Monthly Archives: February 2015

TOP 5 AREAS OF QLD WITH HIGHEST INTERNATIONAL VISITORS – RENTAL GROWTH

THEY are the places that top the lists when it comes to holidays but new research has revealed the biggest tourist areas of Australia may be the worst places to buy houses.

According to figures collated by finder.com.au the areas with the highest international visitor numbers did not always return the best yields or capital growth.

As many of the top visitor spots are our capital cities buying a house can be expensive and with rental growth down in most cities, the returns for investors are not good.

AT A GLANCE •Property management, Rental services. •	Individual solutions to fit our client's needs •	High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover. Register your interest to receive property updates and our real estate blog.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.
Register your interest to receive property updates and our real estate blog.

Units, which were often cheaper to buy, offered investors better returns in most of the holiday hot spots.

PROPERTY prices may be rising but rents have ground to a halt with new research revealing rental growth is at its lowest level in more than a decade.

The latest CoreLogic RP Data quarterly rental review found that combined capital city advertised

rents had only increased by 1.8 per cent in the past 12 months.

In the last quarter of 2014 rents were unchanged at $430 a week for a house and $410 a week for units.

Hobart house rents experienced the strongest growth of 5.4 per cent in the last quarter of 2014, followed by Brisbane at 2.5 per cent.

Perth and Darwin were the weakest house rental markets with their rents down by 2.2 per cent and 0.8 during the quarter.

The unit market’s performance was “somewhat weaker’’ than the housing market across the board with Hobart and Brisbane the only capital cities to experience an increase in rents during the quarter of 1.8 per cent and 1.3 per cent respectively.

Unit rents fell during the period in all other capital cities.

Despite its rents dropping, Darwin still had the highest median rent for houses and units at $645 a week and $550 a week.

Even though it had the biggest increase in rents during the quarter Hobart had the cheapest median rent for houses and units at $343 a week and $280 a week.

CoreLogic RP Data research analyst Cameron Kusher said the figures revealed the most subdued rental market since the mid 2000s.

“While rental growth remains low, rents still increased over the year in most cities with Perth, Darwin and Canberra the exceptions,’’ he said.

Mr Kusher predicts rental growth will remain fairly soft throughout 2015 particularly as there is a high number of new dwellings approved and ready for construction.

In Queensland’s the Brisbane CBD pipped the Gold Coast in terms of visitor numbers. Houses returned poor yields of 3.49 per cent while the unit market was a much stronger performer at 6.33 per cent

If you’re going to invest on the Gold Coast or Sunshine Coast the unit markets in both those regions were a much better prospect with much stronger rental returns.

TOP 5 AREAS OF QLD WITH HIGHEST INTERNATIONAL VISITORS — HOUSES

PORTSIDE WHARF WATERFRONT

Brisbane — 974,156 visitors — 3.49%

Gold Coast — 792,702 visitors — 3.3%

Tropical north Qld — 684,241 visitors — 4.42%

Sunshine Coast — 218,404 visitors — 4.81%

Whitsundays — 182,337 visitors — 3.48%

In Tasmania the returns in Hobart were fairly evenly split between the house and unit markets.

With 129,292 international visitors during the year, houses return 4.49 per cent and units 4.87 per cent.

AT A GLANCE •Property management, Rental services. •	Individual solutions to fit our client's needs •	High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.

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Foreign Buyers article of interest

more on the current topic of Foreign Investment))

ljgrealestate

Foreign Buyers article of interest 27-2-2015

The Federal Government is proposing to charge foreign investors a fee to apply to buy an Australian residential property. The fees start from $5,000 for property sold under $1m & increase by increments of up to $10,000 for each additional $1m in property value.

Large fees are also mooted if overseas buyers, or those selling property to them, breach these new rules.

These new proposed fees are a lot less than those originally suggested in last year’s parliamentary inquiry into foreign investment.

The real estate industry has, predictably, slammed the current proposal, which I find quite comical, given that many within the property industry have been arguing (some heatedly with us) that foreigners represent only a tiny proportion of sales & have not materially influenced the market.

Now they are claiming such fees will have a detrimental impact on housing demand, prices & construction.

View original post 554 more words

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Aging Population Threatens Society with Unsustainable Debt

by John Edwards
Founder of Residex Pty Ltd and Consultant to Onthehouse.com.au.

residex

In Table 1, we present the growth rates and other statistics for our housing markets across Australia.

Table 1: Market Performance

Sydney is continuing in its ‘boom’ growth path. The median value of all houses in Sydney is now a staggering $911,500. Growth in dollars for the month was $11,000. Sydney home owners are doing well, but how can young people save at a rate that keeps up with property growth rates? The trend data, as shown in Graph 1, does not seem to point to any slowing in this market. The current trend is not what we had expected and is probably a consequence of the expected lower interest rate environment.

Graph 1: Sydney Trends

Rental yields in both Sydney and Melbourne are falling away as the increase in values outstrips dollar weekly rental growth. The yields in both cities are becoming unattractive and will sooner or later cause investors to slow their investment activity as some purchases become uneconomical.

The market is patchy and while Sydney is ‘booming’, Darwin is shedding value. This is a consequence of it being in the midst of economic slowing as the wet season slows activity and some resource projects also slow.

This will be my last newsletter to all of you as I will move to the next part of my life mid next month. I have enjoyed my discussions with a large number of you and trust that I have helped many in their endeavours to improve their personal wealth. It’s hard to believe that when I started analysing the property market, the median value of a Sydney house was in the order of $175,000 – a huge difference to today’s median value of $911,500 (the average per annum rate of growth over the last 25 years has been 6.8 per cent). Although I am leaving, Residex commentaries, statistics and reports will continue. I am leaving you in the capable hands of Eliza Owen – Market Analyst and Editor. Eliza has a Bachelor of Economics (Hons I) from the University of Sydney, and 5 years experience in the real estate sector.

In case you were wondering, I am not leaving to retire. The word retirement doesn’t sit well with my fertile mind, but it does make me think of an issue that is very topical: how do we help to make people independent in retirement and less reliant on the government pension? It is clear that this has to happen for the good of our country. Unless we do, there is a real risk that the standard of living of our aged, and all of us generally, will reduce. This is because government can’t spend more than it receives forever (That is, unless we all want a situation like the one that exists in Greece).

The family home is, in most cases, the largest valued asset that is held by many retired people. It is not fully utilised and in reality most do not need the space it provides. If you can afford to live without any help then why not just continue to live where you have lived for most of your life and enjoy it? However, if you can’t afford to live in the dwelling without government help then rational economics would suggest it should be sold and you should move to a home which is more in accord with your financial position.

My statement is harsh but it is the reality and we would all do exactly as I have stated if Government wasn’t there to support us in our old age.

Notwithstanding the economic rationalism, socially and politically it is very difficult to make a change and remove something that has been previously allowed. For decades, people planned for retirement based on an assumption that they would never have to sell their home. They paid taxes, and accepted those taxes on the basis that in old age, the government would support them and never have regard for the value of the family home.

Yet the reality is that we can’t continue as we have. We have to find a solution. So for what it is worth, here is what I believe Government should do:

  • Include the value of the family home in the means test when identifying the right to any pension or part there of. The value of the family home included should be that amount which exceeds say $400,000;
  • Allow any person to contribute up to $2 million into their super fund where such funds are generated from the sale of the family home and the person is over the age of 60 years;
  • The ability to contribute to the super fund should be a once off entitlement and have no tests other than those in the above point. It should be allowed, even where the person is receiving a pension from their super fund.

There is a significant amount of discussion currently around the right of people to contribute more than is realistically needed into super simply for real estate planning. That discussion is soundly based given the large cost this potentially has on tax revenue when government is struggling to reduce debt and balance the budget. In reality, even if we retire at say, 60 years most of us don’t need to support ourselves for more than about another 30 years. So how much do we really need in our super fund?

If we assume inflation at a rate of say 2%, and today we are happy that we can comfortably live on $70,000 per year after tax, then we would need to have a fund today of approximately $2.06 million. This assumes our fund has a growth rate equal to the inflation rate only. Clearly, our fund should be able to do better than this.

On the above basis, it does appear reasonable that the government should limit the size of the tax free status retirement fund to something in the order of say $2.5 million.

Given all of the above it seems to me that a reasonable and acceptable solution is to encourage home downsizing and at the same time alter the super fund rules so funds have a limit of $2.5 million. At the same time, people downsizing should be allowed to make a contribution of up to $2 million to their fund.

The consequence for all is a win. For people downsizing:

  • They will still be able to live in a home they own;
  • They will no longer have a tax liability on earnings being generated off the sale proceeds of the family home;
  • They will not have to enter into reverse mortgages which have a high interest cost and have the potential to reduce the value of their asset by an unknown amount when it is sold; and
  • Their prior, non-income earning home will start to produce income, tax free and enhance their lifestyle.

For Government, the cost of the current Super Fund arrangements, and the amount spent on pensions, will be reduced. Those who contribute funds to their super as a consequence of the sale of the family home will, in all probability, require much lower levels of support.

Perhaps as an additional benefit, state governments across the nation might consider removing conveyancing duty where a person over the age of 60 sells their family home and buys a lower cost property and contributes surplus funds to their super fund.

Perhaps all of the above is wishful thinking but I hope for the sake of all it isn’t.

Wishing you all well and I trust all your property investments turn out to be, as mine have been, exceptional investments.

AT A GLANCE •Property management, Rental services. •	Individual solutions to fit our client's needs •	High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.

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Filed under LJ Gilland Real Estate Pty Ltd, ljgrealestate

Success is first and foremost about communication El éxito es, ante todo, sobre la comunicación

We believe that regular, open communication is the key to building strong partnerships. And it’s these partnerships that give LJ Gilland Real Estate Pty Ltd the power to push through new challenges and deliver industry-best property management and sales solutions to Our clients.

Together with extensive local knowledge and more than a decade of experience in the Brisbane Wide & Mt Isa, Queensland Real Estate market, it’s this commitment to open and regular communication that powers Our combined success, and the success of Our long term friends, clients and associates.

Creemos que la comunicación abierta regular es la clave para construir sociedades fuertes. Y es estas asociaciones que dan LJ Gilland Real Estate Pty Ltd el poder para empujar a través de los nuevos retos y ofrecer soluciones de la industria-mejor gestión de la propiedad y la venta a nuestros clientes.

Junto con un amplio conocimiento local y más de una década de experiencia en el Brisbane ancha y Mt Isa, mercado Queensland Real Estate, es este compromiso con la comunicación abierta y regular que los poderes de nuestro éxito combinado, y el éxito de nuestros amigos y largo plazo, los clientes y asociados.

Xin nian quila 2015

成功首先是关于通信 Chénggōng shǒuxiān shi guānyú tōngxìn

我们相信,正规,开放的沟通是关键,建立强有力的合作伙伴关系。和它的这些合作伙伴关系,让LJ Gilland房地产控股有限公司,以推动通过新的挑战,并提供业内最优秀的物业管理和销售解决方案,我们的客户的能力。

加上十几年的布里斯班宽和伊萨山,昆士兰房地产市场经验丰富的本地知识,更多的,它的这个承诺,打开和定期沟通的权力,我们的联合的成功,以及我们的长期朋友,客户的成功和同伙。

Wǒmen xiāngxìn, zhèngguī, kāifàng de gōutōng shì guānjiàn, jiànlì qiáng yǒulì de hézuò huǒbàn guānxì. Hé tā de zhèxiē hézuò huǒbàn guānxì, ràng LJ Gilland fángdìchǎn kònggǔ yǒuxiàn gōngsī, yǐ tuīdòng tōngguò xīn de tiǎozhàn, bìng tígōng yènèi zuì yōuxiù de wùyè guǎnlǐ hé xiāoshòu jiějué fāng’àn, wǒmen de kèhù de nénglì. Jiā shàng shí jǐ nián de bù lǐsī bān kuān hé yī sà shān, kūnshìlán fángdìchǎn shìchǎng jīngyàn fēngfù de běndì zhīshì, gèng duō de, tā de zhège chéngnuò, dǎkāi hé dìngqí gōutōng de quánlì, wǒmen de liánhé de chénggōng, yǐjí wǒmen de cháng qī péngyǒu, kèhù de chénggōng hé tónghuǒ.

AT A GLANCE •Property management, Rental services. •	Individual solutions to fit our client's needs •	High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.

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Filed under empowerment, family, LJ Gilland Real Estate Pty Ltd, ljgrealestate

Working with Passion for Success

If the formula for success was only “hard work” and not a load of complex (or indeed meaningless!) algorithms then, simply, the hardest workers in the world would be the most successful people, and vice-versa. And I don’t think that quite fits.

surround yourself

Certainly, there is an important role for perspiration, but there should also be a key role for planning, patience and persistence too.

3 rules for success

Over the years I have thought about and studied investment and business success more than I care to admit, to the extent that I have written a book on this very subject, to be released later in 2015.

I concluded that for investors and small business owners there are 3 golden rules which all successful folk in these fields have been able to master, consciously or otherwise. 1 – Pleasure-Pain

For Rent1

We find individual solutions to fit our client’s needs. Being property specific rather than area specific because confining ourselves to one area simply wouldn’t be giving you what you need

The first golden rule is the Pleasure-Pain Principle.

What we link pleasure and pain to in our lives determines our actions and behaviours, and thus to a great extent, our results.

Flipping back to the analogy of the gym above, I do wonder sometimes at personal trainers who take new clients through an effective “boot camp” in order to “get them into shape” as quickly as possible.

While hard work may indeed be what an unfit person ultimately needs to put in, if they leave their first session at the gym feeling exhausted and sick, they are unlikely to link any pleasure to the experience and enthusiasm is likely to fade quickly.

It is probably better to start out at a lower intensity and simply enjoy the benefits of exercise to begin with.

This is particularly so because as humans we will invariably go to greater lengths to avoid pain than we will to achieve ultimate pleasure.

How else might this principle impact our lives? From a personal finance point of view, if you see credit card statements as something to be avoided and quickly dispensed to the waste paper basket, it is likely that you see money management as a pain to be avoided. The good news is that personal finances and investment can become a source of pleasure as they steadily improve.

From a business or career perspective, Mark Twain once said that the trick in life was to “make your vacation your vocation” since then you would never feel like you were undertaking a day of work in your life.

The implication of this is that it may be worth considering what your true passion is, and whether you should follow a career or set up a small business in that field.

If setting up a small business seems to risky or daunting, building an investment portfolio to secure your financial future first helps greatly.

I don’t have the space to explain the Pleasure-Pain Principle in full here (you wouldn’t read my book then, anyway!), but a full understanding of why we act in  the way that we do is a key step along the challenging road to emotional mastery. There is certainly no way I would write books (or indeed this daily blog) if I didn’t enjoy the process. Yes, hard work is important – but the real key to success is finding a vocation that does not really feel like hard work because you have a genuine passion for that field.

2 – 80/20 Rule

Time Revolution – 80/20 style

Internet age
It seems almost hard to imagine now, but not so long ago there was no internet and no email. People communicated face-to-face, over the phone, sometimes by fax. Imagine the difference this has made to the way we do business and the way, for example, in which people trade shares so much more frenetically.
A whole new mini-industry grew up – Time Management – which aimed to help middle managers utilise their time more effectively. “Prioritise the key tasks” was one of the suggestions. “Think marginally about your time” was another. I can’t remember any others, but I’m sure there were plenty of them, which we learned about in lengthy training sessions that took up lots of valuable…well…time.
Yet, for many today, there seems to be less and less time in the week. The world is seemingly becoming polarised between those who earn decent money yet have no free time in which to enjoy it, and those who are unemployed and thus have all the time in the world to do stuff, but no money with which to do it.
Pareto Principle
Businessman Richard Koch wrote a book based around what has variously been called Pareto’s Law, the Pareto Principle or the 80/20 Principle, which held that in many facets of life and the universe, 80% of effects or outputs are derived from around only 20% of the causes or inputs.
The idea originated from Italian sociologist and economist Vilfredo Pareto’s observation that 80% of a country’s wealth is often held by only 20% of the population. In business, it’s often true that around 80% of a company’s turnover is represented by only 20% of clients, 80% of complaints come from 20% of customers, 20% of products account for 80% of sales, and so on.
There is much that we can learn from this. In business, focussing on the 20% of your key customers is one strategy. If you want to resolve 80% of complaints, you can probably stem them by finding and addressing the 20% of problems which cause them.
But we can take the 80/20 principle a step further still.
Find out in life what we are interested in, what makes us happy and in what area we have a natural advantage, and double down on it. Do even more of what we excel at and what excites us: this will bring us greater results and more happiness.
Time Revolution
Koch devoted one full chapter of his book to the idea of a Time Revolution, where he suggests that traditional time management is all wrong. We spend most of our time – most likely 80% of it – on matters which achieve very little of any importance and bring us little happiness.
Instead he advocates grasping the 80/20 principle and using it to your advantage. There is little point, he argues, in tinkering around at the edges with the management of our time (“thinking marginally” as the management training sessions put it). Instead, we need to consider how and where we achieve results and happiness and apply time to it with gusto.

The second golden rule is Pareto’s Law, more commonly known as the “80/20 Principle” – that most of outputs are derived from only a few of the inputs.

Most of your results will be gleaned from only a minority of your decisions. It’s an arresting thought.

The implications of this for small business owners are many. Most of your revenue will be generated from only a small number of your products, and perhaps only one of them.

Perhaps up to 80 percent or more of your profits will come from only 20 percent or fewer of your customers. On the other hand 80 percent of your complaints will likely come from 20 percent of your customers (and it’s unlikely to be the same 20 percent).

What this does not mean is that you should make a few big decisions and casually ignore the rest of what it going on in your life.

Used correctly the 80/20 Principle is a far more empowering concept than that.

The 80/20 Principle holds that you should learn to recognise where you are seeing the most effective results in investment, in business and in your life, and double down on these strategies by doing even more of what works.

How can you reach more people with your key product? How can you replicate your most successful investment strategies?

From an investor’s perspective this clearly does not mean that you should ignore the important benefits of diversification.

What it does mean, however, is that you should consider how you can make an investment plan which is effective, sustainable and repeatable.
STAY FOCUSED

Practical tips on compounding –

3 – Compounding

The third golden rule is the principle of compounding or snowballing results – growth upon growth – frequently referred to as “the most powerful force in the universe

Snowball

Most of us have heard about the concept of compound growth, the snowballing effect caused by growth upon growth. You know the kind of thing:

-if you could fold a piece of paper 42 times it would reach the moon; or

-put a grain of rice on the first square of a chess board, and two grains on the second square, four on the third…all of the rice in India wouldn’t be enough to cover you off for the final square; or

-lily pads take ages to cover the first bit of a pond, then the last bit they cover really quickly…or something like that.

These anecdotes tend to be mildly interesting but not particularly useful in a practical sense. In terms of what this means for an investment portfolio? It means time is very much the friend of the efficient buy-and-hold investment (click chart):

In this case $100,000 invested at the age of 25 at 10% per annum compounded is seen to be worth a staggering $5.5 million by the retirement date – even without any extra funds invested. It’s this simple concept which allowed folk like Warren Buffett to become a billionaire so many times over.

Illogical rules about compounding

There are a few things to note about compounding that don’t appear at first glance to make any logical sense.

One is that is where you build a portfolio which doubles in value fairly consistently, the increase in value of the portfolio at each interval totals more than all previous gains.

For example, in the example below where the portfolio doubles in value every seven years through recording gains of a shade over 10% per annum, in the seven year period between year 35 and year 42 the portfolio gain of $3.2m exceeds the gains of all of the previous 35 years ($3.1m).

Year Portfolio
0 $100,000
7 $200,000
14 $400,000
21 $800,000
28 $1,600,000
35 $3,200,000
42 $6,400,000

Watching how the gains can accelerate when left to grow unimpeded by capital gains taxes and transaction costs should draw investors to two logical conclusions:

(1) it’s best to start investing now; and

(2) investing in assets which you never have to sell can be very appealing.

Examples of such assets might include:

-an index fund; or

-a Listed Investment Company (LIC) with a low management expense ratio which invests in more than 100 profitable and dividend-paying industrial companies; or

-a well-located house in a capital city that has rapid and sustainable population growth.

I’m not sure there is much value in adding another numerical example here, only to note that often an investor who starts earlier achieves a far better end result than one who starts later.

Even if the late-starter invests more capital per annum, it is very difficult to ‘play catch-up’ simply because of the accelerating power of compounding growth.
As you can see, therefore, building wealth is ultimately only reliant upon three things:

(i) having some capital to invest;

(ii) the ability to command satisfactory returns consistently; and

(iii) time to allow the portfolio to compound.

It’s this simple realisation that allows apparently ordinary folk like Peter Thornhill to build massive multi-million dollar investment portfolios.  Note that it’s not necessarily really down to exceptional asset selection – shares in a handful of great companies and a few low-cost industrial LICs might easily do the trick.

It’s much more about patience, time and understanding how wealth is created through compounding returns.

Five practical tips

OK, so some practical ideas:

(i) Starting small is OK

If there is one thing that the above concepts tell us is that’s it is better to invest something rather than nothing. Investing small amounts regularly works over time because of the compounding effect.

However, if you are going to start small do be aware of the impact of transaction costs, such as brokerage or fund management fees, and invest efficiently wherever possible.

(ii) Forced saving is good

Have you ever heard anyone say: “Money in my pocket or in my bank account just seems to disappear?”. I have! In fact, I’ve probably even said it myself at one time or another.

It’s a truism of personal finance that simply attempting to pile money up in a bank account doesn’t often work very effectively over the long term. Partly this is because you must pay tax on the interest and price inflation eats away at the value of the balance.

Moreover, it’s also because sooner or later that balance of money tends to get spent. How can you set up a means of forced saving? A standing order or a direct debit into a specified investment account?

(iii) You don’t miss what you’ve never had

You don’t miss what you’ve never had – another truism, and one which suggests to me that the more automated your system is for investing (e.g. standing order from your pay cheque) the greater the likelihood of your success. This also leads to the logical conclusion that it can be a great idea to…

(iv) Reinvest gains

Sometimes you might hear the bean-counters, of which I am one myself, say that you shouldn’t reinvest dividends because this can lead to an accounting headache when capital gains taxes fall due some time down the track.

I’ve heard similar arguments in favour of not using a line of credit against your home to reinvest in further investments because the accounting entries can “get a bit tricky”.

In fact, from a value investor’s perspective there actually are some sound logical arguments in favour of not reinvesting dividends at certain points in the share market cycle, particularly when share market indices and PE ratios are significantly over-valued.

However, believe it or not, engaging a lazy professional who can’t be bothered to run a simple spreadsheet to keep track of a few accounting entries is not a solid argument against reinvestment.

As a general rule, reinvestment during the growth phase of your investment portfolio can be an efficient way to grow and compound your wealth.

Just as importantly, reinvestment of your gains makes use of the underlying principles of all of the first three tips listed above: small amounts make a big difference, reinvestment is another form of forced saving and you don’t miss what you’ve never had.

(v) Most people just aren’t very good at saving

Unfortunate, but true. Most of us begrudgingly pay our electricity bills more or less when they fall due, but equally, most people just aren’t very good at saving dollars every month…at least, not over the long term.

Many of us might be able to build up a decent balance over the course of a financial year through spending less than we earn, but it’s also deceptively easy to spend the balance on a car or a holiday when that time of year rolls around again. This is really just another point in favour of setting up an automated investment strategy.

Real world

In the real world, the cornerstone of personal finances for most people in countries like Australia or Great Britain, where home ownership rates are high, is the family home or place of residence. In other words, the majority of people are in one of these categories:

(a) living mortgage-free in a home;

(b) paying down the mortgage on a home; or

(c) saving a deposit for a home.

The practical tips detailed above suggest that regardless of which category you are in, having a forced saving or investment strategy is a sound idea.

(a) mortgage free

If you are in the fortunate position of being in category (a), it might be useful to continue making payments as though you still do have a mortgage into a separately allocated investment account. After all, you have already proven that you can spare that amount per month!

You might also consider using some of the equity in your home to borrow to invest in a sensible manner.

Using gearing to invest is a powerful means of accelerating returns, but should only ever be done moderately and sensibly, and obviously individual circumstances and risk appetites differ so consult a financial advisor where appropriate.

(b) paying off a mortgage

Think back again to the practical points listed above. Can you accelerate repayments on your mortgage debt? Can you make repayments fortnightly instead of monthly?

Mortgage debt does not get treated so favourably for tax purposes in Australia or the UK, so paying down the mortgage more quickly is a strategy that works well for many.

(c) not a homeowner

If you live in a big capital city, it’s likely that we’ll see more people over time in this category, which leads to a decision to be made as to whether you even aim for home ownership at all in the first instance.

Although admittedly my wife and I have lived in some of our properties over the years, generally I’ve been a renter because I realised I could accelerate my returns much faster by renting a smaller property and hammering the investments while I was younger.

This strategy can definitely work miracles if you are able to adhere to the principles of forced saving and reinvesting gains.

However, you should caution against listening too much to those advising you to sit back casually and wait for an inevitable property correction. In cities like London and Sydney, that has generally over time turned out to be poor advice.

It’s far better to be proactive rather than reactive, whether your goal is home ownership or not.

There’s no one size fits all when it comes to personal finance, but obviously if you’re not planning to be a homeowner, you’d want to avoid spending the remainder of your income, so implementing an automated saving and investment strategy is likely to be a great idea.  Source Pete Wargent blogs (which I normally re-post to blogger – LJ Gilland Real Estate Pty Ltd).

AT A GLANCE •Property management, Rental services. •	Individual solutions to fit our client's needs •	High performance property sales, specializing in sales of properties with tenants in place. •	Body corporate management •	Competitive Commission Rates •	LET FEE FOR REFERRALS, We are a business built on Referrals. •	NO Lease Renewal & Comparable Market Analysis’ Fees/Charges •	PHOTOS TAKEN ON ENTRY •	Hands on approach to all Property Investment Management and & Sales Matters. •	Tenants are shown about safety switches and water mains etc at handover at the property.  We meet all tenants on site for handover.

AT A GLANCE
• Property management, Rental services.
• Individual solutions to fit our client’s needs
• High performance property sales, specializing in sales of properties with tenants in place.
• Body corporate management
• Competitive Commission Rates
• LET FEE FOR REFERRALS, We are a business built on Referrals.
• NO Lease Renewal & Comparable Market Analysis’ Fees/Charges
• PHOTOS TAKEN ON ENTRY
• Hands on approach to all Property Investment Management and & Sales Matters.
• Tenants are shown about safety switches and water mains etc at handover at the property. We meet all tenants on site for handover.

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Globally, more people live in urban areas with 54% of the world’s pop. residing in urban centres in 2014.

http://ow.ly/IN6bx

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How to Storm Proof your Roof? Article of Interest for your perusal and information:-

Roofing article of Interest by Roof & Building Service – ‘Experience, Excellence and Endurance’ http://ow.ly/JmUWc

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Roof Maintenance: How to storm proof your roof

Posted on: February 5th, 2014

According to the Brisbane City Council’s comprehensive guide to storm safety, one of the first things you should do is “check and clean your roof, gutters and downpipes.”Very good advice because your roofing definitely needs to be checked.

It WILL be tested this storm season and if it isn’t up to scratch, it WILL fail.

With this in mind, Roof & Building Service would like to detail all the things those responsible for roof maintenance should look for, and steps you should take to weather the storm and enjoy absolute peace of mind.

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