Bulletproof Investing

CHAPTER 11Buying in

I took my first step into the investment market in April 2012.

It was a nervous, stuttering step, a bit like a self-conscious Year 11 schoolboy approaching a girl at a school dance. I wanted to and I knew I should, but I was worried about the commitment and consequences, both medium and long term. What if something went wrong?

Finally, I took the plunge and bought a modest, four-bedroom house in Ipswich, west of Brisbane, for $295 000. It wasn’t quite as I had mapped out with John — a $500 000 property that would be worth $1 million in 10 years — but it was what I calculated I could afford, bearing in mind the pre-requisite of good ‘cash flow’. The other positive was that I bought in a high-growth area, which is one of the most important principles of investing.

At the time, I remember Uncle John (as opposed to Boss John) playfully dubbing me ‘a numbnuts investor’. I had taken so long to decide: going to contract in January, but then backing out a few times over a period of a few months. He was adamant that, in future, I would need to act far more quickly and decisively. I was naturally conservative and risk averse. I had seen my parents’ financial troubles, a lot of them self-inflicted, and those ghosts can haunt you when you’re stepping into unfamiliar territory. Still, at 21 I found myself borrowing money and, for the first time in my life, buying an asset of significance.

According to John, I wasn’t buying a ‘property’. What he wanted me to buy was ...