mrd

Until two weeks ago “I Was Overcharged $6,418 In Interest” per annum across three of our investment properties! As an owner of a finance company this is embarrassing and demonstrates that I didn’t know what I didn’t know.

My motivation for expanding into finance in early 2010 mirrored why I started my property business in mid 2002; the need to ‘raise the bar’ and create a five-star business model was glaringly obvious! Unfortunately, as can be the case with a new venture, mrd finance had some ‘false starts’ but today Heather, our finance specialist driving this business, is competently and effectively delivering the level of service that I expect… but people rarely experience.

Pigs Don’t Know That Pigs Stink

You don’t know what you don’t know… until tough times test relationships, finances and beliefs etc.

If the average person doesn’t know the difference between a good and a bad haircut or when a new lounge suite clashes with the room it’s in… what hope do they have sorting their finances or devising a plan to build wealth alone?

Three Kinds Of Knowledge

1. Stuff You Know
2. Stuff You Know You Don’t Know
3. Stuff You Don’t Know You Don’t Know

Traditional education tells us to increase the knowledge of ‘stuff you know‘. Read more…

Forced national savings are a good thing; it just makes sense to put something aside for your retirement. Twenty years ago former Prime Minister and then Treasurer Paul Keating announced compulsory “Superannuation”. Starting at 3% and increasing to 9% of wages paid, this employer paid system along with its generous tax incentives was sold as the answer to the problem we faced funding an ageing population.

How’s it working out for you so far?

Does 38%+ per annum returns, no capital gains tax and with GREATLY REDUCED RISK grab your interest… even a little? If so, reading this to the end is a MUST!

Back then I was working for Westpac. I was a financial planner and a serious ‘super sceptic’… for reasons that now vindicate me. That said, I see much benefit in super today… not because I have changed but because the legislation has.

Let me deal with something up front before I lose those who think I am just a property person taking a pot shot at another asset class! Just about all Australians are locked into superannuation, so the argument isn’t whether to participate or not… but rather how to manage your super to increase the likelihood of getting the result you want. And for the record, as a Westpac employee I convinced many people to not make extra contributions into super when they had personal debt big enough to choke a horse! Yes, suggesting they pay down non deductible debt (like their home loan) and leverage into investment property did nothing for my income… but that was never the point. It was the right advice to give these people… period! Needless to say I moved out of that industry (my choice) gravitating to where I am now.

Today, I don’t promote property because I’m in the property industry. NO; Today I’m in the property industry because I believe property is our best vehicle for building wealth!

20 years on from Keating’s reforms questions still hang over superannuation and the critical need to fund our ageing population. The stock market may have performed reasonably but ‘failure’ best describes the ability of fund managers when measuring personal superannuation returns.

But it doesn’t have to stay this bad!

Contact mrd >>>here

Most people:

• Have their retirement funds tied to the (extremely volatile) stock market
• Have no real say in their fund’s investment strategy
• Have no ability to leverage their super balance

The current Gillard government wants to introduce legislation to increase the employer contribution from 9% to 12% and then to 15%. This is tied to the mining tax and a whole lot of political ’cause and effect’ that I won’t touch on today. Suffice to say I assume you want the best returns, with the least possible risk, on whatever goes into your super.

FACT: Industry and retail super funds have averaged over the past decade an annual return exactly equal to the annual average inflation rate for the same 10 year period… 3.2%! So your money has effectively done nothing!

STOP for a moment and think about your superannuation. Given you have to participate in the system, are there better options from underperforming funds in volatile markets?

As an example only… Read more…

There are many “Definitions Of A Property Investor”… here is one that’s a bit cheeky, although pretty accurate!

A property investor is a business owner; but who:

• Doesn’t know he’s in business
• Doesn’t look after his investment like he would a business
• Incorrectly assumes that by merely having the property he will create wealth

STOP! I am not having a ‘cheap shot’ at you personally… but let the statistics speak for themselves.

• One in four investment property owners sell their investment property within the first 12 months
• Four out of five STOP buying after just one investment property

That leaves me dumbfounded asking one question… What tha?

Seriously, I’m passionate about the wealth creating opportunities property offers you and me… so these numbers are of great concern. They’re also very surprising and bear no resemblance to the experience of my clients over a decade. What these numbers do tell me is that most people ‘out there’:

• Get it wrong initially
• Lack ongoing support
• Have little understanding of property cycles

Referencing back to mrd‘s three safety check points:

1. Do you have the borrowing capacity up front
2. Do you have the capacity to hold onto your property post settlement
3. Do you have the knowledge, support and understanding to ensure you sleep well at night… not stressing over a decision that you should have been celebrating

Get The Right Support

Don’t wind up in regret… just another sad statistic! Opportunity abounds, especially right now, if done right.

Reliable and competent support in finance, finance structure and property (as in any business) are fundamentals. This is a ‘no brainer’.

My very real points of difference in business are in the education and support we freely offer. My team and I are totally committed to assisting you long before any purchase decision. And when the time is right, we’ll do our best to make your financing and purchasing experiences as uncomplicated and enjoyable as we can. It doesn’t end there, nor should it! For almost 10 years we have continued to support anyone who asks… long after settlement.

One in four property investors selling in the first 12 months and four in five never buying more than one should not be reality! I know for a fact that very often it is in the financing arrangements that most often things are messed up… but that doesn’t have to be YOUR experience.

In a nutshell, I promise that if we can help you at any stage of the process – we will!

Do You Want $7,000

It’s now one month into the new financial year and time to lodge your tax return. Did you know that an ordinary couple earning just $55,000 and $30,000 respectively who purchased a typical $350,000 investment property would be entitled to a $7,000 tax refund? NB: This is an example in which I’m assuming a new property and a depreciation schedule prepared by a registered quantity surveyor (QS)… not just an accountant (who is not licensed to claim as much as the QS).

In my experience most investors:

• Buy with emotion or on yesterday’s demographics
• Don’t understand nor implement advanced financing strategies
• Fail to claim all the ATO legitimately allows them to
• Do not prepare budgets or accurate cash flows
• Spend little time in understanding the market and market cycles impacting their ‘business’
• Fail to seek professional assistance, opting instead to make decisions that reflect their feelings at any given time
• Basically.. “perish for lack of understanding”

I guess it’s no wonder why only one in four investors last only 12 months and four out of five investors never go beyond a single investment purchase! Weird, in my opinion, given the certain financial fate we all face and the predictable assurances that investing in property (done the right way) will deliver over the medium to long-term.

Win/Win

Let’s face it… we win when you win!

If you’re even considering how (a) right finance structure and (b) investment property might fit into your future… do yourself a huge favour by speaking with mrd first.

If not more thoroughly and more professionally… I guarantee we’ll support you at least as well as anyone else – AND without the ‘BS’!

You have MUCH to gain and absolutely nothing to lose by contacting me with your question(s) now >>>here

Read more…

Prevention is better than cure!

Do you remember when the GST was introduced into Australia? It was July 2000. Since then, most working singles and couples could have managed to secure (at least) half a dozen well researched residential investment properties. If you did this; congratulations! No doubt, with falling interest rates and a seriously growing housing shortage… the global slowdown would be delivering you more benefits than challenges right now!

Reaction is all too common! Why wait for drastic times to push us to those “drastic measures” that the politicians keep spruiking?

Doesn’t it make more sense to conduct our financial affairs during the good times in preparation for those drastic times… that always find us sooner or later?

Now while we can’t change the past, it is unwise… perhaps irresponsible… not to learn from it!

Read more…

Last week the Reserve Bank of Australia (RBA) made the decision at it’s monthly board meeting to leave the official cash rate on hold. That means no adjustment to interest rates this month.

But Did The RBA Get It Wrong?

It will be interesting to watch what they do with interest rates in the months ahead. Their actions will be an indication of whether this months decision to leave rates on hold was the right one or not.

At the beginning of 2008 the RBA put interest rates up twice. At the time the opposition argued that the decision to do so was wrong and a reaction to Kevin Rudd & Wayne Swan talking up inflation; citing it as the # 1 enemy to go after. What they failed to recognise was that the negative economic impact coming out of the USA had already begun to work its way through the system and here in Australia the economic slowdown was just about to bite.

The numerous interest rate cuts later in the year is clear evidence that monetary policy in the early part of 2008 was wrong.

Read more…

The following graph shows the history of interest rate movements in Australia from March 2001 to March 2009. The official cash rate currently stands at 3.25 per cent, which is a 45 year low.

Some people are simply confused right now. They have heard so many mixed messages in the past 18 months that they are unsure if now is a good time to step out and invest… or hold back and minimise their commitments.

If that’s you, don’t stay confused. It’s only when we have the right information that we can make fully informed decisions.

• Keep asking questions
• “Lash out” and have us prepare a Finance Structure & Cash Flow Health Check (there’s no cost anyway)
• Explore your retirement possibilities; not based on what you have done to date but what is possible in the next 7 to 10 years

To have us assist you, click here

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

Prevention is better than cure. A complimentary, no obligation Finance Structure & Cash Flow Health Check may:

• Save you (literally) tens of thousands of dollars
• See the mortgage on your home cleared quicker
• Open up opportunities that would otherwise have passed you by

Yes please!

Read more…

There are many people involved in building a property, bringing it to market and eventual settlement.  Builders, planners, architects, marketing groups, purchasers, finance brokers, banks… and the list goes on. All these people are at the mercy of one person’s opinion.

The Valuer!!!

The term “Valuer” is often misleading.  Many people assume, due to the label “Valuer” that this person is going to mathematically compute a recommended retail price for a property.  Nothing of the sort!  The term “Valuer”, when dealing with a financier, refers to someone who assesses the perceived risk involved in a particular transaction.  There are many factors involved that have nothing to do with the property itself.  The biggest single factor in any assessment is the opinion of that one person named “Valuer”.  It is not uncommon for opinions between valuers to differ by 10% or more on the same property.  The property is the same, they both have access to the same documentation and historical data but they come back with two vastly different numbers.  The only variable between them is their opinion.

Read more…

A drivers license and a car are good to have. They offer convenience and choice. But when a person throws caution to the wind, driving becomes hazardous!

• Bad drivers don’t know they are bad drivers
• Pigs don’t know that pigs stink
• And you don’t know what you don’t know about finance structure

The following “Horror Finance Stories” took their victims by as much surprise as the person who had someone pull out in front of their car and cause an accident.

Read more…

Friday February 13, 2009, 3:27 pm

SYDNEY (AFP) – Australia’s parliament narrowly passed a 42 billion dollar (28 billion US) stimulus package Friday in a bid to stave off recession in the face of the global economic crisis.

The parliamentary approval leaves the government free to immediately implement its spending plans, with Prime Minister Kevin Rudd stressing the need for swift action throughout protracted negotiations during the bill’s passage.

Rudd was jubilant after parliament backed the plan, saying the package was in the national interest and would help Australia’s centre-left Labor government fight the global economic recession.

“The most irresponsible thing to do today, with the worst global economic recession since the 1930s staring us in the face, would be to do nothing,” he told parliament.

The package includes spending of 28.8 billion Australian dollars on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of 12.7 billion dollars to eligible workers, farmers and students.

Rudd said the Treasury estimated the plan would boost economic growth by 0.5 percentage points in 2008-09 and 0.75-1.0 points in 2009-10, supporting up to 90,000 jobs.

“Without parliament’s support for this plan, growth would be slower and unemployment would be higher,” he%2

>>>>  Finance, Business and Company News – Yahoo!7.