ROYE was developed in-house over two years ago. However, in response to the changing global credit environment, our team began revising the program. Now ROYE delivers so much more than was previously possible.

I am very proud of the finished product and while I wish I could say that I personally developed it, I can’t. The team at mrd has developed ROYE, a team that is ethical, intelligent and above all, extremely hard working.

ROYE is mrd proprietary software and has been redeveloped over the past six months as part of our very important Customer Care Program. It is unique and has no marketplace competition. Totally exclusive, it is a software program that can put into actual numbers, what can be achieved given certain parameters. It provides answers to the questions on every investor’s mind:

1. When will my properties be able to support my family and me?
2. How many properties will I need to purchase to secure my future financial needs?
3. How quickly will I need to put my portfolio together?
4. What is the best way to use my portfolio once it is built?
5. How does living on debt and not paying it back actually work?
6. Will I be able to live off the rental income received?
7. Will I have to sell my portfolio once I retire?

Not only does ROYE answer these questions, it answers them relative to your personal situation - your expectations, your parameters, and your plan.

At mrd we know investing is personal and we are committed to Customer Care. We only ever espouse the virtues of responsible debt management.

ROYE is conservative. At mrd, we will never exaggerate the benefits you will receive by building an investment property portfolio. Below are some of the conservative assumptions made by ROYE:

1. ROYE calculations are projected out up to 35 years into your retirement so you can see how the money does not run out.
2. Although the vast majority of retirement goals can be achieved within 10 years, ROYE can project the date of your retirement out to 20 years from now (for those who prefer to work longer).
3. ROYE assumes each loan for a new property will be 104% of the contract price. (Borrowing 104% allows purchasing and settlement costs to be factored in.)
4. ROYE assumes all funds required to build your portfolio are borrowed, requiring none of your own cash. (Keep your cash for your current lifestyle while your equity builds wealth for your future lifestyle).
5. ROYE assumes you will NOT pay down any principal on any of your loans (including your own home). This ensures projected available equity figures are more likely to be conservative, not overstated.
6. In ROYE, after ‘retirement’, any remaining debt on your personal home needs to be covered by rental returns. This is included in the net rental calculation.
7. In ROYE, debt on an investor’s own home is separated from the debt on the investment properties. This ensures projected rental yields are not inflated by ‘assuming’ rental income on the value of a person’s own home.
8. In ROYE, default rental return is calculated at 5% of the total value of the investment portfolio.
9. Default rental return is then discounted by 25% so as to allow for property expenses including body corporate fees, council rates, etc. (This 25% reduction is consistent with that used by the majority of banks when assessing rental income in borrowing calculations). The figure can be changed to show higher or lower ‘what if’ scenarios.
10. ROYE will calculate and factor in rental income shortages and take any required top-ups from existing available equity.
11. In ROYE, any net rental income surplus is applied to overall debt.
12. The front page of ROYE shows either ‘PASS’ or ‘FAIL’. This result reflects a calculation where your overall loan to value ratio (LVR) is less than 50% of your total property value and is reducing year by year.
13. ROYE gives you a realistic assessment of the amount you can responsibly draw down each year. This of course, takes in all of the above as well as reflecting the variable parameters we use to reflect each individual investor’s personal situation.
14. ROYE gives you results in today’s dollars plus a 3% per annum consumer price index (’CPI’) rise. This ensures the impact of inflation is also factored in to each calculation to maintain your standard of living. NB: The 3% CPI rise is our default setting but can be altered to demonstrate ‘what if’ scenarios.

Added to the many Customer Care measures we have included in our COMPLETELY UNIQUE ROYE program; we also provide you with FIVE very different retirement options:

1. Retiring on just your property equity.
2. Using your equity to invest into a Managed Fund(s) and retire on the income those investments produce.
3. Waiting until your overall rental income surplus can underpin your retirement needs.
4. Selling off a part of your investment portfolio to pay down the debt on the remainder… and then living off the remaining rents.
5. Selling your entire property portfolio and investing your profits with a fund manager (or similar) and retire by drawing down an annuity.

Again in all of the above options, ROYE will make the necessary assumptions to ensure we do not exaggerate the possible outcomes. For example, ROYE will:

1. Factor in Capital Gains Tax (’CGT’) where applicable.
2. Assume a top marginal tax rate of 45% is applied to any capital gain.
3. Assume properties sold were held for more than 12 months meaning CGT is applicable and is then calculated at 50% before being added to the top marginal tax rate.
4. Factors in 3% as the cost of selling a property.
5. In Retirement Option 5, ROYE assumes all taxes and debts are fully cleared. NB: This leaves an investor owning their own home with a lump sum to invest elsewhere. We believe this is probably the closest direct comparison with superannuation.

I will be displaying the power of ROYE in the upcoming web seminars I am hosting from next Wednesday. If you have not already done so, I encourage you to register and be involved in one of these sessions.

As a further incentive, (because I truly want you to benefit from our exclusive software), I will be giving a very genuine and worthwhile gift to all who participate. And this gift, if applied, should result in a huge financial advantage to you five years from now.

I look forward to ’seeing you’ on one of my upcoming webinars.

To register, click here

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

No hype. Just straight unbiased facts.

And you’ll have the opportunity to ask me questions on anything we talk about.

For your convenience, this event will be repeated four times; on different days and different times.

To find out when these will be… and to secure your place - click here

If you have never participated in a webinar before, don’t panic. We will give you all the simple instruction you need. It really is a very simple and painless process.

Nick
PS: This event will be FREE!

It is the month of August, on the shores of the Black Sea .. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit. Suddenly, a rich tourist comes to town.

He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to choose one.

The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.

The butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.

The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.

The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town’s travel agent to pay for last year’s trip away.

The travel agent runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she had booked for her clients.

The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.

At that moment, the tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.

No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism…..

And that, ladies and gentlemen, is how the United States Government is doing business today.

Colleen Coyne has researched 10 economic sub-regions of the city and highlighted the suburbs best positioned to cope with the influx of new residents, tipped at around 350,000 by 2031.

Coyne says maintaining job creation at the same rate experienced over the past decade (4 per cent to 4.5 per cent per annum) would be difficult.

“While the global financial crisis will play a factor, the city’s ageing workforce will be an on-going issue,” she says.

“A national slow down in manufacturing and construction is also impacting the Gold Coast, as is a slowing in productivity growth, which will have a long-term impact on the city’s ability to continue creating new jobs.”

The research points to a marked loss of jobs from the Surfers Paradise-Broadbeach and Burleigh Heads subregions over the five years to 2006.

“We are seeing these workers, and in particular casual and part-time employees, shifting to the outer suburbs because of lower housing costs and the desire to work near home,” says Coyne.

“The ageing of the population along the coastal strip is also a factor in loss of resident employees, as older workers retire.”

Coyne says that while the Gold Coast

>>>> Population growth to impact property sector. | Gold Coast Business News

The latest monthly RP Data-Rismark International indices found that values also continued to rise nationally, with a 4 per cent increase in the year to May.

During the first five months of this year, home values in every capital city except Perth have increased.

>>>  Brisbane house prices on the rise, median at $432,000 | The Courier-Mail.

Gold Coast Weeken Bulletin June 28th, 2009 http://www.goldcoast.com.au/article/2009/06/28/93035_gold-coast-top-story.html

Real Life Example

One situation that highlights the difference between bank staff (or inexperienced brokers) and what we would expect from one of the mrd preferred brokers was highlighted recently when one of our clients sold his home and moved into a rental property while his new home was being constructed. This scenario is a relatively common one.

What Happened?

• An investor sold his home
• Their broker told him that he would have to pay out and close the investment loan that had been secured against his home
• This loan was a Line of Credit (LOC), with a tax deductible balance of $100,000
• As per the broker’s instructions, they cleared this at settlement

What’s Wrong With What Happened?

• While on face value this course of action seems fair and reasonable, it has unintended consequences down the track.
• This borrower had to use $100,000 of his own cash to pay out the tax deductible loan
• This means he is now down $100,000 of his own cash to use on his next home purchase
• He now has to borrow that extra $100,000 and pay interest on it
• The interest on the new $100,000 loan will NOT be tax deductible - as the purpose of the new loan is the purchase of his own home
• Effectively, this careless advice has resulted in the borrower turning $100,000 of tax deductible debt into $100,000 of NON deductible debt; not an ideal situation

So What Was The Alternative?

• Rather than paying $100,000 of personal cash to clear the tax deductible loan at the time he sold his previous residence, he could have put that same $100,000 into a term deposit
• The investment loan that had been secured against his previous home could have been ported or transferred over to be secured against this term deposit, until such time as his new home was built
• Once construction of the new home was complete, the loan could then be ported again and secured by his new home… releasing the $100,000 in the term deposit
• This $100,000 could then be used to pay down (or offset) his private debt, rather than his investment debt
• Doing this would have preserved his original investment loan and its tax deductibility on the interest payable

The Cost Of This Action

This may look like a lot of fuss to go through for the extra tax deductibility. Perhaps, but let’s work out what it is worth in dollar terms.

• Assuming an interest rate of just 5.2%, the annual interest bill would be $5,200 (this is the amount of interest that is no longer tax deductible)
• Assuming a marginal tax rate of just 30%, the borrower’s tax saving would have been $1,560; not once… but each and every year (even more when interest rates rise again at some future time)

So let me ask you a question. Was the little bit of “fuss” worth it?

Investment Funding Ought To Be Structured So As To Deliver You A “Trifecta”

There is so much more to investment funding than merely securing a loan.

• Does it satisfy the lender?
• Does it satisfy your accountant?
• Does it satisfy YOUR requirements?

Satisfying Your Lender

If your bank doesn’t like it then it isn’t going any further; it’s that simple. But don’t despair! There are many banks at our disposal; each with dozens of loan products; so we can usually find something suitable.

Satisfying Your Accountant

How the Australian Tax Office (ATO) views your arrangements is a very important component of the right finance structure. Crossing investment with private debt in the one account makes things very complicated for your accountant. It will also ensure you are hit with an unnecessarily higher bill to have him separate things. NB: On some occasions it is unwise to even mix private debts.

Satisfying Your Needs

Even assuming one of our preferred brokers set up the most effective financial structure possible… it would not really be of benefit to you unless you understood how to use it correctly. This is where education and ongoing mentoring helps.

Our team of brokers work hard to meet these high standards, nevertheless I’m sure you would concur that it can be challenging to satisfy all of these criteria. With years of personal and industry experience behind us and having witnessed what we label “Property Investor Crash Victims”, it’s no wonder we may cringe when people insist on using an existing bank or broker on the basis of… “I have been dealing with them for years”.

We are certainly not interested in challenging the relationship you have with your banker or broker; but the harsh reality is that there is a very strong chance he or she does not fully understand the intricacies of investment property finance structure. They tend to know the way they have been taught to set up loans; that is… the way the bank likes them structured.

Of course I am not suggesting that bankers and brokers deliberately set up loans inefficiently. I am simply suggesting that they do not usually have the training or experience to do so in a way that is most suitable for an investor. It may also be that they do not have access to the ideal loan product or may be restricted to certain valuers.

Finance Structure & Cash Flow Health Check

Are you making measurable progress (towards the realisation of your goals and dreams) in reasonable time… or are you simply working harder and longer for little real advancement?

Do you have a plan that works and are you working that plan?

If you cannot answer YES to those questions I strongly encourage you to consider how mrd can help. We have been consistently undertaking complimentary cash flow health checks for numerous clients… and thus far there has not been a single one we have not been able to save money or improve their situation (literally, not one!). These are undertaken without obligation as part of our Customer Care Program. A good name and a great reputation is reward enough!

Call us during office hours on (07) 5580 8888 or click here and we’ll call you; next week in office hours.

Educational Web Seminars

I’m hosting four separate COMPLIMENTARY WEBINARS to show you how to prosper and retire on your real estate equity. No hype. Just straight unbiased facts.

And you’ll have the opportunity to ask me questions on anything we talk about.

We are repeating this event between weekday evenings and Saturday morning so as to offer you choice (times will vary from State to State due to the time differences).

For all the details and to register for FREE - click here.

Happy Investing,

Doug Wroe & Nick Lockhart
mrd Customer Care Program… because investing is personal

Colliers’ Gold Coast director in charge Stewart Gilchrist said the majority of construction in the region was concentrated in the fast-growing suburbs of Robina and Varsity Lakes.”These suburbs are at the geographical heart of the Gold Coast, but they have become much more than that, staking a claim as one of the city’s prime centres for business and entertainment, and a sought-after residential address,” he said.

“Major road and rail improvements will support this position, making the area even more accessible.”

Several major infrastructure projects in progress include an $8.3 million upgrade to Christine Avenue, the first phase of a $920 million rail extension from Robina to Coolangatta, $287.7 million expansion of Robina Hospital and the $6 million Robina Police Station. There are also major infrastructure improvements in the pipeline, including a $75 million upgrade to Burleigh Connection Road, $22.6 million expansion to Robina Library, a new $9.7 million Australian Technical College, and upgrades to the motorway and interchanges from Nerang to Varsity Lakes. Ms Campbell said the $1 billion Varsity Lakes, the $500 million The Glades in Robina and the $440 million The Observatory at Reedy Creek were the largest residential projects in the region. “Many of the big tracts of land have now been developed, so we are seeing plans being put forward for smaller residential projects, with an end value of about $30 million to $40 million,” she said.

>>>  Gold Coast Bulletin June 13th

When asked what they would do differently, if they had their life over again, many elderly people are quick to reply that they would ‘dream bigger, take more risks, have more fun and spend more time with their families’. “More Overtime at Work Doesn’t Get A Mention!”

Realising the dream of a financially secure and rewarding life requires change… why then are we inclined to maintain such a tight grip on the status quo? Why do we resist letting go of old habits and beliefs… or anything else that may be limiting our potential?

You can never plan the future by dwelling on the past.

If the alternative is a life of financial freedom, choices and time to cultivate relationships with loved ones… then aren’t the things of the past that we struggle to let go of, by comparison, mere peanuts? Yet these peanuts keep so many locked into yesterday!

Investing in property… and doing it properly…  is actually an incredibly simple process! The anguish felt by some is often more a “head thing” than a reality.

Anxiety is a common symptom felt especially by first time property investors. It’s too easy to dwell on the negative and stress over all the challenges that may occur after the purchase… on the basis of negative stories in the media or well meaning friends etc! The mental challenge quite often is in simply making a decision to get started.

We must let go of our old ways of thinking, our irrational fears and our personal insecurities. This is a mental transition requiring great determination; bad habits are much harder to let go of than good ones!

The monkey in the cartoon may appear incredibly stupid for literally giving up its freedom for a peanut, but ask yourself… how many people do you know that are really no different?

Those who stare at the past have their backs turned to the future! So, embrace your future, let go of your past and drop the peanut!

Finance Structure & Cash Flow Health Check

Are you making measurable progress (towards the realisation of your goals and dreams) in reasonable time… or are you simply working harder and longer for little real advancement?

Do you have a plan that works and are you working that plan?

If you cannot answer YES to those questions I strongly encourage you to consider how mrd can help. We have been consistently undertaking complimentary cash flow health checks for numerous clients… and thus far there has not been a single one we have not been able to save money or improve their situation (literally, not one!). These are undertaken without obligation as part of our Customer Care Program. A good name and a great reputation is reward enough!

Call us during office hours on (07) 5580 8888 or click here and we’ll call you; next week in office hours.

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal

Take such a person out for a nice meal (that you pay for) and pick his (or her) brains. Ask him if he would mentor you and, assuming "yes", keep in touch and stay accountable.

There is no advantage in reinventing the wheel!

"Surely it can’t be that simple"; some may muse. "Don’t you have to go to University, secure a degree… and then work hard for years before success comes"? That’s a great plan… for those wanting to be successful at working hard.

Successful people, regardless of their chosen field, are generally happy to share their journey, their experiences… and their ’secrets’. All you need to do is ask and then listen.

Ask And Listen

• Don’t seek advice/wisdom and then ignore it
• Don’t revert back to what you have been conditioned to believe, unless you are happy with the outcome or results being achieved

Many people come to mrd for guidance. Our weekly newsletter is primarily written and constructed as a way for us to drip feed you with quality educational materials. It’s our way of steering those who want success as property investors… in the right direction!

I personally found that the way I used to think was my biggest hindrance to achieving those things that were important to me.

Everybody would love a different outcome… but not everyone is prepared to change the way they think.

It is the sum total of our numerous educational articles that will help you to think differently. I believe with all my heart that as you continue to ponder on these, taking in the numerous quality educational materials (that would normally come with a price tag).., you will change in your thinking and develop the knowledge and confidence to go after and apprehend your dreams in life.

So much of the knowledge is ‘buried’ in the archives of our web site; but it is all there. Perhaps you are a new subscriber and have read very little of the content we have in over 400 blogs (articles). Perhaps you have been around for a while but would like to go back and re read materials previously published.

Regardless, for those seeking quality education and guidance from those that have gone before you… and at no cost… there are links below that will take you to the different archive sections of our web site.

mrd Newsletter Article Archives

From The Desk @ mrd (original content and teaching)
http://investmentmentor.com.au/category/from-the-desk/

Friday Afternoon @ mrd (Original cartoons & inspirational thoughts)
http://investmentmentor.com.au/category/friday-afternoon-at-mrd/

In The News @ mrd (copied straight from the media | non original)
http://investmentmentor.com.au/category/in-the-news/

Property Updates @ mrd (updates to purchasers re: their purchases)
http://investmentmentor.com.au/category/property-updates/

Educational Web Seminars

I’m hosting four separate COMPLIMENTARY WEBINARS to show you how to prosper and retire on your real estate equity. No hype. Just straight unbiased facts.

And you’ll have the opportunity to ask me questions on anything we talk about.

We are repeating this event between weekday evenings and Saturday morning so as to offer you choice (times will vary from State to State due to the time differences).

For all the details and to register for FREE - click here.

Finance Structure & Cash Flow Health Check

Are you making measurable progress (towards the realisation of your goals and dreams) in reasonable time… or are you simply working harder and longer for little real advancement?

Do you have a plan that works and are you working that plan?

If you cannot answer YES to those questions I strongly encourage you to consider how mrd can help. We have been consistently undertaking complimentary cash flow health checks for numerous clients… and thus far there has not been a single one we have not been able to save money or improve their situation (literally, not one!). These are undertaken without obligation as part of our Customer Care Program. A good name and a great reputation is reward enough!

Call us during office hours on (07) 5580 8888 or click here and we’ll call you; next week in office hours.

Happy Investing,

Nick Lockhart
mrd Customer Care Program… because investing is personal