@martinw-48 wrote:
I'm not a gambler.
I don't buy Lotto tickets.
Cham recently said that those who own their home could take out a line of credit to capatilise on the current market.
As someone who has failed at everything they've attempted except for achieving home ownership I feel it would be stupid to risk my one success to achieve something that doesn't drive me anyway, gaining money.
More money would be great but I have more money now I'm not paying for the roof over my head.
My girlfriend spends $100 a fortnight on Lotto.
I know she's had two big wins totalling fifteen thousand but in the ten years I've known her that's cost twenty six thousand.
In my mind I'm eleven thousand in front
A bit of context....The comments where made on another discussion dealing with the fallout of the corona virus. Another poster ( rogespeed from memory ) made a couple of very pertinent posts stating that there is money to be made from chaos and also the suggestion to fish for shellfish on a falling tide and swimming fish on a rising tide. In other words investors simply need to tailor their investment strategy to the environment they are in. All great advice. I made a further post agreeing with rogespeed and noting that fortune favoured the brave.
Martin responded that those with money make money, a post I partially agreed with, but noted that those who owned their own home had money tied up that they could invest if they where brave enough.
What I didn't mention ( I always get accused of bragging if I share real life experiences ) is this is exactly the strategy we used in the last financial crisis with a lot of success. We where uncomfortable with the global economic situation and before the crisis hit we sold all of our investment properties and paid out all of our loans. We then drew a $100,000 line of credit mortgaged against our home to be used for investment if a crisis hit.
The crisis did hit and for six months through the depths of the crisis we traded shares using a technique I had worked out that was specific to the panic of the crisis. We made $83,000 from the share trading before the anomaly in the market we where trading disappeared.
At that time a neighbour to our hills farm near Adelaide got into financial trouble with his trucking business. The banks where on the verge of foreclosing on him and he visited us and asked us if we would purchase an adjoining 40 acres of land at a large discount to normal value. By then the banks had basically shut up shop and where not lending money to anyone. We offered him the $83,000 profits from share trading which he accepted. ( we paid over $5000 per acre for our original property ) This was enough to save his home and business which he still owns today. Win / Win.
So all up we made around $200,000 profit in six months from trading through the financial crisis, funded by a line of credit on our house. Was it stressful, you bet, but it did help to secure our families financial position for a very long time. . Would I do it again. If I was ten years younger I wouldn't hesitate.
But at my age .... a definite NO...In my current position I am already planning for my retirement which is probably only 5 years away. If and when the next crisis hits I suspect it could be much deeper and longer lasting than the last financial crisis. Global debt is higher and sovereign banks do not have the financial ammunition to keep things afloat that they had 12 years ago. ( no room to reduce interest rates ) . The only option is quantative easing ( printing money ) which builds inflation into the system only to emerge years down the track.
My strategy next time round will be to conserve wealth as much as possible, keep working if necessary and just try to get through in one piece with assets ( land ) that will stand the test of time when rampant inflation ( from global quantative easing ) finally emerges in ten or twenty years time..
Finally though " dont try this at home kiddies ". If someone has not taken the time over many years to educate themselves on the workings of the share market and financial markets in general it would be catastrophic to " give it a go " in the depths of a financial crisis. It requires A LOT of research and previous trading experience in a more stable financial environment.
Undoubtedly though, fortune does favour the brave.
3BrNBBRz4UYdo+!~~60_7.JPG "chameleon54"){kind=avatar}
