Debt vs Cashflow – Part 1: Make It Keep It
- November 23rd, 2010
- Posted in Property Investing Strategies
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I’d like to explain to you my make it, keep it philosophy. I came up with this quite some time ago. I don’t know about you, but I like to make money and I also like to keep it. So I call it the make it, keep it philosophy, or, as I’ve nicknamed it, the MIKI.
Investing in property has a lot of ups and downs so it is critical that you have a really good reason behind what you are doing. I am talking about the “why” behind your investing. Money is a shallow goal so you have to have something that really drives you to succeed.
Something that is just as important as your reason for investing is your strategy to be able to keep the money you make, which is why I created the MIKI.
Quite a number of years ago, we sat down and tried to work out what might be the best way to create a passive income through property and then how we would sustain that wealth and effectively apply the MIKI.
At the time we looked at a number of strategies. Positive gearing was the one being touted the most, so we looked at that first. We did the numbers and figured out that we would need something like 200 properties to create the income we desired at the time.
This all seemed well and good but with that many properties comes a lot of risk and a lot of problems – 200 in fact…. But I will elaborate on that in my next post.
When you are putting together your wealth creation plan make sure you have a strategy in place to keep the wealth once you make it.
What’s your MIKI strategy? I would love to hear your comments below.
PS MIKI strategy – I do not have one, but often wondered what I would do with the money to keep on earning income while preserving the original investment. At this stage, I am a long way off having that worry – but I am sure there are numerous ways I could invest the money. The safest for me in the short term would be to place the money in Term Deposits until I found a safe way to preserve my money while earning more to reach my ultimate goals.
Great feedback Judith – thanks! Sometimes we can get too focused on the money and lose sight of the real goal – what we can do with the money. Its great to be having this line of thought before entering the property market – well done
Sounds good to me, in fact it sounds the best way to me!
I am 56yo, now single with a job which pays average income and is casual in nature. I have a tiny mortgage on a 4 bedroom contemporary home in an area which is in high demand for family homes and in an area which is still growing and has new infrastructure happening in the immediate area and 10 minutes from a regional city. I do not have any other debts.
I have been reliably informed I am in a good position to invest in property, but I have been afraid to take the plunge for various reasons – economic downturn and I do not want to take on massive debt and risk in a large buy and hold property portfolio and putting my current security at risk.
In addition, I could not really see that these long-term strategies would meet my goals within the timeframe I would like. I am looking for ideas and help to understand how the deals are done; and who I can call on for help for short-term investing – buy and sell strategies.
Your ideas of investing sound pretty good to me.
Judith
Hi Judith, thanks for your insights. Its often only ourselves that hold us back. You sound like you are in a good place to take the plunge. Have the belief to do so and i wish you all the success you deserve.