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Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I don't believe this is measuring risk correctly. The theoretical maximum downside on an unleveraged Stock portfolio is 100%, the theoretical maximum downside on a leveraged Property portfolio is over 900%. Of cause we are talking about theoretical but what I'm getting at is just because the volatility is lower doesn't mean the risk is lower because in one situation you are using leverage and the other you are not. I would argue that a 50% leveraged broad market stock portfolio is actually in a similar risk band to a 90% leveraged properly portfolio, bring the risk adjusted returns roughly in line. And before I hear "Stocks can go to 0, where property cant"... on an individual level that may be the case, but on a broad market portfolio, for that to happen you're betting on the entire economy going to 0, that's just as preposterous as property going to 0. I would however suggest that for an average person negative equity is a lot easier to carry in property than stocks though. That said, I believe a combine strategy is best.
Thanks for your input. I tend to agree with those rough % in terms of comparing like for like on a risk adjusted returns basis. The reason most of the video focuses on an un leveraged share portfolio rather than one at 50% is it reflects how most Australians invest in shares (unleveraged). Certainly merit to holding both.
@@brendancolley I've never actually taken a proper look at the volatility of stocks compared to housing to get a proper like for like comparison but it would be an interesting exercise. Most people seem to be way more comfortable with housing leverage anyway though.
@@samuelbarnes9243property in Australia is much less volatile than shares (either ASX or international indexes). I think the largest drops in value property on aggregate has seen were between 7.5-10% and this has only happened twice. Those times were the GFC and beginning of COVID. This stability explains why people are prepared to hold >80% leverage.
It would be interesting to see how a debt recycling like approach where someone leverages their property holdings to buy shares would go after 30 years.
I disagree with the argument that margin lending isn’t suitable for Mom and Dad investors due to volatility. Even a 30% drop won’t trigger a margin call if they’re leveraged at 50% on a stock with a 70% LVR. In that case, there’s no need for concern. If you put back the LVR to 50% for shares and reinvest dividends-as most investors should do-shares would outperform property in your model. Then add the missing cash flow from property negative gearing to the shares case. Guaranteed shares come on top by quite a margin.
I don't think either PK or I said margin lending wasn't "suitable" for Mum and Dad investors. Just that 'most' Mum and Dad investors wouldn't adopt the strategy you've outlined above which I agree with. A couple of things to note: • I suspect only a very small minority of all investors would be prepared to have a 50% LVR on a share portfolio. I have done this myself so agree with your comment but it doesn't reflect the majority. • I think making a judgement about how many investor's reinvest dividends is speculation. Depends on life circumstance. • Adding the equivalent missing cashflow that would be required to hold a share portfolio requires extra discipline than doing this when investing in property. If you don't do it with a share portfolio, only your future self misses out. If you don't do it with a property the bank will sell your asset. • The comparison of this sheet looks at a portfolio of shares versus 1 property. It does not compare the scenario where equity from the property is recycled into more properties to earn more equity. I agree that if equity in the property wasn't recycled shares will greatly outperform but if the equity is recycled I'd expect the results to be closer. This scenario is for someone else to model =), I've got the ball rolling. Thanks for your educated comment.
As you correctly pointed out, leverage is the biggest driver. Interesting to get both of your views on products like NAB Equity builder allows you to buy ETFs, at a loan to value ratio of up to 80%, and on average 75%. And there's no margin call, and it's monthly loan repayments just like an investment property. ETFs such as NDQ, or S&P500 ETFs domiciled in australia. @brendan: keen to hear your thoughts on comparing a product such as that (leveraging the 75k for shares at 75% LVR into ndq), when compared to property investment as you've done. Both have pros and cons, property still probably comes out ahead, but probably doing both leveraging ETFs and IPs could be the preferred approach.
Thanks for making me aware of these products, I’m not familiar with them as it’s been over 5 years since I’ve held equities on leverage. I suspect banks are willing to allow higher gearing into ETFs and not enforce margin calls because they are diversified. Leveraging ETFs to those levels would produce large volatility in your underlying equity position as the value increases and decreases. I think most investors would be uncomfortable with such wild swings in the value of their starting capital. As with most investing, time in the market and consistency in reinvesting drives most results regardless of asset class. Remaining patient is an underrated skill in achieving returns.
True share investors typically do not follow the model suggested. They don’t sell shares every year; instead, they leverage their investments, can handle volatility, maintain a 30-year vision, reinvest dividends, and demonstrate the discipline to invest the money saved by avoiding property expenses. Most importantly, many investors look beyond Australia for opportunities
The model does not assume that a share investor sells each year, it just shows what the after sale cash impact would be IF an investor chose to sell. This can then be compared from an after tax perspective with the scenario of an investor selling a property also. I'll adjust the sheet to make that clearer.
This was quite a good discussion, and one of the few that considers leverage of shares. One poorly defined term however is the loose use of the words "trader" and "investor". This discussion is comparing property investors with share market investors. Trading is something completely different. It's a much more active approach to buying / selling with some sort of positive expectancy to beat market averages.
@@AusPropertyMasteryWithPK everyone "expects" to make a profit 😉 But it does change the leverage discussion entirely. For example, in trading futures contracts, it is not uncommon to be able to take a 95% leveraged position on a financial product such as the E-mini. But you'd be absolutely bonkers to try and do this for a long term buy & hold strategy!
one issue not often considered with property is that it can take you 10+ years to actually work out if you bought the right one , liquidity is also not valued in this comparison ... so the opportunity costs need to be considered , perhaps these things might offset the volatility of shares but it would be good to see a scenario on this ?
@@scooterstubsman1893 yes agree, we didn’t mention liquidity, which is a double edged sword with volatility too.. In term of knowing if you bought well, my experience with over 3,500 transactions suggests we don’t have to wait 10 years, rather the best outperform happens in the early years and as time goes by the standard deviation of outperformance narrows
Agree with your point Jarryd, it was something I noticed watching the video back that 'trader' and 'share market investor' are incorrectly used interchangeably. Our mistake. As someone who use to trade contracts for difference in currencies (with mixed results) I'm well aware of the difference. Hopefully watchers of the video can read these comments to help their understanding.
Thanks for a great comparison , glad you gave the shares the option of reinvestment of franked dividends .. and pumping into to the cash flow the avoided interest on the loan costs !
I had a large position in various stock markets... my 1 property that cost me 5X less, netted me more money than my entire stock portfolio over 4 years in terms of actual net earnings, not just on a % basis. When they're good, they're good, but stocks are far too volatile. Also, if they go to zero, you have nothing. If a house loses value, you still have a house.
If this was true then logically the property market as a whole should be bigger in size than the market capitalisation of stock market. We see that property market is fraction of its size. If this was true then property managers and buyers agent would be making more money and in more demand than money managers because property is giving better yield. I calculated for Werribee a recent property was sold and it returned 5.89 percent compounded and it was a landed property. A simple bond investment of 7 or 8 percent with 50 percent leverage could have given far superior returns
Great discussion. Volatility can be a pro, rather than a con, depending on the lens you look through. Keen to see stock investing in blue chips and with 20% in disruptive markets, only buying on red monthly closes and investing back the equivalent of the holding cost of the property each month and with the same starting deposit over 30 years. Dividends should also be reinvested (like rent from a tenant) Then it is fairer comparison. My hunch is shares will be higher, without leverage.
Also agree shares could be expected to be higher without leverage as they are businesses versus residential property. From a risk adjusted returns perspective, they need to be higher to justify the extra risk compared to investing in property. In reality though, an investor can get higher levels of leverage to invest in property and this helps achieve large returns on equity when assets grow. Property's superpower is argubably less in its underlying performance as an asset, but rather its ability to attract capital to help investor's get returns by using other people's (ie, banks) money.
The property investor faces negative cash flow, which isn’t reflected in the shares investor’s case. To make a fair comparison, we should account for the cash flow the property investor is using, which would then be available for the shares investor to invest. This adjustment would provide a true apples-to-apples comparison.
Nifty has given 15 percent return for the last decade. 50 percent leverage makes it 30 percent. Investment from Australia is possible through etf. Please use that and lets see the results.
This modelling is not about sharing exceptions. Did you watch the whole video? I can share investment properties that have double in 2 years. It’s about sharing averages which is what most people achieve.
I think there is a fundamental difference that you are missing. A company keeps reinvesting profits and value of share grows by expansion of value while a property value is a pureplay supply and demand question. Your money is locked in one particular suburb in a one particular house and you have no access to your money during emergency. Some one with a portfolio of 1mn can sell it in one day and buy a property but the other way around is really difficult. If your point is that Australian shares give poor yield then i completely agree. You can and should invest in emerging markets like India which has given great returns from stock market. As for leverage if you dont know how to get 80 percent leverage from bank it does not mean it doesn't exist. Nab gives me 80 percent leverage. Dividend stocks are probably worst because those companies are not investing back cash
I think best you rewatch it. You are right, stocks have better liquidity which is also a double edged sword with volatility. The rest you stated was already discussed. Without dividend re-investing, stocks perform even worse. If you have a model for nifty and the tax consequences would you mind sharing the link if you think it’s better please?
This model assumes the shares are sold every year, incurring taxes, while the property model doesn’t involve selling the property annually. For a true apples-to-apples comparison, we should assume that the shares are held for the same duration as the property investment.
The model doesn't assume the shares are sold each year, it just shows what the after sale affect would be for a given year if an investor chose to sell. This can be compared to what the after sale effect of selling property would be for the same year.
This modelling is quite simplistic and does not tell the whole story. I am an investor in both property and shares and my share portfolio returns over the past 10 years has beaten my property portfolio (even though they have more than doubled) hands down, no questions asked. There are other significant advantages you have with investing in shares rather than property. That being said, having a property portfolio does give you optionality in your investing which you may not have otherwise.
The cash loss after tax calculations seem to be wrong? Also, this comparison doesn't make sense because it's ignoring the yearly losses of holding the property - the share balance needs to be increased each year by the same amount to allow comparison. If this was included along with the existing assumptions, then shares will win
As PK mentions, there is the ability in the model to include the equivalent cash losses required to hold an IP in the share portfolio. I’m comfortable the after tax calculations are correct.
Thanks, ok but that option was never enabled for this comparison? And for the tax numbers I'm looking at that first year with 17,617 losses and 5,637 tax deduction coming out to 9,479 which doesn't seem to add up? Appreciate the analysis
I’m starting with crypto to make 70% of my retirement amount, and then using real estate to get to that last 30% over the next 10 years. Would love to know your experience/opinion on crypto, PK.
Without sharing link to the excel model which was used, it does not make any sense. There are lot of variables used here to suit one kind of investment over the other. If you torture statistics enough, it will tell what you want to hear !!!
Property and equities are generally about the same return at 8-10% and you can find leverage at 95% for equities and property as well. Property Drawdowns come in cycles and are shallow compared to equities with a 150 year sample size too. Also, the government has a vested interest in ensuring that our housing markets keeps rising. It’s not leverage or returns. Drawdowns are the key
@@venomsixxx drawdown is the % drop from peak to trough. For example, If the high median price in Sydney was $1M, and then the lowest median price in the cycle turned out to be $900k, then that cycle had a 10% drawdown. During the GFC, equities had a drawdown of >50%. Australian Property had an 8.5% drawdown over the same period. A shallow drawdown is very important when it comes to testing your emotional intelligence during a drawdown. That’s why property is the preferred vehicle. It’s not the return or the leverage. It’s the drawdowns. Now you know what 99% of investors have no idea about and makes all the wealth.
![SIX DEADLY MISTAKES [Avoid] - IT Consultant Loses SIX Property Portfolio! | Australian Investing](http://i.ytimg.com/vi/5KrwcuJL8D4/mqdefault.jpg)
![SIX DEADLY MISTAKES [Avoid] - IT Consultant Loses SIX Property Portfolio! | Australian Investing](/img/tr.png)
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Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
I don't believe this is measuring risk correctly. The theoretical maximum downside on an unleveraged Stock portfolio is 100%, the theoretical maximum downside on a leveraged Property portfolio is over 900%. Of cause we are talking about theoretical but what I'm getting at is just because the volatility is lower doesn't mean the risk is lower because in one situation you are using leverage and the other you are not. I would argue that a 50% leveraged broad market stock portfolio is actually in a similar risk band to a 90% leveraged properly portfolio, bring the risk adjusted returns roughly in line.
And before I hear "Stocks can go to 0, where property cant"... on an individual level that may be the case, but on a broad market portfolio, for that to happen you're betting on the entire economy going to 0, that's just as preposterous as property going to 0.
I would however suggest that for an average person negative equity is a lot easier to carry in property than stocks though.
That said, I believe a combine strategy is best.
Thanks for your input. I tend to agree with those rough % in terms of comparing like for like on a risk adjusted returns basis. The reason most of the video focuses on an un leveraged share portfolio rather than one at 50% is it reflects how most Australians invest in shares (unleveraged).
Certainly merit to holding both.
@@brendancolley I've never actually taken a proper look at the volatility of stocks compared to housing to get a proper like for like comparison but it would be an interesting exercise. Most people seem to be way more comfortable with housing leverage anyway though.
@@samuelbarnes9243property in Australia is much less volatile than shares (either ASX or international indexes). I think the largest drops in value property on aggregate has seen were between 7.5-10% and this has only happened twice. Those times were the GFC and beginning of COVID. This stability explains why people are prepared to hold >80% leverage.
DCA in QQQ over 20 years way outperform property. Do your back test and your own research. Land tax not considered also in this example.
Valid point on the land tax. I’ll look to add this when I get time.
It would be interesting to see how a debt recycling like approach where someone leverages their property holdings to buy shares would go after 30 years.
I disagree with the argument that margin lending isn’t suitable for Mom and Dad investors due to volatility. Even a 30% drop won’t trigger a margin call if they’re leveraged at 50% on a stock with a 70% LVR. In that case, there’s no need for concern. If you put back the LVR to 50% for shares and reinvest dividends-as most investors should do-shares would outperform property in your model. Then add the missing cash flow from property negative gearing to the shares case. Guaranteed shares come on top by quite a margin.
I don't think either PK or I said margin lending wasn't "suitable" for Mum and Dad investors. Just that 'most' Mum and Dad investors wouldn't adopt the strategy you've outlined above which I agree with.
A couple of things to note:
• I suspect only a very small minority of all investors would be prepared to have a 50% LVR on a share portfolio. I have done this myself so agree with your comment but it doesn't reflect the majority.
• I think making a judgement about how many investor's reinvest dividends is speculation. Depends on life circumstance.
• Adding the equivalent missing cashflow that would be required to hold a share portfolio requires extra discipline than doing this when investing in property. If you don't do it with a share portfolio, only your future self misses out. If you don't do it with a property the bank will sell your asset.
• The comparison of this sheet looks at a portfolio of shares versus 1 property. It does not compare the scenario where equity from the property is recycled into more properties to earn more equity. I agree that if equity in the property wasn't recycled shares will greatly outperform but if the equity is recycled I'd expect the results to be closer. This scenario is for someone else to model =), I've got the ball rolling.
Thanks for your educated comment.
As you correctly pointed out, leverage is the biggest driver.
Interesting to get both of your views on products like NAB Equity builder allows you to buy ETFs, at a loan to value ratio of up to 80%, and on average 75%. And there's no margin call, and it's monthly loan repayments just like an investment property.
ETFs such as NDQ, or S&P500 ETFs domiciled in australia.
@brendan: keen to hear your thoughts on comparing a product such as that (leveraging the 75k for shares at 75% LVR into ndq), when compared to property investment as you've done.
Both have pros and cons, property still probably comes out ahead, but probably doing both leveraging ETFs and IPs could be the preferred approach.
Thanks for making me aware of these products, I’m not familiar with them as it’s been over 5 years since I’ve held equities on leverage.
I suspect banks are willing to allow higher gearing into ETFs and not enforce margin calls because they are diversified.
Leveraging ETFs to those levels would produce large volatility in your underlying equity position as the value increases and decreases. I think most investors would be uncomfortable with such wild swings in the value of their starting capital.
As with most investing, time in the market and consistency in reinvesting drives most results regardless of asset class. Remaining patient is an underrated skill in achieving returns.
pretty sure nab discontinued that, if only they didnt
True share investors typically do not follow the model suggested. They don’t sell shares every year; instead, they leverage their investments, can handle volatility, maintain a 30-year vision, reinvest dividends, and demonstrate the discipline to invest the money saved by avoiding property expenses. Most importantly, many investors look beyond Australia for opportunities
The model does not assume that a share investor sells each year, it just shows what the after sale cash impact would be IF an investor chose to sell. This can then be compared from an after tax perspective with the scenario of an investor selling a property also.
I'll adjust the sheet to make that clearer.
This was quite a good discussion, and one of the few that considers leverage of shares.
One poorly defined term however is the loose use of the words "trader" and "investor".
This discussion is comparing property investors with share market investors.
Trading is something completely different. It's a much more active approach to buying / selling with some sort of positive expectancy to beat market averages.
Very good point. And a good word to use: positive “expectancy”.
@@AusPropertyMasteryWithPK everyone "expects" to make a profit 😉
But it does change the leverage discussion entirely. For example, in trading futures contracts, it is not uncommon to be able to take a 95% leveraged position on a financial product such as the E-mini.
But you'd be absolutely bonkers to try and do this for a long term buy & hold strategy!
one issue not often considered with property is that it can take you 10+ years to actually work out if you bought the right one , liquidity is also not valued in this comparison ... so the opportunity costs need to be considered , perhaps these things might offset the volatility of shares but it would be good to see a scenario on this ?
@@scooterstubsman1893 yes agree, we didn’t mention liquidity, which is a double edged sword with volatility too..
In term of knowing if you bought well, my experience with over 3,500 transactions suggests we don’t have to wait 10 years, rather the best outperform happens in the early years and as time goes by the standard deviation of outperformance narrows
Agree with your point Jarryd, it was something I noticed watching the video back that 'trader' and 'share market investor' are incorrectly used interchangeably. Our mistake. As someone who use to trade contracts for difference in currencies (with mixed results) I'm well aware of the difference. Hopefully watchers of the video can read these comments to help their understanding.
Can you please share the link to the financial model to download pls
Hi, if you send me your email address I can send it through.
Thanks for a great comparison , glad you gave the shares the option of reinvestment of franked dividends .. and pumping into to the cash flow the avoided interest on the loan costs !
I had a large position in various stock markets... my 1 property that cost me 5X less, netted me more money than my entire stock portfolio over 4 years in terms of actual net earnings, not just on a % basis. When they're good, they're good, but stocks are far too volatile. Also, if they go to zero, you have nothing. If a house loses value, you still have a house.
Please keep doing what you're doing!
If this was true then logically the property market as a whole should be bigger in size than the market capitalisation of stock market. We see that property market is fraction of its size. If this was true then property managers and buyers agent would be making more money and in more demand than money managers because property is giving better yield. I calculated for Werribee a recent property was sold and it returned 5.89 percent compounded and it was a landed property. A simple bond investment of 7 or 8 percent with 50 percent leverage could have given far superior returns
The property market is indeed larger than the Australian ASX market cap my friend
Werribee is not a good location.
Great discussion. Volatility can be a pro, rather than a con, depending on the lens you look through. Keen to see stock investing in blue chips and with 20% in disruptive markets, only buying on red monthly closes and investing back the equivalent of the holding cost of the property each month and with the same starting deposit over 30 years. Dividends should also be reinvested (like rent from a tenant) Then it is fairer comparison. My hunch is shares will be higher, without leverage.
Dividends were discussed and modelled and only help beat property when there is sufficient leverage
Also agree shares could be expected to be higher without leverage as they are businesses versus residential property. From a risk adjusted returns perspective, they need to be higher to justify the extra risk compared to investing in property. In reality though, an investor can get higher levels of leverage to invest in property and this helps achieve large returns on equity when assets grow. Property's superpower is argubably less in its underlying performance as an asset, but rather its ability to attract capital to help investor's get returns by using other people's (ie, banks) money.
The property investor faces negative cash flow, which isn’t reflected in the shares investor’s case. To make a fair comparison, we should account for the cash flow the property investor is using, which would then be available for the shares investor to invest. This adjustment would provide a true apples-to-apples comparison.
This functionality is in the model.
Nifty has given 15 percent return for the last decade. 50 percent leverage makes it 30 percent. Investment from Australia is possible through etf. Please use that and lets see the results.
This modelling is not about sharing exceptions. Did you watch the whole video?
I can share investment properties that have double in 2 years.
It’s about sharing averages which is what most people achieve.
I think there is a fundamental difference that you are missing. A company keeps reinvesting profits and value of share grows by expansion of value while a property value is a pureplay supply and demand question. Your money is locked in one particular suburb in a one particular house and you have no access to your money during emergency. Some one with a portfolio of 1mn can sell it in one day and buy a property but the other way around is really difficult. If your point is that Australian shares give poor yield then i completely agree. You can and should invest in emerging markets like India which has given great returns from stock market. As for leverage if you dont know how to get 80 percent leverage from bank it does not mean it doesn't exist. Nab gives me 80 percent leverage. Dividend stocks are probably worst because those companies are not investing back cash
I think best you rewatch it.
You are right, stocks have better liquidity which is also a double edged sword with volatility.
The rest you stated was already discussed.
Without dividend re-investing, stocks perform even worse.
If you have a model for nifty and the tax consequences would you mind sharing the link if you think it’s better please?
This model assumes the shares are sold every year, incurring taxes, while the property model doesn’t involve selling the property annually. For a true apples-to-apples comparison, we should assume that the shares are held for the same duration as the property investment.
The model doesn't assume the shares are sold each year, it just shows what the after sale affect would be for a given year if an investor chose to sell. This can be compared to what the after sale effect of selling property would be for the same year.
Whete can we get the link for the excel file Brendon ? Do u have an email ID ?
Request if you could share link to the model
This modelling is quite simplistic and does not tell the whole story. I am an investor in both property and shares and my share portfolio returns over the past 10 years has beaten my property portfolio (even though they have more than doubled) hands down, no questions asked. There are other significant advantages you have with investing in shares rather than property. That being said, having a property portfolio does give you optionality in your investing which you may not have otherwise.
@@uppady1 please can you kindly share its limitation that you see? Noting Brendan did mention. But keen to understand your assumptions?
Great insights 🎉 thank you 👊
The cash loss after tax calculations seem to be wrong? Also, this comparison doesn't make sense because it's ignoring the yearly losses of holding the property - the share balance needs to be increased each year by the same amount to allow comparison.
If this was included along with the existing assumptions, then shares will win
That was mentioned, and also in the model on shares assumptions areas, can toggle in and off
As PK mentions, there is the ability in the model to include the equivalent cash losses required to hold an IP in the share portfolio.
I’m comfortable the after tax calculations are correct.
Thanks, ok but that option was never enabled for this comparison?
And for the tax numbers I'm looking at that first year with 17,617 losses and 5,637 tax deduction coming out to 9,479 which doesn't seem to add up?
Appreciate the analysis
@@Finndersen Depreciation of $2,500 is added back to the after-tax loss because it's a non-cash deduction.
@@brendancolley i see, cheers
Don't put all your eggs in one basket 😉
I’m starting with crypto to make 70% of my retirement amount, and then using real estate to get to that last 30% over the next 10 years. Would love to know your experience/opinion on crypto, PK.
Hey :) im sorry im not expert on crypto and don’t want to give you bad advice
Without sharing link to the excel model which was used, it does not make any sense. There are lot of variables used here to suit one kind of investment over the other. If you torture statistics enough, it will tell what you want to hear !!!
It’s just a logical model where you can change the assumptions, in the fb group you can ask Brendan for the link.
Have you built your own too?
Just not an accurate comparison. Just not, leverage for starters.
This was covered
Property and equities are generally about the same return at 8-10% and you can find leverage at 95% for equities and property as well.
Property Drawdowns come in cycles and are shallow compared to equities with a 150 year sample size too. Also, the government has a vested interest in ensuring that our housing markets keeps rising.
It’s not leverage or returns. Drawdowns are the key
What’s a drawdown
@@venomsixxx drawdown is the % drop from peak to trough.
For example, If the high median price in Sydney was $1M, and then the lowest median price in the cycle turned out to be $900k, then that cycle had a 10% drawdown.
During the GFC, equities had a drawdown of >50%. Australian Property had an 8.5% drawdown over the same period.
A shallow drawdown is very important when it comes to testing your emotional intelligence during a drawdown. That’s why property is the preferred vehicle. It’s not the return or the leverage. It’s the drawdowns. Now you know what 99% of investors have no idea about and makes all the wealth.
You can use stocks to build up a property deposit.
This was covered. 👍🏼
Fastest way is crypto
Nonsense mate. Ive spent 3 years doing crypto in every way under the sun. Its not all hopes and dreams.