sme

Known to us English nurses as unsocial hours

SJR

Ours is around $2300pm but that is interest only for a couple of years until we get our business more established. It's quite a commitment for us and a bit scary!! Our mortgage broker told me that the loan size we are taking (370K) is average for the area, we are about 430km south of Perth.

temptininnit

hehe.

No I meant this property boom.

geordie downunder

I started in the days when banking was a highly regulated industry.You had to bank with them ,and save, for years, to prove you could pay off a mortgage. I saved the deposit for a house ($8000 I think) and bought my first property.

I was scared stiff at borrowing such a large amount (50K),and wondered how the hell I was going to pay it back.None of my family had ever owned anything.

At the end of every week the $10 or $20 a week I had left was paid off the mortgage,sometimes I managed $30.I worked every bit of overtime I could,and decided that the money would be 60% to pay the mortgage and 40% to pay for holidays.

I then went to a get a rich quick seminar and thought the guy was full of shit,but the fact that prices rise over the years stuck in my head.The get rich quick seminars are still everywhere.

I borrowed more money and bought another house,and shit myself and wondered how the hell I was ever going to pay back such a large amount,all over again.

Then the light came on ,I realised wealth was owning a lot of assets that produced income,and the more of those assets I had the wealthier I would be, and my income would be much larger.The crowd were wrong thinking millionaires had loads of cash in the bank and lived off the interest.

As an apprentice I would buy the financial times occasionally ,just to try to look intelligent, and probably to try to score with the nurses at tech,I never understood a word of it ,and had the piss taken out of me something shocking.However ,as the light came on ,articles I had read must've stuck in my memory,they suddenly became very clear.

I then tried to find wealthy people and questioned them endlessly on how they did it.At AGM,s today if I can corner the head boys of the company I will ask as many questions as I can to try to learn more.Sometimes that is very rewarding,a director of one company will be a director of a different company.One of the head lads at Commonwealth bank was on the board at Leightons,asking questions he said they had started some new blood on the board there,he was very impressed by them and said it may be worth having a look at them. I never bought any but about 9 years later the stock price plunged,I remembered what he said and did some research on the company and decided they were worth a chance.They proved to be a good company and I have been very happy with the stream of dividends every year ,and the stock price took off.

You need to decide how you view risk,the crowd will always tell you it is very high risk,it isn't.The crowd will put money into the bank and tell themselves it is very safe,why is owning the bank high risk.You need to decide for yourself,the crowd will tell you that it is 99% certain that CBA will go bust,I am 99% certain they will not,there is always a small element of risk.The crowd have no idea why they think that CBA will go bust,they just repeat what everybody else repeats,and tell themselves it must be true.So a certain degree of mental toughness is needed,the crowd will always tell you you are wrong,no matter how many times you are proved right.

I cannot tell you what to buy,simply because I cannot predict the future,but neither can anybody else.

If you like property then you will have to think for yourself ,I am now heavily biased to stocks,therefore that bias must be seen for what it is.

The bias arises because they are highly liquid,property is not.I can dispose of a stock in 3 days,the sell order goes in,the money goes into my account on the 4th day .The money is guaranteed through various safe guards and indemnity insurances that brokers must have. In a falling market it can take 18 months to sell a house,it may never be sold if unemployment is rising.

Looking at two investments ,a house and a stock.Say they both cost 100k and both have the same yield of 5%.From the 5k rent you have charges of rates,insurances,land tax,repairs and anything else involved in the day to day running of a property,management fees or the time cost of managing it yourself.

From the 5K dividends there are no costs,you may end up with 1k in your hand after the large holding costs of property.You will end up with 5K in your hand from the stock.

The entry costs for a property are high,again just as an example the stamp duty and fees etc on your 100k property may take the total cost to 110K,the selling costs are also very high.

The entry costs for a stock are around 0.3% for brokerage,so 100k costs $300 ,selling costs are the same 0.3%.The holding costs for the property will rise over the years,the holding costs for stocks will be $0 unless things change.So if you hold the property for 10 yrs at an average of 6K a year your holding costs are 60K,of which the taxman will rebate you 18K .Stock cost is $0,it can make a huge difference in returns.

Any way one finger typing is hard work so I will leave it there.
Good Luck.

leigh&ivan

Perth salary hotspots:

Accountancy: Western Australia experienced unprecedented salary growth in the accounting sector. For example, the typical salary for a financial controller (turnover > $150m) increased from $180,000 to $210,000, which is $10,000 above Sydney and Melbourne's typical salaries. At the support level, a degree qualified assistant accountant with four years or more experience now typically receives $68,000 compared to $58,000 last year. Payroll staff enjoyed strong increases in Perth, with the typical salary for a senior payroll clerk increasing from $44,000 to $52,000. Professional practice salaries increased strongly with the typical salary for a management consulting principal/director increasing from $135,000 to $160,000.
Banking and Financial Services: From branch staff to wealth management, Perth's salaries were the standouts in the banking market, particularly within financial planning where typical salaries rose a massive 22.9 percent on average. For example, the typical salary increased from $65,000 to $80,000 for a senior para planner (qualified) and from $85,000 to $115,000 for a financial planner (qualified).
Construction & Property: Perth architects experienced solid salary growth. For example the top end of the salary range for a Perth landscape architect rose from $65,000 to $85,000. Significant increases also occurred in construction civil (for example the top end of the salary range for a foreperson increased from $105,000 to $120,000) and in construction building (the top of the salary range for an estimator increased from $120,000 to $150,000).
Contact Centres: Western Australia was the clear winner geographically for contact centre salaries, with average typical salary increases of 17.1 percent. For example, the typical salary for a Perth senior customer service representative rose from $39,000 to $45,000 and from $55,000 to $70,000 for a team manager.
Human Resources: Marked salary increases occurred in learning and development, with typical salaries for learning and development managers and consultants rising from $85,000 to $110,000 and $60,000 to $70,000 respectively.
Information Technology: Perth infrastructure salaries increased on average by 8.7 percent. For example, the typical salary for a network designer increased from $80,000 to $95,000. In development, Perth salaries increased on average by 10.7 percent. For example, the typical salary for an analyst programmer rose from $60,000 to $75,000.
Insurance: Along with Brisbane/Gold Coast, Perth experienced the main salary movements across general insurance underwriting, broking and claims. For example, the typical salary for a Perth broker rose from $75,000 to $87,000 and from $60,000 to $76,000 for a senior underwriter.
Legal: Perth lawyers were the main legal salary beneficiaries overall as employers compete for candidates, with small practices in particular now offering typical salaries above Sydney rates. For example, those with 2 years PAE receive $65,000 in Sydney and $75,000 in Perth.
Logistics: Higher industry salaries were awarded to logistics project managers.
Office Support: Perth's document controllers and site secretary/administrators experienced some of the main office support movements, rising from $45,000 to $50,000 and $50,000 to $55,000 respectively.
Resources & Mining: All resources & mining specialisations, from mineral processing, to metalliferous geology, mobile plant, industrial design and industrial construction moved forward. For example, the top end of the salary range for metalliferous geology mine geologists increased from $90,000 to $110,000. The top of the salary ranges for a mineral processing maintenance planner increased from $120,000 to $140,000 and also from $120,000 to $140,000 for a mobile plant underground auto electrician.
Sales & Marketing: Western Australian sales & marketing salaries stabilised somewhat following the rapid increase in levels last year. The exceptions were marketing coordinators (where the typical salary increased from $40,000 to $46,000) and communication managers (where the typical salary increased from $70,000 to $75,000).


This was posted in the WA business news on Friday, again even though salaries have risen, still no way of affording the silly prices being asked for houses and blocks of land so small that you should only out a shed on it.

quercus

Geordie, that's an eye opener for me!
Thanks for taking the time with those contributions.
Q

Vash the Stampede

I don't live in Perth, and that would be impossible for me.

My wife and I have a UK mortgage on our house over here, which costs around £350 per month.

We also have an Australian mortgage on two properties Down Under (both currently rented out) which costs around £400 per month.

What confuses me is the way people go out and spend money on a house they can't really afford. Our house in Adelaide cost us only $225,000 and that's not unusual for South Australia.

My view is that too many people want the biggest and best, even when they can't afford it. Then they complain about house prices.

geordie downunder

As an indication of how much you will be going against the crowd and group thinking ,a company annual report will usually give you a breakdown of who owns the company.

For ANZ bank the shareholders of between 1000 and 5000 shares number 72,000,or approx 0.34% of the population.From listing in approx 1980 at around $2 a share to around $30 today every body has had the chance to spend money and buy them,very few people ever do.
To leverage into them in 1980 it cost $2000 to buy 1000 shares.Interest rates were high then during little johnnies reign as treasurer.Say an interest rate of 20%,so the holding cost was $400 for a year.From memory the dividend was 10 or 20 cents a share,call it 10.So the dividend was $100 ,shortfall of $300.When share prices drop it is possible today to leverage into them for under $1000,people will still not do it ,it is a very exclusive club of people who will make a start on investing.

When you get to higher levels of ownership it begins to get really exclusive.There are around 400 people/super funds that own 100,000 shares or more,it could be feasible to suggest that 10% of those 400 are individual shareholders,the rest would be OZ/US/UK super funds.

So in the whole of OZ there are 40 people that own 100,000 shares,they are far from being in the high wealth bracket,they own $3 million worth of shares and collect around $130,000 a year in dividends from those shares.A very comfortable life ,but far from the billions of $$ that mega rich own,and the hundreds of millions $$ they collect in dividends.

The experts will always tell you never to put money into one stock,the crowd will always tell you never to buy any stocks,it is far too risky.So it does take a certain mental strength to have the courage of your convictions and tell them all exactly where to go.

The masses will always tell you it must have been so much easier in 1980,if it was so much easier then why does everybody not own ANZ stock?Obviously it wasn't easier back then,back then everbody was wandering round saying you were mad if you did something like that,exactly the same reasoning they use today, it is too risky,you will lose all of your money.They always know a bloke that knows a bloke ,he knows a bloke that knew a bloke,that bloke's wife worked at ANZ years ago and got paid off,with such top quality info straight from the horses mouth things must be bad at ANZ,and they are sure they read an article in the paper about it last month,or saw something on the internet ,so it must be true mustn't it.

Good Luck ,and welcome to the wonderful world of investing if you decide to give it a go.

OzzieNurse

Your house is gorgeous Vash. So glad we are heading for Tasmania with the house prices in Perth being so ridiculous. We dont want the best just something of our own after renting for years.