My First Post Here - Hello

Not sure what to write to introduce myself but here goes:
1. At the wrong end of my 50’s decade.
2. In 1977, I left home with $50 in my wallet (21st birthday present from my parents) to start my first job in Melbourne, on a salary of $9,000.
3. Currently ‘un-employed and un-employable’. I don’t like the R word (retired).
4. Government ‘forces’ us to take 4% out of our smsf every year as we are in pension phase. This is more than enough for us to live on.
5. Keep myself busy doing volunteer work and travel.
6. I was a volunteer driver for the G20 Summit in Brisbane in November 2014, was Airport Team Leader for the Asian Cup in January 2015 and currently a volunteer driver for AngelFlights and Leukaemia Foundation.
7. Undertake at least one decent overseas holiday every year:- in 2014, went to Canada and Alaska (including going above the Arctic Circle); in 2015, went to England (including Wimbledon and 2nd (at Lords) and 3rd Ashes Test) and Ireland. For 2016, going to Vietnam, Laos and Cambodia.
8. Bought first property (2 bedroom unit) as a PPOR in 1979 in East St Kilda for $26,000 (would probably cost $550,000 to buy today). Borrowed $24,000 as a P&I loan at 3%pa interest (staff loan through work). Repayments were $26pw and I could rent out the second bedroom for $32pw. I was so naive and so scared about buying property, I got my ‘future’ father-in-law (who was into property) to fly down from Newcastle to help me with the purchase. Sold it for $39,000 in 1981 as I moved to Brisbane as I had changed jobs.
9. Bought second property (3 bedroom house) as a PPOR in 1981 in Mansfield, Brisbane for $54,000 (would probably cost $570,000 to buy today). It was tough to get a loan in those days. Banks wouldn’t take the wife’s income into account. We had a $32,000 deposit (yep, 60% deposit) and the banks would only lend us $11,000 and only as a Personal Loan. Sold it for $92,000 in 1988 to buy our third property, an acreage property (love the land content) which is still our PPOR today.
10. Bought fourth property (3 bedroom house) as our first IP in 1991 in Mansfield, Brisbane for $125,000 (would probably cost $550,000 to buy today). It was initially negatively geared but after 25 years, it is now well and truly positively geared (current rent is $445pw).
11. Today have eight properties including PPOR, net LVR of 12.5% (loans are actually higher than this but Offset Accounts reduce them down to this net LVR).
12. Joined Somersoft in January 2003; my last post was in July 2009. I stopped posting, mainly due to being too busy with my work. I learnt so much from Somersoft for which I am truly grateful. So sad to see it close but, at least, we have a replacement on this Forum.
13. Know Ian and Jan Somers, read all of Jan’s books, bought Ian’s PIA software and still use it today.
14. Helped set up BIG (Better Investment Group) in Brisbane, including its incorporation. I learnt so much from being actively involved in BIG. So sad to see its demise after I left.
15. My broad investment principles:
a. Have the right balance of shares, property and cash. One has to work this out for oneself as it changes over time and is different for everyone.
b. With cash, one can never have too much. I like to use Offset Accounts to make the keeping of cash tax effective.
c. Ask the banks for cash when you don’t need it so that you don’t have to ask them when you do need it.
d. Own listed shares, both domestic and international, direct and in managed funds in our smsf.
e. I used my own businesses as cash cows. In my working life, I bought one business and started two other businesses. For various reasons, I have sold all three, each before having the next.
f. With property, my strategy is Buy and Hold (don't like selling). Hence, I bought investment properties in trusts. A side-benefit is that my kids won’t have to pay CGT when I die. My grandkids will have to pay CGT when the trusts expire (in about 70 year’s time). If that is a problem for them, I can always remove them from my Will.
g. Go for capital growth. For me, this meant being negatively geared. If you keep a property long enough, it will become positively geared. Look at item 10 above.
h. I am a big believer of Interest Only loans. I can make better use of the money rather than give it back to the banks through the paying of principal, even if I leave it in an Offset Account for some time. When I need the money, I can just take it and I don’t to ask the banks for it.
16. I have seven step approach to investment (happy to expand on this in a separate post):
a. Educate Oneself
b. Select Your Advisors Wisely
c. Develop A Financial Independence Strategic Plan
d. Enact YOUR Financial Independence Strategic Plan
e. Monitor Progress Against YOUR Plan (formally do mine every 3 months)
f. Make Adjustments To YOUR Plan
g. Enjoy The Journey
17. Top Six Favourite Investment Sayings:
a. If you are the smartest member in your team, your team is in trouble (got that from Michael Yardney)
b. If you CAN’T afford to lose it, you MUST afford to insure it.
c. Perceptions may not be the ultimate truth but they are what people use to make decisions (American Institute of Creative Learning)
d. It doesn’t matter how much you know or how much you don’t know, don’t be afraid to ask someone for help.
e. Don’t take ‘No’ as a refusal; take ‘No’ is an interesting negotiating position.
f. I can’t give you advice (as I am not certified) but I am happy to share my (humble) opinion
My apologies for this becoming so long-winded. Hopefully, it helps to inspire someone on the Forum.

 

Welcome!

I must admit, that I read halfway through your points and formed a wrong initial impression.

I had to then go back and re-read everything in view of the second half. (I think the 12.5% was the trigger )

 

Welcome mate, impressive write up .. 17b... i like that

Look forward to hearing you share your knowledge

All the best

 

Hi @kierank
Welcome to PC
Your story was a great read

 

Thanks. I will try to make future posts a lot shorter but I must admit I won an award from my staff stating that "I can talk under water and concrete, at the SAME time"!!!!

 

What a great intro! Thanks for sharing your story!

 

Great intro and interesting story Kierank, welcome.

 

Welcome @kierank. Thank you for sharing your great story. I am taking a point away as we speak !!

 

Out of interest, which point?

 

Good to be back. Are you on the Gold Coast now? Still a mortgage broker?

 

Take the money from the banks when you don't need it.

 

Great stuff Kieran.
However, very disappointed with point 12.
Work should never get in the way of posting on Somersoft/Property Chat.
I especially like point 15. e - Using businesses as cash cows, it's a great strategy.

Your post is like a revised edition of the propery investors Bible.

 

Years ago, just prior to selling one of my businesses, I accessed the equity in all my properties. All of the banks asked for my last 3 years financials which I provided (as they were very good). None asked for a forecast of the next year's financials (which was going to be different).

I was amazed as the Finance industry continually tells us that 'past performance is not an indication/ guarantee of future performance'.

 

I agree but this was just after the GFC and one of my business had clocked up over $1M loss in 10 months. This called for drastic action including sacking of staff, pay cuts for everyone, etc. This required my full focus, otherwise it would have destroyed a lot of my net worth. No time for Somersoft. The good news is the action, albeit painful for everyone, turned the business around.

As a final note, the people who bought that business off me ended up going belly-up (after 30 months) and owing the banks a reported $12M, after losing everything. Owning your own business is a great way to make money; it is also a quick way to lose money!!!! You have to know what you are doing and to stay focus (at all costs, business and private).

 

What was the product for your business if you don't mind sharing @kierank

 

Project Management software including training and consulting.

I apply the principles of Project Management to my life, especially my investing life. Steps c, d, e and f of my seven step approach in my starting post is pure project management!!!

 

I think that's the best intro post I've read. I'm looking forward to reading your contributions in the future.

War horse? Better explain that one

 

I need Rolf to answer that one. My explanation would be too long!!!

 

What a kick ass intro, esp point 15 onwards. I like. Thanks for sharing your journey and philosophy.