If I was to lose and die with 1 less investment property, it would not really impact life. May have a bigger impact on my kids lives ... but in reality they will appreciate whatever they get and will not think otherwise of me because of a "with the best intentions for my kids" LOM investment.
Although uncommen, I have heard many stories and met people around the world, which thought property investments were very safe ... and ended up losing everything they had accumulated in a lifetime because of "safe" property. You can't trust anything in today's society ... anything is possible.
I have met people that live in other (South American) countries, where they had money saved for their retirement and the Government decided to take and confiscate the funds ... they lost everything and were devastated, but it still happened.
My dad is a retired property investor and always says "the damn Australian Government and banks are slowly taking my properties back from me" ... with Bank Interest, Income Tax, Land Tax and Capital Gains Tax. My dad keep reinvesting (negative gearing) to minimise his income tax on investment property income, which increase how much interest he pays to banks and land tax to Office of State Revenue (He has properties where land tax is over 40% of his rental income) ... He is very asset rich, but is cash flow poor and feels it's getting worse as the years go by. My dad is "old school" and thought he could retire comfortably ... but now has the opinion that he has to keep moving and investing in order to keep ahead / minimise paying high income tax.
Mind you in the meantime my dad is doing very well from his property appreciation ... but is not felling it from a cash flow perspective.
Just remember, if the Australian Government / budget position gets so bad ... it will do whatever it needs to fix the problem ... at the cost of anybody and everybody (which means anyone who has money / wealth (including property owners) ... and will most likely exclude welfare recipients).
Very pessimistic, yes, but potentially (eventually) realistic ... the Government can not sustain what it is currently doing forever and eventually (possibly not in my lifetime), something may have to give (drastic actions). Hence a small (controlled by me) risky investment in LOM is better than a (out of my, or my kids control) loss of investment by Government decisions or taxes which do not make property as attractive and valuable. E.g. Death Duties (God forbid) ... in the UK they are around 40% (although they will not be that high here as we have capital gains tax).
Good "factual and visual" example of the above ... ,ost of my dad's properties are currently Capital Gains Tax (and Death Duties free), as purchased before Sept 1985 ... although all of my investment properties are subject to Capital Gains Tax ... and who knows what may be possible in years to come ... Capital Gains Tax on your residence. Who knows!!
In others words, Yes Angola is a risk (higher), but in todays complex society there is a risk in everything that we do ... all we can do is pray that all goes well for us.
Obviously went off on a tangent ... thought I would try and explain why I made the comment about "betting a house on it" ... it reality even our houses may potentially not be ours, and definitely won't be once we are no longer here.
One should enjoy and make their investments exciting and interesting ... although they will only be enjoyable if (a) performing well and (b) investing within ones means.
Enough deep philosophical comments for a Sunday night ... before I go back to the grindstone tomorrow to earn mony to pay for my bills and investments.
GLTALTH,
Zippy1
LOM Price at posting:
38.5¢ Sentiment: Buy Disclosure: Held
(20min delay)