Superannuation

I have a day off tomorrow and I'm putting switching my super in my sights.

Hello 0.02% fees.

Goodbye 0.5% fees

Hello comfortable retirement sum.
#settingupmyfuture

Barefoot plan

Okay so I've now organised my bank accounts into new accounts with no fees ever and easier and higher interest rates. I had my commbank accounts set up so I wasn't charged fees but that was more strategy than bank policy. I moved to Me Bank. I really like them. They actually answer the phone and they do it quickly.

So 3.05% interest on savings. House deposit paid (only 10%, I rushed it a little). Money set aside for emergencies. Money for me and some for fun things. It's a good strategy.

Next week is my superannuation.

The Barefoot Investor

So, I found the website. I read the blog and the 'ask barefoot'. I saw the book and the investment guide and after the last scheme I wasn't really in the mood for another "fix all" BUT I was really curious so I bought the book. I LOVE THE BOOK!!! It is what it claims. It is written by a person who sounds human. It is no nonsense and it makes sense. It's beautiful in its simplicity and strategy. Please read it. I recommend it 100%.

Don't put it off. After I've finished with it I'm sending it to my sisters.

Read it. 

Post Christmas Post and Settlement!

So I've been lazy over Christmas and the New Year, like everyone. So I'm sorry about that.

I'm also currently organising my loan documentation through my broker. The plan is to get my loan application approved prior to the unit being completed and then the two week settlement period won't be stressful because I'll be ready to go as soon as they are.

Just a tip for all those people who are planning on buying a place. Once you sign that contract the only person who is going to drag their feet is the bank. The only person who can afford to drag their feet is the incoming mortgagee. So make sure - and by that I mean have something in WRITING - that your lender has unconditionally approved your loan and that you are READY to go. It is what will delay you. It is what will delay settlement - unless a lawyer screws up or the outgoing mortgagee throws a hissy fit (which they shouldn't because they should get a payout).

And NEVER sign a contract without talking to your lawyer. There are some nasty things hidden in contracts of sale. Don't ever assume that people are good or that they wont screw you over. They will and they won't care. Look out for yourself. Get the right people in your corner and it will matter. 

Timing for an off-the-plan loan

When would you expect to acquire finance when buying off the plan? I thought (perhaps naively) that I could acquire a loan immediately once I'd signed the contract, or that banks would be able to project savings and future finances. Apparently none of these things are true. You can only acquire finance about 3 months (at most) from settlement. That's coming a lot closer for me. But it's still not here. I almost feel like I haven't done anything because I don't have that mountain of debt people keep warning me about. Ah well, more time for me before the guillotine falls. 

Time off work

It's been wonderful. I've been sleeping in and getting to things I've left undone for too long. I've watched tv series and movies and applied for some more jobs. But this time is quickly coming to an end and I cannot be happy about it. It is so nice to have a moment in which to take stock of your life. I am going to miss it awfully. 

Home loans

I was speaking to a friend about home loans. We were discussing the benefits of guarantor vs larger deposit.

IF you have that 20% deposit, this is probably not going to be very useful for you.. But if you're like me and not quite there then it might be.

I have approximately an 88% deposit at the moment. As I'm buying off the plan and trying to save (the no job thing is putting a bit of a damper on that) more for my deposit, I'll see what I end up with. But for now, lets use what I've got.

So, I can either pay LMI, which will be a few thousand dollars, or my darling mother has offered to guarantor my loan. This guarantee can be limited or it can be unlimited. If you're getting someone to guarantee your loan, I would recommend that you limit their guarantee. Then they're not exposed to the extent of your debt, it'll just be your property and everything else you might own that's on the line...

So, the point is, your parent can guarantee a portion of the loan, mostly your difference of deposit (to 80%) plus a little more for bank security. This is a great option for those without 80% as it will (potentially) save them that LMI - good huh?

Time

Obviously I have a lot of time on my hands. And I'm finding it hard to fill. You have so much identity tied up in your work. I mean they tell you that, but you don't really know until you're without it. I was offered a job from a past employer. He likes my work, but I don't know how stable the organisation is. But at this point does it matter? I need the job. Any job really and this will be a good one. But I don't know about salary, conditions, anything really. But he's pretty ad hoc by nature, so that's not unusual. But I'm still freaking out a little.

Employment

As anyone who has bought a house will know, the banks want to see employment. They want to see genuine savings. They want to see stability. 

I was made redundant today. 

It's a little terrifying. I need to be employed. I need that stability. I am so worried. 

I have an option for a job, but I'm not sure how stable it is as it's a small firm which has just started. I want something more than that. I just can't afford to be picky at this stage. 

Pffffff. This is stressful. 

Just a little reminder...

Property Spruikers

I found a nice little video on ASIC's money smart about this. Here is the transcript https://www.moneysmart.gov.au/tools-and-resources/videos/video-property-spruikers-seminars-investigated

Investment Choices

So, I know I'm buying a house at the moment, but if I wasn't do you want to know where I'd be putting my money?

I'd put 10k aside for emergencies and then I'd put the rest into a share portfolio.

I know shares seem risky and hard to figure out. I know they make headlines - "Investors lose thousands!" etc. But what they don't tell you is that if you bet on the good horses, then you make money.

For example: I bought 4 different shares. 3 were great choices, 1 wasn't. I'm still on top. The good choices are making me 9-14%, the bad choice lost me $300. Now I'm not playing with big money (I don't have it). I'm just putting in a thousand here and six hundred there. I read Motley Fool and the Barefoot Investor. I like Barefoot better but can't subscribe due to tight finances for the next 6 months.

Now don't just rush out and buy whatever. Always research, always make sure it's a good bet, and most of the time that wins through.

I would highly recommend it. It beats the 1.95% you can earn in "high interest" savings accounts, and it's a lot more fun.

Saving

So part of buying off the plan means I have some time to save some more for a deposit. BUT this is hard. Like really hard. I know people say that it's difficult to do but man did I underestimate that. You do grow into your salary. It's not fun. It sucks, like when I was actually poor. I don't want to save this hard but I want to get ahead early. So I guess I have to. You don't get something for nothing. It's all about compromise. So I'm sticking with my choice and working two jobs and saving as much as I can. I'm even thinking of taking a steadier third job. Sigh. Sometimes I feel so boring.

Terms in a contract

Warning - Rant ahead

I have had some frustrating and somewhat aggravating instances lately where the other party to a contract or while negotiations for a contract, has not listened to the terms agreed or has tried to make me do something outside the terms of the contract.

After being a 'nice' person for a number of years I have finally had enough. I will not be nice to you if you try and bully me into a corner. I will not be nice to you if you ignore our agreement and try to get money out of me faster. I will not be nice to you if you stop showing respect for me or try and take advantage of me. I know what I am entitled to and I know my obligations. If I am not obliged to undertake a task and you request it "under the contract", guess what? I read the contract. And if it's not there, you can jump. If we've agreed to something and you change it I will not let it slide. I am sick of people assuming I will be fine with it when they try this. If you try this I will stand tall and scream back at you (mostly this is figurative) - You cannot do this. It is not allowed. Stop trying.

It damages the relationship, but why would you want to be working with or dealing with someone who shows so little respect for you? I certainly wouldn't. So I will be watching you carefully, and if you work with me and negotiate fairly and stick to our agreements, we have no problem. I will go out of my way to help you out. If you don't and you assume you can take my compliance for granted - you've got another thing coming.

Rant over.

Take a Chance

The Property Club (The Property Investment Group)

I know I've been talking about this mysterious 'Property Club' for a while now. So I had a random thought this morning. I should link it. So, here: http://www.propertyclub.com.au/

That's what I mean.

Then  I started reading up on them.
http://www.abc.net.au/news/2014-08-12/high-flying-investment-club-sued-by-couple-over-$1m-in-loans/5665976

http://www.whocrashedtheeconomy.com.au/blog/2014/08/the-investors-clubproperty-club-embroiled-in-emerging-australian-subprime-crisis/

And stories like that came popping up.

I'm not very keen on them anymore.

Any thoughts?

I'm buying it!

The townhouse I inspected turned out to be part of a large complex that had plenty of units available. The townhouse was out of my price range but I talked to my broker and figured out my finances and I have bought something in the same complex. It is so much more than I thought I'd spend. I have so much more of a deposit because settlement isn't until December. It's looking up ladies and gents!

I will move in in December.

Into a 2 bed, 2 bath, 2 car space ground floor unit with a swimming pool and grounds and a BBQ area. It's very exciting. And it will be mine!!!

Reading Up

I'm currently reading Paul Do's book "I Buy Houses". It relates mostly to investing in housing and since I'm intending on turning my live in home into an investment I feel like it's something I should take into account when considering my options.

I wanted to put in a particular quote that I just read which resonates with me. It's in a section entitled 'watch out for hidden agendas' and explains my property group to a T.

"Watch out for hidden agendas"
Although real estate spruikers explain that it is the land that appreciates while the building depreciates, they do not explain why they only spruik new townhouses and apartments...the reason is that the developers pay them a marketing commission for each property they sell to their clients.

He suggests that you balance their advice with your own due diligence and a real estate agent's advice on the established units in the area.

Food for thought.

House Hunting

I keep forgetting how influential the actual feel of the place is once you're house hunting. I went to see some townhouses today and now I really want a two bedroom place that's way out of my price range. They do have an option that is in my price range but I will have a look and see how I go with the figures. I need to talk to my broker tomorrow.

No stamp duty and a $10,000 leg up from the government is a wonderful thing.

But this is crazy. I'm buying a house! Well, not a house, but something that will be my own. My partner came looking with me. He complained about the size of the oven. I told him we could amend that. He got so excited. So was I. Not renting will be a really nice change. But it's a little intimidating - all that debt. But there's never been a better time to do it. May as well jump huh?

Oh, and by the time I finally got the agent on the phone, all the ones I wanted in the complex I was talking about in my last post were gone. Sigh.

Is it the one?

I think I've found it! I think I've found the unit I want to buy!

I am inspecting tomorrow, more details to come.