Tag: Money

I’m not a big risk taker when it comes to investment. But I do understand it’s essential to step out the comfort zone if I want to be financially comfortable. It may sound counter-intuitive, yet sometimes it’s really a matter of “who dares win”. Success is biased in that regard.

I used to own a small number of shares in one company many years ago. I did it as an entry point to see if investing in shares would do anything for me. In fact, I didn’t want to in the first place. But my family kept talking me into it so I thought OK, just give it a ago.

It turned out the volatility of share prices and all that was a bit too much for me to take. At the end, when the company was offering to buy those shares back, I jumped on it straight away and sold them. True, I made a tiny fortune out of it, but the amount was too small to mention.

Though being a conservative investor, I did have a thing about real estate. Having said that, I was never interested in buying something as an investment property, more so as an owner occupied residency. Put it simply, a place for me to live in. So, finally in 2006, I bought an apartment unit, signed the next 30 years of my life away by taking up a home mortgage – the biggest debt ever.

Over a decade later, it’s proven to be a smart move. So even a low-risk taker like me can have a crack at investment. That’s not to say, everything will go smoothly even if you’ve done all the right things and your “home work”.

My property buying experiences went from OK to bad in the very beginning, then from bad to worse towards the end. The last straw, just when I thought that’s it, it couldn’t have got any worse, then bang! I finished it on a good note. Those damn awful experiences include:

• The first property I was interested in had an on-going defect issue. It’d potentially cost a lot of money to fix it – my solicitor warned me not to go ahead. I listened to him.
• The second property I was interested in, one of the owner’s finance providers had a caveat on it. They refused to release it due to some unresolved debt issue with the owner. Later the owner claimed bankruptcy. The rest is history.
• I got gazumped. In case you don’t know what gazumping means, the owner accepted a higher offer after they’d already accepted mine. It sucked.

Obviously above mentioned are shorter versions of what actually happened. I found a bit depressing to revisit those bad memories but I believe by talking about my bad experiences here may help others, that’s why I don’t mind doing this. Anyway, at the end, I got nothing, yet still had to pay a big sum of money to the solicitor for the work he’d done. Certainly those unfortunate events taught me many valuable lessons, something money can’t buy.

I guess my message to anyone who’s going to enter in the property market as a buyer is:

• Research the market well, stay educated and be very careful. Nothing is certain till you’ve got the whole set of keys in your hand.

Another reason for writing this is a friend of mine and his wife are saving money to buy their first home. I thought I’d cover some key things here to help him prepare for what may come their way. So, here we are:

1. Buying a property is an emotional process. It’s very easy to be drawn to those glossy marketing materials prepared by real estate agents. And when you do go out to inspect those properties, it’s also very easy to grow attachment to those houses that are beautifully presented. Some may well be outside your budget bottom line. Don’t go overboard. It’s a good idea to bring a partner along during inspection or even at auction, if he/she is more a head person. Because when it comes to one of the biggest investments in your life, you need to think more with your head and less with your heart. Anyone who can help you do that, take them with you.
2. Real estate agents work in the best interest of their clients – seller, not yours if you’re a buyer. They may play games with you and that’s all part of their game plan and strategy to achieve the best possible outcome for their clients. Don’t be too surprised if an agent all of sudden starts ignoring you. Waiting is a big part of game playing. Be patient and keep your options open but within your limits/affordability.
3. When your offer is accepted. Great! But it’s not the end of it. It’s only the beginning. Hopefully no other forms of drama pop up out of nowhere. From there, you’ll need to find a reputable solicitor to help you check all the nitty-gritty stuff in the contract and other relevant documents. Your friends or colleagues who themselves have gone through a similar process before and had a happy ending can recommend a good solicitor to you. Getting professional people to do the job through word of mouth or a personal referral makes good business sense. It’ll save you time and money or even headaches.
4. Shop around for a good mortgage provider. Find one that offers competitive rates and also flexibility when needed. For example, a redraw facility, something you may consider should your circumstances change later or when you need a bit extra cash to deal with the unexpected expenses.
5. Once you get your contracts exchanged, wait for the property to be settled (the standard period is 6 weeks but can be negotiated). The day you go picking up your house keys, it’s a moment of home sweet home. Celebrate! All bitter, hard work is behind you. Enjoy your new place, decorate whatever you like it and live it up!

Good luck to all!

Money has two faces. So do people who want it badly.

Let’s set the record straight. Money isn’t a dirty word. Who doesn’t like money? If you don’t, my next question is: What’s wrong with you?

Money is only dirty if we “make” it dirty.

Look around, people are more exposed than ever. If we don’t watch our back, we can easily become a soft target for scammers out there.

Where do those scammers come from? They can be someone who sends you an unsolicited SMS message or email, a stranger who calls you up for personal/company financial information or simply a random person on a street stopping you for cash. As their tactics are getting more and more sophisticated, it’s hard to pin down exactly their true motives. But a good rule of thumb is, anything that requires you to open your wallet, think twice!

Among all suspicious people I’ve come across and dealt with, I must say below is one of the standouts.

When I was walking on my way back to the office today 4 years ago, then coming from an opposite direction, this stranger, speaking with a foreign accent and wearing an ethnic-looking costume stopped me right in a middle of the street. He quickly pointed his finger at me and to my forehead and said “Good luck will come to you next month”.

I was a bit stunned by his action, thinking what the hell… I forced a smile but remained very cautious. Not letting me go, he carried himself like a sales person. I could tell he must’ve done this many times. Quite oddly, he claimed himself a holy man and a fortune teller. “Show me your palm” he said, I did but kept a safe distance and ensured no hand touching. In a matter of few seconds he wrote something down in a tiny piece of paper, squashed it and made it into a pea sized ball then passed it on to me. “Hold it but don’t open it” he insisted. I found myself becoming more intrigued and my curiosity taking over my initial resistance.

In the midst of confusion, he asked me 2 questions: what my favourite colour is and what my favourite number is. Feeling somewhat skeptical, I kept the answers to myself while holding this small squashed paper in my hand. “Now blow it and open it” he said. I thought this is getting a bit bizarre… Don’t know why but I did what I was told. Then I saw the right answers in front of my face. Admittedly, I was impressed but not overly so.

He went on to analyse my life saying that I have a smiley face outside, but inside I’m an unhappy man. I work hard but feel under-appreciated, I have two bad habits that I need to break (note: this is the most part I was interested in) and a love of my life will come to me next month etc. Lastly, the highlight: he opened his little note book, looked me in the eye and said in a firm voice tone “Now put your money there!”. Surprised and not surprised, I told him I don’t have any money with me. “I don’t believe you” he responded as if his mask had just dropped. I repeated ” I don’t have money” then quickly ran away…

Looking back, it’s kind of laughable now. Well, he got those 2 easy questions right but not the money part. Want my money? Out of the question!

To me, some of his words still lingered but I wasn’t taking it too seriously. Believe or not, there were 2 scammers in that week. Enough…

You love money, who doesn’t?! but how do you make money love you back? Money money must be funny? Well, only when you have enough to live by. When you don’t, it’s not so much a laughing matter. Money, love it or hate it, we still work for it, none of us wants to live a day without it. Almost everything we do depends on it. Even charities need money to run and do their good deeds.

Is money a devil or an angel? Maybe both? Money may have two faces but money itself isn’t a problem. It’s our money habits that determine whether money will work for us or against us.

The concept of one dollar saved is one dollar earned still rings true for me to this date. It’s old school like a grandma’s advice but it’s stood the test of time and proved to be a steady way to getting money in shape. In my experience, it’s helped me get through those tough days when I was a bit low in cash.

What do you do with your money? If buying a home is on the cards, you can be sure that it’ll be one of the biggest investments you’ll ever have in your life. Unless you’re self-funded, that is, using your own money, otherwise it’s a whole new board game waiting for you to play. And? You want to play to win!

Buying a home isn’t for the fainthearted. The first challenge most new home buyers face is to save enough funds for a deposit. To achieve that, it means the spending habits will need to be modified, if their finance isn’t already in good shape. Of course, you don’t want to squeeze yourself too much or it’ll feel like you’re suffocating. When it comes to money savings, a little goes a long way. It’s doable even if you’re someone who gets regular pay cheque every fortnight/month, with no other source of income. Start saving today and you’ll see your money tree grow bigger beyond your imagination. I’d say a realistic time frame to give yourself is 2 to 5 years if you’re a newcomer.

So, what are things you can save on? Try small things first and bigger ones later.

• Coffees: If you buy coffees 5 times a week, try to reduce it to 2 or 3 times a week.
• Grocery Shopping: Buy in bulk and put those essential items in your trolley only when they’re on special.
• Transport: If getting off the bus one stop earlier means you can save $1.00 each time. Do it. It’ll make a great work out. Win win!

To get more serious about savings, the following 3 saving tips aren’t negotiable:

• Eating out: Cutting down on restaurant bills and do more home cooking. Cheap and cheerful.
• Holidays: Take day trips in your city that don’t require overnight accommodation. I’ve always preferred my own pillows.
• Entertainment: Do those fun and free activities instead of those that require you to spend money on. I’m not sure if the best things in life are free, but the funniest things definitely are.

Once you’ve got your hard-earned money saved up for a deposit (ideally 20%), it’s important to talk to a reputable home mortgage provider first (personally, I’m conservative, I prefer banks) to see how much you can borrow from there, before you begin your home hunt. That way, it’ll give you a good idea of what the house price range you can afford to buy. It’ll also give you a quick snapshot of what repayments would look like should you decide to take up the loan.

When you got your mortgage account set up, congrats! All the paper work and nitty gritty stuff is behind you. What you’ll see in your first bank statement for the first time is tonnes of money, a big number – in negative! Welcome! You’ve signed your life away! Mortgage, it’s daunting to just look at it, let alone paying it off. Have I scared you off already?

In Australia, the average loan size is $384,700.00 in 2018 according to the Australian Bureau of Statistics (ABS). That’s one hell of a debt to carry. The number is even bigger in Sydney, $462,100 to be precise. Imagine, you’ll have it on your shoulders for the next 25 years or 30 years. How old will you be when you finally get it down to zero? If not careful with money, you’ll soon feel stuck in a rut and be miserable for a long time.

The bottom line is you want to get out of debt as quickly as you can. Let your income work harder for you by having it in an offset account to reduce the loan interest. Beware! Not everyone wants you to be debt free sooner, especially your bank. Our love-hate relationship with banks is here to stay. On one hand, they lend you money so you can buy a home, on the other, they have an eye on their self-interest – interest on your loan, so to speak. When it comes to money, it’s very point-blank, very much black and white (or red). Either you have it or you don’t. If you do, sweet! Be my guest. If you don’t, you’re a stranger, they don’t want to know you. Simple as that.

So, here it is. My Quick Guide To Paying Off Home Mortgage Years Faster. Sounds fancy! I know it’s a bit basic and raw… Huh? Have I just heard someone say… Who do you think you are Ted?! What makes you qualified to speak on this topic? Hmmm… Not bragging here but I’ve followed own advice and paid off my mortgage in 13 years as opposed to 30 years – the life of the loan. That’s 17 years faster! I guess I must’ve done something right, right?

Please also check out my previous blog post: https://tsaited.com/2018/10/29/say-bye-bye-to-mortgage-years-earlier/

I hope you’ll find it helpful.

Money talks but does money walk? I don’t think there’s such a phrase in English but you get what I mean. We’ve seen money as a good motivator for some people. Let’s face it, when money is good, it’s hard to resist it, isn’t it? So, will you jump at an opportunity or an offer purely based on the money factor? What role does money play in your life?

A month ago, I went to a family dinner party that I was invited to by a friend whom I had just met. It was my first time to see the host family and their guests so I didn’t know what to expect. Fortunately, everyone was so welcoming and charitable, I began to mingle with them and make small talk very quickly. Among many topics, one that stood out a lot was career. I guess talking about ourselves especially what we do for a living is often deemed as a good ice breaker.

The host mother, a teacher and her teenage son, a recent high school graduate seemed to be very interested in what I had to say about my jobs, past and present. I could tell she wanted to hear my perspectives and apply to her son’s situation if any of my words was useful. I loved their curiosity. It really fired me up and made me want to share the practicality, the nuts and bolts of how I landed my jobs. For me, reviewing my career trajectory, all the ups and downs I went through and mistakes I made along the way, serves as a good reminder of how I got where I am today. It’s like taking a refresher course again. When I looked back on it, what I learned most was money was a wrong reason for leaving a current job or accepting a new job. Why? At one point, I went to take a job that looked more money and a nicer title on the outside but a few months down the track I discovered it didn’t bring me more fulfillment or happiness. In fact, I ended up working longer hours and even some weekends. Interestingly, when I saw it from an hourly rate point of view, I began to realize I wasn’t at all better off compared to the job I had before.

What do we get when we break things down into hourly rate pieces? Try this analogy: When walking through the aisles of major supermarkets here in Australia or perhaps your country too, you’ll see unit prices on almost all grocery items you come across. A unit price is a piece of information that tells shoppers exactly what they pay for per unit such as per item or per kilo. In turn, it helps shoppers see the real value of the goods they’re buying. An hourly rate works in the same way. I’m convinced that knowing how much we’re charged or paid for every hour worked, it’ll help us:

• Rethink if the task at hand is worth paying attention to
• Use our time more wisely and selectively when it comes to work-life balance
• Say No more often to time-wasters (imagine how much it’ll cost us if we waste an hour on this)
• Walk away from situations that no longer serve us

For what it’s worth, money is like a coin that has two sides, each with a distinctive character on its own. Together, money has the power to make or break our career, relationships and many more. Do you let money limit you or stretch you? To show who’s boss and make money work for you, why not start off by “charging” an hourly rate and see if money pay dividends in no time…

If I can do it, you can do it, too – Sounds easy but is it really? Don’t you love to hate this line? Let’s not kid ourselves. Things like losing that spare tire on your body or becoming a guru or master in your chosen field are never quick and easy. They require a long-term commitment, relentless efforts and possibly lots of swearing (physically and verbally) before you can cross that finishing line. What about paying off a mortgage? It’s even more painful! Don’t despair yet, there’s a way even for a non-risk taker, an average income earner like myself. It’s hard but achievable.

I won’t bore you with too many numbers here. Basically, I took out a 30-year standard variable home loan back in 2006. It’s been 12 years since but fingers crossed this time next year, I’ll have saved up enough funds to pay off my mortgage – 17 years faster than the loan term. OK, I admit it’s only a prediction so anything can happen in the next 12 months. Who knows if the world market will be hit by another Global Financial Crisis (GFC) like the one in 2008 which led to a severe economic downturn, bankruptcies and unemployment everywhere. Been there, done that and survived the financial storm. If GFC in 2008 was the worst thing that has ever happened to us in the last decade, what’s to fear in the future? Here I’m in 2018, 10 years down the road, I’m well ahead on the mortgage repayments and moving closer to clearing the final hurdle. Sounds like a sweet victory in waiting but if anyone asks me what does it take to get there? I’ll say it without hesitation: Sacrifice and lots of it. Wait! Don’t get turned off by it and throw in the towel that quickly. Things do get better.

What are the key measures that I’ve taken (or sacrifices that I’ve made) to help pay off my mortgage faster?

• Eat two meals instead of three per day every day. Have breakfast, dinner only and no lunch in between. Initially, I did this out of pure laziness as I couldn’t be bothered preparing all the lunches at home. Changing my daily meal routine to such a way wasn’t something I had to adjust or get used to, it just fit my lifestyle perfectly. So, overall it wasn’t a hard thing to do. Also, I avoid buying take-away foods or eating out. Over time the cost can add up very quickly.
• Take public transport to work. From the start, I chose to catch train (as opposed to bus) because it was the most economical. In recent years, I’ve switched to bus as it’s more timesaving.
• Holidays at home. Over the years I’ve spent my downtime discovering some hidden gems in the city (Sydney) I live in and all of them are within an hour drive from home. Cheap and cheerful I would say.

Life is full of uncertainties and surprises. Despite the fact I was made redundant twice, out of job for 12 months since the start of my mortgage, as a single person with one single income, I still came out OK, managed to pay private health insurance, all household and car bills on time and stay on top of my mortgage repayments. So, allow me to say this: If I can do it, you can do it, too (but only if you want to)…