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More Jobs. Strong Economy. Infrastructure Spending. The recipe for Sydney’s real estate surge.; It would have happened if the RBA hadn’t been cutting interest rates
Topic Started: 21 Aug 2015, 06:07 PM (3,965 Views)
Bardon
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Its probably safe to assume that there is high correlation of individuals that built wealth through land, tending to own it as opposed to them renting it.
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stubby
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Bardon
23 Aug 2015, 01:18 PM
Its probably safe to assume that there is high correlation of individuals that built wealth through land, tending to own it as opposed to them renting it.
Actually, a great many of Australia's agricultural and mining fortunes have been based on pastoral leases and mining claims, with the land involved rented from the state.
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Bardon
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stubby
23 Aug 2015, 01:29 PM
Actually, a great many of Australia's agricultural and mining fortunes have been based on pastoral leases and mining claims, with the land involved rented from the state.
Quite right, an anomaly or perhaps a different type of rentier in this instance?
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Loki
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Bardon
23 Aug 2015, 01:18 PM
Its probably safe to assume that there is high correlation of individuals that built wealth through land, tending to own it as opposed to them renting it.
No, it's not safe to assume that. At least, not in the Western world for the past 60 years. Even turn of the century oil men paid access fees to land owners to drill on their land, and became 100s of times wealthier than the land owners they "rented" from.

Most successful companies and wealthy individuals of the past 60 years rented houses, offices, land and even equipment.

Maybe Mike Cannon-Brookes and Scott Farquhar should have pooled their resources to buy a house so they could become wealthy the Australian way instead of building a billion dollar company.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Bardon
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I hate to be the one that breaks it to you but wealth creation through land appreciation is not restricted to Australia.

Yes oil and mineral "producers" the ultimate rentiers. Lets not forget that the oil and minerals already existed, they didn't even have to buy it from someone else, they were just clever enough to get a licence from the state to flog it, pretty neat really.

Our company are pretty successful and I know all the owners also own land as well. That's the beauty of land ownership it is effortless and allows you to do other wealth building things whilst it pays dividends and appreciate in value owning land is not mutually exclusive of other wealth building activities. Honestly you should try it you might be surprised how effortless it is.
Edited by Bardon, 23 Aug 2015, 05:46 PM.
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Loki
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Bardon
23 Aug 2015, 05:15 PM
I hate to be the one that breaks it to you but wealth creation through land appreciation is not restricted to Australia.
Sure, there are plenty of peasant societies in the world, even today.
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Yes oil and mineral "producers" the ultimate rentiers.
Yes, but they are not particularly wealthy by today's standards. In fact, every year for the last 111 years, being a rentier has diminished as a path to wealth as being a value creator has risen. The value creators are now the worlds wealthiest people, but economic exploitation is still attractive to the lazy and corrupt, that is for sure.
There were and still are countries that refused to give up the agricultural age, who have turned their economies into basket cases and societies into thinly disguised dictatorships, as the value creator countries surged in wealth and power. And then there were the anomalies, like Australia and to a lesser extent Canada, that were able to remain peasant countries as they rode on the economic skirt-tails of the USA and Japan like spoiled trust-fund babies.
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Lets not forget that the oil and minerals already existed,
You seem to forget that the oil and the minerals are largely useless in their raw form. Almost all of the wealth that is created today comes from taking those inputs and turning them into thousands of value added products.
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they didn't even have to buy it from someone else, they were just clever enough to get a licence from the state to flog it, pretty neat really.
Not really. They have no way of adding value to their products if they are a pure producer, and their margins depend on the vagaries of supply and demand. Once the resource is completely depleted, they are out of business. It's why most of the oil majors got into the refining and/or petrochemical business.
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Our company are pretty successful and I know all the owners also own land as well.
You should post this information to this website: http://www.tylervigen.com/spurious-correlations
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That's the beauty of land ownership it is effortless and allows you to do other wealth building things whilst it pays dividends and appreciate in value owning land is not mutually exclusive of other wealth building activities. Honestly you should try it you might be surprised how effortless it is.
Maybe I will, my sex slave trafficking business takes up most of my time. Keeping the meth labs producing is no picnic either and selling AK-47s in Africa was just more trouble than it was worth so I gave it away.


“Talk sense to a fool and he calls you foolish.” - Euripides
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Bardon
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Like I was saying the oil men are the biggest rentiers of all.
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stubby
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Bardon
23 Aug 2015, 07:06 PM
Like I was saying the oil men are the biggest rentiers of all.
And the iron men, and the beef barons, and the sheep farmers...

All got rich from *renting* land.

As many other types of enterprise-owner have done from *renting* capital in various forms: buildings, machinery, intellectual property, or money itself.

There's nothing special about "ownership" as a path to wealth.

:lol :lol :lol

Edited by stubby, 23 Aug 2015, 08:52 PM.
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Loki
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stubby
23 Aug 2015, 08:35 PM
And the iron men, and the beef barons, and the sheep farmers...

All got rich from *renting* land.

As many other types of enterprise-owner have done from *renting* capital in various forms: buildings, machinery, intellectual property, or money itself.

There's nothing special about "ownership" as a path to wealth.

:lol :lol :lol
Indeed.

It could even be argued that the renter gets the lion share of the asset's value.

My landlord is holding out for some nebulous payoff at some distant point in the future, and yet I get to live the house right now, for a discount no less! And the present value of right now is 1!

And as you so rightly point out, borrowing money and paying interest is renting money. So it would seem that not all economic rents are created equal. The money renters seem to believe there is arbitrage between money renting and land leasing.

But isn't all arbitrage priced away by the market? And if no, then why not?




“Talk sense to a fool and he calls you foolish.” - Euripides
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Car tart
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Loki
24 Aug 2015, 12:33 AM
Indeed.

It could even be argued that the renter gets the lion share of the asset's value.

So what you're really saying, is that you have such a poor savings and investment habit that you can't scrape together a deposit, so have to make up bullshit to justify your financial inadequacies.

Show me a successful oil baron, mine owner, Station owner that doesn't own their own house.

Of course many of us rent things, I rent photocopiers as I can't see the purchase price of $28,000 each being worth the cost of a 5 year lease which include maintenance. And so on with cars in other states, holiday homes, phone systems, even my computer program is rented. But that is a business strategy nothing to do with the joy and security of owning your own home.
You cant drive a house, BUT you can always sleep in a car!
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