When the next GFC hits, the American economy implodes and China emerges as the next dominant power….GOLD/SILVER will emerge as the best investment. As Steve says, it has held its value forever, the major players in the world are stockpiling the precious metals as they know the economy is on life support. Anything linked to the dollar is big trouble.

Look into Mike Maloney and others who go into this situation in depth. Very scary and important information to have

Thanks
Jigs

I want to build a passive income portfolio of at least $120k pa hopefully in the next 2 to 3 yrs. As my first investment property for this goal, I am considering the one below in Ballarat. What are your thoughts?

http://www.prdballarat.com.au/5066924/9-kingsley-court-ballarat-east

I don’t think there is stamp duty in NZ, is there? What would be the ‘cost’ of selling them to a new entity? I’m expecting you would still have to be a personal guarantor to the loan in the name of the new entity, but I would have thought the lender would be happy with that? I imagine there would be some loan fees to investigate too.

Regards,

– Steve

Erwin>>>>……. However, my lender advised my accountant just today that they couldn’t do this as part of their lending policy either all of the properties under the LTC or under my name………..

First, I’d be seeking the services of a good Mortgage Broker to suggest another lender. Why? Because it “sounds” like this lender might have cross-collateralised all of your properties – just a guess, or why else would they want to do it “their way”?

Second, I always kept my home with a separate lender – never with any of the banks that had my IP’s. And I would suggest that to be a good way to gain future security.

Third, it is interesting that your lawyer also said to keep them all “under your name” – that could be for other reasons, and, of course, it might be a NZ thing (my investments were all in Australia). This might be one area you would need to clarify before doing too much else.

I hope some of those thoughts might have helped. I’ll now await Steve’s comment too (he has invested in NZ previously, so will likely have some useful thoughts for you).

Benny

Will you be able to advise on how to go about this problem in NZ?

Thanks and regards,
Erwin

Thanks for the post. I haven’t kept a close eye on Ballarat for a while, and not at all over the past 12 months while I was living in the US. That said, I was told the local council opened up a lot of land in there and that prices had struggled since given the extra supply.

Speaking about regional areas in general though, pay careful attention to jobs and infrastructure. You would want a higher rental yield to compensate you for (usually) a lower capital gain return.

Ballarat was always of interest to me because it was affordable and within 70 mins train commute to Melbourne, which is less than a car commute from Cranbourne.

Do you have a property on your radar? Reply with the url and I’ll give you a first impression.

– Steve

When I studied economics at Uni, historical attempts to stimulate an economy by printing cash inevitably led to inflation. At the moment this hasn’t happened, but it is being closely watched which is why interest rates are creeping up.

As far as market commentary goes, at the extremes you have people predicting continued prosperity, and others predicting financial Armageddon. Only time will tell which will unfold…

If you believe that there will be a financial melt down, then cash may not be your safest asset given the risk of bank failure. Typically people look to precious metals, rare gems, etc. in such times; items that are scarce and hold intrinsic value. Since you hold the opinion about potential market downside risk, it would make sense that you research what types of investments are prudent and invest accordingly. Just be careful about being ‘all-in’ and ‘all-wrong’. A few years back, after hearing Harry Dent predict the S&P would crash, I made a small speculative investment in a manged fund that shorted the S&P. After losing 40% of its value because the market did the opposite of what Dent predicted, I cut my losses and sold out. Since then the market has continued to go up, up, up.

Normally you would put the capital you want to protect in low risk low yielding assets (government backed bonds, etc.), but still have your at-risk capital in higher yielding higher risk assets. You adjust the mix as you see fit and according to your risk tolerance and in response to your read of the market.

The downside to cash though is that, if you’re wrong and the economy continues to expand, then you will lose
buying power. For instance, if cash earns a 0% and property earns a 10% return, then after a year your cash buys 10% less property.

Now, to my thoughts… a saying: all markets overshoot on the upside, and overshoot on the downside. My opinion is that, with new highs being recorded on stock markets almost daily, we are probably in ‘overshot on the upside territory’. That said, there may still be more to come before it corrects.

Regards,

– Steve