Sunday, February 21, 2010
To invest, or not to invest?
More specifically, the question should be, invest in property alone, or diversify? Throughout the last 4 years or so since I began property investing, the returns have been good. I can't say great, because the 2008/2009 "slump" has put a bit of a dampener on things, but still, the value of our investments grew, albeit not as much as in 2006/2007, or the time period I like to call "the icing on the 2003 boom cake." So the current question circles in my mind, keeping me occupied, evaluating my financial position and thinking about what I should do next. After much much thinking, the answer has been shares and online savers. It's a bit of a no brainer, but I really had to re-calibrate my approach of "property only" after the last few years. So here I am, nicely tucking some bucks away into UBank, but also keeping an eye on the share market, some of those blue chips are starting to look tasty.
I think perhaps more importantly, I took stock of my portfolio. Although I was aware of the situation, I am now thinking I have to change the negative gearing situation. Yeah, sure, the capital is increasing and I'm "silently" making money, but my cash flow is taking a major hit. With interest rate rises almost a certainty (although we have heard that before), a few more hits to the cash bottom line, and things will get very interesting very quickly.
As such, I am looking to sell, and I am looking at offloading the poor performers, or, as I am increasingly noticing, my non-performers. I have two blocks of land, sitting idol, doing nothing, growing very slowly, but not making any major headway and definitely doing nothing for cash flow.
The situation has also opened my eye to doing things differently. Being a wage earner is fine, but it's not the way things should be. I absolutely love my day job, but it has strings attached...I HAVE to be there, I drive 25 minutes each way every day, I put in a few hours more than I really should. With a business, I can employ someone to be there, to do the work. With a business, I can look at data and make a difference to operations with cash benefits, at my job, there is no such thing. So, taking the Rich Dad, Poor Dad approach, I am going to start something new, something risky, but more importantly, something that will result in some learning.
Ciao for now...