One Sherpa - Latest Comments

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

OneSherpa — Sat, 18 Apr 2009 20:42:26 -0000

Thanks for you encouragement. Sometimes it is difficult to cut through the clutter and rhetoric. This often means people give up before the truth emerges and are then trapped in a financial straight jacket.

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

Investor — Sat, 18 Apr 2009 11:19:32 -0000

I wanna thank you for having this post, you gave your extra efforts to have this and inspired us....

Re: Do the Accounts of a Business Really Show What’s Going On?

OneSherpa — Mon, 30 Mar 2009 22:45:35 -0000

Hi Ben,
I think you could show this to your clients because my point is that IF the books were filled out correctly they would show exactly how a business is running. However, with so many business owners choosing to do the books themselves or have them done by a substandard book keeper, we're left with the situation where the books often can't be relied on for more than the most basic compliance information.

Re: Do the Accounts of a Business Really Show What’s Going On?

Ben Kelly — Mon, 30 Mar 2009 20:55:10 -0000

Can't really show this to my clients Andee

Ben

Re: How George Set Himself Free of Money Worries…

OneSherpa — Fri, 30 Jan 2009 01:27:31 -0000

If we follow correct principles there is no doubt we will come out of it. However, as long as speculation is the primary wealth driver for people we will inevitably get some booms and busts along the way

Re: How George Set Himself Free of Money Worries…

jaydress — Thu, 29 Jan 2009 11:47:32 -0000

Just worried the more I see videos like this. Are we ever going to come out from this?

Re: How George Set Himself Free of Money Worries…

Marble Host — Sat, 10 Jan 2009 00:02:50 -0000

Financial crisis continues ....

Re: Humour on the financial crisis

Marble Host — Fri, 09 Jan 2009 23:58:16 -0000

it sounds good he explained good information

Thanks

Re: Humour on the financial crisis

Marble Host — Fri, 09 Jan 2009 23:28:12 -0000

Excellent thoughts thanks for sharing..

Thank you

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

OneSherpa — Fri, 09 Jan 2009 16:35:41 -0000

Thanks for your comments Adrian.

I agree with you.. It's the mindset that makes the difference when it comes to investment in real estate. Some people have thought it is simply a matter of buying a property, sitting on it for a few years and then selling it. For me that is more speculation than investment.

Once you are looking cash flow rather than capital gain as the chief determinant in investing I believe you're using a business mindset.
Looking forward to catching up with you soon.

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

Adrian — Fri, 09 Jan 2009 08:19:50 -0000

Andee, your message seems clear: treat your real-estate investment as a BUSINESS.

A real business is bought (or started) because it does (or soon will) produce profits and free cash-flow year in and year out, and then MAY be sold at a future date for a speculative gain. At least, that's what happened to me ...

... I can't understand why we shouldn't look at any other investment, including property, exactly the same way?

Re: Are You Making These ”Money Burning” Financial Mistakes?

OneSherpa — Thu, 11 Dec 2008 15:49:43 -0000

Thanks Jack.
Feel free to share the George videos with ALL those Georges and bring them into a conversation which may change their lives for ever

Re: Are You Making These ”Money Burning” Financial Mistakes?

Jack Pearce — Thu, 11 Dec 2008 07:27:30 -0000

Thanks Andee. I know plenty of Georges.

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

OneSherpa — Thu, 11 Dec 2008 03:39:02 -0000

Thanks for taking the time to give us your comments Doug. I think they add another valuable perspective to the conversation on this popular topic

Re: Why Some of the Rhetoric of Property Investment Gurus Doesn’t Quite Make Sense

Doug McClelland — Thu, 11 Dec 2008 02:54:51 -0000

Half a lifetime in the finance industry provides a good perspective on debt. I have to agree with Andee's comments in relation to the importance of sustainable cash flow. If I look back over the years at the clients who have really succeeded financially they're the ones who had moderate gearing and strong cash flow either from existing investments or from other sources. I've had a few others who made a big hit with one or two property developments - but longer term they usually took one big risk too many.

One of the first lessons I leant as a lender was the importance of cash flow - the security value only matters when you buy an asset and when you sell it - in between times cash flow is king. One of the first lessons I learnt about investments (I managed a large financial planning / investment advsiory firm in the mid 80s) was that the taxation benefits of any investment were purely a secondary consideration. If tax benefits were a major consideration you should look elswhere.

Business is no different - the basics hold true - strong cash flow and tight control of expenses are major keys. We've have a whole group of workers and employees who have never experienced a down turn of this magnitude. A lot of businesses don't yest realise how deep the water is -

We need to educate our managers, staff families - and a whole raft of "advisers" and consultants how finance works - but we all have different experience levels and we need to start with the basics. Andee - keep up the good work

Re: The great ‘Financial Freedom’ Myth that Keeps Millions Broke!

OneSherpa — Wed, 10 Dec 2008 00:07:32 -0000

David,
Thanks for your comments. There are quite a number of people who hold your view which is why this whole topic needs discussion and debate. I plan to take up your comments more fully in a further blog post

Re: The great ‘Financial Freedom’ Myth that Keeps Millions Broke!

Daid Butcher — Tue, 09 Dec 2008 19:13:24 -0000

Andee
This is quite misleading. The problem with generalisations is that everyone's circumstances are different. If George had a rigorous investment analysis he MAY have had a smile on his face! You have forgotten tax benefits which can be substantial. Also, the actual equity needed to purchase his investment could have been minimal compared to the purchase price. Most importantly, over time the tenant and the tax man pay for the majority of his invesment. Cashflow is an important element when assessing an individual's capacity to buy into an investment property, and provided his projected debt to equity ratio (based on worst case scenario assessment) is comfortable, he MAY be able to use the increase in equity for his investment property to liquidate the debt on his principal residence. He would then have GOOD debt (tax-effective) and would liquidated his BAD debt. Of course property prices, like equities, can fall, and interest rates can rise. But his interest rate (after tax and deductions) could be around half that he is paying on his own residence and, most importantly, he takes a long-term view on property investment which historically has doubled in value every 8-10 years. I know you are looking at the impact of cash income, but generalisations such as yours cannot be applied to everyone
Cheers

Re: The great ‘Financial Freedom’ Myth that Keeps Millions Broke!

Ben — Tue, 09 Dec 2008 05:10:36 -0000

Great & simple explanation - looking forward to vid #2

Re: Paddy strikes again

Doug McClelland — Wed, 19 Nov 2008 16:42:32 -0000

This guy is excellent at explaining the complexities of the problem. - Also agree its a fabulous marketing / education tool

Re: Humour on the financial crisis

OneSherpa — Sat, 08 Nov 2008 16:37:58 -0000

Hi John,
Thanks for the correction.

Re: Humour on the financial crisis

John Lacey — Sat, 08 Nov 2008 06:29:31 -0000

The Green Brothers are very funny and intelligent guys... but it is worth noting it is John and Hank (not Tom and Hank) Green.

Re: Do you really know where your profits are coming from?

OneSherpa — Fri, 31 Oct 2008 19:48:25 -0000

Hi John,
Thanks for your comments. I agree that many SME's have a very low level of financial acumen and as a result fail to appreciate how their business is really travelling. Without relaising it, their behaviour has the effect you are talking about

Re: Do you really know where your profits are coming from?

John Barnett — Fri, 31 Oct 2008 00:50:22 -0000

Andee, a lot of SME's have no idea on their costs and the relevance of each cost to the health of their business.
Unfortunately, managers are only able to argue over the size of the dollar, not its importance.
They damage their company's relationship with their customers, suppliers, employees and lending partners for short-term "gain".
Too many business owners have no realistic strategies.
That said, I agree with your blog completely. Great piece

Re: Do you really know where your profits are coming from?

Rachael — Thu, 09 Oct 2008 19:23:31 -0000

Your thoughts make sense. Thanks Andee

Re: It’s time to hold the debt-peddlers to account!

Doug McClelland — Thu, 09 Oct 2008 03:33:05 -0000

Are the villains the financiers who designed the products? Or are they the so called investment advisers who sold creative products to unspophisticated investors worldwide? Or are they the US Supreme Court who ruled that you couldn't decline a loan on the basis that someone couldn't afford to repay? Or do we blame the 9/11 terrorists who prompted a truly massive injection of liquidity into world markets that found a home in speculative real estate development? Perhaps the real villains are the Ratings agencies who used mathematical models to rate financial instruments they couldn't understand? Or do we blame the various government regulatory bodies who failed to see the symptoms and take the necessary steps? Or should we blame the politicians for populist tax cuts / incentives that fuelled asset bubbles in real estate and shares? Do we blame the financially sophisticated advisers who should have been sounding alarms - but didn't?
The real villain is human nature for wanting that extra investment return that was just a wee bit more than the average, or a home that the they thought was beyond their dreams? Perhaps we all need to look in the mirror!!