I have fond memories of maths in school. I loved doing the cumulative interest sums (If Mrs Smith earns 10% per year and invests $1,000/year how much will she have in 40 years) but unfortunately I was never taught about investing in property. Recently I was wondering “Why don’t they teach property investing in school? And if they did what would they teach?”
Here are some things I wished they taught me about property when I was in school
Saving a Deposit
How much deposit do you need to save and what are some effective ways to save a deposit. My parent’s always spoke to me about the importance of saving, but school never taught me techniques to saving or how I could effectively save a deposit.
Gaining Finance from the Bank
Gaining finance from the bank can be difficult if you aren’t simply applying for your stock standard loan. I would have loved to learn how to apply for a bank loan, what is important to include in your application, how to gain more finance etc. It would also be great to learn about how and why to refinance your existing portfolio.
Positive Gearing and Negative Gearing
What is the difference between positive gearing and negative gearing and what are the advantages and disadvantages of each investment strategy. Why do most people in Australia invest in a negative gearing strategy and how can you gain financial freedom as quickly as possible using each technique.
Depreciation
What is depreciation (this can be tricky to understand) and why is it helpful. Depreciation can help you reduce your tax payable and can actually cause you to be entitled to a tax refund. This is extremely helpful as an investor but I rarely heard this word in school and it only referred to non-investment items like cars.
Taxation
Tax is a very complicated subject, but some of the key tax principles around property investing are quite easy to understand. Lessons on how to minimise your tax payments (or even how to complete your tax) would have been extremely useful.
Residential Property vs Commercial Property
There are large differences between residential and commercial property and each investment vehicle has different positives and negatives. Evening the simple fact that commercial property requires a larger deposit than residential property wasn’t taught to me. I would have loved to learn more about these two investment options.
Our School System Is Failing Our Children
School was very important for me to learn social skills such as playing with other kids and being self-confident, but I don’t feel like much of anything I learned I have been able to use outside of school.
Even things such as business etiquette, which is so important in today’s society, was not taught to me. More important things such as managing finances and investing effectively weren’t even mentioned. Sure I can do algebra and I can speak a little French, but was that all that school had to offer?
There must be a better way to equip our kids for life outside of school.