Frequently asked questions
You don’t need to earn anything to buy property, you can buy property using investors money. If you want to use your own money as a start, you will need to earn as little as R3500 and take advantage of a government subsidy called FLISP (Finance Linked Individual Subsidy Programme) which is there to help home owners to purchase their 1st home and improve their affordability. The subsidy is also extended to existing home owners with certain terms and conditions.
There’s no need to quit your job, the beauty about property is that you can do it part-time while you work as a #SideHustle or main business it all depends on your plan and strategy. Property is an immovable asset which can generate extra income for you while you are busy with your main job. You are also able to outsource the property management and collections of rent or finding tenants.
The earlier the better, but then the beauty about property is that it has no age limits and you can even find your kids being property owners through inheritance. Anyone within any age or race can get into property and build a portfolio of note. I always say the sooner you can start in property the better chance of succeeding and building leverage for yourself.
In life it’s difficult to avoid debt, so rather have good debt other than bad debt.
Good Debt is the kind of debt that increases your net worth/wealth or has future value or the kind that buys you income generating assets.
Some of the good debt you commonly find is mortgage and this enables you to buy that with debt in a form a home loan (bond). A house increases in value over time and the vast majority of home owners sell their properties for more than what they paid, while others build property portfolio’s and collect rental income making this form of debt a solid investment. The other benefit of having a house bond is that it allows you to borrow further money against it, which increases your financial flexibility.
The first and arguably the most beneficial form of good debt is educational debt, in the form of money you borrow to pay for an education. The reason why this is a good debt is that the education will most likely allow you to generate more income than the value of the loan. In other words, you’ll make a profit, if we measure it only in financial terms. Of course, education has plenty of other benefits, which further increase its value and make it a good debt.
Yet another type of good debt that can improve your financial status is refinancing. If you are paying off a number of different debts at relatively high interest rates, it will become a lot cheaper if you are able to borrow a single sum at a lower interest rate, with which you can pay off the rest and only have a single source of debt, however this should be considered as a last resort or option (Seek advice from a registered financial advisor before considering this as an option, usually it happens after debt review).
Bad debt is debt that does not increase your net worth or wealth and is used to buy non-essential goods or services that do not increase in value its debt that cannot be recovered. This type of debt is dangerous because it is easy to get yourself into unmanageable debt by giving into the temptation of buying luxuries that you don’t really need and cannot realistically afford.
These can be considered bad debt if they are not used responsibly. Retail Store accounts make it easy to indulge in non-essential luxuries and can put you more into debt
These loans often have very high interest rates attached to them, meaning you will end up paying back a lot more than you borrowed. It is also very easy to get stuck in the cycle of taking out more loans to keep up with the previous ones.
Credit providers use your credit score to determine whether you qualify for a loan and how much interest you should pay. A high score indicates a low risk borrower, while a low score means a high risk borrower. Having a bad credit score doesn’t mean it’s the end of the world, however it means it’s an opportunity for you to learn to manage your finances better and improve or grow your credit score. Unlike before, these days you can improve your credit score by doing the following:
Check your credit score / profile
Get help and Knowledge
Get out of Debt
Pay your creditors on time and don’t miss payments
Spend or Buy Responsibly
Get off the Black List
Real estate / Property has produced more wealth than any other industry in the history of time. However, people still remain skeptical about entering into the industry because many do not understand it. When it comes to property or real estate income, there are three ways to generate cash. You can generate passive income by buying and holding. You can generate passive income by maximizing through conversions that can generate rental income for you. And you can also generate an active income by flipping houses, doing renovations or adding value in another area such as putting together property development deals. It really all depends on the confidence of knowing what you doing, I can safely say other properties can generate you income immediately while other can generate you income after a week, or a month or even years depending on your strategy and how soon you work on it.
Home and property ownership is generally thought of as a sound financial decision, however they are some financial risks associated with home ownership. Here are a few risks that you will want to consider before you go out and buy a property.
1. Risk of Default
The biggest risk associated with home ownership is the risk of default. Buying a property is a very large financial obligation. In most cases, it is the biggest amount of money that someone will ever borrow. Therefore, there is a lot riding on you making the payments every month. When you fail to make the payments, the bank will take back the house and your credit will be affected drastically. You may never be able to buy a house again. If you do, you will most likely have to agree to unattractive terms and high interest rates and besides a number of things can happen over the course of 20 years that make you not afford your monthly payment anymore. You could lose your job. You could incur huge medical bills. There are many factors that could contribute and 20 years is a long time to look into your future. You never know what could come up thus I always encourage and teach ordinary citizens to buy below market or buy income generating assets so that they can service themselves or produce profits.
2. Value Depreciation / Obsolescence
Another risk that you have to become aware of is your house becoming obsolete in the market today. The real estate market is always changing. As time goes by, styles change and people like different things in houses. If you live in your house for many years and do nothing to update it, you could run the risk of your home becoming obsolete. You might not be able to sell it unless you take a drastic reduction in the price.
There’s many other risks that could be involve such as over investing, leveraging, too much debt and etc… I am unable to cover everything here, but in my classes we get into details with this and also have an entire module that is focused on risks alone. Thus I always say get the knowledge and get a mentor…
Growing through my entrepreneurship journey I struggled a lot with getting a mentor and I know having a good mentor relationship is often a dream come true. A mentor is a teacher, a trusted adviser that a budding entrepreneur can turn to with questions and get valuable advice, tailored directly to their industry and specific business situation. There is an assumption there that the mentor will have teaching or coaching skills, based on their professional experience. That is why with my team we’ve launched a mentorship programme to support entrepreneurs and others throughout the economy to create economic growth and social cohesion, however we would do this in partnerships with our partners and stakeholders which is mainly group based other than individual focused. I do not do individual mentoring as its time consuming and besides that mentorship is personal. Don’t just jump headfirst into the mentor relationship; if you’re hoping to ask someone to be your mentor, get to know them first. “Don’t ask people to be your mentor without knowing them, its relationship focused. I prefer coaching other than mentoring
You need to be told what you need to hear not what someone thinks you want to hear, and some mentors will tend to sugar coat their advice, whereas a real coach or mentor should tell it like it is. You need real advice, not fluff in order for you to grow that is why you need to Pick someone who does not have strong “ties” to your business emotionally or financially tied. It’s understandable that you might think mentoring and coaching are similar or even the same thing. But they’re not. I have tried and experienced both, but I have found more value in coaching that I have in mentorship, so I do not see the need to recommend to you what didn’t work for me.
Mentoring is relationship oriented. It seeks to provide a safe environment where the mentee shares whatever issues affect his or her professional and personal success. Although specific learning goals or competencies may be used as a basis for creating the relationship, its focus goes beyond these areas to include things, such as work/life balance, self-confidence, self-perception, and how the personal influences the professional. Without a relationship poor matching can be a pitfall and the mentoring can fail as its also rushed, that’s why you would also hear some people say my mentor stole my idea or implemented my idea because they do feel obligated to you or sometimes they do not have time to attend to you that’s why its important to find someone who has your best interest at heart. How do you know a complete stranger has that interest?
Coaching is task oriented. The focus is on concrete issues, such as managing more effectively, speaking more articulately, and learning how to think strategically. This requires a content expert (coach) who is capable of teaching the coachee how to develop these skills, it is time line orientated, the purpose is to improve the individual’s performance, this involves either enhancing current skills or acquiring new skills which are specifically designed to benefit you and your growth is also measured and once the coachee successfully acquires the skills, the coach is no longer needed. If you are getting someone as your coach, you buying their services and their professional expertise with a set objective and KPI’s, you are both protected by a contract or agreement and if one party is not happy they go get services from someone else, no one can steal your idea or take advantage because you have paid for their time and they cannot cancel on you anytime they want or don’t feel like seeing you.