Warren Buffett’s long-time business partner, Charlie Munger, who incidentally, will turn 100 in January next year, famously said, “The big money is not in the buying or the selling, but in the waiting.” The more investing experience I accumulate, the greater the appreciation I have for how true this statement is. It is interesting to…
Commentators often refer to the price of property relative to household incomes. For example, it is estimated that property in Melbourne and Sydney now costs more than 10 times the median household income. But is this really a meaningful measure if it is, property cannot continue to grow at a faster rate than incomes (a…
Engineers know that for a building to remain structurally sound for many decades it must have strong foundations. It doesn’t matter how good a building is above the ground, if the foundations are substandard, the building won’t last. The same is true for building wealth. There are several foundational matters that investors must optimise before…
A common property investing rule of thumb is that you should “buy property and never sell”. That’s because prices always trend higher over time which means you benefit from compounding capital growth. Of course, the rule-of-thumb should be adjusted to include “buy quality property and never sell” to ensure you maximise investment returns. But the reality is, that…
A property’s value is typically divided into two components: the land value and the value of any improvements, such as the dwelling. Conventionally, land tends to appreciate over time, while buildings depreciate as they get older and suffer more wear and tear. However, the rise in construction costs poses an interesting question: what impact do…
One of the most interesting things I do is meet many investors every week (i.e., prospective clients). It is something that I have been doing regularly for almost 20 years, so I’ve literally spoken to thousands of investors. It is interesting because it provides me with the opportunity to reflect on people’s past investment decisions…
Many people can be very focused on repaying their home loan in full before they begin investing. They are so averse to debt that they cannot envisage doing anything else until their home loan is gone. However, often this isn’t the best approach to take. At some point, investing is more important than debt reduction….
Have you ever had a strong opinion (belief) about investment markets that was subsequently proven to be incorrect? A recent example was when many people predicted borrowers would be forced to sell their properties due to the Covid lockdowns and the market would crash. This outcome now seems unlikely. It is my view that a…
One good financial decision will have positive consequences. But five good decisions in a row will be life-changing. It will create a lot more than five times the positive outcomes that one good decision will. That’s because good decisions are a compounding asset. Our lives are a sum total of the choices we have made…
A lot has been written about the good fortune of ‘baby boomers’ in that, overall, they have enjoyed a long period of economic, share market, and property market prosperity. Whilst they haven’t enjoyed the full benefit of compulsory super (which only began in 1992), other assets such as property have certainly compensated for that. This…
