While your child may not end up a property genius, this is a fun read that helps break down complex concepts for most new investors.
Title: My Four-Year-Old The Property Investor
Authors: Cam McLellan with Matthew Lewison
Blurb: The straight line to wealth: what successful investors teach their kids about property investment!
- How to select the right market, the right area and then the best investment property for that area
- Why paying off your own home with earned income from a job, is a waste of time
- How to avoid the ‘sharks’ and the ‘nasties’ who circle the property industry
- Why a modest income is no impediment to success in the world of property investing
- How to enjoy passive income from growth property and a lifestyle that you never thought possible
Most suited to investors who: Want a practical, workable and simple guide to property investing, or who are looking for techniques on showing investment concepts to other people
Firstly, I’d like to make it clear that I do not have children myself, nor do I find myself in the company of four-year-olds on a regular basis (if ever). Yet that didn’t detract from my interest in this book. I currently have half-a-dozen post-it notes stuck through the book on pages where it cleared up previous 'unknowns' for me or where a complex idea was simplified really well.
Part 1: ‘But Why Dad?’ is a great, simple, look at the reasons for investing. Explaining from the very basics (‘what is a portfolio?’ And ‘what is a yield?’) to financial freedom and the importance of time, there is a clear overview of why it’s important to pass on this knowledge, as well as a good introduction to property itself.
Part 2: is the ‘nuts and bolts’ where we look at risk, median prices, the concept of equity growth and how to launch into your next portfolios using this equity. Essentially, how to build up your portfolio and the basics of most investing.
Part 3: is all about identifying performing investments (using a process developed by Mr McLellan called ‘Straight Line to Wealth’).
Part 4: shows you the ‘tools required to stay in control of your investment system’ (which is actually a link to a website).
The questions mentioned above continue through the whole book. At some point we hear ‘what’s drip-feeding Dad?’ and later about mortgage insurance and crossing loans. This is a good technique to quickly explain concepts, and acts like an FAQ. The ‘Dad’s tips’ boxes are also really simple and range from the obvious (Always appreciate the Aussie way of life) to the slightly more sophisticated (Invest in a Family Discretionary Trust).
As mentioned before, I am not a parent. However, I can’t help but think most of this would go over the top of most under 16 year olds' heads (particularly when tables, graphs and accounting come into play).
Despite this, for the rest of us it proves a handy ‘back to basics’ reminder that explains concepts, allows us to simplify what we’re doing and get an understanding of a number of techniques. In the back of the book are a number of forms, such as a ‘due diligence checksheet’, that are great tick boxes to fill out and examples of organization strategies.
The strength of this book lies in the graphics. Occasionally just illustrated with slightly odd cartoons (a shark, for instance, to portray the ‘nasties’ in the industry), there are some powerful representations of cross-securitization and trusts that help explain the concepts clearly and you'll want to re-examine when confused.