Successful???

[billybones]

Or not???

Although some people I know are not quite millionaires they do run a couple successful business that are doing well for themselves and help give them a good income.
Problem with that is that they are then expected to live in a big house with the latest furniture as well as wear the latest fashion and have the latest model car.
If they don`t, they are worried it will make everybody think that their business is not doing well and stop dealing with them.

I also know people that live from payday to payday hoping that there is enough feul in the car, there is some bread on the table and that nothing unexpected happens.

Now who is better off??

For me, it`s the second group. They seem to be happy who they are, not so worried about how society views them and quite happy to stop, talk and perhaps even help another.

The first group. Have to spend most of their time at work, have very little time to socialize and worry that if they help one person they will then be expected to help another...

 

[WRXXR]

Keeping up with the jones's is a sad issue that you'll never eliminate unfortunately.

I don't agree with it but I certainly don't agree that living week by week is any good either.

I think there's plenty of middle ground. Sure you don't need a spare 100k in the bank, the latest 65" 3D tv or take OS holidays every year but it's great to not have to stress out about that next tank of fuel or bills (expected or not) coming in. Makes for a much happier person that isn't greedy.

Combine that with a healthy work:life ratio and your onto a winner.

 

[Trevsa10]

Well no arugment we spend to much of our lives gathering up possesions and when we are gone most of those things we worked so hard to get end up on the rubbish dump THE most i,portants things inn life are freely given and LOVE would top of the pile

 

[Farm Boy]

Just wondering what a millionaire is Bill, could it be?

Some one with one million dollars worth of asserts ?

Or a person with asserts worth one million unencumbered ?

Maybe a millionaire is only someone with a spare $1000000

Or a spare 1000000 Pounds Stirling

Farm Boy thinks the only true millionaires have One million Troy pounds of Gold that's about $17,235,240,000. and there not alot of them about

 

[WRXXR]

It'd have to be a million worth of assets uncumbered or a bucketload of assets that if sold you'd walk away a million in the clear?

 

[PC_Thug]

It'd have to be a million worth of assets uncumbered or a bucketload of assets that if sold you'd walk away a million in the clear?

So True, I know plenty of couples who would claim to be millionaires with house, couple of cars, boats, shares, superannuation etc.

Problem is if they had to liquidate tomorrow the bank would want $700k of that back in mortgages and personal loans and credit card payments.

So with that in mind, is the guy with $300k cash in the bank and nothing else any less wealthy than the first couple?? Or is he in fact better off not having the stresses, and easy access to his money if he needs it??

 

[whilom]

The Buzz thing to do is to have a "Property Portfolio"

Buy one that you can afford and rent it out.
6 months goes by prices rise and equity increases.
Buy a second property using the equity in the first and rent it out.
6 months go by prices rise equity in two properties increases.
Buy a third property using the equity in property one and two and rent it out.

If the properties were worth $350 K each you now have over a $ 1 Million in assets so you must be a Millionaire.

Every thing is apples because the properties are negatively geared.
(How many of you know how "Negative Gearing" actually works?)

Anyone see the flaw in this??

The Whilom

 

[PC_Thug]

So right you are Whilom. The problem with this scenario is that while your Gross Assets are increasing, ie the number of properies you "own", so is your debt ratio, using equity in one property to mortgage another does nothing more than halve the equity you have in each one in real terms.

All well and good while property values continue to increase, but as soon as they take a small slide in a southerly direction, you're essentially in a situation where you owe more than you actually own.

As for negative gearing.... why in hells name would anyone investment into any sort of investment that actually loses money????? Because in a nutshell Negative Gearing essentially means the asset costs more to own than it actually generates in income..... Kinda goes against all the rules of making money now dont it??

 

[Trevsa10]

There are 3 distint things here a million dollars in assest might mean the bank owns $999,999 worth of it and a million dollars whorth of unencumbered assets dose not mean you have any thing to live on just buy a farm and find out . To my way of thinking if you want to be a millionare you need to have the cash on hand . You cannot take a few bruick from your investment units to the supermarket if you want to buy food .Especially if thise bricks are mostly owned by the banks

 

[Fudd]

In my opinion:

1. A Millionaire is a person with "net financial assets" that exceed 1 million dollars and is the difference of Assets minus Liabilities. The net financial assets are those that are capable of being converted into "cash" and are based on market value and not book value of the asset, eg a car may have a book value of $40,000 but the marketplace will only pay $30,000.

2. Negative Gearing is a long term investment strategy. In the short term, it is correct to say that its a money losing venture, however, Negative Gearing has 2 objectives (i) to reduce your CURRENT tax liabilities and (ii) build FUTURE equity in the property over time. However, the key to Negative Gearing is one's ability to "service the loan" in securing a property (only a handful of people own more than 4 houses) & the effect that tax laws have on one's income (the current ATO "Guide" runs 44 pages - some guide!).

Fudd

 

[Happy2]

I have always thought if you can walk into your bank and withdraw $1000000 of your own money and still be in the black your a millionaire If you have to do the bondy shuffle you are a paper millionaire