I don't know and neither do you, you are speculating at best.
It was you who implied she sold at a profit, not me.
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What we do know is that she is a fool and she is unlikely to have gotten any smarter in such a short space of time.
That's what I said! She must have found a greater fool to buy it from her.
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People who are stupid have to own their stupid decisions. she can't outsource blame, it's hers to keep.
I quite agree. I think most people should be appointed a custodian of their financial affairs so they don't do stupid things with their money.
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You are trying to infer that buying property is a mugs game.
It is the listener that infers, the speaker implies. I am implying that buying property may not be the risk free, effortless path to riches it is so often touted as.
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It's not, but mugs do buy. refer back to the initial post.
Stupid people are not always aware of the traps in this world, but they do learn. This was a particularly expensive lesson however.
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
It was you who implied she sold at a profit, not me.
No I just repeated what someone else said.
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That's what I said! She must have found a greater fool to buy it from her.
maybe she did, or maybe she sold it at market value. You and I don't know.
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I quite agree. I think most people should be appointed a custodian of their financial affairs so they don't do stupid things with their money.
people are custodians of their own money, but that won't stop them from doing dumb things with it.
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It is the listener that infers, the speaker implies. I am implying that buying property may not be the risk free, effortless path to riches it is so often touted as.
No need to infer it, that is right, buying property is not an easy road to wealth. Like shares or any other asset it must be managed well and it can still lose money.
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Stupid people are not always aware of the traps in this world, but they do learn. This was a particularly expensive lesson however.
In my experience they generally remain stupid. They just find other ways to lose.
Any expressed market opinion is my own and is not to be taken as financial advice
maybe she did, or maybe she sold it at market value.
I'm not sure what you mean by 'market value'. Do you mean something other than what the buyer and the seller agree to?
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people are custodians of their own money, but that won't stop them from doing dumb things with it.
Like buying 1br units in Brisbane?
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No need to infer it, that is right, buying property is not an easy road to wealth. Like shares or any other asset it must be managed well and it can still lose money.
I have other people manage my investments for me, the total return is lower, but so are the stress levels. Property is often leveraged with debt, magnifying the risks (I think, do you disagree?).
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In my experience they generally remain stupid. They just find other ways to lose.
Do you think property investment is more dangerous for stupid people than other types of investments or less so?
------------------------------ " ... which is that all-too-familiar dynamic in Irish life where people tell lies, cover them up and create all sorts of collateral damage, sometimes spread out over decades, and never take responsibility." - Alan Glynn
I'm not sure what you mean by 'market value'. Do you mean something other than what the buyer and the seller agree to?
In any house sale the price should be at market value, but it's not always so.
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Like buying 1br units in Brisbane?
One bed units in Brisbane are very good investments if you buy well positioned units for the right price. There are such units available.
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I have other people manage my investments for me, the total return is lower, but so are the stress levels. Property is often leveraged with debt, magnifying the risks (I think, do you disagree?).
I would let agents manage property for me, but I wouldn't let a fund manager manage cash investments or shares for me. I know that it suits some people but I think that people should gain the skills to manage their own money. Of course exceptions do apply - eg lottery winners.
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Do you think property investment is more dangerous for stupid people than other types of investments or less so?
I think that property carries a lower risk profile than shares, and is not much riskier than cash over a period of 5 or 10 years or more. Inflation is the enemy of cash, but it can be a friend to property. Shares can be good, but if we are still talking about an investor who is not sharp, then the risk is quite high. It could still be managed if they had some training.
Investment property is usually leveraged. That both increases the risk if values fall, but it magnifies the profits if values increase. It's just maths. If we use a 20% deposit and then over say 4 years we get a 20% nominal lift in values, then we haven't made a 20% nominal profit, we have made a 100% profit. Same applies in reverse.
Lets assume that we can buy property on an 80% LVR and neutrally gear it with a 6% gross return and interest cost of 5% (I'm guessing on these figures, but it will be close) If we had $500K in cash we could buy one $500K property and maybe get 6% return pa (less 1.2% costs) over 4 years. That would compound to a net return of about 25% over 4 years taking our stake plus the gain to around $625K.
But if we bought 5 X $500K properties each with a 20% deposit, we would get a zero rent return over 4 years, but 100% on the stake of $500K to $1M in that time. That's $375K more profit by using leverage. If it went the other way our stake would be lost, but past history has favoured gains over time periods of some years.
People make the mistake of calculating return on the total value of the property, rather than the value of the cash stake in the play. generally leveraged property can't be margin called, so even if the trade isn't working you can just hang on until the trend reverses.
The downside risk is in interest rates, the loss of a tenant, and competition for the best buys.
(NB those figures are back of an envelope and don't take stamp duty and legal costs into account.)
Any expressed market opinion is my own and is not to be taken as financial advice
In any house sale the price should be at market value, but it's not always so.
One bed units in Brisbane are very good investments if you buy well positioned units for the right price. There are such units available.
I would let agents manage property for me, but I wouldn't let a fund manager manage cash investments or shares for me. I know that it suits some people but I think that people should gain the skills to manage their own money. Of course exceptions do apply - eg lottery winners.
I think that property carries a lower risk profile than shares, and is not much riskier than cash over a period of 5 or 10 years or more. Inflation is the enemy of cash, but it can be a friend to property. Shares can be good, but if we are still talking about an investor who is not sharp, then the risk is quite high. It could still be managed if they had some training.
Investment property is usually leveraged. That both increases the risk if values fall, but it magnifies the profits if values increase. It's just maths. If we use a 20% deposit and then over say 4 years we get a 20% nominal lift in values, then we haven't made a 20% nominal profit, we have made a 100% profit. Same applies in reverse.
Lets assume that we can buy property on an 80% LVR and neutrally gear it with a 6% gross return and interest cost of 5% (I'm guessing on these figures, but it will be close) If we had $500K in cash we could buy one $500K property and maybe get 6% return pa (less 1.2% costs) over 4 years. That would compound to a net return of about 25% over 4 years taking our stake plus the gain to around $625K.
But if we bought 5 X $500K properties each with a 20% deposit, we would get a zero rent return over 4 years, but 100% on the stake of $500K to $1M in that time. That's $375K more profit by using leverage. If it went the other way our stake would be lost, but past history has favoured gains over time periods of some years.
People make the mistake of calculating return on the total value of the property, rather than the value of the cash stake in the play. generally leveraged property can't be margin called, so even if the trade isn't working you can just hang on until the trend reverses.
The downside risk is in interest rates, the loss of a tenant, and competition for the best buys.
(NB those figures are back of an envelope and don't take stamp duty and legal costs into account.)
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