Sunday, November 30, 2008

Investing in Property Down Under

Report from The Australian:

IT is at times like these, when shares are so attractive that every expert, including the galah at the local pet shop, is screaming that we're looking at the buying opportunity of a lifetime, that I know why I love investing in property. The fact that I am a property fan does not mean I don't like shares, it's just that property is a better asset for normal people.

When people ask me for advice for nothing -- normal people won't easily pay for advice, and that is a big issue in itself -- I profile the inquisitor.

If they receive the "normal" tag -- risk-averse and a very casual, nearly disinterested party when it comes to shares and the underlying companies -- my advice is simple.

Buy a house and pay it off quickly. Your principal property can be a great investment -- it's capital gains tax-free and you can live in it, saving you rent.

I recall a retired, relatively young priest, who left the church without any super and needed a wealth-building plan.

With a lateral-thinking adviser's help, his plan was to buy a cheap home, live in it, renovate it, sell it and trade up.

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