I found an article by Chris Gray host of Your Property Empire on Sky News Business channel and CEO of buyers’ agency Empire totally enlightening
He explained that because we are all so different we have to look at plans for retirement differently too. One man’s meat is another man’s poison as the saying goes.
However even though we may be at different stages of our lives and have different attitudes to risk he points out that there are some “Golden Rules” to adhere to.
Even though I’m not against a bit of risk I do like the odds stacked in my favour if possible and Gray agrees that our investing should give us the best possible chance of profiting while taking the least amount of risk and cautions us to “Concentrate on the numbers”
Maybe because math doesn’t come all that easily to me I am always out with the spreadsheet and plotting the numbers; so I’m on track there ….
However the trick is, I guess, to listen to them regardless of what you feel emotionally. Investing is not an emotional pastime I have found and in property the numbers almost shout at you!
Property as with all investing needs time so focus on the long term is paramount. I have started my investing on a small scale but having worked the plan through I know what I have to do and exactly for how long, until I can truly say, I am able to retire on the passive income the investments generate.
I have learnt that the best location you can afford is a must and unless you are flipping a property then the idea is to hold it and only sell if you can better the deal and returns ie rents by doing so otherwise your profit disappears in fees and charges.
There will always be a high demand for property in good suburbs as they tend to sustain high prices, so it’s best advice to buy more and build up your portfolio if you have the knowledge and are prepared for the work it entails.
“I would much rather have $2 million worth of property with a $2 million mortgage, than have a $500,000 property paid off and $500,000 in equity.
If the market moves up 10 per cent, my $2 million rises by $200,000, however my $500,000 property rises by just $50,000.
Over a decade, I would aim for my $2 million to double to $4 million rather than have the $500,000 doubling to $1 million. It’s more risk in the short term, but it pays off in the long term.“
I have also found out the hard way that you need a cash buffer to take care of the calamities that cross our investing paths. Without the cash you land up having to sell during a calamitous time, which kind of defeats the whole object of investing doesn’t it?
As we cannot be an expert in everything we do, we still need to seek out professional advice to help us make educated and calculated decisions. plus it might cost a bit but it is so inspiring seeing things through their eyes and realising what can actually be done. I love my frequent visits to my accountant, I always come home with something to look into and understand a bit better.
After one such visit I had a total epiphany and rethought our whole retirement plan! As I said I’m not averse to a bit of risk and something a bit different. ‘My bit of different’ seemed to be the only way I was going to every be able to actually retire so I was delighted when my due diligence and numbers all agreed!
Gray also agrees “If you do average things, you get average results. Most people work a 38-hour week and don’t retire until they’re 65.
If you want to create more freedom and choice in your life, often you need to do the opposite of what a typical person does.”
It’s often quite a challenge to go against the grain but often that’s what it takes. So do your homework, check for any possible downsides and then go for it. I did just that with Flipping 4 Profit and so far so good. I get the odd look from some people but some have seen it as I have – the way to the light at the end of a tunnel.
My retirement is on track with an achievable end goal now, Phew!
So, Go well till the next time 🙂
- Chris Gray is host of Your Property Empire on Sky News Business channel and CEO of buyers’ agency Empire