Saving is boring

[murtagh]

Hello,

We are saving up for the deposit on IP #1, having purchased a little PPOR late last year. It would have been nice to see some instant equity from the PPOR but it looks like that won't happen. We have our savings going into the offset account on our PPOR mortgage. No debt aside from the mortgage. It's nice watching the offset balance grow .. but it's like swimming in treacle.

I guess we are somewhat cautious because we intend to buy IP #1 early next year, so any "investing" we could do with our cash in the meantime needs to be quite short term - and beating the return on our offset account in the short term seems unlikely.

What can we do to accelerate our savings?

Is this just the "starting out is hard" part that everyone talks about?

Cheers,
David

 

[tiger]

Earn more money....

 

[Aaron Sice]

make your money earn more money.

there's more to life than a full time job and a few houses.

 

[murtagh]

make your money earn more money.

there's more to life than a full time job and a few houses.

I have followed some of your share trading stories, BC .. very interesting to me.

I assume that's what you're referring to?

Can you suggest ways I can start learning the skills you have?

(and congratulations, that was your 1000th post! )

 

[The Y-man]

beating the return on our offset account in the short term seems unlikely.

I would tend to agree with this. I feel that any money you "invest" at the moment into other markets will need to go in with the proviso that you are comfortable if the returns are crap for the next 5 years, and it further delays your IP plans.

Cheers,

The Y-man

 

[BlackSpider]

Earn more money....

That's what I would say too.
If you concentrate on how to earn more and take action, then saving won't be boring.
You won't even be thinking about how slow saving is because all you will be thinking of is how fast your income has increased and how much you have grown personally in the process.
Saving money will become a side effect which just happens by itself.


Spider

 

[murtagh]

That's what I would say too.
If you concentrate on how to earn more and take action, then saving won't be boring.
You won't even be thinking about how slow saving is because all you will be thinking of is how fast your income has increased and how much you have grown personally in the process.
Saving money will become a side effect which just happens by itself.

"Earn more" isn't really a viable option at this stage. I'm well above average income, at the peak of the income scale for my role. So the "upside potential" for more income from a J.O.B. is very low.

If you mean "earn more" from investing, I am all ears on where to start - but the IP purchase next year means we need our capital back in time for that to happen.

 

[murtagh]

I would tend to agree with this. I feel that any money you "invest" at the moment into other markets will need to go in with the proviso that you are comfortable if the returns are crap for the next 5 years, and it further delays your IP plans.

Thanks Y-man.

I appreciate the validation - we are very focussed on IP#1, so perhaps saving is as good as it gets in the short term.

It's just boring - but they do say "sometimes the best thing to do is nothing".

 

[GoAnna!]

Congrats on moving forward when many are moving backwards.

Is there anything you can do to add equity to your PPOR to spead up the process?

Keep on eye on sales in the area of your PPOR and when comparibles start to move sufficiently in the right direction get yours revalued and get that equity out.

Watch your intended ip market so your are ready to pounce when you see a bargain. Get your fiannces in order so that you can take advantage of any under market sales and gain that instant equity. Taking a higher LVR and perhaps paying LMI will be worth it for the right property but watch for the negative cashflow drain.

In this market you do need to work hard to move forward and those well prepared and well researched will be rewarded. Once the growth starts kicking in again your won't believe how easy it feels.

 

[Rob Williams]

The process of saving might seem boring, but there is plenty you can do to keep things interesting.
LOTS of research, talking to agents, mortgage brokers, other investors etc etc in order to boost your knowledge.
Crunch some numbers, work out your cash flow etc etc and start to build some models around different scenarios, so you will have a better idea of what you are looking for, the desired area, price etc.
It's all good fun when you get into it and NOW is the time to start becoming an expert and educating yourself, NOT when you've saved your deposit and are ready to buy.
It can all be fun if you make it so. Rememeber, it's all just a game!
Good luck.

 

[murtagh]

Congrats on moving forward when many are moving backwards.

Thanks for putting our "problem" in perspective. You are right - it's a fairly "good" problem to have!

Is there anything you can do to add equity to your PPOR to spead up the process?

Keep on eye on sales in the area of your PPOR and when comparibles start to move sufficiently in the right direction get yours revalued and get that equity out.

Good point - we have not investigated "value adding" to our PPOR in a while. I will do some reading to see what we can come up with.

We are always paying attention to local sales - we are seeing comparable stock hold value at the moment, certainly no trend upwards.

Watch your intended ip market so your are ready to pounce when you see a bargain. Get your fiannces in order so that you can take advantage of any under market sales and gain that instant equity. Taking a higher LVR and perhaps paying LMI will be worth it for the right property but watch for the negative cashflow drain.

In this market you do need to work hard to move forward and those well prepared and well researched will be rewarded. Once the growth starts kicking in again your won't believe how easy it feels.

High LVR and LMI is a given for us (starting from very close to 0!). I'm not too worried by this - you have to pay to play. We are both going into this with eyes open, and planning on maximizing cashflow where we can.

We have a few areas in mind at the moment, but you are right - we could be putting a lot more effort into nailing down exactly what we will be looking for. The joy of an illiquid market is that our findings will still be relevant in six/nine months.

Thanks for your response, we have things to think about now!

 

[murtagh]

Crunch some numbers, work out your cash flow etc etc and start to build some models around different scenarios, so you will have a better idea of what you are looking for, the desired area, price etc.
It's all good fun when you get into it and NOW is the time to start becoming an expert and educating yourself, NOT when you've saved your deposit and are ready to buy.
It can all be fun if you make it so. Rememeber, it's all just a game!
Good luck.

Thanks Rob,

you are quite right - I love spreadsheets and throwing numbers around. I should be taking this "breathing space" as time to really refine my models.

What we are really in need of I think, is something to "pass the time" while we wait for the savings to stack up. More research might be just the thing!

 

[vbplease]

Do you have a spare room in your PPOR? I'd recommend getting a homestay exchange student for some extra cash flow. Our family has had many asian homestays and they can be very quite and respectful - important if you value your privacy.. You and your partner can also learn/benefit a lot from them too.

I'm pretty sure homestay income is tax free.

 

[BlackSpider]

Ever thought about starting up a part time business, some businesses require very little start up costs.

You never know, one day a business you start today could pay you multiple times that of what you are earning in your Job right now.


Good luck

Spider

 

[ianvestor]

Ever thought about starting up a part time business, some businesses require very little start up costs.

That's what I was thinking... It really threw me to hear someone say "Earning more isn't an option, because there's no upside potential at my JOB"!

It reminded me of this guy from The Richest Man In Babylon:

" 'What you need, young man,' I told him, 'is to earn more
coins. What dost thou to increase thy capacity to earn?'

" 'All that I can do' he replied. 'Six times within two moons
have I approached my master to request my pay be
increased, but without success. No man can go oftener than
that.'

 

[murtagh]

That's what I was thinking... It really threw me to hear someone say "Earning more isn't an option, because there's no upside potential at my JOB"!

It reminded me of this guy from The Richest Man In Babylon:

Nice quote

I was trying to head off the inevitable "get a better job" comments which were starting to pile up. You'll see my next line was "If you mean "earn more" from investing, I am all ears on where to start".

So where are these low-capital, high income business ideas? I'm intrigued!

 

[ianvestor]

Nice quote

I was trying to head off the inevitable "get a better job" comments which were starting to pile up. You'll see my next line was "If you mean "earn more" from investing, I am all ears on where to start".

So where are these low-capital, high income business ideas? I'm intrigued!

Well, for me at least, low-capital = internet site. I'm pretty sure a few people have made high incomes from the internet.

 

[BayView]

Hello,

We are saving up for the deposit on IP #1, having purchased a little PPOR late last year. It would have been nice to see some instant equity from the PPOR but it looks like that won't happen. We have our savings going into the offset account on our PPOR mortgage. No debt aside from the mortgage. It's nice watching the offset balance grow .. but it's like swimming in treacle.

I guess we are somewhat cautious because we intend to buy IP #1 early next year, so any "investing" we could do with our cash in the meantime needs to be quite short term - and beating the return on our offset account in the short term seems unlikely.

What can we do to accelerate our savings?

Is this just the "starting out is hard" part that everyone talks about?

Cheers,
David

I think being patient is the hardest thing; especially at the start when you have an enormous passion to get things going.

I've always been good at saving (even in the early years when p!$$ing the wages away was the cool thing), and I get a kick out of seeing the debt decrease/equity increase/savings grow - no matter how small or slow.

Setting easily obtainable goals is the trick, but think big picture as well.

Form example; your next goal is the deposit for the IP, so focus on that, set your savings limit for each week/month, and work out when the desired amount will be reached. mark it on the calender and go.

But, the bigger picture may be to get 5, or 10 IP's etc, or be retired by the time you're 40 etc.

Your plan to get there is one IP at a time, every year, or something like that.

At least you've made the start towards IP no.1 - many won't.

 

[BlackSpider]

Yes, internet marketing does not have to cost much.

All you need is to find products or services you can sell which will generate worthwhile profits.


Spider

 

[tiger]

"Earn more" isn't really a viable option at this stage. I'm well above average income, at the peak of the income scale for my role. So the "upside potential" for more income from a J.O.B. is very low.

If you mean "earn more" from investing, I am all ears on where to start - but the IP purchase next year means we need our capital back in time for that to happen.

Well, depends how you look at it.
Im glad Im not tied to a job and and income limit.
Think outside the square, there are many more ways to earn money than from a job or investing.