insomnia?

busterwa said...

Im not sure how people on my wage (high income) can take out collossal loans for e.g for rental properties etc and neglect to pay of there own house.

Its called negitave gearing mate.

There is such thing as good debt and bad debt.

Good debt - asset eg a loan on a house.

Bad debt - a liability eg a loan on a car or some other item that depreciates or that the bank wont recognise as an asset.

Buster , is this thread some sort of kickback from the "Shooting ur missus" thread?

T'is simple -- it is a mind set.
The biggest mind setter = Aussie tax system.
I suppose the intention was to encourage people to invest in solid income generating assets.. Great for a large under invested country..
But human nature being what it is instead of solid asset it has proliferated into all things like a weed - (but let's not start on Credit cards and the legally allowable interest rates!!!).

That tax system could be looked upon as an investment system - to get it to work for you to the max you need to go into debt . you can deduct, you can shelter, you can gear negatively and then comes the phantom GST expense and on it goes... This investment process peaks for those who earn enough to not have to live hand to mouth.... of course the creative(!!!) middle man dines well. Schemes being a 'dime a dozen'.

I belive in setting the standard / the bar at a certain height with certain expectations and if you think the incentives to live upto this standard are sufficient then you go for it.
Take first home owner grants - turn this around - you build/buy your first house and stay in it then get a tax break. On going.
You want your house insulated - here are the guidelines (your primary residence, type of products, range of prices, minimum standards) - here is the rebate - go get a quote / install - etc.

Here is a hot potato - If a charge is laid and proven which uses up community assets then the perpetrator should be billed - a Debt designed to discourage.
For example Simon on the piss with mates decides his last shot of Jim's Bean made him 'Hercules' and assualts Deano - well he might get off with a good behaviour bond but the cost of hospital services to Deano added up to $1750.00 and the auto court handling fee of $850.00 are handed down to Simon with a Year deadline - to pay no exceptions.

Back to the hand to mouth -

I agree with good debt and have blown a lot of coin on cars over the years,whenever a new model came out I just had to have it
One wise man once told me,if your not in debt your not going anywhere boy. I guess he was referring to good debt.
I now drive an oldish car,so I think I've seen the light. Dam I really want a new one.

Richiefish said...

The only way to come out ahead is to DIE IN DEBT. That way you get to spend more money than you ever earned !!!

What about if your married, leave the debt to the wife

cisco said...

busterwa said...
no one will ever be able to take my house away from me .

I am not wishing to shatter your dream but don't count on that one.

If your home lies in the path of a new freeway, it is gone. They may pay you market value.

Look at the term "Real Estate". A "Real" is a Spanish gold coin known as a "Royal" and an "Estate" is land property.

Try not paying your rates for a few years and see what happens.

If someone owes you $10,000, they have a problem. If they owe you $1,000,000, you have a problem.

no mate. you owe $10000 youve got a problem, you owe $1,000,000, theyve got the problem!

Option 1;
You have $10,000 you put it in a long term deposit and get 5% per annum whoopee, you are making $500 a year.

Option 2; You have $10,000. You make a 10% deposit on an interest only loan and turn that into $100,000. You buy a new townhouse with a 5% rent return and full depreciation report. Rent is $80 per week, tax savings are $20 a week and interest on the loan is $100 a week. Your cutting it even. You hold the property for 10 years and it doubles in value. Whoopee, you are making $10,000 a year in equity which can become a tax free line of credit whenever you like.

I know which one I would prefer...

This is very simplified, strata fees, land taxes, rent increases, interest rates, insurance etc etc all come into it, but it all comes out in the wash in the end.

forgot about 2 things tight !!!
The butcher takes (-his 10 percent gst + bank TAX )97$ and runs down the street to repay his debt
The pig farmer takes the 97$ and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the 94$(after gst=bankfees) and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

mabe if i saved 10000 i could buy shares in a bank.

Mabe the goverment should purchace banks that might fix our national debt
So there is NO incentive to pay of anything ? or save nowdays?
Funny enough the SYSTEM seems to be working

tightlines said...

It's a slow day in a little east Australian town. The sun is beating down and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich tourist from down south is driving through town. He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend thenight.

As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill to the hotel owner with the $100 .

The hotel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything.
However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how the Australian Government is conducting business today..

Gold ! ! , never read this before, anywhere ! I need to spend more time on the net and less time at Pinna's

i was generally targeting first home buyers on this thread.
i f there is no more you can develop/add value on property purchase another....
develop another. these people are correct.
There is no slums or poor people in australia!!!!
business is specifically different
our kid may suffer...........
but with a generation of accumulated assets they will never be starving!!!!
make the sacrifices today to bring a better future for tomorrow.

Had the financial planner over yesterday and when he saw that my debt was so small 85k in his words
He said just pay the interest put the rest in your pocket
so i will never pay it off

king of the point said...

Hey so what is your profit ?

Financial planning KOP styleeeeeee

It's good to be the King !!! (quote : Mel Brookes)

sandman said...

Option 1;
You have $10,000 you put it in a long term deposit and get 5% per annum whoopee, you are making $500 a year.

Option 2; You have $10,000. You make a 10% deposit on an interest only loan and turn that into $100,000. You buy a new townhouse with a 5% rent return and full depreciation report. Rent is $80 per week, tax savings are $20 a week and interest on the loan is $100 a week. Your cutting it even. You hold the property for 10 years and it doubles in value. Whoopee, you are making $10,000 a year in equity which can become a tax free line of credit whenever you like.

I know which one I would prefer...

This is very simplified, strata fees, land taxes, rent increases, interest rates, insurance etc etc all come into it, but it all comes out in the wash in the end.

Option 2 only works if you assume property will always double in value every 10 years. What if it doesnt, or what if it goes down?

Like everything else in markets, just because the last 10 years it doubled in value does not mean it will do the same in the next 10 years.

While I agree debt used to purchase growth assets is a good strategy to increase your wealth generation, too many people take asset growth as a certainty (when it isnt - just look at the housing market in the US (yes Aus isnt the US, but people are still people).

You have to remember that option 1 is risk free, where as there is a lot of risk in option 2.

busterwa said...

no one will ever be able to take my house away from me.

If I were you, I'd be touching some wood about now... owe some money on a credit card EVEN if unsecured? Got a girlfriend? Ever have a dispute with the council? Not got comprehensive car insurance?...


Money is debt, and it's invented.
Your told to want (demand) > so you go where everybody else goes, the bank > the bank sells you some money, at an UNDETERMINED rate 5-20% > the bank gets it's money from:
Central bank (RBA)
The world (short term debt 90 day usually)
YOU (depositors)
Financial activities.
And can then inflate it tothe legislated amount... eg: $10 deposit, lend out $30

Central bank (RBA), invents the money... it limits the amount of money it creates out of thin air so that Australia $/government bonds/etc preserve their value.


In 1999-2000 I was margin trading (getting 5 for 1 shares), I had already made a huge packet; even entertaining ideas of retiring on a tropical island @ 23 years old and letting my money work for me...

In April 2000 I was holidaying in the Dominican Republic and watched the market tank on HBO... I figured it's just a blip, but no things didn't recover and the next month my broker closed shop forcing me to liquidate. I had enough to cover my positions, but I lost everything and some.

You see my friends nothing ever goes wrong until it does... new economy, future coca cola's, gm's, ge's... house prices always go up... you can never go wrong with property, until you do!

I lost just US$27k on a company called Genentech, my portfolio had around 16 companies.

Well soon after this happened I realized what a f**king retard I was, because I had very little idea how the system worked... so I tried to figure out how markets work, how money is created and what went wrong with my investments.

I read article after article about the the Rothschilds, the Morgans, the Bank of England, Federal Reserve, etc… Some of these articles on BBS and forums were a little unorthodox, one lead to another and soon I’m reading about the New World Order. None of it meant much to me; I thought they were predominantly written by right wing militant Christian groups.

The months past and I was concentrating on my career… then 911 happened and some of the damn articles I had read predicted this very event almost to the day. They described a false flag operation in order to curtail civilian freedoms... I must admit the uncanny prediction (insider knowledge) did make me pay attention and made me a fully fledge aluminium foil hat guy. Sure a lot was just delusional BS, but the fact that I had read about such an event did unsettle me.
Anyway I read about how the next big event was going to be economic... I was expecting it around 2005.

Do you think it’s possible that the events we see played out in the “news” have been orchestrated to serve a fiendish elite global agenda? Don’t get me wrong I don’t think the banks and fund managers are in cahoots to bring down the Western financial system, but I do know if you provide alcohol to stupid young rednecks and introduce a few women in to the mix there will be trouble… I just can’t predict when.

Anyway back to debt: The videos below explain everything, just swap Federal Reserve for Reserve Bank of Australia.