From

our blog.

HOW I MADE A MILLION DOLLARS.

August 6, 2017

It was 2010, the coal mining boom was in full swing in Central Queensland. Business was feeling confident, but I was almost broke. I had no job, three children and my beautiful wife to take care of.

A local Queensland Council were offering three lots of industrial land, each approximately 4000M2 at $50 per M2. They required a 10% deposit, with the balance payable within 12 months. For a small extra fee (payable upon settlement) council agreed to subdivide each of the 3 lots into 3 more lots, resulting in 9 lots of approximately 1,400M2.

Now, the problem was I didn’t have $600,000 to settle the lots in the 12 month settlement period, but I did have the 10% deposit.

The short story is I sold all those lots before I had top settle with council, for a cool $1M profit. (Which I later lost, but thats a story for my next article)

A SIMILAR OPPORTUNITY EXISTS FOR YOU

If you think those days are gone when you can make money like that, you’re wrong. Right now the Queensland government has a similar arrangement, and if you follow my guidance, I’ll teach you how to get even better terms than I did.

There are some eye – watering opportunities available in Queensland right now. Give me a call or shoot me an email.

PS, My story is not meant to be boastful, rather I have a genuine desire to help others. (I am also doing one of these projects myself right now)

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GOOD V BAD DEBT.

August 1, 2017

The numbers reveal the truth

The residential property market doesn’t seem to add up, as the graph depicts. If that’s not enough, take a look at the RBAs’ latest report.

http://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf?v=2017-08-05-12-46-44

 

Here’s my tips on managing debt.

GOOD V BAD DEBT

Living life creates debt. Owning your own home, cars, dining out, and generally enjoying life, all cost money – money that is typically borrowed from a financial institution. While debt is an essential part of everyday life, it can also wear out its welcome, and wear down your desire to dream for a better tomorrow. One of the reasons why so many Australians are restricted in their ability to achieve their financial goals is because they are simply ‘drowning’ in debt.
When you are deep in debt, you restrict your ability to build wealth before you’ve even had the chance to start. That’s why you need an effective debt elimination strategy, a customised plan of action, and a clear understanding of the difference between ‘good’ and ‘bad’ debt.
The difference between these two types of debt can be distinguished as follows:

Bad Debt

• Is used to make lifestyle acquisitions
• Does not generate an income stream
• Interest cannot be claimed as a tax deduction
• The interest and the debt needs to be repaid from personal ‘after tax’ income
• Must be eliminated as quickly as possible

Good Debt

• Is used to acquire investments
• Generates an income and appreciates in value
• Interest is tax deductable
• Income generated from investments is used to pay off the debt.
Since the debt is largely self-funding, there isn’t the same urgency to pay it off. A loan used to secure a residential investment property is an example of smart debt. Financial independence is within your reach. Financial independence is the result of building wealth and this requires discipline, the discipline to consider every dollar you spend and every dollar you save, because wealth (unless it’s handed to you) takes time and commitment to accumulate.
A qualified mortgage broker can assist you in setting up strategies to maximise your debt whilst repaying your bad debt faster. And overall getting to zero debt fast!

 

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Chinese Investment into Australia.

August 1, 2017

Heard of the very catchy Monty Python song “I like Chinese”?

Everyone I meet seems to think the Chinese are going to come with a bucket of money and invest in Australian real estate. (All countries are thinking the same right now)

Whilst it’s correct that there is a 5 year trend growth of 17.7% for Chinese investment into Australia,  the amount of inward investment actually ranks fifth to the US investment. In fact, the amount invested by China and Hong Kong collectively is less than 1/8th of the US investment into Australia.

Belgium is never mentioned at any BBQs I go to as a source of investment into Australia, but astoundingly,  Belgium now ranks 3rd, and delivered a whopping 56% increase to the amount of inward investment into Australia.

 

 

Which countries invest in Australia?
2016, A$ billion
Rank
in 2016
Country 2014 2015 2016 % of total % change
2015 to 2016
5-year trend
% growth
1 United States 782.6 877.5 860.9 27.0 -1.9 10.9
2 United Kingdom 477.7 482.6 515.5 16.1 6.8 3.4
3 Belgium 225.8 247.1 270.1 8.5 9.3 56.1
4 Japan 181.2 200.8 213.5 6.7 6.3 10.4
5 Hong Kong (SAR of China) 74.1 85.9 100.9 3.2 17.5 17.7
6 Singapore 87.4 98.8 98.9 3.1 0.2 14.9
7 China 66.4 75.9 87.2 2.7 15.0 37.9
8 Netherlands 58.2 66.3 74.7 2.3 12.6 14.7
9 Luxembourg 59.0 59.9 74.0 2.3 23.7 15.7
10 Switzerland 50.5 54.2 59.1 1.9 9.1 2.8
11 New Zealand 36.6 39.7 46.2 1.4 16.4 10.9
12 Canada 36.0 38.2 42.6 1.3 11.4 10.0
13 Germany 40.5 41.0 38.8 1.2 -5.4 16.1
14 France 21.4 22.3 28.3 0.9 26.9 7.2
15 Bermuda 31.0 25.1 27.2 0.9 8.4 37.8
16 Ireland 16.3 20.5 26.1 0.8 27.4 45.6
17 British Virgin Islands 19.9 22.9 24.2 0.8 5.7 ..
18 Republic of Korea 21.7 23.4 23.6 0.7 0.9 14.7
19 Malaysia 21.0 20.4 20.5 0.6 0.1 6.9
20 Norway 13.2 13.5 15.8 0.5 16.6 29.6
All countries 2,805.5 3,039.1 3,192.4 5.0 9.2

Based on ABS catalogue 5352.0
Last Updated: July 2017

Source http://dfat.gov.au/trade/topics/investment/Pages/which-countries-invest-in-australia.aspx

 

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AUSTRALIAN BUSINESS VISA QUALIFICATION.

July 29, 2017

AUSTRALIAN BUSINESS VISA QUALIFICATION

This Australian visa stream caters for business people and is designed to attract those people who wish to immigrate to Australia and who have skills which will enhance the Australian economy. Most of these visas allow applicants to live in Australia permanently and to work in Australia.

The Department of Immigration is responsible for all decisions made on visa applications. 

BUSINESS VISA INFORMATION AND TYPES

Business Talent visa – Permanent visa (132 Visa)

This business visa is a permanent visa for high caliber business people who are affluent owners or part owners of an overseas business who want to have a major management role in a new or existing business in Australia OR who have obtained at least 1 Million Australian dollars in funding from an Australian venture capital firm.

This visa is part of the Australian Business Innovation and Investment program. This program’s aim is to contribute to the growth of Australia’s economy by creating jobs, increasing export of Australian goods and services, increasing the production of goods and services in Australia, introducing new and/or improved technology, increasing competition and commercial activity, developing links with international markets and by bringing business migrants to Australia based on nominations by state and territory governments.

Business Innovation and Investment visa – Provisional visa (188 Visa)

This business visa is a provisional visa and is part of the Australian Business Innovation and Invest program. This program’s aim is to contribute to the growth of Australia’s economy by creating jobs, increasing export of Australian goods and services, increasing the production of goods and services in Australia, introducing new and/or improved technology, increasing competition and commercial activity, developing links with international markets and by bringing business migrants to Australia based on nominations by state and territory governments.

Business Innovation and Investment visa – Permanent visa (888 Visa)

This business visa is the second stage of the Business Innovation and Investment visa and can be applied for after applicants have fulfilled the requirements of the provisional visa.

 

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Mortgage Slavery.

July 26, 2017

Horaay for the truth

My rich dad “Bruce” (Not his real name) has hammered home a truth I’ll never forget. “If you’re a slave, at least the slave owner pays for your food and a roof over your head. Having a mortgage can be worse! The bank won’t feed you or pay for your accommodation”. 

It’s true, a home mortgage can be worse than being a slave. Nationwide research by UBank investigated how comfortable Australian mortgage-holders were with their financial situation.

The findings found

  • over half of Australian mortgage-holders are sacrificing social life and family time to pay off their debt.
  • 1 in 4 admit they are financially stretched in meeting their mortgages.
  • 50% turn down at least two social outings a month because of their mortgage debt.
  • 56% skip family time in order to work longer hours to help pay the mortgage.
  • 54% passed on a family holiday because of financial pressures.
  • 59% cut short a holiday due to mortgage payment considerations.
  • 85% of mortgage holders reported having at least one unused room in their house, and from those people, nearly two thirds (58%) admitted they could live without the extra space.
  • 80% wish they could spend more time in their home, indicating that they spend more time working to pay off the house, rather than spending quality time in it.

The solution… borrow less and live more to avoid financial stress.

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Is Aussie property market on a cliff?.

July 23, 2017

 Horaay for the truth

Our view in summary:-

  • Residential property market doesn’t add up, especially in Sydney.
  • Fear and greed is causing people to over commit
  • APPRA report means increasing interest rates
  • The Aussie has risen to 80c, making property more expensive for overseas investors
  • The winners will be those with little or no debt

According to the ABS graph below, housing prices in Sydney are up 70 percent in five years, but wages up only 13 percent.

According to Martin North, principal of research firm Digital Finance Analytics “Debt stress momentum is unprecedented,”. Interest rates are the lowest they have ever been, yet record numbers of Australian households face mortgage stress as large loans and rising interest rates start to bite, according to detailed analysis of lending, repayments and household incomes.

Affluent suburban postcodes feature among an estimated 1000 households a week expected to face mortgage default over the next 12 months, the analysis reveals.

“This is not just about mortgage battlers. It is also hitting the households with bigger incomes and more leverage. It is worrisome,” Mr North said. Numbers of borrowers in severe distress has increased by about one-third to about 32,000 in the past 12 months, he said.

 Concern that 767,000 households – or one-in-four across the nation – are facing financial distress follows last month’s warning by the Reserve Bank of Australia about increasing family “vulnerability” caused by soaring property prices, particularly in Melbourne and Sydney.

Reserve Bank assistant governor Michele Bullock said regulators may be forced to impose even heavier restraints on lenders to prevent the property market becoming the trigger for a disruptive financial crisis, said Reserve Bank assistant governor Michele Bullock.

Ms Bullock conceded that the effect of so-called macroprudential regulations imposed on the banks in 2015 to curb investor lending may be fading.

It also follows the Australian Securities and Investments Commission discovery that about 1.5 million recent loan applications matched minimum financial requirements, triggering concerns about lax lending standards.

Other prudential regulators are warning about the need to control interest-only lending because of concerns borrowers’ lack strategies for repaying principals, increasing vulnerability to financial stresses.

 Digital Finance Analytics’ report is based on information from 52,000 household surveys and public data from the Reserve Bank of Australia, Australian Bureau of Statistics, Australian Prudential Regulation Authority and information from lenders and aggregators, which are companies that act as intermediaries between mortgage brokers and lenders.

Households are “stressed” when income does not cover ongoing costs, rather than identifying a percentage of income committed to mortgage repayments, such as 30 per cent of after-tax income.

Those in “severe distress” are unable to meet repayments from current income, which means they have to cut back on spending or rely on credit, refinancing, loan restructuring or selling their house.

Mortgage holders under “severe distress” are more likely to seeking hardship assistance and are often forced to sell.

 “Stressed households are less likely to spend, which acts as a drag anchor on future economic growth,” said Mr North. “The number of households impacted are economically significant, especially as household debt continues to climb to new record levels.”

However lenders would be expected able to ride out a spike in arrears because they can foreclose on properties whose value has been inflated by unprecedented price growth.

State government budgets in the nation’s most populous states and territories have been boosted significantly by stamp duty charged on property transactions.

About 32,000 households are in severe distress, the analysis reveals. An additional 10,500 households in the suburban mainstream are in risk of default.

Other vulnerable community segments at risk of default include young growing families, the highly leveraged young ‘affluent’.

Most lenders are increasing rates for investors and toughening lending terms and conditions by increasing deposits and demanding more evidence that loans can be comfortably serviced by borrowers.

Commonwealth Bank of Australia, Westpac, National Australia Bank and Australian and New Zealand Banking Group have all raised investor rates in recent weeks.

Lenders are describing their strategy of slugging interest-only investors and easing pressure on principal and interest borrowers as the “new normal” because it differentiates between classes of borrowers as directed by regulators.

Content used from ABR and Duncan Hughes of AFR

Read more: http://www.afr.com/personal-finance/record-numbers-under-mortgage-stress-20170501-gvw2vt#ixzz4n34LBndU
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