Gold and Silver or Property?

Discussion in 'Markets & Economies' started by browski, Sep 13, 2012.

  1. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    [​IMG]



    For those who think things are about to get a bit rough: The Exter Pyramid

    deleveraging happens from top to bottom.

    Liquidity of asset is the key.

    Notice how RE and small businesses are illiquid, not good in K-winter.



    [​IMG]
     
  2. renovator

    renovator Well-Known Member

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    Oh no not another 50% drop believer :rolleyes:

    RE can drop 60% & no one notices ? :lol: ever thought about becoming a comedian ?
     
  3. Sargeant Argent

    Sargeant Argent New Member

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    If u think a 50 percent drop us possible think again. Would you believe it if someone told you a 300 percent rise was coming 15 years ago?
    Housing prices are starting to slide in a lot of markets. Vancouver Canadas most expensive market is down nearly 20 percent this year. another 10 percent by July and I win a 40 dollar bet!
    The money to be made in real estate has come and gone but in the next 3-5 years I see massive buying oppourtunities for buying rental properties especially for tradesman like us who'll be able to clean up a rough looking unit and turn it into a profitable rental. My stack is sitting there waiting for that day.
     
  4. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    Thanks for making my point.

    once again, it dropped 20% (real terms) in the last 3 years and I see no panic, just people laughing.

    enjoy!
     
  5. Ernster

    Ernster New Member

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    "Real terms" isn't real to them though. It's all about the price figure.

    You could tell these people till their blue in the face and they will choose to not believe the inflation or RE cost measured by Gold, argument.

    Remember we are in the denial stage now.

    House prices have "bottomed", interest rates are down to GFC leves cheap cheap, everything's all good.... we are on our way back up :lol:
     
  6. renovator

    renovator Well-Known Member

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    No.... some areas dropped 20% some stayed even .

    I dont know what point you made . Your a tinfoil hat wearing loony ?

    I was laughing at your ridiculous statement that no one will notice if it dropped 60% . Most people here notice if it drops 1% so not noticing 60% is a joke

    You have made a few good points but there is a line where it becomes total BS & you just crossed it .
     
  7. long88

    long88 Member

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    hi value creator,

    by looking at the us housing chart. it looks like it is now good to cash out from gold to RE.. as it is now almost reaching the support of 100 oz of gold to buy a house in US. (currently about 157 ounces..)

    Australia RE, still have a long way to drop / gold goes up in price.

    does this means that it the gold bubble is over?
     
  8. renovator

    renovator Well-Known Member

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    Comparing gold/house prices is not realistic if i looked at them & done nothing in the last few years i would have missed out on lots of profit that i made "in real terms " as you put it .

    I will say the money i made far out weighed inflation or the gains made in gold or having the money in the bank . So whos losing ? not me :p:

    You just cant punch one factor in & run your life /business decisions by it . What a narrow minded approach to any investment .

    Theres many factors you need to take into consideration & just because one doesnt meet "your " criteria shouldnt be enough to can an otherwise reasonable investment strategy .

    There needs to be at least 4 or 5 factors & one bad one means its 20 or 25% of the equation . I look at many more than 5 factors so its an even smaller % of my equation .
     
  9. Ernster

    Ernster New Member

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    Renovator simply put, I'm only saying RE probably isnt the amazing investment TODAY and in the last 1-2 years that it has been in the past.

    No doubt it was one of the best investments in our time, but I believe in general terms that is coming to an end.

    Sure if you know what you're doing you may make a nice profit in certain segments of RE but I'm just speaking from a mass market/sheeple perspective who tend to buy blind and think RE always goes up.

    Plus I didn't mean that the gold to RE ratio is the most important thing, I'm just saying the sheeple wouldn't believe the concept or care even if you did show them them.
     
  10. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    I think you should google it and read up on "real term" vs "nominal" price.


    And this has nothing to do with gold.


    If the nominal price of a property "stays even" and the inflation is 10%...

    your house just went down 10%. This is what is call real terms.

    Then you receive your rates and they went up 10%. Electricity went up 15%, if your lucky. why is that?

    RE is a religion in Australia. You're in love with an asset class.

    I have zero emotional attachment. I just go by the numbers.

    I'll drop gold when the numbers tell me.
     
  11. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    Bernanke buys $1T/year in mortgages

    ZIRP/NIRP

    Manipulation of the housing inventory (2M houses forclosed not on the market yet)

    And all they get is that little, once again almost nothing in real terms.

    I think it's a fake.

    I mean, once the dollar stop being the reserve currency (faster than we think), all these numbers won't mean anything.


    "The government's idea right now is we are going to export our way out of this and
    when I asked a senior Obama administration official last week how are we going to
    grow exports if we won't allow nominal wage deflation? And he says, we are just
    going to kill the dollar.
    I said okayI mean, that's the only answer."

    - Kyle Bass, 2011

    Investing in the us is going long the USD. I wouldn't.
     
  12. nonrecourse

    nonrecourse Well-Known Member

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    Sigh.... :rolleyes: another false prophet with no clothes. For three decades in my own small business I have smiled when fiscal pygmies hand me a wad of cash and whisper I don't need a receipt with a knowing wink. Everything is declared and because of that our property porfolio and gold bullion hedges increase in value year in and year out.

    Problem with you is your a speculator through and through. REAL ESTATE when you own it outright with commercial tenants that pay all the outgoings (yes even the land tax when they are a publically listed company) plus they pay you wads of cash some of which is directed into the gold liquidity moats that you have accumulated for each property that is held in a trust.

    I said some because the rest is directed at continuing to pay down those negatively geared blue chip properties acquired before 2005.

    For a speculator thats not sexy because it takes decades to set up, build the foundations and prepare your financial affairs so you own nothing but control everything.

    Kind Regards
    non recourse
     
  13. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    :D hilarious
     
  14. nonrecourse

    nonrecourse Well-Known Member

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    As I said in an earlier post some of the information you have contributed is worthy of consideration. I just don't agree with your take on it. Keep contributing.

    Kind Regards
    non recourse
     
  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    Good discussion.

    @vc, regarding capital gain on properties purchased in the next decade - that is not a part of my retirement investment goals. Cash flow via rental return is the main consideration so if there is a dip in the next 5 years, I will buy and not expect to see a capital gain in my lifetime, nor am I planning for one. Neither will my kids if I can arrange a decent trust structure ;) It's my great grandkids that could screw it all up!! :lol:
     
  16. renovator

    renovator Well-Known Member

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    No not in love with the asset class just money .Money means fun ...no mon no fun

    I dont get your maths

    Heres the way i see it ...your house is worth we'll say 500K to make it simple

    10% of that is 50K

    Your living expenses for a year your rates electricity food etc cost you what 30K so if they rise 10% by inflation thats 3K .

    But ive lost 50K ? What ? :lol: theres 47k missing from your equation .

    I talk in real money not hypothetical money you cant spend it :p: ..... real terms my white arse i dont care what google says .

    Yes your right it has nothing to do with gold im not trying to project my future on a wish on something that might fall in price & not produce an income .

    My main goal is to produce income in the long run & i dont care if it costs me money to do it in the end i'l get it back . ...
     
  17. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    hey renovator,

    I don't know if you noticed, but $1M doesn't get you as far as 10 years ago.

    What I'm talking about is PURCHASING POWER.

    How many Litres of fuel can your $500k house buy RIGHT NOW?
    How many loaf of bread?
    How many once of gold?
    How many trips to Bali?
    How much fun?

    So how about next year? and the year after?

    If it's less, your asset is losing power. It lost value. Even though the price tag might still say $500K.

    Your house can still buy $500K, but it's buying less and less of everything else.

    Same with gold. People say "it went up 10% this year, not bad". I'm thinking "it broke even. Its doing its job."


    So you can tell me: I don't care if my building loses 50% in value, somebody else paid for it anyways.

    I'll tell you: Ok mate, I believe you.:/


    So what I'm talking about is WEALTH PRESERVATION. Not wealth creation.

    I can't judge what is the best way for you to create cashflow. We all have different skillsets and ressources.

    For me it would be a step down to start collecting rents, but that's my numbers.

    All I'm saying is that, in this time (K-winter) and place (Australia), and timing (market topping) property is not a good way to preserve wealth. I would be a seller, not a buyer.

    But hey people sure are impressed when you tell them you own half a dozen buildings.

    Tell them you own 1000 oz of gold and see their reaction.;)

    (hint: blank stare)

    https://www.youtube.com/watch?v=ndshbH3qZ6Y

    that's about all I have to say about that:cool:
     
  18. renovator

    renovator Well-Known Member

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    Then there is the positive cashflow generated from the property .

    So someone tell me where my losses are

    I dont intend to sell the property so there is no losses only gains .

    Thats the difference here some people use "real terms " some use "google real terms "........ you cant spend google money

    I dont care if the asset is depreciating on paper as long as its giving returns in "real money "

    You notice i used the term " I dont care " a couple of times in my posts ?

    Thats because they dont matter so" i dont care "all that matters is the end result....... generating income or having an asset thats paying for itself & will eventually provide an income ...

    Now lets say i could buy gold with credit & lease it out for the amount it cost me for the payments i would be buying gold hand over fist (to a point because it still cant produce an income you need to remember this )but i cant i need to service the loan with my own money so im effectively going nowhere im paying for something that will never produce income maybe it will go up & i make some capital gains then i need to pay CGT on it if i want to sell it & release those gains .

    I think people need to see RE is set up to help you gain financial independence by the people that usually take all your money .

    Personally i think gold is in just as big of a bubble as RE ...... I know which one i'd rather be holding when it bursts

    some things take time & patience & it seems a lot of people on this site want money returned from day one . .
     
  19. renovator

    renovator Well-Known Member

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    Lets focus on these two statements ....

    Same with gold. People say "it went up 10% this year, not bad". I'm thinking "it broke even. Its doing its job."

    This i agree with ^^^^^ But theres a big BUT I didnt produce any income


    So you can tell me: I don't care if my building loses 50% in value, somebody else paid for it anyways.

    Agree again ^^^^ you forgot to add it is still producing an income & paying for my basic needs . Is your gold doing that ?
     
  20. valuecreator

    valuecreator Well-Known Member Silver Stacker

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    That's great, as long as you don't include them in your net worth.

    You're talking about getting rich. I'm talking about staying rich.

    Gold sucked the big one to preserve wealth in the 80's and 90's.

    RE is to suck big time for a while, starting 3 years ago.

    cap. appreciation 0% + yield 7% (that's you income, that sucks) - inflation 10% = you're still in the red.

    I just show you where your loss is. I still think you're in love with the building, renovator
     

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