Definition: counsel; notification. In your formative years you are usually receiving it from your parents, grandparents and older aunts and uncles, and in your later years, giving it.
Some of the gems from my mother were “Make sure you have clean underpants on in case you get hit by a bus”! Not worried about her son being killed by a bus, but the impression that the ambulance drivers would gain when they discovered that you had dirty underpants. Experience would suggest that of you were hit by a bus, your underpants would almost certainly be soiled!!
“Take that look off your face. If the wind changes you will stay like that”. Isn’t this how Botox works today??
“Make sure you have a clean handkerchief”. No problem Mum, but the sleeve works just as well!!
In my later years I found that I was giving my children and grandchildren the usual fatherly advice, but much of it seemed to fall on deaf ears. Children seem to gain most of their ‘experience’ from social media these days. Unfortunately they seem to accept this without question. Are we creating a world of media manipulated morons?
One of my best pieces of advice was received from a customer when I was working in the bank. This person was a prominent solicitor in the suburb of Moonee Ponds. Like the suburb’s most famous Dame, he was a very shrewd businessman. Not only was he much sought after for legal counsel, he was actively involved in asset accrual. He had amassed a considerable property portfolio and had numerous shares, bonds and deposits. One of his business ventures was with a group of his clients. They were involved in venture capital. This is funding that is provided, at a premium, to inventors and other business ventures that would not normally attract funding from traditional lending sources. Some of the funding was provided on a traditional loan basis and some on a profit sharing basis. His group was very successful and a lot of their funds were lodged with the bank on short term deposits, so they could be deployed at short notice, should an investment opportunity arise.
I was looking at restructuring some of his investments one day, and during our discussions, I asked him what advice would he give me as a general principle for successful wealth generation. His advice was “Never owe money on a depreciating asset”. He explained, that not only are you paying interest on your loan, but the asset is depreciating, so you are disadvantaged on both fronts. Owing money on an appreciating asset has the advantage of having the capital gain to offset the interest charge, and in some cases may actually offset the interest charge completely.
To this day I have never owed money on motor vehicles, furniture or other depreciating items. I have only ever paid interest on loans connected with property purchase.
Barry O’Connor
July 2016
Some of the gems from my mother were “Make sure you have clean underpants on in case you get hit by a bus”! Not worried about her son being killed by a bus, but the impression that the ambulance drivers would gain when they discovered that you had dirty underpants. Experience would suggest that of you were hit by a bus, your underpants would almost certainly be soiled!!
“Take that look off your face. If the wind changes you will stay like that”. Isn’t this how Botox works today??
“Make sure you have a clean handkerchief”. No problem Mum, but the sleeve works just as well!!
In my later years I found that I was giving my children and grandchildren the usual fatherly advice, but much of it seemed to fall on deaf ears. Children seem to gain most of their ‘experience’ from social media these days. Unfortunately they seem to accept this without question. Are we creating a world of media manipulated morons?
One of my best pieces of advice was received from a customer when I was working in the bank. This person was a prominent solicitor in the suburb of Moonee Ponds. Like the suburb’s most famous Dame, he was a very shrewd businessman. Not only was he much sought after for legal counsel, he was actively involved in asset accrual. He had amassed a considerable property portfolio and had numerous shares, bonds and deposits. One of his business ventures was with a group of his clients. They were involved in venture capital. This is funding that is provided, at a premium, to inventors and other business ventures that would not normally attract funding from traditional lending sources. Some of the funding was provided on a traditional loan basis and some on a profit sharing basis. His group was very successful and a lot of their funds were lodged with the bank on short term deposits, so they could be deployed at short notice, should an investment opportunity arise.
I was looking at restructuring some of his investments one day, and during our discussions, I asked him what advice would he give me as a general principle for successful wealth generation. His advice was “Never owe money on a depreciating asset”. He explained, that not only are you paying interest on your loan, but the asset is depreciating, so you are disadvantaged on both fronts. Owing money on an appreciating asset has the advantage of having the capital gain to offset the interest charge, and in some cases may actually offset the interest charge completely.
To this day I have never owed money on motor vehicles, furniture or other depreciating items. I have only ever paid interest on loans connected with property purchase.
Barry O’Connor
July 2016
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