The Value of Money

Here in Phuket and Thailand generally there’s a lot sun, sea and sand to offer anyone who wants an easier life. Having more of what makes you feel good certainly improves your outlook on the future. With fillet steak in a restaurant at three pounds, a whole day speedboat trip around the islands with transport from the hotel, lunch and drinks coming in at thirty four pounds and a full nights entertainment show, transport, dinner and the whole works including tips at only thirty eight pounds. No wonder it’s so popular with holiday makers from Russia, Scandinavian countries and other Eastern Asian places. Your money simply buys you more.

We have clients with properties in Malaysia and other areas in this part of the world and they do get a lot of house for their money even if they don’t make much of a return on their capital. There are times when you have to weigh up lifestyle purchases against cash flow generating properties and plan your life accordingly. We’ve met up with a property developer from Leeds who has his own house here in the city, he and his wife now spend six months of the year here. They employ a full time maid, have their own swimming pool and enjoy life together in a wonderful thriving community. I was speaking yesterday of someone who spends four months in each of Australia, America and England ultimately a similar three way split is my own personal goal for the future.

There is far more to the value of money than its simple buying power. Money in itself isn’t worth anything; it’s only what we can exchange it for that brings benefits to our life. In many places it doesn’t stretch nearly far enough and anyone that has children, elderly parents or expensive habits will know that only too well. When it comes too easily, it is often short lived as many lottery winners will testify. You have to have a respect for money if you want it to flow unconditionally throughout your life.

That means you have to look after it, understand it and use it to make more money. I’ve heard of people ironing their cash, being very particular about having a nice wallet or purse, having money blessed which they don’t spend and always carrying as much as you think you are worth for one day of your time. All these, are ideas for helping your mind-set around the value of money. Property is one of the best methods for ensuring you get value for money.

Having tangible assets of bricks and mortar will always have some intrinsic value and even if it falls down you’ll still have the land if you bought it properly. Understandably many people get worried about buying more than just their own home and are confused by what they read, what they hear from friends and often what consultants tell them. For this reason we like to suggest to potential landlords and investors where we believe they should use their hard earned bucks rather than invest it for them. This means looking at their overall life plan and having some sophisticated thinking around the return on investment. Most property companies want to help you spend your money for their own benefits rather than help you achieve your long term goals.

Recently we were invited to a pension review meeting by one of the big names. They did lay on an admirable lunch but the returns they spoke of were a pittance compared to the potential of property, they gave no guarantees and your money was locked in long term. So many people are taken in by these sales tactics. I don’t know whether they think that a free lunch is really free but when they see how much they would be charged for someone else to look after their funds, they could easily work out it would be cheaper to go to the Ritz.

Before leaving for holiday I put an offer on a shop with a five year lease, it got a big name tenant who should be able to pay the rent. That’ll return over ten per cent per annum if they accept the price we’ve put in and if they don’t they’ll be plenty more up for grabs. Looking at the true return on your capital is far more important in the early days than buying places to have holidays in. Once cash is flowing and there is a surplus month in and month out then you can look further afield for more deals.

We certainly wouldn’t advise anyone to buy overseas without thorough investigation and a long term strategy in place. For new property people the best bet is usually to buy local to where you live, in an area you know, a type of property that you can easily rent out and a style and quality that will have minimum maintenance issues. We have one person that owns a number of properties; he self manages making a very nice living and doesn’t even drive. He doesn’t want anything he can’t cycle to.

Money planning is fraught with danger but as soon as you let someone else get their hands on your share, you are likely to find that few things are ever as rosy as the picture sales people paint. We don’t charge for suggesting how people invest and usually point people to other companies we have dealt with and trust. Although we try to help every step of the way, our mission is to stop people from losing out by showing them how to make enough to have a happy life without the stress of dealing with every little detail.

Dependant on where you are now, where you want to be and the intermediary time factor will be the crux of the planning procedure for moving forward. We’re dealing with a seventy eight year old guy who has still got potential to raise money by selling some assets he bought in the seventies and we know a woman under forty that had one hundred and fifty properties and lost every one of them because she hadn’t planned properly. When you plan properly, buy properly and manage properly you can have a much bigger return on far less property so you have less stress in management and less burden of debt should problems occur. It’s not the life for everyone but for me I’ll feel a lot happier after an hours massage for six quid. So that’s where I’m off next.

Always try to plan for the long term lifestyle you want.

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