Header Ad Module

Collapse

Announcement

Collapse
No announcement yet.

Complete newbie - I would love some advice :)

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Complete newbie - I would love some advice :)

    I am a complete newbie to the PI game, and I would like to get some advice on the smartest direction for me to move. I'm 28 years old, earning 60K/year, no debt, and 40K saved in the bank.

    I read Rich Dad, Poor Dad last week which completely changed my perspective on money and got me thinking about my financial future. I absolutely love learning, so I've read all the threads in the first 10 pages in the Property Investment (NZ) forum, a lot of the wiki, and thanks to suggestions in the newbie forum here I've gotten these books out from the library to read:

    Andrew King & Lisa Dudson - Create wealth : the complete guide to residential property investment in New Zealand
    Tony Steindle - Property law : a New Zealand investor's guide
    Mark Withers - Property tax : a New Zealand investor's guide
    Peter Aranyi - How to survive and prosper in a falling property market.
    Martin Hawes - Financial secrets : the New Zealand everything guide to everyday finances
    Graeme Fowler - New Zealand real estate investors' secrets
    Martin Hawes - Property investment : a strategy for success

    So my basic question is: what's the smartest direction for me to move in? My natural instinct is to learn everything I can about a subject so I can make the smartest decisions, but on the other hand I don't want wait so long that I miss out on opportunities that I could take advantage of in the current market. Are there any strategies I should pay special attention to as I'm learning? Any specific books that would be good for me?

    Any suggestions at all would be very appreciated.
    Last edited by snark; 04-08-2009, 03:15 PM.

  • #2
    Welcome to PT snark.

    It looks to me like you are on the right track. Those books are great - all good, solid reads. (The Fowler book mis the only book that is not a "how to" book, but nevertheless it is very good in my opinion.)

    I spent a good two years reading and researching before I jumped in. I started in August 2006. Am I worried that I did not start in 2004, and missed out on some great growth? No, because I wouldn't have been able to do what I have done without the background research.

    So don't rush - what's a year or two at your age?

    Paul.

    Comment


    • #3
      You've come to a good place for advice. I'll restrain myself as a lot less experienced than those who will post after this. While reading all the suggestions, please keep in mind that too much information can be paralysing, and the main thing is to take action at the first moment you feel ready.

      Suppliment your reading with going to lots of open homes and browsing real estate sections of the paper to get a really good feel of the market. Pretend you are going to buy, and do the sums on what you feel are good places.

      Once you kick yourself for missing out on a great deal, you will know what you are looking for, and feel very motivated to take action. By then you will have enough knowledge from everywhere to start.

      No-one ever knows everything, and you keep finding hints and tips as you go.

      Have fun!

      Comment


      • #4
        Originally posted by snark View Post
        I've gotten these books out from the library to read:

        Andrew King & Lisa Dudson - Create wealth : the complete guide to residential property investment in New Zealand
        Tony Steindle - Property law : a New Zealand investor's guide
        Mark Withers - Property tax : a New Zealand investor's guide
        Peter Aranyi - How to survive and prosper in a falling property market.
        Martin Hawes - Financial secrets : the New Zealand everything guide to everyday finances
        Graeme Fowler - New Zealand real estate investors' secrets
        Martin Hawes - Property investment : a strategy for success
        I hope you are not planning on reading these back to back, your mind will explode.

        While you read through those, starting learning an area. Look aat trademe/property press/newspapers/ walking the street to learn the price of property and what they rent for.

        Subsribe to Interest.co.nz daily interest summary.

        Those factors are the main ones in determing whether a property is a good buy (proeprty price and interest rate determine the main cost, rent is your main income). once you learn an area or two, you should start to learn what is good and what is bad.

        You will need to start determining your "rules" - one of the books will go into this but at a very simple level it is what do you want to buy - ie, cashflow positive flats, home and incomes, subdividable. cashflow positve houses after tax, do ups?

        Read a lot on this forum and ask questions when you need too.

        Comment


        • #5
          I would research predicted interest rates, because they affect everyone's sums. If you're spending your own money, you look at deposit rates. If you're spending the bank's money, you look at lending rates. You appear to be somewhere in between, given that you have 40k saved, probably getting around 3.5%.

          The problem with interest rates is that this time last year, deposit rates were at around 8.5% and lending rates were at around 10.5%. If you did your sums then, it made no sense to buy anything. (For example, in Auckland the cost of buying a house was twice the cost of renting it.)

          There are plenty of opinions on the subject of future interest rates.

          Comment


          • #6
            Wow, thanks for the quick and helpful responses! I'm already a huge fan of this site, I'm very glad I found it.

            Tan, excellent advice, I'll definitely start doing that.

            CJ, thanks for the link, I've subscribed to it.

            Glad to see I'm on the right track anyway. I don't want to rush into anything, I'm just making sure there's not an "obvious" first step that I'm missing due to my lack of knowledge.

            Comment


            • #7
              Originally posted by snark View Post
              Glad to see I'm on the right track anyway. I don't want to rush into anything, I'm just making sure there's not an "obvious" first step that I'm missing due to my lack of knowledge.
              YOu also need to think of structures.

              Are you going to be a buy and hold or a trader.

              LAQC, trusts, own name ??

              Comment


              • #8
                Where are you based Snark? Maybe you could join your local Property Investors Association or hook up with the nearest PT get together.
                Premium Villa Holidays in Turkey

                Comment


                • #9
                  CJ: will do, just have to learn what all the options mean first!

                  revdev: I'm in Auckland. I would love to go to a PT meet, but there's nothing in the forum at that moment. And your post in the APIA thread looks less than encouraging, but I'll have to look into them.

                  Comment


                  • #10
                    Originally posted by snark View Post
                    ...And your post in the APIA thread looks less than encouraging
                    True!! Oh well nevermind...I'm sure PT Auckland must be due for a mid-winter meeting pretty soon (whitt??)

                    G
                    Premium Villa Holidays in Turkey

                    Comment


                    • #11
                      I would definitely read the second Kiyosaki book "The Cashflow Quadrant", its even better than rich dad poor dad. I'm in a similar position/age as you. I guess your strategy will depend on exactly what you want to achieve. Do you just want to have a comfortable retirement, do you want to earn more money now, or are you looking for passive income and to work less?

                      In respect to learning before doing...I have learned much more just getting out there and doing things, taking small risks. Its easy to spend lots of time in books, but actually getting out there and doing smalls deals will teach you more than any book could. I'd say read for at least 6 months before doing anything, then just get out there!

                      That being said the Cashflow Quadrant is probably the best business book I've read (out of about 80 in the past 3 years!) Can lend it to ya if you like

                      Comment


                      • #12
                        Do you rent or own?
                        Simple starting point may be to buy your own house.

                        Welcome to mortgages, insurance, rates, flatmates & maintenance!
                        There's a dirty little four letter word in there - "Work"
                        (Often missing from all those books & seminars).

                        Think a little about what you want to achieve.
                        eg $1K pw "passive" income.
                        May find faster avenues than property.

                        Then it's less time on edumacation and more time negotiating.
                        Oh and do learn how to smell a crook - bare land, seminars, off the plan apartments, consultants, overseas bargains - all great fun - unless it's your money!
                        Last edited by PC; 23-10-2010, 12:16 PM.
                        The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

                        Comment


                        • #13
                          Yeah you definitely need to "define" exactly what you want to achieve. Goal setting if you will. Is it a weekly income figure or Total Wealth figure you are after...then you can start looking it the right area of investing.

                          If you are going for a Total Wealth figure like 2 million net worth, then property will be your best bet. If you are looking more for income, then a business will be better to achieve that.

                          Comment

                          Working...
                          X