Millionaire Challenge

lapis_lazuli

lvm wrote: »

Hey Lapis,

The hope with buying investment/rental property is that there will be a positive rental yield (the rent would cover the mortgage and any associated expenses) and you'd have some left over. If you saved this deposit for 15 months, bought the property, what would stop you saving another deposit for another 15 months and getting another? It should take even less than 15 months because you should be getting an extra income from your rental.

A couple of things. First, the longer you delay payment, the more interest is accrued and the more money you owe the bank. Thus, the longer it takes you to pay off the mortgage. Second, the bank takes into account any outstanding debts you have when you apply for a mortgage, so if you have one which is already in progress then they won't lend you as much the second time around. Third, if you pay off the home you want to live in before you buy the second property, you won't be turfed out onto the street by the bailiffs if it all goes wrong.

If things go very well, savings for a deposit for a 3rd property should be even quicker. If you put a limit on how many you do you can work out what extra monthly income you would be bringing in and maye put this towards paying off one or more of the mortgages in half the time...

Ye-e-e-s, but wouldn't it be better to put that extra money from the second property towards the mortgage of the second property? :think:

lvm

lapis_lazuli wrote: »

A couple of things. First, the longer you delay payment, the more interest is accrued and the more money you owe the bank. Thus, the longer it takes you to pay off the mortgage. Second, the bank takes into account any outstanding debts you have when you apply for a mortgage, so if you have one which is already in progress then they won't lend you as much the second time around. Third, if you pay off the home you want to live in before you buy the second property, you won't be turfed out onto the street by the bailiffs if it all goes wrong.

Ye-e-e-s, but wouldn't it be better to put that extra money from the second property towards the mortgage of the second property? :think:

Your first point - of course the longer you delay payment the more interest you pay but what opportunities are passing you by while you put all your extra money into your own home? Are you going to wait 10 years til you're mortgage free before buying an investment property when prices are probably going to be a hell of a lot higher?

Your second point - When you talk about outstanding debt, do you mean mortgage debt?! This isn't really relevent. How do you think people manage to own multiple properties? They certainly don't save up the cash then buy them outright. My Mum and Dad alone own upwards of 10 rental properties as well as their own home which are all mortgaged with, at a guess, 30% equity overall. They have a few properties completely paid off but only because they were very cheap development auction properties. Lenders usually give you mortgages depending on forecast rental income (your rent must be 125% of mortgage payment).

Your third point - paying off your own home won't stop the bailiffs coming round if you default on all your other mortgage payments. End up bankrupt and you can say goodbye to your home!

Pay whatever property you want, your own home or rental - doesn't matter. Whatever accrues the most interest would be most sensible.

There's a lot more to property than this and just aiming to pay as much of the mortgages off as possible isn't necessarily going to be the most profitable method!

lvm

tinktay84 wrote: »

Well I have made a start on my first e-guide.... in that I have a topic, a title page and a picture haha.
Ive always been quite good with lists and organisation and writing guides etc so hopefully I will find it fairly easy (ish) Im hoping to get 2 or 3 set up, print them out and get them checked over as im terrible for not spotting the 1 error until its too late.

Does anyone have a clue what price to put on them? I was thinking 99p as its a very small sum so people may not mind paying it and you are able to get guides without paying (but not always exact)

Hey tinktay!

Seems like you've been doing loads and are doing well!

With regards to the 99p price tag...be careful not to undersell yourself. Is there a chance people could look at the price and think it's not really going to be worth it for such a low cost.

Also, are you aiming to sell on eBay? I can't remember if this is still the case but I remember ages ago I wasn't able to sell any electronic items on eBay. Had to start putting them on discs and posting which was an extra cost. That might have changed though.

I'm sure you've said you already have a website - why not have a dedicated page for each eGuide you sell and you could include peronalised help for those who buy your guides if they come across any trouble.

Good luck with the writing! Hope it goes well!

tinktay84

hi all,

to the people talking about property...with buy to let properties you can only claim 'interest' payments against any income so as an example (very random numbers so dont start looking at faults in figures) If you pay £300 per month mortgage of which £230 is interest, and you get rental income of £450, your profit would be £220 (obviously before other expenses) anything you pay over and above interest is out of your own pocket so to speak which is why many buy to let mortgages are interest only and why people use the income to purchase further propeerty as you can claim more back that way.
I dont know the full ins and outs but that was a basic explaination hat I was given. Hope this helps :-)

Exstra

Considering inflation over 13 years, that is not really an unrealistic target.

Little_Miss_Uni-Debt

Morning all!

Tinktay, looks like we are the same age! 13 years doesn't seem long I'd best get working hard! Need to find £76k this year to be on track lol

podperson

Hi all,
What a wonderful thread! It's so nice to see people who are positive and aim high rather then constantly saying that things can't be done. Would like to join in if possible. Am currently about £21,250 in debt so starting from a negative Was about a grand higher a month ago though so aiming to get it down asap and then can work on building towards the million!
I live pretty frugally at the moment but because am on a low wage then struggle to save from that and so will mainly have to concentrate on getting extra income in. I currently work in admin and accounts (though am not qualified in it) so could possibly look at doing more of that on a freelance basis - but would need to find work that I could do in the evenings or weekends. Am also into photography - mainly landscape, am looking at branching out into areas that might be able to make me some money - would perhaps need to do some free jobs to bump up the portfolio. I also draw and write a little. Am going to try and work out how I might be able to get some income from these areas but any suggestions welcome

lessonlearned

Hiya PP

Nice to "see" you on this thread. So, like me, as well as aiming to be "Fab" you are also looking to become richer.

We'll get there PP - on both counts:D

See ya

podperson

Hi LL :wave: - Yup the dream is to be rich and fab, could also be fabulously rich and richly fab

Tink - you're so right that it's not really about the status to me, I don't think a million is a magic number! But after struggling for most of my life it would be nice to be able to feel secure and comfortable and while I don't think I would have a lavish lifestyle then being able to have a few luxuries would be nice. However, a lot of hard work is needed I think before anywhere near that point!

usa1

Little_Miss_Uni-Debt wrote: »

Hi usa1, glad you're joining in! I think some people get annoyed by others that aim high or think big, that it is showy. Maybe because it makes them feel bad for their achievements.

Folks with those attitudes, even when you get to your million will probably be the ones saying "it's ok for you, you're just lucky" no matter how much hard work you put in.

For me, I love being motivated by crazy ideas. Starting off with an unusual aim makes you think differently, approach problems in different ways and make great leaps of progress.

There's nothing wrong with expecting a lot from yourself or from life. It doesn't really matter if you get the exact digits in your account or not. What is more important is that you build a life that you're happy with.

No one has to work a 9-5 for 45 years for a retirement they can't enjoy. You just have to be bothered enough to find a different approach! Even if that's selling all your belongings and living on a carribean island if that's what you want most of all!

Well done on your BTL! That's a huge nest egg to have!

Best business model for passive income is - create something once, sell it many times. Something that sells while you sleep It could be a digital product (music, software, ebook, video) or a physical product that you design and then a manufacturer produces. Oh the possibilities! :rotfl:

A million doesn't have to be in £'s but it's good to imagine what it would take to make you feel like a millionaire. :A

Hi Little Miss

Thank you for your encouraging post. It has given me food for thought. I will keep you posted on any progress and will try and run ideas past you. Sometimes I have ramdon money making ideas at 3am. I like the idea of working for myself and not working to make other people rich, or working for the tax man..