THE TOP 10 MISTAKES THAT EVERY First Time Investor Should Avoid Like The Plague - Part Two

Acting Too Fast And Acting Too Slow
Some people make quick decisions and change their minds frequently. Some people make slow decisions and stick with it. I think the best thing to do in this situation is to have a balance between the two. Some people make the mistake of getting so excited about a concept after they have attended a property investment seminar and go out there with very little research and attempt to implement what they have learnt. They either end up paying too much of select the wrong structure for investment.The ones that are too slow however, are so scared of making a mistake and of moving out over their comfort zone that they are paralyzed and miss out on all the great opportunities in front of them.

One important thing to remember is that investing is something that you may not be 100% comfortable with. Because you are going outside your comfort zone and attempting to do something that you haven't done before. There is always something a little unnerving about that. But you need to balance this fear by taking the necessary measures to do your research and cover all things that you are unsure of. That way you are able to move forward, but with caution. There is no point in making rash decisions and sometimes there is no point in standing still and doing nothing.

Over Estimating Income And Underestimating Expenses
It’s important to have some sort of a safety net when you are looking at investing. Most people either stretch themselves too thin when it comes to buying their property, or over estimate their current income and the rental income they will receive. You need to be able to take into account rental vacancies and other expenses that may unexpectedly pop up. Its best to do some research on rental income around the area, instead of just sticking to general rules and principles.
If you do feel like sticking to a rule, then the best one to stick to is to under-estimate income and over estimate expenses by around 10%.

Looking Short Term Instead of Long Term
Investing property is usually a long term thing. So its not a good thing to go into it thinking that you can make a quick buck and then leave a richer man. Most things in life don’t work that way. This usually will lead you into get rich quick schemes and deals that seem too good to be true. Because hey they usually are. The key here is to be able to hold a property for at least 10 years by which time it would have doubled. Its about reinvesting your capital and putting that into other property that will grow, which helps to create a solid asset base. A good quote to remember is “ Let time be your ally and patience be your friend”

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Jennifer

THE TOP 10 MISTAKES EVERY First Time Investor Should Avoid Like The Plague!! Part One

There are a number of things that a first time investor can miss when they are looking to buy their first property. Here are a few tips, that gives you a general guideline as to what to look out for when you start investing.

Having No Strategy
People often don't give the time and the effort that investing requires. They dive into deals that seem to look good without doing the necessary research and evaluation. People need to understand the certain strategies that can be placed with property. Whether they are going for a buy and hold strategy or a buy and sell one. They need to know what balance they need to find between growth and stability. Whether its best for them to positive, negative gear or neutrally gear. All of this of course depends on your current situation and is the reason why its best to know what strategy will best suit you. The thing is that most people neglect this part and then wonder why they end up in a worse position then when they started. By setting up a strategy you don't fall into the trap of painting yourself into a corner or only having one plan of attack. You are more able to prepare for when something doesn't go to plan.

Being Emotional Rather Than Analytical
Investing especially with property can be an emotional process for people and this gets them to make bad and irrational investment decisions. If you want to be emotional, then be emotional about the deal and not so much the house. Being too emotional can lead to paying too much for a property, selecting the wrong one and over capitalizing in renovations. To counter this its always best to know what you are looking for, have a walk away price and stick to it!

Not Taking Investing Seriously
If you are a guy,let me ask you how long you would spend looking for a $40 000 car? How much research would you do? I would say at least 2 weeks right?N girls, let me ask you. How much time would you spend looking for a $1000 dress? I reckon at least a couple of weekends right?!Now let me ask you this questions on average how long does a person spend researching an investment property worth at least $400 000.Well if we were speaking relatively, it would be 10 times longer than the amount of time looking for a car right?Who do you know that spends a minimum of 20 weeks researching on their investment property? Well if you want the good news now, then don't need 20 weeks of research to make a good investment decision. But you should apply the same amount of importance and research on your investment property as you would a car or a dress at least.

Attempting To Do Everything Yourself
For some reason people assume that investing will involve you having to do everything yourself. With property its all about building relationships with the right people. In terms of getting a good deal its good to build strong relationships with the real estate agents, home inspectors, lenders and appraisers. In terms of re-modeling and maintenance you want to get to know the contractors, roofers and electricians well. Its also a good thing to know how to outsource. There is always a balance between your time and the money being spent. Sometimes your time is better spend managing other people rather than doing something yourself.

More tips coming in the next couple of days

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Jennifer

WHAT IS WEALTH BUILDING? - Turning $10 000 into $2,000,000 - Making Money Work For You!

Wealth building is a large part of creating financial independence in the future. It can be sometime mis understood by a lot of people, yet something very essential.

The first thing that we will clarify is the difference between real income and wealth. A lot of people confuse the two. Most people believe that if you are earning high income in a well paying job that you are rich, you've made it and you are going to live happily ever after. However this is not true because at the end of the day once they stop working they have nothing left to sustain their lifestyle. Yes they may have the BMW's, the multi million dollar houses but at the end of the day if they aren't investing their money, when they stop working they will have very little left.

Wealth on the other hand is all about creating assets, which give you capital growth and passive income. The power of compounding is very important here. The example below will illustrate this.

Example: Person A chooses to put aside $10 000 each year for and enjoy the benefits of it in 40 years time. At year 4 their money is at $40 000, year 14 $140 000 and by year 24 $240 000. At the end of the 40 years he would have only accumulated $400 000!!

Example: Person B invests $10 000 at 15% for 40 years. This is a once off investment and he doesn't take any of the money out. Now at year 4 their money has grown to $17,490.06. By year 14 it has grown to $70,757.06 and by year 24 it has grown to $286,251.76!! As you can begin to see the growth is exponential. Do you want to know how much his money is worth by year 40? Well ill tell you. At the end of 40 years after initially putting in $10 000 dollars and not adding a single cent to it, his money is now worth $2,678,635.46!! Who would jump at the idea that if they had 40 years and $10 000 that they could be a millionaire?!

Know can you imagine that scenario with a bigger initial deposit or more time? If person B continued for another 5 years that amount would have grown to $5,387,692.69!! Who wants to make $2,709,057 in 5 years sitting on their butt all day? Because thats essentially what you just did!

So one the keys to compounding is to get started and get started now! Because you get your money to work for you and not the other way around!


Now compounding with real estate also works very effectively. Essentially the key is to continually re-invest your earnings and from that duplicate the process.

The best way to start is to buy an investment property, watch it grow in value and then access your increased equity - you then use that to purchase another investment property. If you keep buying wisely, structure your finances right, you can then duplicate this process again and again.

The beauty of duplication is compound growth. Invest the capital growth on one property - and start getting capital growth on two properties. Use the growth on two properties to buy two more. And so on... The growth is exponential.

So just to recap quickly. The difference between income and wealth is that wealth is about investing your money, making it work for you and accumulating assets that can provide for you in the future. Income is a nice car, a nice apartment and a nice pension from the government of about $300 a fortnight when you can no longer afford to work. Which one would you choose?

Jennifer

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Before You Start Investing - You Have To READ This!

Hello again!

So lets get this straight. Everyone wants to make more money right? There are those that want to move into their dream house. Buy that BMW. Own a business. Get a better job. Do something that they love doing. Just be able to get by. Have more quality time with their loved ones. The list is endless. And yes we have heard them all before!

I think that when it comes to investing. Many people jump the gun and sabotage themselves even before they get started. One of the fundamental things that I have learnt so far, is that you have to invest wisely. You have to come from making educated decisions and you have to do with the right mind frame.

I’ve heard all the horror stories of people getting involved in get rich quick schemes. Losing thousands or hundreds of thousands of dollars in ventures gone bad. Yeah sure for the successful investor he/she may have been burnt a couple of times to know when a deal is good or not.

But ultimately situations like this will be attracted to you, if you come from this "lack mentality". You know the one. You've heard the sayings. Money doesn't grow on trees. You cant afford that. Rich people are unethical. There just isn't enough money to go around. Money is hard to come by. Rich people are just lucky. Money is a terrible thing and I want nothing to do with it. I'm sure that you guys can add more to the list.

So I think where I'm going with this, is that before you start investing, you have to work on some of your own beliefs about money and about wealth creation. Accepting accountability for your current financial position, is something that can be disturbing yet very liberating. Because if you had the power to get yourself into this current situation then you also have the power to make your future whatever your want to be. I come from this mindset, because I love the area of personal development. Despite being 20 I have been into personal development for about 7-8 years.

So here I am going to provide you with a list of a couple of books that I found really helped me build this abundance mindset. It set me free from the shackles of my limiting thoughts and beliefs and hopefully it will do the same for you. The good thing is that most of these books that I'm listing are now on public domain. Meaning to say that they are free. Funny that, because the information within them, is really quite priceless.

1) Napoleon Hill - Think and Grow Rich

Even though I have been into personal development for a little while. I didn't come across this book until a little later down my personal growth journey. Which is ironic because its one of the books that people usually come across first that gets them on the path to personal development. Its one of those classic books that you just have to read. I guarantee you that every uber successful person has either read this book or unknowingly lives by the principles which it teaches.

You can find the link for this book below

Think And Grow Rich

2) Wallace D Wattles - The Science of Getting Rich

What i really love about this book is that really changes gets you to think about your current circumstance and realize that where you are, is a result of all your past thoughts. If that sentence sounds familiar its because they used that line so many times in the movie "The Secret" as it was one the main inspirations for it. The book delves into the whole idea of the law of attraction and really helps to build this abundant mindset and shows that you can really create your own reality and that you deserve an abundant life.

The Science of Getting Rich

3) Dale Carnegie - How to Win Friends And Influence People
This is one of my most favourite books. Being originally quite a shy girl, I really found that this book helped me overcome that. It basically teaches you some fundamental rules on how to relate to people and helps to build your self confidence when you realize that really what people think of you doesn't really matter, because most people are concerned with what is going on in THEIR own lives. While this is not on public domain yet, here is a link which summarizes some key points from the book. It is definitely a worthwhile investment though.

How to Win Friend And Influence People

4) Russell H. Conwell - Acres Of Diamonds
This is a really cute little story which I love. Its a inspirational story that reminds you, that whoever you think you need to become to be successful is something that is already within you. I think that sometimes people underestimate the unlimited power that resides within them and are always searching for something more somewhere else. This sort inspired me to believe in myself and know that all I ever had to be, is someone I already am. You can find the link to the e-book below

Acres of Diamonds

5) Richest Man In Babylon - Geroge S Classon
This is another classic book which I came across recently. I love this book primarily because it teaches some fundamental rules about investing and saving money. One of the core principles in this book is to save first and then spend later. Sounds simple right? But its so surprising how many of us, pay the tax man, pay the bills, pay all the expenses before we pay ourselves. Just this simple shift in perspective can be the difference to your financial future in 5, 10 or 15 years from now. One of best pieces of advice i got from this book is to save 10% of everything you earn. I think that its such a simple and effective way for anyone to get started.
The link for the book can be found below

The Richest Man in Babylon

So there you go guys. Go out. Read. Enjoy. And please let me know what your thoughts are on these books.

All the best

Jennifer

What Does A 20 Year Old Know About Investing?!

Hi everyone and welcome to this blog! =)

My name is Jennifer and I'm one of the youngest training consultants at Investment Realty. This blog is wholly my responsibility so I'm going to make sure that its the best it can possibly be!

While I would love to be able to write a blog on some of the hottest property tips out there, provide my extensive expertise on some of the best markets to get into, or write articles on how to read markets and so on, this is simply something that I cannot do. All I have in my enthusiasm for investing and a thirst for knowledge so that I can implement what I have learnt, in a day from now, a month from now, or a couple of years from now, to help create my own wealth plan. That's not to say that I am not surrounded by a team of people and resources around me that can assist me in areas that I'm lacking.

So in this blog I will do my best to bring you relevant resources that come to my attention which I have found valuable and would like to pass on. Also I want this to be a place of open discussion where if people have any questions or topics of debate please bring them up! If there is anything you would like to know in this area, please leave a comment, because I'm sure that other people probably have the similar questions in mind. The team I am part of have a wide range of knowledge in many different areas so I'm sure that we could get you a quick and valid answer!

Also anyone that has something of value to contribute to this blog, whether it be an interesting article, something that they would like to share whether they wrote it themselves or found it, it would be much appreciated, so please let me know, I would love to hear from you

You can write to investmentrealty@live.com.au

Be talking to you soon

Let the Blogging Begin!

Jennifer