• TobyPascoe

#1 - Chasing the dream

Updated: Sep 9, 2020

There are some great speeches that attempt to motivate us to follow our dreams. Speeches from the likes of Steve Jobs (ex-Apple CEO & Founder), Steven Spielberg (Director & Screenwriter) or even technology engineer Elon Musk. These speeches often get the heart going, build a sense excitement in us that we can get up off the couch and go out and achieve anything we set our minds to.

So whats the problem with this? Normal life gets in the way - work, kids, and some more work again. Sometimes it can feel like we are in the 'rat race', constantly chasing life, let alone chasing dreams.

You've opened up this blog, taking the extra step from the home page, most likely because you have an interest in property like me, but now your wondering who is this twat going on about dreams? Right?

My dreams are simple. Perhaps some of them may resonate with your's? Bear with me.

I dream of being able to provide every opportunity to my children as they grow up, whether it be choices of school, sports or any overseas experiences.

Helping my children out with their own home deposits, even if its in a small way would be a dream result in about 20 years time. The price of housing, if it continues as it has for the last thirty years, could be upwards of $2,400,000 for an average home in somewhere like Auckland. Even $980,000 in Invercargill!

Having the flexibility to not worry about not taking that extra overtime shift at work would be good wouldn't it?

I dream of being able to not have to open the bill that arrives in the mail, having the confidence to know it can be paid by direct debit without checking the bank account.

How about retiring slightly earlier than the government recommends? The body could be struggling to keep up as a firefighter at the ripe age of 65... or could it be 67 by the time my generation gets there?

Whether we can retire early or at the retirement age, will funding the remainder of our lives for 10 - 30 years be nothing but a dream? Do you believe government super (the payment you get each week from the age of 65) will still be around? It has been proven time and time again in multiple studies and economists analysis, that this payment cannot keep up with the cost of living, all while supporting an increasingly ageing New Zealand population, however the only government response in the last 20 years has been Kiwisaver. It will simply not be enough.

I don't think my dreams are unreasonable, they are simply living life and enjoying it along the way. And that comes down to having choices, having flexibility and having control.

Bring in Property.

I bolded it so you know we have finally reached the point.

Property and more specifically property investment is the vessel that I have chosen to get me to my dreams. I don't dream of sailing on super yachts or travelling on a jet, I'm probably amongst the majority of Kiwi's who simply seek freedom.

Of the four main investment asset classes - Cash (the bank), Shares, Bonds and Property, the latter is the only one where you can take a chunk of your money, and then multiply it by five to purchase an asset (a home) using 80% of the banks money.

If I have $100,000, I take it to the bank and convince them I'm worthy enough to purchase a home worth $500,000, and they give me $400,000! Of course there is a $400,000 mortgage and I hear all the time about people not wanting to take more debt on. Property is good debt. A car, furniture on HP or a holiday is bad debt. The first produces an income. The latter doesn't. The incomes that properties produce at the moment are mostly all enough to cover all the expenses.

Now is without a doubt the best time to enter the property market, either as a first home buyer or as an investor. Interest rates are the lowest they have ever been, LVR (loan to value ratio) restrictions have been relaxed, and with the amount of money the government/reserve bank is printing that will eventually inflate asset prices - it will probably never be cheaper to purchase a home.

Now is the best time to chase those dreams.

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