Where are these investors now?

[drelly]

Maybe because the Dollar devalues to half of what it was worth every 8 years?

The RBNZ inflation rate calculator says that...

- the general CPI since 1973 is 6.6% p.a.
- the housing rate of inflation is 9.0% p.a.

My calculator says that...
- Ron's investment averaged 10.3% p.a.

[Lissica]

The RBNZ inflation rate calculator says that...

- the general CPI since 1973 is 6.6% p.a.
- the housing rate of inflation is 9.0% p.a.

True, but what is the real economic growth rate? That should be factored into the calculation also. Housing seems to be a good inflation and growth hedge, and should help inflate away your debts. Having said that, in a deflationary environment like Japan, you would have done poorly over the last two decades.

My calculator says that...
- Ron's investment averaged 10.3% p.a.

I'm not saying he hasn't done well, but it's a bit hard to pin down what he means by a 'boom'. To me, a boom has to be something much larger than the rate of money inflation and economic growth, and a 'boom of all booms' must be something far in excess of that.

[Bluekiwi]

And if its 30% or 50% instead of doubling, its still good enough.

The other important factor is that rents (Your yield) go up with inflation, but your espenses (Interest rates) dont !!!

Someone made the point once, that they didnt expect their properties to make money from day one, but after 5 years or so the rents usually took care of all expenses.
If you buy right, I can see that working in lots of cases.

Ron's examples show interesting ROI (of the purchase price).

[Bluekiwi]

True, but what is the real economic growth rate? That should be factored into the calculation also. Housing seems to be a good inflation and growth hedge, and should help inflate away your debts. Having said that, in a deflationary environment like Japan, you would have done poorly over the last two decades.



I'm not saying he hasn't done well, but it's a bit hard to pin down what he means by a 'boom'. To me, a boom has to be something much larger than the rate of money inflation and economic growth, and a 'boom of all booms' must be something far in excess of that.

Reminds me of a saying my friend used to say.

"I'll take the fat one, and you take the really fat one".

Maybe the size of the boom is in the eye of the beholder.

[NovInvestor]

If property values go up 30% or 50%, then just don't be too agressive and leverage to the tilt.

Always keep a 40% equity margin on average at the top of the upward cycle, to be prepared for the fall.

And keep up the interest payments!

[drelly]

True, but what is the real economic growth rate?

I have no idea what you mean by that. GDP? It's irrelevent.

Having said that, in a deflationary environment like Japan, you would have done poorly over the last two decades.

But we weren't and he didn't.

[Lissica]

I have no idea what you mean by that. GDP? It's irrelevent.

Irrelevant to what? To making money on your investment? I'm asking what a 'boom of all booms' is. You can't make wild predictions without quantifying it. What is the minimum that housing must increase, over what space of time, for it to be a 'boom of all booms'? Otherwise it's nothing more than an abstract concept, which you can retrospectively fit your predictions around at a future date.

But we weren't and he didn't.

I was using it as an example of why there are pitfalls, even though I think housing is usually a good inflation and growth hedge.

[drelly]

We could just agree that it's a really big boom... a bigger boom than your average boom. Boomtastic in fact.

[Lissica]

We could just agree that it's a really big boom... a bigger boom than your average boom. Boomtastic in fact.

I predict that it will be sunny in Wellington sometime between 2010 and 2020. In fact, it's going to be sunnier than your average sunshine.

Prove me wrong ~.~

[drelly]

I predict that it will be sunny in Wellington sometime in future. In fact, it's going to be sunnier than your average sunshine.

Prove me wrong ~.~

See if you predicted that the "next" sunny day would be sunnier than average, I could prove you wrong.

[Lissica]

See if you predicted that the "next" sunny day would be sunnier than average, I could prove you wrong.

I have to predict what? o.O

How about I just predict that the next boom will be boomier than average, but I'm not going to tell you what I consider a boom.

[drelly]

How about I just predict that the next boom will be boomier than average, but I'm not going to tell you what I consider a boom.

It's just an opinion, does it matter?

[Lissica]

It's just an opinion, does it matter?

In my opinion, yes.

If we are to form an opinion on someone else's opinion (which is the whole point, or they wouldn't have posted their opinion in the first place), we must first define what it is they are talking about. Now if they post a vague assumption, then in my opinion they can't be proven right or wrong. Which defeats the purpose of telling everybody your opinion.

Of course, it's probably a little obsessive compulsive ^_^

[Davo36]

Lissica, good on you for trying to pin down specifics.

So many of these guys say there will be a 'crash', or there will be a 'boom', or property is 'good' or 'better' than other investments and so on.

And many of them make vague and conflicting statements in the same pieces of writing. And then no matter what happens, they come out later and say they were right. And people believe them. Why? Because many people are basically a bit careless with this sort of stuff. And that's why they pay these people $10k or $20k for courses/mentoring/advice and come out with nothing.

[drelly]

I've seen Ron speak and he does provide a lot of useful info. I've never paid him anything but if I did decide to, it would not be based on his predicitve powers of the size of the next boom, it's timing and so on. Rather, I would seek to gain the knowledge and skills he passes on to be able to make my own decisions. I seek to be an investor in my own right. Not a sheep. If I wanted to be guided by the nose, there are plenty of companies selling properties as investments.