Wednesday, January 19, 2005

Investing - Assets vs Liabilities

Read the full story on Assets vs Liabilities here

How I made $122,000 and lost $132,000 - A lesson in Assets vs Liabilities

This is a true story from my own experience that illustrates how buying assets for wealth creation works.

Just over 3 years ago I found myself with $75,000 to spend or invest. My wife and I needed a new car as the old one was 8 years old and not as reliable as it used to be, so we spent $40,000 on buying the latest model.

Our $75,000 was now reduced to $35,000.

We now made the wisest financial decision we have ever made (apart from buying our own home) and used the remaining $35,000 as a deposit on an investment property to help provide for our eventual retirement. The investment property cost a total of $178,000 including mortgage, conveyancing, and stamp duty costs.

Three years have gone by and this is what has happened...

Read the rest of the story on Assets vs Liabilities here