@*kazumi* wrote:
@martinw-48 wrote:
Brer, I've been getting by on a low income since '93.
My house is worth very little.
Purchase price was twenty thousand.
Where are you? I am in not particularly expensive area, but just before christmas a fibro house in "original" 1940s condition on small block sold for over $600 000. Houses in good condition and in brick are over $1 000 000. I am sure your house is worth lot more than what you paid, BUT that does not mean you should be borrowing against it to gamble. There is a high probability you would lose.
I don't think anyone would be wise to borrow against their house to gamble. Playing the pokies or tickets in lotto are a bit of fun for some people, but the odds of winning are stacked against the player.
Making prudent investment decisions in shares and property, based on extensive research still have an element of risk, but if done intelligently the rewards regularly outweigh the risks. In the case of the investments I made which Martin noted at the start of the thread, the investments where very extensively researched, the downsides understood and measures where taken to mitigate the risks.
In the case of the investment properties that where purchased first, more than half where positively geared ( the rent was more than the combined utilities costs and the costs of servicing the loans ). This was achieved by buying properties in terrible shape that where due for demolition and restoring them myself at minimal cost. ( I had a builders licence at the time ). On the couple of houses that where slightly negatively geared ( costs where greater than income ) they where in prime locations in a rapidly rising market and the risks where offset by the positively geared properties . ie. the combined property portfolio was positively geared and rent spread across a number of properties.
All of the properties where also located in an area of rapidly increasing population base, rapidly rising rents and rapidly rising housing prices, further mitigating any risks. The properties where all sold around twelve months before the property cycle peaked at a 10% discount to the absolute peak of the market, but after doubling in value over the 5-7 year period I held them. ie. Timed to get out and take profits before market instability hit. Again based on research and analysis..
In the case of share trading through the financial crisis I was conducting two types of trade. The first was " normal" trading buying shares in several gold miners who where regularly cycling in a tight band. Buying at the low point of the cycle and selling at the high point with stops in place should they break below the normal lower cycling level. ie. if they broke out below the normal trading band, the shares where automatically sold at a small loss, mitigating downside risk. The companies all had no or low debt and as gold is seen as a safe haven investment in times of turbulence, had more upside potential than downside risk.
The other method I was using was a unique system I devised in response to an anomaly in the market. Too hard to explain here, but lets just say of 17 trades I only lost on one, ( several hundred dollars ) but made up to $7000 per trade on an investment of $15,000 on the others, most profits being in the $3000 - $4000 range per trade.
Investing the profits from share trading in an adjoining farm property, twenty minutes drive from the city fringe at 40% of its normal value, was never going to be a risk and gave me the opportunity to scale my hobby farm to a commercial size, returning the investment many times over.
There is a huge difference between a well researched, intelligent investment and gambling. Like everything in life, you get out what you put in. Little effort, low reward, extensive effort, much greater rewards.
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