Just say you bought a $900,000 investment property and borrowed the full $900,000. Then never made a single payment and also put the rent in your pocket for 20 years. If the capital gain was 10% and the interest rate averaged 7%, the position after 20 years would be: Property value – $6.05MProperty Loan – would have grown/capitalized to $3.24M (In addition, the accumulated rent […]
Regulators and some advisors have recently been pushing people towards “principle & interest” (P & I) loans rather than “interest only” (I.O.) loans. The theory and logic is that with a P & I loan, the loan gets paid down, whereas with an IO loan it stays the same. However, there is a lot more […]
To really get ahead, you need to make investing a priority. Most people wait for the world to be perfect before investing, and that time never comes. A wise man was speaking to a group of his students. He put a large jar on the table and carefully placed about 12 large rocks into the […]
Most people only grow their income and wealth in a linear manner. Their income only comes from the number of hours they spend at work. Their accumulated wealth only comes from saving up. The answer for some people is to find ways to increase the number of hours they spend at work and/or their value […]
This is key – and can painlessly grow anyone’s wealth and net worth to the top of the tree Renowned economist, banker, teacher, communicator, UNE alumnus Dr Don Stammer said this. Based on market indices and the reinvestment of any income flows: One dollar invested in Australian cash in 1900 would today be worth around $259. If one dollar […]
“Action actually cures fear”. Inaction does not prevent or avoid fear – it multiplies fear. “Fear is the prison of the heart” – Anonymous. Most Australians well know that they don’t have enough to retire on. And most of them don’t know what to do about it. One thing is for sure – you have […]
The secret to building wealth is not to spend your capital but to only spend the income you derive from that capital. It’s ok to buy luxuries such as flash cars, boats and holidays, but your passive income should pay for them. You should protect the “golden goose” i.e. your capital. It’s one of the […]
Some people think, “I’ve paid taxes all of my life; let the government take care of me in my retirement.” Thirty years ago, that may have made some sense. At that time, there were 7.5 Australian workers funding each retiree. Today, there are just five workers per retiree. If the current trend continues, it’s estimated […]
