Investing - Property/Shares
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@voodoo said in Investing - Property/Shares:
@MajorRage said in Investing - Property/Shares:
@voodoo said in Investing - Property/Shares:
@MajorRage said in Investing - Property/Shares:
@Victor-Meldrew said in Investing - Property/Shares:
@MajorRage said in Investing - Property/Shares:
Give up sleep more often - that's a great and informative post.Oh, it may be worth also looking at the future of electricity. It's something that seems to have gone un noticed that I'd look into. What will x million electric cars do to power supply?
I'd invest in companies rolling out the fast-charge stations. Going to be a bread and butter business sector, with a stable user base and a lot of start-ups will get snapped up by the big boys.
But where do they get the power from? Thats the question I have.
2 entirely different qns obviously.
As to the charging stations, I'd say they remain a pretty risky investment. How do you protect against a major petrol co adding their own to their existing infra? Or the roadside cafes doing the same. Or Tesla rolling out their own in a deal with Coles, Wooli, Tescos etc. I just don't see how you can pick a winner there with any confidence?
As to power generation, its not so simple to say more EVs = more electricity demand. Its about a completely different approach to electricity. Here in Oz we have a legacy setup of massive coal fired generation and power lines distributing that all the way along the eastern seaboard. Now we see a move to to distributed generation, where not only smaller power plants (almost all renewable) exist closer to loads, but also homes generating large portions of their power requirements. EVs can draw power from installed home batteries, and can act as a supplier of power when not being used. They're massive batteries at the end of the day.
The challenges are in some way technical, but really more about displacing the incumbents and the existing infrastructure.
I don't think we have a supply issue, just a big adjustment to make.
With all due respect, Australia sales of electric cars aren't going to be any real driver of anything. Energy sources down there are abundant.
I'm talking more Europe, China & US.
You'll have to be more offensive than that to disrespect me 😎
Europe is going through a transition for sure as it figures out what to do with nuclear, offshore wind, and a resurgence of thermal (gas) power. But China and the US really have no shortage of generation sources. China is developing renewables faster than any other country, again, its not a tech issue, its a desire issue. For them its more about security of supply than saving the environment, but the result is the same. Equally the US has plenty of resources available. They're really not that different to Australia, just on a much bigger scale.
And all of those countries will benefit from the points I mentioned earlier. As the grid gets smarter, EV's can help to smooth loads, power homes at certain times. Its not just a new, big drain on the power supply.
China is in process of building a fleet of coal plants to produce an insane number of GWs!
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@Victor-Meldrew said in Investing - Property/Shares:
I can really only talk about the UK, but here you can no longer off-set mortgage/loan interest against income on rental property and you get hit with CGT when you sell. You can make a fair bit of money moving from house to house and improving it, but that's disruptive if you have a family, you get hit for estate agents fees, Stamp duty & VAT on the cost of improving it.
But you can put £20k a year into an ISA with low charges and just let that grow, take the dividend income or invest in what shares or Unit Trusts you want and sell when you want - totally tax-free.
Ditto with pensions where you can put in up to £40k a year of your income (which is taken off your taxable income), let that grow and when you reach 50, you are effectively taxed at 11.5% on the first £55k of income
In UK can get a pretty good yield. FTSE100 currently 4.7%. To that one can expect over ten years to get 3% p.a. real capital return and some inflation, say 1%. All up perhaps 9% compound, WITH NO GEARING.
CGT is 20% max. Tax on divs 7.5% on first £25k of income.
One can build a nice little retirement plan around that.
And as @Victor-Meldrew notes, scope for some smart tax planning.
Meanwhile, residential property prices are driven by propensity of banks to lend against it. There has been a MASSIVE increase in bank credit in last 30 years. At some point that will stop and prices will stall. The interesting question then will be how many people have been funding their lifestyles off equity release?
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@MajorRage said in Investing - Property/Shares:
But where do they get the power from? Thats the question I have.
I'd guess from the National Grid on a wholesale basis or, as is being proposed in the South West, from solar/wind farms next to A road and motorways.
The return on a wind farm was about 10% about 5 years back but not many farmers could put in the £1m capital so they leased the land or brought in partners. Can see a similar thing happening with EV charging and government grants.
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@pakman said in Investing - Property/Shares:
Friends tell me the price of replacing the battery drives the resale value.
Resale values seem to hold well for the Kia Hyundai vehicles - if you can find a used one.
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@junior I've quoted this before but it has been one of my investment axioms for decades
Rockefeller said he made a fortune buying high and selling low.
I'm not a totally passive investor; I have a strategy and I review my portfolio regularly but I do play the long game and I definitely don't chase the hot tips (by the time I learn of them they're already cool) or try and catch the peaks and troughs.
It's worked well for me. My problem has been having to bail out friends and family who get into strife. I've always been paid back - eventually - but the opportunity cost has probably been about 1/2 Mill in terms of price movements while I was out of the market and the ongoing impact of that. Illustrates the value of letting the investments sit. It's the closest example I have to trying to be a proper trader. Still if helping whanau isn't what money's for what is the point.
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@junior said in Investing - Property/Shares:
@Snowy said in Investing - Property/Shares:
@taniwharugby said in Happiness Scale:
@Snowy my bank manager suggested I should be looking at an investment property, I said yeah nah.
I'm not good with handling stress relating to finances and I expect that would just about kill me, am pretty risk adverse when it comes to money.
If you are getting into too much debt to do it, it would be pretty stressful.
Then you get a tenant who smokes P in it and things get ugly quickly, bloody bitch. Two young kids too. It was insured but it took me six months to sort it out. It's also getting more difficult to get rid of shit tenants with changes to laws. They aren't exactly helping with rental property shortages.
Yes to both comments above - tracker funds aren't a bad way to go and the diversity reduces risk. The same thing applies though, never be in a position where you have to sell, whatever the investment.
My old man, who has made plenty out of shares (was an accountant) gave me a tip when I was trading quite a lot and markets were quite volatile. If you have made a large capital gain sell what it cost you, and keep the rest. Effectively means that you have no risk as what you kept cost you nothing. Stress free stock holdings.
Define "Large"? And what would you do with the money once you have sold? Buy some other shares?
It depends how much that you had to start with. Enough that you still have reasonable holding after selling. Having a whole lot of odd lots isn't much good. And yes, buy some other shares, diversify and spread your risk. Both my grandfather and father were accountants and did this for over 100 years in total, and it worked for both of them. I should have followed their model a bit more than having too much in property. Some of that worked well but I would have been better off with at least some in stocks.
Trying to reallocate it now. -
@Snowy I've never had a property investment. I decided to gain exposure to property by investing in companies who made money in that sector. Mainly because I didn't want the hassles you faced.
I do get the attraction of property i.e. you get 100% of the total CG for a minimal outlay but I like the flexibility and liquidity of equities.
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@dogmeat said in Investing - Property/Shares:
@Snowy I've never had a property investment. I decided to gain exposure to property by investing in companies who made money in that sector. Mainly because I didn't want the hassles you faced.
I do get the attraction of property i.e. you get 100% of the total CG for a minimal outlay but I like the flexibility and liquidity of equities.
Liquidity is another of my old man's catch phrases. I've never been in a position where I had to sell in a hurry, so haven't been caught out, but it is a valid point.
Your first point is where I am going now. Best of both worlds, still in the property market but more diversified risk. Looking closely at peer to peer lending. Squirrel and Zagga (had Harmoney and it was O.K but they sold out). Good returns, secured against property with out actually owning it and the issues that go with that.
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Might need an energy thread
@pakman said in Investing - Property/Shares:
@voodoo said in Investing - Property/Shares:
And all of those countries will benefit from the points I mentioned earlier. As the grid gets smarter, EV's can help to smooth loads, power homes at certain times. Its not just a new, big drain on the power supply.
China is in process of building a fleet of coal plants to produce an insane number of GWs!
Definitely an issue - some are designed to replace older, less efficient plants. More interesting is that capacity factor across the fleet is below 50% as of 2019. Why build new coal when you're not even using half of what you have?
Overbuild has been part of their planning for decades, but at 50% CF you'd surely mothball any new plans until that rose to mid-70s percent and in the meantime add a crapload of wind or even nuclear, given it is China after all.
Some of it is being driven by the need to stimulate growth by the continuation of jobs and action by the big power companies. Some by politics - quoting "energy security" is always a winner.
It presents a further geopolitical challenge if countries start accounting for carbon trading in their tariffs. Who is going to be the first to tell China their goods cost more due to coal?
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@Victor-Meldrew said in Investing - Property/Shares:
@pakman said in Investing - Property/Shares:
Friends tell me the price of replacing the battery drives the resale value.
Resale values seem to hold well for the Kia Hyundai vehicles - if you can find a used one.
Have been watching Robert Llewellyn on his YouTube channel about EVs and one area that might provide a ready source of second hand EVs is the lease market. Three years down the track, a few start popping up, and they have favourable policies in place for zero-carbon emissions in the lease market that can get some in the door who would otherwise not be able to afford an EV.
Goodness knows dealers aren't pushing them because they're less profitable than fuel burners on service etc.
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@NTA said in Investing - Property/Shares:
Goodness knows dealers aren't pushing them because they're less profitable than fuel burners on service etc.
They're pushing them quite hard here. Diesel and petrol car sales are banned here in 9 years time
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A couple of other comments:
Tech stocks - we have seen all of this before. I think it took 18 years for the Nasdaq to get back to where it was in 1999. I'm more with Warren Buffet, invest in something that people actually need food, clothing, etc (he was big into Coca Cola though). Tech has its place but easily gets over inflated. FOMO I suppose.Without getting too far into EVs again, and this is investment related, you can get up to 10% ROI on one. Depending on how many solar panels you put in and what you spend on the car.
I have just calculated that my Dad spent about $180k and is getting around 6% (bloody lovely but expensive car) can easily do better than that. You do have to be able to charge the car from the panels during the day though. If you are at work it doesn't add up the same. -
@Snowy said in Investing - Property/Shares:
Tech stocks - we have seen all of this before.
This time you can add regulation and anti-trust actions to the risks. Google is a prime candidate to be broken up along with Apple. Will be interesting to see how the Oz - Google News royalty spat goes.
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@Victor-Meldrew said in Investing - Property/Shares:
@Snowy said in Investing - Property/Shares:
Tech stocks - we have seen all of this before.
This time you can add regulation and anti-trust actions to the risks. Google is a prime candidate to be broken up along with Apple. Will be interesting to see how the Oz - Google News royalty spat goes.
Which might be a reason Google valuation metrics were only FANG ones which were half reasonable when I looked late last year.
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@Snowy said in Investing - Property/Shares:
@dogmeat said in Investing - Property/Shares:
@Snowy I've never had a property investment. I decided to gain exposure to property by investing in companies who made money in that sector. Mainly because I didn't want the hassles you faced.
I do get the attraction of property i.e. you get 100% of the total CG for a minimal outlay but I like the flexibility and liquidity of equities.
Liquidity is another of my old man's catch phrases. I've never been in a position where I had to sell in a hurry, so haven't been caught out, but it is a valid point.
Your first point is where I am going now. Best of both worlds, still in the property market but more diversified risk. Looking closely at peer to peer lending. Squirrel and Zagga (had Harmoney and it was O.K but they sold out). Good returns, secured against property with out actually owning it and the issues that go with that.
Without having looked into it myself (TL:DR), what happens when the loan isn't repaid and you have to liquidate the secured property - who takes responsibility for that? Because I imagine that would be a complete ball ache for an investor who may have only lent a relatively small sum.
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@junior Done by the company that "owns" the loan ( the two mentioned). LVRs are pretty good (for a lender) so disposal of a default means it is pretty secure. Harmoney was very small units ($20 I think) and they had plenty of defaults, but interest rates were high to cover it.
Zagga is only 1K, Squirrel only $500 for minimum investment but obviously much easier to dp more than that. Most of them average $750k loans and they go really fast.
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I cant really actively invest in shares due to work reasons (independence etc) so just have kiwisaver which isnt one Im actively involved in so basically runs on autopilot leaving me at the mercy of the investment managers (who I actually do rate).
This means property is more for me. Have our home and a rental on the shore plus the bach but wouldn't mind another rental this year
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@JK I'm selling one in a few weeks at auction (if not sold prior of course). Just giving it a tidy up at the moment. I did a complete reno on it about 4 years ago. I've made my money out of it but it will go higher I think. Getting a good tenant is the key. PM me if interested.
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https://www.pggwre.co.nz/property/MAT33663/gore-road-matamata/
For those that want a lifestyle block, we have sliced a hectare off. Apparently it's the only one in the district but I can't back that up. They aren't lasting though and are selling at overs in my opinion.
We did consider building on it and selling but neither of us have that extra bit of time to organise so decided to do it the "stress free" way.
I think someone will buy and get a house built and transported onto it and then sell. Probably a very quick way making a $300k profit.