Join our investing community

Hi from Adelaide

Discussion in 'Introductions' started by dkbook, 5th Feb, 2007.

  1. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    Hello all, finally got up the nerve to introduce myself as I feel a bit overwhelmed by all the success stories having lost the lot in the property bust in the late eighties. Never have been able to get back on my feet so I am hoping some of your success will rub off on me.:D
    I am now approaching my mid fifties, so with retirement not too far off, my wife and I are trying to get a small bookkeeping service off the ground to clear debt and give us a means to quit full time work.
    Any ideas or suggestions on how to start again at this time in life would be greatly appreciated.
     
  2. TryHard

    TryHard Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    863
    Keep at it DKBook - attitude is everything. From everything I've read, all the truly successful people have been to the wall at least once. So you can probably be pleased you've got your 'once' out of the way - so onward and upward ! Looking for better ways to do things is a great step in the right direction so good on you for getting into InvestEd :)

    Cheers
    Carl
     
  3. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    Many thanks for your encouragement Carl. We are not about to give up yet.
     
  4. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Best of luck with getting back on your feet DK. I'm sure everything will come good for you, you're certainly in a good place here.

    Do you mind telling us how you went bust in the 80s? I'm sure you have lots of knowledge to pass onto the rest of us. The school of hard knocks turns out the toughest graduates!
     
  5. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    Had to do a bit of thinking on this one. :) Not much to tell really, a combination of high interest rates, inflation, property price crashes, unemployment, economy in a nose dive, poor choices on my part.

    A few don'ts may avoid a lot of pain:
    - Don't over extend your commitments
    - Don't rely on ever increasing land/property prices
    - Don't rely on long term, high paid employment or dual incomes
    - Don't rely on real estate agents hype
    - Don't rely on any favours from your bank or mortgage provider
    - Don't make any decisions when under emotional stress
    - Don't rely on the government to make the right choices or to bail you out
    - Don't expect the current economic bliss to continue indefinitely

    Make your choices for the LONG term, the last bust took Victoria about ten years to recover ground lost.
     
  6. TakeStock

    TakeStock Well-Known Member

    Joined:
    14th Aug, 2005
    Posts:
    140
    Location:
    Sydney
    In other words, expect the unexpected.:eek:

    Some very sage advice given above. This is where insurance and careful planning come into their own. Risk management is critical. You literally have no idea what tomorrow may bring. Life seems to drift along pretty much as expected and then suddenly, without warning, someone or something throws you a curved ball that can tip your world upside down in a flash.

    Keep going DKbook. You are still in a very productive stage of your life and no doubt you have a tremendous amount to offer. By taking the time and trouble to discuss your situation here, it demonstrates that you do have what it takes to really move ahead again...

    Cheers
     
  7. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    Curved balls - you betcha - and the vast majority are way beyond your control.
    Yes, expect the unexpected and cover your ass! :D
     
  8. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    So let's not forget the importance of insurance :)
    Income protection, life, property, contents and the list goes on.....
     
  9. FreedomLadder

    FreedomLadder Member

    Joined:
    22nd Feb, 2007
    Posts:
    5
    Location:
    Canberra, ACT
    Reach for your dreams, begin today!

    Hi dkbook

    I'm a newbie and I'm thrilled to have come across this website. My goal over the next 12 months is to increase my financial IQ and my financial wellbeing. So I know I'm going to enjoy being a member of investEd - what a fantastic resource .. and it's Australian too!

    I hope your bookkeeping biz is getting off to a good start - good on you for starting a new venture, I take my hat off to you. It's never too late in life to reach for your dreams and begin something new.

    All the best,
    Debbie

    ------------------
    Debbie-Jo Dutton
    Your wealth matters - take a look and decide for yourself ...
    AGEL - The NEXT Generation Business Opportunity
     
    Last edited by a moderator: 22nd Feb, 2007
  10. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    Thank you for the encouraging words Debbie-Jo.

    Not a lot happening with the business just yet, we have been promoting it a bit more the past month or so. I guess it is a bit early yet for most people to start thinking about getting their accounts in shape for the tax man!

    No doubt panick will set in as June 30 approaches.

    Good luck with your biz. To the success of all.
     
    Last edited by a moderator: 23rd Feb, 2007
  11. iiinvestor

    iiinvestor Well-Known Member

    Joined:
    1st Feb, 2007
    Posts:
    121
    Location:
    Sydney


    Jacque:

    Interesting topic; I wonder what the opinions on this forum are regarding insurance. Do most people here have TPD, life, income protection, landlord, full-comp car, professional indemnity for business/contracting, public liability, etc?

    Here's a thought (maybe completely flawed though). The insurance companies hire a raft of actuaries to calculate insurance and reinsurance premiums based on the likeliness of something happening. Then they add some more for profit. If we're on the other side of the deal, could we assume that based on the stats, we'd be better off not insuring at all and covering mishaps with our own money? My thinking is if they've worked out the stats and covered themselves plus some, then they've essentially worked out what it would cost for us to cover ourselves, but then they added more. Am I completely wrong and talking nonsense?

    I guess it's just a hedge really. For most of us, we'll probably pay more in insurance that we get back. But for the unlucky minority who have a real disaster, they will think of themselves very lucky for insuring.

    Anyway, just thoughts.
     
  12. dkbook

    dkbook Member

    Joined:
    9th Oct, 2006
    Posts:
    15
    Location:
    Melbourne, Victoria
    I think you are probably correct, the insurance companies make money from us. It is all a numbers game, the gambol is - do you think you are one of the lucky one's or not? Tough choice.
     
  13. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    Warning! Warning! If you listen to nothing else I say, please read my responses to this very important issue raised by iiinvestor.

     
  14. iiinvestor

    iiinvestor Well-Known Member

    Joined:
    1st Feb, 2007
    Posts:
    121
    Location:
    Sydney
    Thanks for the reply Nigel

    The only part of your post I have reserves about is:


    That's like the Gun Club commissioning a report that Australians are grossly under-gunned? :D

    Or the Meat Council commissioning a report that we're only smart because we ate red meat. What about all the animals that ate read meat at the same time, why haven't they researched their own genomes or built supersonic aircraft yet?

    However, I've seen the error of my ways, especially in light of your comment on the Canberra bushfires. I tend to forget our properties have building insurance and that it's soooo cheap relative to the asset value. Obviously it's cheap due to statistical chance, but I think it's cheap enough (in most areas) to warrant it. If $250 covers a $500k asset, then you'd probably be crazy not to insure.

    For me, the jury is still out on all of the other insurance, but I realise now this is totally to do with my circumstances. At this stage I wouldn't touch life, home contents, private health, income protection and landlord insurance.
     
  15. Nigel Ward

    Nigel Ward Team InvestEd

    Joined:
    10th Jun, 2005
    Posts:
    1,172
    We can agree to disagree about how "independent" the insurance research is, but I'm comfortable that it's accurate.

    I guess I'd say to you - do you have borrowings? If so then how will you service the debt if you have an extended period where you're unable to work?

    On the health insurance front, same question. All the various funds have "young and healthy but not too wealthy" options for cover so I'd look into those...

    Landlord insurance is the one I'm probably comfortable with people not having...PROVIDED they've done the analysis and have the free cash flow and cash reserves to deal with extended vacancy of one or more properties and the reinstatement costs if there's interior damage...

    Cheers
    N.
     
  16. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I just got my car insurance renewal ... "agreed" value (I don't remember being asked my opinion !!) for our car is now around $2800 (it is a 12 years old hatchback) ... and while the premium has steadily dropped over the years, I'm wondering why I have comprehensive insurance for a car worth $2800 !!

    I actually need to check into what other cover is included in the comprehensive insurance (compared to just CTP) to see if it is justified. I seem to remember there being extra third party insurances included (in case I destroy something else with my car !). Must check.
     
  17. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    I suggest everyone without landlord insurance who is relying on their building insurance check their policy wording carefully ... many building insurance policies do NOT cover you for malicious / deliberate damage - especially by tenants. You could potentially be significantly out of pocket with serious damage to your property without income from your asset.

    Of course you can minimise the risk of this through careful screening of tenants, but there are no guarantees, and a conflict may arise with a seemingly ideal tenant - and you can't control who else enters the property at the invitation of your tenants ... thus increasing your risk.

    Malicious damage cover is the primary reason I decided to take out landlords insurance - although I don't have it for our ex-PPOR where the tenants have been there ever since we moved out 8 years ago !!

    Insuring for loss of rent from tenants who break lease is pretty trivial and not worth it in my opinion, but loss of rent from serious malicious damage could be quite a lot given how long it may take to restore the property to tenantable condition.
     
  18. Chris.R_WA

    Chris.R_WA Well-Known Member

    Joined:
    7th Aug, 2006
    Posts:
    113
    Location:
    Perth, WA
    Health insurance

    I regard health insurance as a must.

    This is simply not optional for my partner and I; we value this asset above all others.

    An unfortunate sporting injury last year really drove home the importance of insurance, and I was very glad I had it.

    Mind you, I could probably minimise the risk by retiring soon...

    Maybe next season :)
     
  19. iiinvestor

    iiinvestor Well-Known Member

    Joined:
    1st Feb, 2007
    Posts:
    121
    Location:
    Sydney


    Sounds good. It just seemed funny at first; I'm not necessarily disagreeing with the study. Actually the Canberra fires alone proved how under-insured people are! So I now agree (can I do that). :p



    Huge borrowings, geared to the eyeballs, the percentage alone would scare small children. But I don't really work; so no income to protect (do they guarantee rental income?). When I did work, there were reasons I wouldn't be covered or covered at a very high cost.



    I'm an android, normal health insurance doesn't cover my electrical? :D Seriously though, I've saved an absolute fortune in hospital costs from NOT being in private health. Let's just say numerous emergency hospital visits would probably have saved $100k+ of costs if I was in private health. However, as soon as there's any sign of pregnancy, or need for a top surgeon, or if I get nasty teeth (heaven forbid!), I'll be straight onto the private health bandwagon. I know there are probation periods, but that's the risk I'm taking at the moment. As soon as I make too much money as well, I'll get aboard to save on the levy.




    This is the one I would consider if I had more residential property (and more sense).

    As for other insurance: I don't own a car (no car insurance), I live in a very secure residence without much content (no contents insurance), etc. So it's really just circumstance. I can easily imagine a situation where I'd need all of that stuff.

     
  20. TryHard

    TryHard Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    863
    Then again Landlord Insurance seems to be pretty cheap compared to the level of risk it mitigates, and its tax deductible.

    I'm with you Nigel - if anything I'd rather be over-insured, in every aspect of life that involves finances of any sort ...