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Discussion in 'Introductions' started by benneh, 15th Jan, 2007.

  1. benneh

    benneh Member

    Joined:
    2nd Oct, 2006
    Posts:
    6
    Location:
    Canberra
    Hi All,

    About a year ago I decided I should start being a little more sensible with my money. I had been quite frivolous with my income, and knew it was about time to start trying to build some wealth, but first had to address quite a bit of accumulated debt with GE CreditLine, VISA, bank loans etc (hey, i like to buy new gear :D).

    I did a very detailed budget and was quite disturbed to see how much of our money was disappearing in interest, long story short, it's all paid off now and I am starting to look more seriously at investing now and getting a good start to that research here.

    Cheers,
    Benneh
     
  2. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Good on ya, this is a great place to start.

    Reckon in a couple of years time you'll be calling yourself a property person, or a sharemarket person, or both?
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Well done on taking responsibility and taking action Benneh. Now that you've got your bad debt sorted, the sky's the limit.

    Welcome to InvestEd!

    Cheers
    N.
     
  4. gad

    gad Well-Known Member

    Joined:
    5th Sep, 2005
    Posts:
    150
    Location:
    Canberra
    G'day Bennah

    8 years ago I was living in Housing Commision. I'm a storeman & my wife works (paid work, full time job looking after me he he) only about 10 - 12 hours a week.

    We now have our own PPOR, 2 IP's & 1M in the Navra funds or to put it another way; just over 1M in debts (all good debt) & almost 2M in assetts.

    Am actually too heavily weighted in Navra funds & about to look for 1 or 2 more IP's & Super alternatives.

    It can be done.
    I was app. 42 years old 8 years ago when I started. the earlier you start the better you will off you will be.
    You are definetly heading in the right direction. Use your brain, not your brawn.

    Your dream can become reality.

    I wish you all the very best in your endeavours.
     
  5. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Gad

    That's an inspirational story! Can you give us some more details as to how you've achieved your success to date?

    Cheers
    N.
     
  6. gad

    gad Well-Known Member

    Joined:
    5th Sep, 2005
    Posts:
    150
    Location:
    Canberra
    G'day Nigel

    I'll try & be brief but it will be a saga :eek:)

    We bought our 4 bdr home (needed some work) for $125k in Dec 98.
    Sold the app. $35k of shares we had & borrowed $95K P&I.
    Before making the first loan repayment my father gave his 5 sons $40K each as we all now had mortgages & he couldn't see any point waiting until he died. That went straight off the mortgage.
    I was paying as much as I could possibly afford off that mortgage & at some stage during the next couple of years I was transferred from one company to another & as far as the super fund that I was putting personal contributions (I was in 2 funds) into were concerned, I had left that companies employment & I was able to access app. $20k of personal contributions which also went straight into reducing the mortgage.

    By Sep 01 we only owed app. $45 so we redrew $15k for a deposit on IP#1 which was a 2bdr unit in a Canberra suburb. Mid Dec 01 we borrowed $85.5k P&I & paid $95K for that unit.

    By July 02 I'd paid that PPOR mortgage back down to almost zero so we then redrew $30k for deposit on IP#2 which was a 3 bdr town house in a Canberra suburb. By Oct 02 we paid $210K for the T/H & borrowed app. $189k P&I.

    Aug 03 with a balance owing on PPOR of $28.5K we redrew app. $57k to try out the Navra Aust fund.
    At the end of July 04 we cashed out the $62.6K & took it back off the PPOR mortgage so we could proceed with a larger investment in the Navra Fund.

    Early Nov 04 with app. $20k owed on the PPOR we remortgaged IO to 80% LVR & put the remaining app $252k into the Navra Aust. fund.
    At app the beginning of Nov 05 we took out a margin loan with which we bought $25k of shares in Navra with the other $240k going into the Aus fund.

    Mid Feb 06 we refinanced IO IP#1 to 80% LVR with the remaining app $64k going into the Aus. fund.
    Late Feb 06 we added an app. $66k to our margin loan & put that into the Aus. fund.

    Should point out at this stage that all the distributions from the fund were being reinvested in more units while I was able to cover all the interest costs from my wages & the rents (did take app $8k out of fund to help pay this years tax bill). Margin loan interest is being capitalised.

    Early April 06 with an ever-lowering margin loan LVR we added another $50k to our margin loan & put that into the Navra American fund.
    At the end of May with funds left to my wife after the death of her father we put another $100K into the Navra Aust. fund.
    At the end of May we added another $50k to the margin loan & put that into the American fund as well.

    As it stands now: (roughly, ignoring super & a small amount of other shares ect)

    Asset values:
    PPOR - $360k, IP#1 - $195K, IP#2 - $270k, Navra funds/shares - $1019K & Offset Acc - $45k = $1889K

    Liabilities:
    PPOR - $271.6K, IP#1 - $139.7k, IP#2 - 166K, Margin loan - $468.5K = $1045.8K

    The property/investment loans are in both our names. The title of PPOR is in both names. Title of IP#1 is in my name, IP#2 in my wife’s name. All Navra funds are in my wife’s name.

    Sorry about the length.
     
  7. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    That's a great growth story Gad. How did you turn around your housing commission existence - was there a lightbulb moment or something? Surely something changed mentally which then affected your financial independence..
     
  8. gad

    gad Well-Known Member

    Joined:
    5th Sep, 2005
    Posts:
    150
    Location:
    Canberra
    G'day Glebe

    That's a good question.

    I guess it was from my fear of debt.
    I remember being a late teenager & buying a second hand car from a dealer. It took me years to pay off that loan. I swore I'd never be in debt again after that & did stay debt free for many, many years after.

    It was my fear of debt that made me want to be rid of the PPOR debt as fast as possible.

    I remember thinking how lucky we were to have paid off our mortgage in such a short time & how lucky we now were with our own home & no debts. Oh, that was such a good feeling after all those years of believing we could never afford a home of our own (living in Sydney back then). Yahoo, would not have to work over time (OT) again, Yahoo.

    BUT, once the PPOR loan had been paid off I had no idea of what to do with the $'s that I was now so used to paying into the loan.
    I had just read Jan Somers book "More Wealth from residential Property" and thoughts of people's welfare, during retirement, were also going through my mind.
    I had another brother who stayed with us from time to time while doing work in Canberra & he already had an IP, through accident really, & we did talk about IP's ect which did generate a bit of interest as well (he now has 3 IP’s).

    I so clearly remember my restless/sleepless nights when we first bought IP#1. So much fear of what could go wrong, had I put our PPOR in jeopardy (my wife would have killed me) ect.

    I now wish I had bought ten :eek:)

    I have read a lot since then & still have lots & lots more to learn but the journey is very exciting. (Well, property investing is really only exciting when purchasing, pretty mundane after that. Managed funds can also be pretty mundane investments unless, like me, you monitor them daily, he he, keeps your heart fluttering :eek:) )

    Oh, & I do still do all the OT offered at work :eek:)

    Gotta go, crickets back on.
     
  9. voigtstr

    voigtstr Well-Known Member

    Joined:
    24th Jan, 2007
    Posts:
    679
    Location:
    Hobart
    awesome work Gad!
    I'm starting at 38 and your story is inspirational. I'll knock my consumer debt out of the way first, save a deposit, and get cracking!