WHAT IF THE ECONOMY CRASHES?


I was recently asked “What if the economy crashes?”

My reply was along the following lines:

“Thanks for voicing your reservations – if you didn’t have some concerns then I’d be reaching out to take your pulse to see that you’re still with us.

“You must remember that property investments are for the long term – you told me that you have only $100,000 in super. So you should consider putting one in place now, so that in five years - when you come to retire – you will have at least one running for you. Then if you live off your super for two years, then an investment – one that a family would pay say $400,000 today to live in – should be well in excess of that value.

“Since records began, property has increased three times in every 21 years. Which is why the commentators say ‘property doubles every seven to ten years’.

“And if you have ever thought ‘how will young couples ever be able to afford a family home?’ then you too know that property values increase over time.


“Over this past 150 years, there have been depressions and recessions, world wars, 22% interest rates, change of governments, financial meltdowns, stock market crashes, you name it. Even the impact of the ‘recession that we had to have’ in 1991 only lasted four years before property values exceeded what they were in 1990.

“Don’t let the current crop of bad news distract you from taking action to ensure some form of dignified retirement.

“I know it’s a watershed moment for you – but whether you invest, or if you don’t, there is definitely a foreseeable outcome either way. Destiny is a matter of choice, not chance.

“Which outcome would you prefer?”

Phone me Bernard Kelly anytime on 0414 778 518 cell 61- 414-778 518

or visit the website http://www.retirelaughing.com/

WHY YOU NEED A FUNDING STRATEGIST


Banks are in the business of lending money. They are not in the business of helping you put something extra aside for your retirement.

So they try to tempt you with “the lowest interest rate”. Unfortunately, as an investor, you will find that generally such loan products won’t let you make extra repayments nor will you have an offset account.

The same goes for “honeymoon rate” loans. The banks don’t give money away, so after the initial honeymoon period you’ll be paying a high variable rate, and there will be solid penalty exit fees if you try to go to another lender. They will make the same off your loan – over time – as off every other client’s facility.

The only way to obtain the best package is to talk with a funding strategist.

I can introduce you to a funding strategist at the peak of their profession.

Phone me Bernard Kelly anytime on 0414 778 518 cell 61- 414-778 518

or visit the website www.retirelaughing.com

I ENJOY CHATTING WITH SOULMATES WHO SHARE MY HOBBY


So let me say at the outset (in the tone of an unemotional consultant) most of us fail with our efforts at property investing because you don’t have a goal, and without a goal you can’t possibly have a long-term strategy. At best what you would have is a haphazard strategy.


My long term strategy used to be that when my estate event occurred, the kids would say “the old man did pretty well, didn’t he?” Now that I’m 63 and the kids are mid 20s – early 30s, my goal is now to teach them Wisdom. So that when I die I hope that they’ll say instead “Mum and Dad, as a partnership, did pretty well, didn’t they?”


So what is your long term goal? A mate of mine wants to be able to pay the taxman $100,000 each year in his retirement. Because if he achieves this, he knows that he’ll be earning $400,000 pa.


My strategy is better than yours because I have a goal (which is to own a substanial investment portfolio before I’m 78) and have worked out a simple strategy how to get there.


But even your haphazard strategy is better than the 95% of the population – who have none. My typical clients come to me in cruise mode – but they have suddenly realised that in their mid-50s they just don’t have anything like what they’ll need for 20-25 years of dignified retirement. They are now trying desperately to avoid the cliff.


So I give them a goal – which is to own three investment properties before they retire.


But if your younger, I would suggest that your goal could well be to have an income in retirement of say $100,000. Which means having wholly owned assets (in today’s money) sufficient to give you a 5% return. So the goal that I offer to you is wholly owned investment assets worth (in today’s money) $2,000,000.


The only reason why my strategy is better than yours is because I have been chatting to soulmates who share my hobby for 20 years longer than you have. So I have learned from them. My hobby – and yours – is really no different than any other hobby. When you’re keenly interested in something, you find soulmates in the most unlikely places, or you see something on TV or in the press and you run it around in your mind until you work out how they did it.


If you go to the bookshop at the airport, you’ll see that there are perhaps 18 books there on investment property, each offering a different strategy. As a generalisation, I’d say they’re all OK, but that mine is far better. Those authors are writing to make money – and that is a very different goal to giving you the best advice.


All those 18 strategies are OK, because property is forgiving, and even if you make a mistake, over time any investment will rise in value. Capital city properties have risen three times in value during each 21 year cycle over the past 150 years. Which is why they say “property doubles in value each 7-10 years”. This is true even in Perth, although the Perth market goes through long droughts – ten years or more – before it has explosive growth for a few years to catch up the moving statistical trend line.


My focus is on “least in, most out”. So I have determined the demographic of the ideal tenant, how to attract that ideal tenant, where would this ideal tenant be willing to pay an above normal rent, and how much can the average investor afford each week. These elements determine what the accommodation is, so then I look for the ideal location – a family suburb near to a solid cluster of basic non-boom jobs, in a growth corridor, where land taxes are lowest. And the exit strategy determines that the price should be up near, but under, the median so that you can exit into the broadest market (families).


Congratulations! You are ahead of the field, and you’ll keep increasing your lead. Over time you’ll gradually develop a goal and then a strategy, and don’t worry about the past. Just keep chatting to soulmates and you’ll find your way.


Regards


Bernard Kelly www.retirelaughing.com mobile 0414 778 518 cell phone 61 414 778 518


PS As I don’t spend my advertising budget on traditional media, I’m able to pay you $1000 for successful referrals

I would be delighted to be your personal financial coach over the next five years and share a strategy that will dramatically reduce your learning curve.