Advice on creating a plan please!

[Volatile]

Well here is my current situation

Im 21 years old, living at home with my parents in wellington.

I'm in my final year of four at Victoria University and at the end of 2006 will have completed a BCA in Accounting and Commercial law with a post graduate deploma in professional accounting.

I have secured a Audit position with one of the big 4 accounting firms starting Feb 2007.

I have about $55,000 in the bank at the moment and will have $60,000 by end of 2006.

Zero hire purchases or credit card debt.

No dependants.

Student loan debt which will be approx $45,000 by end of 2006 - i'm not worried about this at all, at this stage as its interest free and will pay it back as slowly as the minimum payments will allow.

Purpose
I want to become "financially free" so that i can pursue property full-time and ultimately be able to support my parents in there retirement (in 13 years time) because unfortunately they wont have anything except the house they own.

Options and strategies

1 - At the end of 2006 i could purchase a property that needs some cosmetic improvement and actually live in it and learn what is involved in house improvements and actual home ownership. Then sell that property and move onto the next. OR

2- I could stay living at home and pay board. Then start an LAQC and begin buying appartments or houses that are positively geared before tax. One option would be to split the $60,000 in two and start by just buying two properties if it was not possible to buy on a 100% finance. OR

3 - Instead of purchasing a property as in option (1) i could rent a house and then embark on option (2) ie setting up a company and buying property to rent out.

I'm sure there are other options also but these are the first to occur to me.

I have read quite a few books on the subject of property but i think it is time to actually learn from experience.

Your thoughts would be much appreciated!


Cheers
James

[Stevegoodey]

Hi James,

I think you should buy me a coffee.

Just my 2cents worth.

Steve

[Volatile]

Hi James,

I think you should buy me a coffee.

Just my 2cents worth.

Steve

...... Please elaborate?

[Chemill]

I think you should meet with Steve and have a chat over a coffee also (Steve = smart).

Another option is to trade.

I would also encourage you to start while at Uni. Find an income partner (parents?), and there is no reason why you could not purchase a positive cash flow. I did this with my parents while I was at uni - they did not need to contribute a cent but the provided the 'income' for the bank's serviceability.

Chemill

[whitt]

...... Please elaborate?

Steve is a man of great knowledge in investment property. Check out his previous posts. Most investors are willing to chat for merely the cost of a coffee. Start you off in the right direction.

Good luck

[Volatile]

Steve is a man of great knowledge in investment property. Check out his previous posts. Most investors are willing to chat for merely the cost of a coffee. Start you off in the right direction.

Good luck

In that case, Steve your offer sounds fantastic. When are you free?

[Stevegoodey]

Hi

I'm working in upper Willis Street at the moment so Mojo coffee has become my local.

But can also be found at cafe La Farre most lunch times.

I'm available Thursday?

Steve

[Dean@Massiveaction]

Thinly disguising the fact he is attempting to crack 1000 posts, Pooomba also recommends Steve G. If you want set a plan, talk to people who have them and are achieving them!!

[booyaah]

hi all

I dont mind buying you a coffee as well Steve Im new to this as well would appreciate any advice

cheers

[Volatile]

Well here is my current situation

Im 21 years old, living at home with my parents in wellington.

I'm in my final year of four at Victoria University and at the end of 2006 will have completed a BCA in Accounting and Commercial law with a post graduate deploma in professional accounting.

I have secured a Audit position with one of the big 4 accounting firms starting Feb 2007.

I have about $55,000 in the bank at the moment and will have $60,000 by end of 2006.

Zero hire purchases or credit card debt.

No dependants.

Student loan debt which will be approx $45,000 by end of 2006 - i'm not worried about this at all, at this stage as its interest free and will pay it back as slowly as the minimum payments will allow.

Purpose
I want to become "financially free" so that i can pursue property full-time and ultimately be able to support my parents in there retirement (in 13 years time) because unfortunately they wont have anything except the house they own.

Options and strategies

1 - At the end of 2006 i could purchase a property that needs some cosmetic improvement and actually live in it and learn what is involved in house improvements and actual home ownership. Then sell that property and move onto the next. OR

2- I could stay living at home and pay board. Then start an LAQC and begin buying appartments or houses that are positively geared before tax. One option would be to split the $60,000 in two and start by just buying two properties if it was not possible to buy on a 100% finance. OR

3 - Instead of purchasing a property as in option (1) i could rent a house and then embark on option (2) ie setting up a company and buying property to rent out.

I'm sure there are other options also but these are the first to occur to me.

I have read quite a few books on the subject of property but i think it is time to actually learn from experience.

Your thoughts would be much appreciated!


Cheers
James

Slight change, staying at home is not an option anymore. I've decided it is definately time to get out of the nest.

[AustinWong]

Volatile, I think that at 21years old with $60,000 in the bank you are well on the way to being financially free.

Perhaps you can even share your knowledge with others on how you managed to aquire your savings (if it is not of a personal matter of course).

I think it is wonderful that a person so young has their head screwed on so well.

Well done. I look forward to hearing about your progress.

Lawrence

[Volatile]

Volatile, I think that at 21years old with $60,000 in the bank you are well on the way to being financially free.
Perhaps you can even share your knowledge with others on how you managed to aquire your savings (if it is not of a personal matter of course).
I think it is wonderful that a person so young has their head screwed on so well.
Well done. I look forward to hearing about your progress.

Lawrence

Well it is a combination of luck, hard work and a good grasp on the time value of money etc. I had originally wanted to pay my entire University education and come out debt free at graduation - subsequently that changed.

I started University in 2003 and began buying and selling what ever I could to turn a profit to pay for my fee's ($5000 PA) which was basically cars as I knew the market inside out.

What was happening is that I could put all the profit from the cars into the next deal or the bank, my part-time job paid for all my expenses (books, food, clothing, entertainment, booze) with a little left over that went into savings as well.

The Government would also give you $150 per week for the weeks you study full-time which ended up being $5550 PA. (NOTE:- this is not free money you have to pay it back) I just had good self control and put it all in the bank, on top of my savings - $5550 x 4 years = $22200 (Think interest and the ability to have the money on tap for trading).

Also played around in the share market for a bit- but I’m not convinced its my passion.

So in summary I will have $60,000 invested/saved by the end of 2006 if I follow my "secure" strategy and just sit and hold nothing to drastic. My student loan will be approximately $45000. At the start of 2003 the plan was to net my savings off with my student debt and whatever was left over was a bonus.

However, here is the game breaker. Our government organised a lolly scramble and gave all students interest free student loans (bad for the economy, good for me - I am sure you all know the scheme).

So because of this policy I’ve gone from having $15,000 to get into property with to $60,000!!.
Just for interest sake. Say if i start on a salary of $41000pa the payments on my student loan are $200 per month.


Some interesting concluding facts.

1. I never had the issue through my studies of being flat broke, unlike most students.
2. Drove and owned some nice cars.
3. Only met one other person at University who has done a similar thing to me, and we are great friends now.
4. Everything that i've done was completely legal
5. I couldn't have done it without the support my parent provided (ie a roof over my head)
6. I'm very frugal with my money, but not over the top. - I raced Downhill Mountainbiking competitively through 2001-2004 which gets expensive.
7. I've always had a part-time job since I was 12 years old (paper run => supermarket => Manager.)
8. Any regrets? - not being able to convience my brother and some of my great friends that short-term thinking maybe fun now but will make things so much harder later in life when they are stuck in the rat race.

Well that is the story thus far, not as fantastic and inspiring as most i have read on here. I am happy to chat about anything, and any advice on my path from here would be greatly appreciated?

Cheers
James

[Volatile]

ops i just read my post and it does not read to well sorry and there are a couple of parts i need to add. I will do it as soon as i have some more time.

Cheers

James

[BusyLizzy]

Well that is the story thus far, not as fantastic and inspiring as most i have read on here.

I have to say that I disagree Volatile! I find it very inspiring.

Like you, I always had part-time work, from the age of 13 or so. I have always been a good saver, although do like to spend on things that make me happy (travel, for instance). I managed to get through my Uni years debt-free while flatting, and never once had to borrow money from my parents or ask for a contribution. But that was back in the days when Uni fees plus books cost less than $800 a year!

With hindsite, however, I wish I had put more thought into an investment strategy back then. And I should have made an effort to learn about and understand different investment options. If I had, I perhaps would be much further ahead with property than I am now.

I admire what you have achieved at such a young age. I also admire your desire to support your parents in their retirement. Not many 21-year olds would be contemplating taking on that responsibility.

Well done!

[essence]

Steve Goodey

Hi Volatile and welcome to the forum.

The cup of coffee you invest with Steve will be well worth the money.

You'll walk away from meeting Steve totally enthused, overwhelmed with the knowledge you've been given, and excited to get to the next phase of your investing.

Good luck and great investing.