Take Charge of Your Money Now.: The #1 DIY Financial Freedom Plan by Stephen Parr

Author:Stephen Parr [Parr, Stephen]
Language: eng
Format: epub
ISBN: 9781922118714
Publisher: Happy Self Publishing
Published: 2016-12-10T08:00:00+00:00

Risks

There are risks involved with every type of investment. We need to be aware of them and to consider strategies to avoid or minimise their effect on our investments. It is however, important to note that taking on risk can be very rewarding. The following chart gives some examples of types of risk that may need to be considered depending on the type of investment being considered.

The prospectus or Investment Statement of any new investment should carry a section that outlines all the general risks that an investor should consider as well as risks specific to the particular investment.

PROPERTY

New Zealanders and Australians are well known for our love affair with property. There are a number of reasons for this. Most people aspire to own their own home and banks now fall over themselves trying to loan money to property buyers. We are DIY nations and love to improve our homes before selling and moving up the ladder. From an investment point of view it provides a wonderful opportunity to use leverage.

My Property Story

I thought I would give you my own experience in case you think I am only keen on shares and investment portfolios. I bought my first house when I was about 23. I was living in a low-rent company staff house with three others at the time and so chose to stay there while I rented out my newly purchased house to a solo mum on the condition that I was able to do it up while she was in it. I spent all my spare time papering and painting the inside and out and putting in a garden.

A few years later I sold that at a good profit and bought a small block of two flats that also needed a great deal of work done to it. Quite a few years later I moved up to a block of three small shops in the main shopping street of a small but thriving country town. I kept that until the tenants had completely paid off the mortgage.

I later sold that and bought two commercial properties at different times in Tauranga, one on my own and one with my business partners. Each was purchased at a very good price because each had a problem. However, one problem could be fixed very easily while the other property was able to be converted from being an industrial building with a yard to a retail and office complex with a large car park.

Then after another 10 years or so, I got so sick of the upgrading and maintenance work and dealing with tenants that I sold out of both and went back to investing in shares. That includes shares in some property investment companies listed on the share market that own some of the country’s best buildings...and now all I have to do is collect the dividends.

In one of our own homes, a two bedroom stand alone townhouse, my wife and I added a third bedroom and an office with a separate entrance.

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