First, for those of you who don’t know me that well, here’s a quick overview.

Some of you will know, I am passionate about property investment. I have accumulated a sizeable investment property portfolio both in Australia and overseas and now, through Investors Choice Mortgages, I help others on the journey to wealth creation through sound investment choices.

After a varied and exciting career in mining and quarrying which has taken me throughout Australia and overseas, I recently retired from the mining industry to launch Investors Choice Mortgages, a mortgage broking service specialising in providing services to property investors and those in the extractive industries finding finance to suit their personal needs and circumstances.

I am in a unique position as a property investor myself to understand intimately the processes and issues. As a mining professional I too understand both the challenges and the benefits experienced by those who work in these industries and to be able to offer property finance solutions. While I cannot legally give advice as a mortgage broker I can refer you to my extensive resources on property selection ‘tips and traps’ that take into account the needs of this growing sector, the web site is full of tips.

I have also been fortunate to be able to share my experiences in mining and encourage others to become part of an industry which has provided me and many others with the means to create long term wealth. Through publishing technical papers and articles in industry magazines; speaking at many industry conferences (both locally and internationally); and an appearance on the ABC’s Australian Story – as ‘Lady Jane’, I hope I have been able to inspire young Australians and those just getting started in mining, with the potential to achieve great things in an industry that has a lot to offer.

Manage your money or it will manage you

Throughout my career in the mining and quarrying industries, I discovered there was ample opportunity to earn very good money, I have also seen many colleagues and site operators experience difficulties managing money and debt. I began to realise there was an opportunity for someone like me to help others in the industry build their own long term wealth strategies through property investment. The website has over 100 pages of information and resources for you to use and aply to your circumstances, visit www.investorschoice.com.au

So – as you now see – after more than 13 years in the field, I have left the industry and become a qualified mortgage broker. I established Investors Choice Mortgages not only to concentrate on my passion for property investment but also to help others utilise their money effectively for long term wealth creation and financial independence.

I hope you will enjoy the articles and information brought to you each month by Investors Choice Mortgages, and of course I welcome your questions and enquiries at any time. You can reach me by phone on 1800 464 810 or via email at jane@investorschoice.com.au

DID YOU KNOW? – Investors Choice Mortgages services are free (the banks pay me for introducing you), completely independent and objective, I have accreditation with over 25 lenders. Investors Choice does not represent specific property developers or real estate agents.

My service commitment is to put the client first and at no time are offerings made based on the amount of commissions Investors Choice Mortgages might receive. Testimonials from past clients on www.investorschoice.com.au reinforce my commitment to deliver this service standard.

Newsletter Members Special Access

I have compiled a number of spreadsheets I trust you will find helpful. I will add to these regularly to provide you with more tools to assist you in creating your own wealth through property. Click on the InvestKit below for access.

For those reading this newsletter on the web, by joining the Newsletter you will receive links to the InvestKit

“A supercycle is under way, but it is in demand rather than price, because the demand most relevant to commodity prices is in the emerging industrial giants of the world. It is they who drive most of the growth in additional industrial production. That role of emerging giants now rests with China and, to a lesser extent, India [both are] reverting to the share of the world economy they had before the industrial revolution... [and] higher commodity demand seems set to stay.” 1

What does this mean for those who work in the mining and resources sector?

It means the potential for greater income earning potential coupled with higher job security. It also means potential challenges for employers who will be required to provide a range of benefits and services to attract the highest quality employees.

Releasing the results of its first Resources Industry Turnover Analysis Survey this month, WA consulting group Mackie Employer Solutions found that the skills shortage was putting employers under increasing pressure to find ways to retain key staff and avoid losing them to rival companies.

"The cost of high levels of employee turnover is considerable and the skills shortage is fuelling pressure for pay and benefit increases," MES managing director Jeff Mackie said. 2

However the potential increase in pay and benefits can have a downside for those either inexperienced, or lacking confidence in managing their money. As someone who has been in that position herself, I found that any increases in salary were quickly diluted through spending on cars, overseas holidays and other things to reward myself for working long hours in remote locations.

I also saw many colleagues experience problems with money management and through this, some found themselves in a destructive debt spiral.

Good debt and bad debt

Having said that, not all debt can be considered bad or destructive. There is such a thing as good debt or ‘deductible debt’. This is when you invest in long term wealth creation strategies such as shares and property and use the expenses you incur in doing so to provide tax benefits.

In other words good debt is used to acquire assets that appreciate in value while bad debt is used to purchase items that either fall in value (such as a boat or car) or there is nothing to show for the outlay other than the debt itself (such as a holiday).

While the initial property investment may place you in a debt position, there are several upsides. With this type of debt you have the potential for some tax breaks through negative gearing and don’t forget historical evidence shows that Australian house values, double every 10 years. You will also end up with tangible assets, which can – should the need arise – be relatively quickly liquidated.

Sit on the fence too long and you’ll get splinters

If you’ve been thinking about investing in residential property, there is no time better than the present, no-one can pick the top or bottom of cycles so there is no use trying - don’t sit on the fence. The timing is right now for those thinking about property investment as a wealth creation tool, or as a means of forced saving (by having to put money into a mortgage each month).

Compared to other investment options such as shares or bonds, residential property offers the certainty of bricks and mortar, the opportunity to use high levels of leverage (in some instances the banks will lend you up to 100% of a property’s value) and solid growth over the long term, with improving returns.

And not only that, over the last 12 months the property market has made a major shift in favour of buyers. According to Australian Property Monitors, “Sydney homes are now on the market for an average of 84 days” 3 and vendors are so keen to sell that prices can be discounted by as much as 30%.

In addition, the high demand for rental property (in selected areas) means plenty of rental income generating potential. The Real Estate Institute of NSW president, Rowen Kelly, says the latest REI vacancy-rate survey shows the total vacancy rate for Sydney was down from 2.8 per cent in September to 2.4 per cent in October. 4 Many areas throughout Australia show similar trends.

"Low vacancy rates mean increasing rents, with improving returns for investors," Kelly says.

Although “real growth has slowed since housing prices peaked, the commodity boom means the world is pumping $40 billion of extra income into Australia a year. That is why the dollar is so strong and BHP Billiton shows our biggest profit. Resource stocks are near record highs, business investment is leaping, and the federal surplus is strong. These all have the same cause – excellent commodity prices”. 5

The combined effect of lower housing prices, increased rental demands and higher resources sector returns translates into a great opportunity to put that extra income into something that will provide either a potential retirement strategy, or a means of generating even further income.

If you would like to explore the possibility of starting or building on your own property investment portfolio please feel free to call me for a no obligation appointment to discuss your needs. Send me an enquiry online http://www.investorschoice.com.au/enquiry.htm or call me on 1800 464 810.

References

1. The boom's busting out all over, Chris Richardson, Director of Access Economics. Steve Ryan, Chief Economist of St George Bank. The Age, 10 November, 2005.

2. Rising staff turnover hits miners, John Phaceas. West Australian, 14 November, 2005.

3. Vendors: what to do if its still not sold, Kate Farrelly, Sydney Morning Herald, 1 November, 2005.

4.Vacancy rates bring good news, FairfaxDigital Property News, 16 November, 2005.

5.The boom's busting out all over, Chris Richardson, Director of Access Economics. Steve Ryan, Chief Economist of St George Bank. The Age, 10 November, 2005.

DID YOU KNOW? - As a newsletter subscriber you receive exclusive access to the Investor’s Choice InvestKit containing valuable downloads such as a basic budget and goal setting spreadsheet; and a series of property evaluation checklists – fundamental tools for anyone considering a property purchase. Click on InvestKit below to access.

For those reading this newsletter on the web, by joining the Newsletter you will receive links to the InvestKit