property hoarders who see nothing wrong with buying up stacks of property (a basic human need) are coming after ya...better run and hide

Click to expand...

I am sick of your negative commo attitudes. If you are so disadvantaged go to China.

Realist.

Im very suprised,you can actually think outside your shoebox!

Excellent.

The people who make real money out of property are developers who borrow, subdivide and sell of sections of the property for as much or more than they paid for the lot; they repay their loans and now have an asset which cost them zilch. They then use that asset as a deposit to leverage their next property, and so it goes on; leverage par excellence.

The bigger developers have the added advantage that there is little competition for really large properties (say $20-100M), and when these properties are broken up into bite sized pieces for smaller developers the wealth generated is nothing short of astronomical.

Well, I'm not there yet, but just recently I purchased a property for $300k which is now in the process of subdividing. Development costs are expected to be in the order of $100k, and final gross value somewhere between $640-720k depending on the state of the market. At very worst, a fire sale should deliver $500k and leave me with a $100k profit minus interest payments, at best I'll make $300k. Its not the greatest example either; I personally know other developers who pay peanuts and make millions; it is a matter of being in the right place at the right time and knowing value and seeing opportunities that most people miss. But I'm starting where I can.

What makes this story significant is that I had no money; I haven't actually put a cent into it. This is not unusual; most property developers I know started with nothing, and learnt the skill of making something out of nothing.

So how does one raise the cash for the deposit? How does one raise another $100k for development?

Easy.

If you have shares or property, then leverage the deposit off either. I do, so I could.

If you don't, your friendly developer may offer to fund your deposit; naturally the price will rise artificially, but that isn't necessarily a bad thing because it establishes a higher market value on your properties anyway. The developer will then defer payment of your deposit. If the developer is a friend, he may even forgive you the debt, and write it off. At the end of the day, a property is worth what the market will pay anyway. Then when the DA is approved, the value of your property rises again substantially, and the bank will be happy to fund the development costs, including the interest payments in the mean time.

All of which sounds terribly high risk...and it can be...but, providing the end returns are there and you have done your sums correctly, it can be a relatively safe fast way to build equity and wealth from nothing. As a rule of thumb, it probably isn't worth doing if you can't reasonably expect to double the purchase price, the aim being to double the money applied.

When you have nothing, you have nothing to lose by trying something.

Snake Pliskin said:

I am sick of your negative commo attitudes. If you are so disadvantaged go to China.

Click to expand...

Just booking my ticket to China as we speak...LOL

Yes ...I guess I am so sick of greedy behaviours that have become the social norm, and yes greed is owning way more than you need, or your family needs.

Yes, but are you telling us how to be a property developer fulltime?

Of course they make money. Everyone who works fulltime makes money.

I make money turning up to work each day. I'll make millions over many years, what is the difference?

The beauty of the sharemarket is it aint work. It is fun!!

Property development is painfull IMHO. If you wanna do property development why not get a job as a gib rock plasterer on all your weekends and some nights - you'll make $200,000 over 3 years. It is the same as working on rennovations on your own property isn't it?

$7.4 million? I want $74 million! (100 actually) Oh well, better get back to tradin'. :

Realist said:

Don't buy a house. Rent. Put the money you save into shares..

Start with $20,000 in your Account in highly successfull large companies that are near monopolies, they make large increasing profits and pay good increasing dividends and have a good future ahead of them.

Westfield, Fosters, Brambles etc.

Diversify, and avoid selling if you can purely for tax reasons, let what you owe in tax compound for you not the government.

Each year you buy $20,000 (+ $1,000 for each year) worth of shares . So on the 10th year you are adding $30,000 etc.

Reinvest dividends.

After 1 year you should have $20,000 + $21,000 +$2,400 = $43,400.
After 2 years you should have $70,608.
After 30 years you should have $7.4 Million.

Then move to Bermuda....

If you wanna tinker try and pick house price spikes before they happen - or if you can postively gear some investment properties go for it. I'm not against property but by using this method you will be alot wealthier than a property investor without all the effort.

Thoughts?

Click to expand...

Given your buy and hold philosophy, Realist, what will happen to your plan if we have several years of bear markets? I gather you don't short, so how would you manage that scenario?

Not trying to be picky here, as basically I agree with your post, but you can't bank on all your shares going up all the time.

Julia

One obvious problems with these projections is that these are not normal times.
It's easy for those who came into the market in the last 3-4 yrs to assume that stocks will continue to make massive annual gains in perpetuity.
Why not if it's all you've ever seen?
However history says that's unrealistic.
Markets return to the mean.
In order for this one to, there either has to be a substantial fall or 5-10 years of flatlining, neither of which will be much fun for shareholders.



ice

Moses.

Well done.I hope all goes well with the subdivision.

Realist its a gip rock fixer.Your not even close to understanding Moses and the likes.
Some of us ( and Im not sure about Moses) develope property as part of our business.
Even some retirees do it on a small scale.

Stop.

How much is enough?
At what level do you define greed?
$1500 Commodore or $85,000 BMW?
Owning a house in Elizabeth or a house in Beaumont?
Being able to holiday in the Bahamas or holiday in Melbourne?
Jeans and T/Shirt or Suit?
Retire and take the pension or be self supporting?
Be in the position to make other people's lives easier when true need arises or sorry cant help cause Im not in the financial position to.

Or would a world all living in Byron Bay be your ideal?

For those that do not believe 12% p.a. is sustainable over 30 years please consider dividends.

Roughly 6% dividends, and a 6% share price increase is very conservative in my opinion.

No I do not short Julia, and yes I expect poor years, even losses. 12% is the average I would expect over the longterm though, there'll be very good years to offset the poor years.

tech/a said:

Realist its a gip rock fixer.Your not even close to understanding Moses and the likes.

Click to expand...

I wouldn't know, I don't do manual labour..

tech/a said:

Moses.

Stop.

How much is enough?
At what level do you define greed?
$1500 Commodore or $85,000 BMW?
Owning a house in Elizabeth or a house in Beaumont?
Being able to holiday in the Bahamas or holiday in Melbourne?
Jeans and T/Shirt or Suit?
Retire and take the pension or be self supporting?
Be in the position to make other people's lives easier when true need arises or sorry cant help cause Im not in the financial position to.

Or would a world all living in Byron Bay be your ideal?

Click to expand...

Yes its all relative...but from where I am sitting you have more that adequate for yourself, your family and then some and some more and even more.

While turning on the tap reveals water and the flow in the Murray is still adequate enough for the tap, then there will always be ways to justify your position. The argument still remains!

How much is enough?

There is self suffiecent (including family) then there is just pure greed.

I am sure you would struggle to feel happy and content in the company of people like Rupert and Laughlan Murdoch.

Realist said:

Yes, but are you telling us how to be a property developer fulltime?

Click to expand...

Developing property needn't be any more difficult than paying someone to draw lines on a map. But you're right to a point; it might mean work. Or does it? The key is value adding, and the more you value add the higher the return. Value adding usually requires work of some sort, but then...any serious property developer pays someone else to do the work, which gets filed under "development expenses". The idea is that these are paid for out of the development's potential, seen very soon after some new lines are drawn on the map.

So its just as T/A says; its about thinking outside the box.

tech/a said:

Moses.

Well done.I hope all goes well with the subdivision.

Realist its a gip rock fixer.Your not even close to understanding Moses and the likes.

Click to expand...

thanks.

and btw, it "Gyprock"

Realist said:

I wouldn't know, I don't do manual labour..

Click to expand...

Thats evident.

I am sure you would struggle to feel happy and content in the company of people like Rupert and Laughlan Murdoch.

Click to expand...

Remember that people grow Companies the success can be steam rolling and I hope your not suggesting that the true entrepeneurs of the world stop and retire at a figure which isnt considered obscene by people like yourself.

The world wouldnt have Vehicals,or Computers or medical science,or infrastructure.Really it is a rediculous position.
My "Greed" as you call it employes many who believe me have their greed!!not long ago I had to sack half my staff for theft---not though necessity (The theft) on their part,pure greed.

What your proposing certainly cannot be supported in the western world.
Looks like to be happy you will need to move to a socialist society.
But then you'll be controlled by big brother,just like we are but with absolutely no way to gain reprieve.

moses said:

thanks.

and btw, it "Gyprock"

Click to expand...

So it is.