There are more interesting articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the ones I’ve read during the week.
Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.
Peculiar Traits of Rich People
Morgan Housel writes in Motley Fool that a lot of rich people aren’t exceptionally talented at what they do. They just have quirks and habits that let them think differently about money than the rest of us. This includes the fact that…
They care about time periods most can’t comprehend
There are four ways to invest:
- Long-term (varying degrees of success)
- Short term, successful due to luck
- Short term, successful due to manipulation/fraud
That’s the complete list. Nos. 3 and 4 eventually become No. 1.
Long-term investing is the only sane choice. But it’s unnatural. We’re hardwired to grab immediate gains and avoid immediate threats
Top suburbs for property investment | Do Men & Women buy differently? | Do you need a sinking fund? | Finding distressed buyers
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
George Raptis has five great tips to make sure you can negotiate your way through any purchase
Buyers agent Miriam Sankuhler talks about the differences in buying habits of women and men and how to beat skyrocketing house prices
Louis Christopher from SQM Research is along to tell us about an investment tool that is entirely focused on finding distressed properties for sale
John Edwards reveals the suburbs still offering strong investment potential.
You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.
Looking back over a 40 year period residential rents have never fallen -Pete Wargent
Regular Property Update Blogger Pete Wargent undertakes a detailed analysis of Australian residential rents over the last 40 years in his blog and concludes that annualised rents have never fallen in Australia across a time-span of more than four decades.
In fact, rents have never even fallen in nominal terms in any individual quarter let alone over a 12 month period.
In his typical fashion Pete’s brings up some interesting facts and some thought-provoking conclusions. Good reading as usual.
8 Dumb Property Investment Strategies That Could Lose You Money
While property is a reasonably safe investment, there are also many ways you could lose your hard-earned cash according to Your Investment Property Magazine. These include:
- Lifestyle Investments in Coastal Areas – These have no real market drivers as they’re often retirement and small tourism communities.
- Mining Towns that are one trick ponies
- Ineffectual Joint ventures
- Cross securitisation as the lender gain too much control
- High Strata Cost Properties – as these erode your cash flow
- Buying at auction in a bull market – as often you overpay
- High population and high land supply areas – Sometimes areas where there are high population forecasts are actually the worst areas to invest. The state governments often identify this growth through town planning so will keep housing affordable by releasing land. The more land identified for release may mean the population increase is a zero sum effect. It’s a fine line balance of land and population.
- Buying because you love it – Our emotions don’t make good business sense! When we buy with our emotions we are putting our feelings ahead of what the market is doing. If, for example, we fall in love with a property that happens to be in a market that is at the top of the property clock – in other words it’s at the peak of the market – we’ll be sorely disappointed with our returns as the market begins its natural decline into a trough.
Nobel economist Thomas Sargent’s list of 12 valuable economic lessons
Nobel economist Thomas Sargent really economized on words when he gave a graduation speech at his alma mater UC-Berkeley but it contained some great lessons. He said:
I remember how happy I felt when I graduated from Berkeley many years ago. But I thought the graduation speeches were long. I will economize on words.
Economics is organised common sense. Here is a short list of valuable lessons that our beautiful subject teaches.
- Many things that are desirable are not feasible.
- Individuals and communities face trade-offs.
- Other people have more information about their abilities, their efforts, and their preferences than you do.
- Everyone responds to incentives, including people you want to help. That is why social safety nets don’t always end up working as intended.
- There are tradeoffs between equality and efficiency.
- In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.
- In the future, you too will respond to incentives. That is why there are some promises that you’d like to make but can’t. No one will believe those promises because they know that later it will not be in your interest to deliver. The lesson here is this: before you make a promise, think about whether you will want to keep it if and when your circumstances change. This is how you earn a reputation.
- Governments and voters respond to incentives too. That is why governments sometimes default on loans and other promises that they have made.
- It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do (but not the social security system of Singapore).
- When a government spends, its citizens eventually pay, either today or tomorrow, either through explicit taxes or implicit ones like inflation.
- Most people want other people to pay for public goods and government transfers (especially transfers to themselves).
- Because market prices aggregate traders’ information, it is difficult to forecast stock prices and interest rates and exchange rates.
4 Beliefs That Will (Eventually) Lead to a Nervous Breakdown
[sam id=43 codes=’true’]Inc.com explained how anxiety is a powerful drug for entrepreneurs. In the right doses, it’s mobilizing and motivating. But it can get out of hand more easily than you think.
But when how you think about your work becomes too rigid–veering into an unhealthy belief system dominated by dictates like “must” and “have to”–it’s only a matter of time before you experience the debilitating effects of stress and anxiety.
Here’s a partial list of beliefs that, if undetected, will eventually catch up with you and create a nearly inescapable nervous breakdown.
1. Everything I do must be perfect.
Perfectionism ranks high among anxiety-inducing beliefs. It typically takes root in childhood, where we learn its value–to buffer us from the criticism of others.
It’s a competition you can never win because you’ll never be perfect.
2. If people really knew me, they’d hate me–and probably want nothing to do with me.
At pivotal points in your life you learned that certain behaviors were acceptable and others were not–and if you want to get along in this world you better only show the acceptable parts.
This self-denial leads to an untenable level of disconnection, a breakdown of your identity, and eventual stress.
3. Talking about emotions are only for the weak.
Emotional Intelligence is important for understanding ourselves, working well with others, and managing our relationships.
4. If I fail, I’ll die. So I’ll kill myself NOT to fail.
In order NOT to fail, we neglect our health, grow distant from family and friends, feign our own wellbeing so we don’t have to talk about it, and plod on to the next task that ensures our eventual “success.”
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of some of the blogs you missed this week: