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Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 12:05pm On Nov 15, 2019 |
tot: Yes that is true but if you look at the history of the Nigeria exchange rate since 1970, you will notice the Naira always depreciates. There has never been a period when Naira appreciates. In Naira terms you may have more Naira over time, but what is the real value of that Naira? Most Naira asset losses real value over time. Except the appreciation of that asset exceeds the long term depreciation of the Naira....which will continue to occur. Like I said you could have bought 8 brand new Toyota corollas in 2015, if you sell that house today, you can only buy 2. If you have 4 children and bought a property for 40m thinking I will sell this property and use it to send my kids to school abroad, you have failed, at best that property will only pay for 2 children’s school fees. In real terms your house has lost value. In real terms the house has not protected your wealth. Some properties keep value more than others or depreciate less than others, so when it comes to property, the key is location!!!! Be wary about investing in Naira assets property and stocks because in most cases the devaluation or depreciation in the Naira will erode any gains in price. 2 Likes 1 Share |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:06pm On Nov 15, 2019 |
khalids: No one is saying he should plough the 40m into a house foolishly. It's all about making a balanced decision. He can build a house below 40m and invest the rest. My point is investments are not guaranteed, so you shouldn't put all your income into it. Life is all about balance. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:09pm On Nov 15, 2019 |
isthatso: The more reason a person should at least have a roof over their house (and save the recurring expense of rent), as the 40m he is investing in TBills etc is depreciating every year in actual terms, not to mention Nigeria's high inflation rate. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 12:21pm On Nov 15, 2019 |
tot: my father bought land in what was a prime area 35 yrs ago Today that property is worth 1000x more in Naira terms than what he paid but if you convert to dollars today he would have been better off converting the money to dollars and just putting the money in a savings account and allowing the interest to compound. The value of the land today 35 yrs later and the value of the savings account would be the same. Like I said it was a prime property but Nigeria is a lawless country and desire able places can become undesirable in 10 years with the haphazard way we do things. Just look at Festac. I am not saying all properties are like this but I just gave this example to highlight that property is like any other asset, some will appreciate, some won’t. There is no Decree that every property will appreciate or hold real value over time. 4 Likes 1 Share |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:26pm On Nov 15, 2019 |
isthatso: I totally agree with your point on investing in property or stocks in Nigeria can be risky because we do not have a structured system. What you have not factored though is the income (rent) he got from the property OR the rent it saved him from paying elsewhere over the 35 years. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 12:28pm On Nov 15, 2019 |
tot: In case you missed it, my message is be wary of investing in all Naira demoninated assets, unless it is giving you returns like 50% a yea which are usually scams unless it is a business you are doing yourselfr. If you are investing in t bills at 12% and inflation is 12-15% you are losing money....even before the inevitable Naira depreciation |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 12:30pm On Nov 15, 2019 |
tot: If he buys/builds a home he'd live in for 2/3 years.. 1..He will need to pay for maintenance. 2...He'd still be paying for rent where ever he travels to. You might want to read this to understand better... If mr A builds/buys a house for 20m and he knew he'd be living for a very time 1. it's an investment that would take him 20 years or more to payback 2. This Will safe him money of rents of 20m for 20 years years. ( If he pays 1m annualy for rents.. Dont forget that cost of rents might also go up. 3. Will likely spend money on Maintenance of the house. 4. House keeps same design for ever. ....If mr B has 20m but decided to invest it. In maybe treasury bills with 13 percent yearly returns. 1. He gets 2.6m yearly 2. He pockets 1.6M yearly as profit (minus 1m yearly rent) 3. He could reinvest the 1.6m in business or another investment (which would make him richer) or probably bought a land for 1.6m, which he might sell for X400 higher in years. Dont forget Land No or less maintenance. 4. He does not pay any maintenance fee for X years if he had bought a home(amount in millions) 5. he gets the chance to choose a modern design he would love to buy/build a home 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Slimsly100(f): 12:32pm On Nov 15, 2019 |
cue64: Ok bros. But the question is; are we in a sane clime |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:35pm On Nov 15, 2019 |
dake40: Thanks for the explanation, I see your point. But one thing is all these figures are simply projections. As we saw this week, TBills are already on a downward spiral. Also, the maintenance cost people have kept mentioning is really not as significant as that. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by alpontif(m): 12:36pm On Nov 15, 2019 |
I have been saying this exact concept for years to Famil/friends, but I have realized over time that they take such information wrongly, apart from thinking you are stupid, they will think some spiritual forces are preventing you from owning your own house, they never understand..and those of them that have already owned houses think you are insulting them. It is also the reason a lot of people live average lives and never become wealthy. They might be rich, but they can't afford to stop working, hence they never become wealthy. The house you live in is not an asset, since you will not sell it under normal circumstances, we call it dead capital. It is not producing any income for you, nor can you benefit from selling it if land values should increase, because, remember, it is your house....so you can't sell it. What people who become wealthy (and this is why I greatly love and admire Igbo men, though I am Yoruba) do is that they save up money to establish Cashflow businesses, they will then keep on managing and saving up to establish more cashflow businesses . These cashflow businesses will be generating income, which is saved up and then invested in passive investments like TB, Bonds, plots of cheap land all over the place, student hostels, lockup shops etc. The income from investments initially is not as much as cashflow businesses, but it is passive and do not require active management, so as the money is coming from their cashflow businesses, they are putting it in passive investments, gradually, until it comes to a point when the yield from their passive investments can cover their yearly living costs. At that point, they will now start putting money in non assets like their own house, and may even decide to retire, without ever working in their life again. To illustrate this point, let us assume you do a business and just hit twenty million, or you saved up twenty million naira. The first instinct of a typical Nigerian is to show he has arrived by buying cars and building a house, the instinct of someone who wants to be wealthy is to establish a cashflow business. Let us assume you want to be wealthy, so what did you do? You imported a haulage truck for five million naira, opened a paga shop with three hundred thousand, established a block industry with one million, opened a shop in a market to start selling provisions with one million, opened a small buka with five hundred thousand...everything at a total cost of seven point eight million. You now bought dollars worth eleven million, then used half of it to buy Tbills, and fixed the remaining in your dorm account. You want to be running your life with the one point two million that remains. You have just established a cashflow business. Your haulage truck will produce money every week, you set aside a sum to recover the cost of the truck and send the profit to a special account every week......say fifty thousand weekly Your paga shop will produce money every day, you set aside part of it to recover the cost of establishing the business and send the profit to a separate account daily......say two thousand daily...fourteen thousand per week Your block industry will produce money every week..........same process........say fifty thousand weekly Your provisions shop will produce money every day......same process........say ten thousand daily.....sixty thousand per week Your small buka will produce money every day.........same process......say ten thousand daily....sixty thousand per week Your tbills is producing money...keep it there Your dollars is protecting you against inflation .....keep it there Money is entering from all directions, that is cashflow.....in other words, you have a very high liquidity.....this means that you can have access to reasonable amounts 0f money at any time for you to take advantage of opportunities. So, as these businesses continue to grow, you keep expanding them, and opening more branches, piecemeal, gradually. Assume you open this businesses forty weeks in a year of fifty two weeks, Per week, you are making two hundred and thirty four thousand naira Forty weeks total Nine Million, three hundred and sixty thousand naira. And that is after you have removed the seven point weight million you used to establish the businesses, you will still have nine point three ,million as profit. On just single branches. The more you expand, the more money you make, the more liquid you become, to the point that if any opportunity comes up that requires cash, you won't be running up and down looking for money. When it gets to a point, start using the profits you are getting from your cashflow businesses to buy cheap land in Hectares and acres, dont go to where land is presently in demand, buy land anywhere, everywhere, as long as it is secure and very very very cheap. Only suckers buy expensive land. Buy more bonds , dollars, tbills, at any point in time make sure most of your liquid cash in the bank is in dollars. Continue this over a period of ten years, if you dont become a hundreds millionaire, call me barstaad. At that point, you can now build your own house, and even retire. Please note that this advice is for people who want to be wealthy, not those who want to be rich. It is strictly for business minded people not people comfortable with earning excellent salaries. A house is not an investment, if you fear you will die before your time and want to secure your family, and that is why you want to build your own house, there are insurance and investment banking products for that. Think with your brain not your feelings. If you use that twenty million and build a house, other than waking up and seeing your house every morning, it will not give you a single profit, you have just buried money.....like the guy in Jesus's parable. For people who are working and are not business men, if you save up and get this kind of money, buy dollars and keep, buy tbills, fix part of it with a cooperative bank, fix part with an investment bank like Meristem, FBN capital, Investment one. etc..... Dont bury money.... 11 Likes 4 Shares |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:36pm On Nov 15, 2019 |
isthatso: Yes agreed, but I wouldn't call buying a property which I intend to live in an investment. It is simply a means to meet a basic need of shelter and have some security. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 12:40pm On Nov 15, 2019 |
tot: How about reinvesting the fund in Business with strong backup?. Afterall, he worked before he could have such amount of money to buy a home in the first place.. I understand your point about having roof over one's head.. He could get a roof under his head via renting too and reinvest his capital. The OP is only coming from an angle of "JOURNEY TO SUCCESS" |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by stieyven(m): 12:41pm On Nov 15, 2019 |
charliboy654:He who calls another a fool shall be in danger of hell. Matthew 5 :22 |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Nobody: 12:41pm On Nov 15, 2019 |
tot: I do agree though with what you said earlier and the guy did mention it as one of the reasons for buying a house. Buy a house because you have a pyschological need to own your own home , for peace of mind etc. tot: These are valid reasons, My point is to challenge this idea that property is always appreciates, that it always stores wealth or that it is always a good financial investment especially in Nigeria over time. Also if you buy a house and are paying a mortgage, you are buildiung equity inside instead of throwing away to a landlord. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:44pm On Nov 15, 2019 |
dake40: Well, he could have inherited the money....lol. Yeah, I get your point. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 12:45pm On Nov 15, 2019 |
isthatso: Yep, get your point. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 12:47pm On Nov 15, 2019 |
tot: Believe me, building/buying a house with this kind of money is the worse decision anyone would ever make.. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by dake40(m): 12:54pm On Nov 15, 2019 |
alpontif: Thanks for the analysis. I enjoyed every bit of it... |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by tot(f): 1:00pm On Nov 15, 2019 |
dake40: He can split the money, doesn't have to spend it all on a house! Cashflow without assets makes no sense. Assets without cashflow also makes no sense. It is all about BALANCE. 3 Likes |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by cue64: 1:10pm On Nov 15, 2019 |
Slimsly100:the question is are you in a saner clime? |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by pacehood(m): 1:29pm On Nov 15, 2019 |
bizzibodi:This is not a London matter people in Nigeria now buy houses on loan with monthly installments paid to the real estate company, the terms of the contracts are often biased more like predatory lending to me. Stay woke |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by bonusblack: 2:28pm On Nov 15, 2019 |
fsgbeats: Why is it that we Nigerians dont read to understand... The dude didn't say having a house as investment is bad. He only said having it as a home to live in, is bad investment... If you are building for resale or renting out, definitely its a good deal. But why waste that money to build/buy a house to live in when u can reinvest and use only a part of the profit to pay rent |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by sparko1(m): 3:33pm On Nov 15, 2019 |
charliboy654: Actually, he made a very valid point, investing in a house that you give out for rent actually pays more that buying a house for your personal use. Now, the problem with this theory is in Nigeria you are at the mercy of the owner, the owner can come any day and just ask everyone to leave, then you have to go look for another, pay lots of money to fix things, pay the ridiculous agency fee and legal fee all over again. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Ugosample(m): 4:41pm On Nov 15, 2019 |
Gerrard59: Well said nwanne |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by bizzibodi(m): 6:37pm On Nov 15, 2019 |
pacehood:For own many yrs,is it d paid at once,pay in 3,6months or 1yrs where u will see 2brm going for #30m,my friend that is not morgage that is building & selling houses to d rich. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Royalsleek22: 8:05pm On Nov 15, 2019 |
The guy is actually correct counting on short term investment. 1 Like |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by Clean2016: 8:07pm On Nov 15, 2019 |
Viking07: I have used the same principle and it's still working for me Sir. In fact in Nigeria there are better loopholes to make bigger profit than Kiyosaki method |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by EgunMogaji2: 8:17pm On Nov 15, 2019 |
dake40: He really is. Most people commenting don’t realise that he’s talking about having N40M to build a house. With his method you’ll always be safe financially and not cower to landlord because you principal is always at hand. I built my own home, not because I couldn’t rent hut because I wanted some specific architecture to deal with Nigeria’s issues. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by EgunMogaji2: 8:22pm On Nov 15, 2019 |
bonusblack: I read once that the best way to hide information from black peoples is to put it in writing. Sad. |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by NairalandAngel(m): 10:38pm On Nov 15, 2019 |
Yoighaman: So what if he used Lagos as an example? If you had an opportunity to own your own house in say Maryland or Yaba for instance, would you prefer to forgo the opportunity and rent instead because of some mumbo jumbo economic theory? |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by sorepco(m): 6:21am On Nov 16, 2019 |
Guy chill. U no understand this man oh! charliboy654: |
Re: Home Ownership Is Mostly A Bad Investment- Expert Says by sorepco(m): 6:27am On Nov 16, 2019 |
U did not understand the man. He said owning a house is better than owning a home! So try to understsnd him first before criticising Viking07: |
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