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The Rule of 72...hurry up and start saving!: December 12, 2016
So, according to recent statistical data, life is pretty expensive in Australia. What a surprise...really?
It details the amount first home buyers need to save per month in each capital city before they can even get a toe in the door to their first home. If you are lucky and unlucky to live in Sydney or Melbourne then the pressure is ON! If you can save over $1000 a month for your deposit then more power to you. If you are looking at this table and your eyes are twitching and the saliva in your mouth has dried up and you are ready to throw in the proverbial towel, then you had better pay heed to what I'm about to tell you...again.
You can halve these amounts if you are willing to co-buy. Team up with someone and get yourself into the market. Start building your asset base, start securing your fiinancial future and stop PROCRASTINATING and finding an abundance of EXCUSES as to why you shouldn't pool your resources with someone who is equally finding it excruciating to break into the market. Get your name in the co-ownership section of this site, browse the profiles and find someone. Discuss your exit strategy, get yourselves a contract, also from this site and for God's sake...take the plunge before you are totally priced out!
Have you heard of the Rule of 72? No? Then glue your eyes to the next few lines and don't let your minds wander...The Rule of 72 means that every 7.2 year property is set to double if its annual rate of return is 10%
The rule of 72 is a shortcut to estimate the number of years required to double your money at a given annual rate of return. The rule states that you divide the rate, expressed as a percentage, into 72: Years required to double investment = 72 ÷ compound annual interest rate..
If you think a property will grow 10% per annum, just divide 72 by 10% and that tells you that it'll take 7.2 years to double.
Wow...let's consider 7.2 years ago, or in this example, 10 years ago, what were the prices and could you have jumped in?
These are the more upmarket suburbs so they would represent the middle to top of the range. Strangely, they now seem affordable, especially if you had teamed up with a co-buddy and bought. The essential lesson is that time and action can carve out an exception future for you. Don't put it off and don't be put off by those who might discourage you from teaming up. Just do it safely and you will prosper. Consider what your alternatives are and how quickly time will erode your opportunities.