Forget the Packers, Murdochs, and Myers. Here's an every-man's guide to squandering any fortune, from the family that does it best.
‘Buy high, sell low’
This one is more like a meta-rule. It really is the sine qua non of investment, the financial equivalent of the commandment to obey one god. Adherence to it will ensure that your portfolio and capital conveniently diminish over time, even as your debt load remains high. It is the key to remaining unburdened by lucrative commercial and beach-front properties which, let’s face it, are boring and prohibitively expensive to hold on to – some real estate agents want 12 percent of rental income!
‘Borrow big or bugger off’
This one’s a bit of a no-brainer. If you’re planning on making an investment, or any purchase that might require a loan, be sure to borrow an amount that greatly exceeds what you anticipate having to spend. The surplus can then be spent over the next 6 months on all sorts of miscellaneous non-revenue generating goodies. While there’s no hard and fast rule about how much extra to borrow, as a general rule of thumb, it should be enough to mitigate any capital gain on the investment for at least, say, 10-15 years.
‘Safe as Swedish steel’
Forget property. If, like any good investor, your aim is to maximise risk and minimise appreciation, always go for motor vehicles – cars or motorbikes. Ensure it’s a European make, and in general the older the model the better. Always pay a premium for ‘çharm’ as opposed to reliability. That way, spare parts are rare and guaranteed to be very expensive. You’re not going to put Serge and John’s daughters through Caulfield Grammar with a Corolla, are you? Finally, whatever you do, don’t buy insurance: $250 up-front to maybe save $12,000? ‘Tell him he’s dreamin’!
‘The best advice is free’
Whether it’s the country solicitor plugging the next Ponzi scheme ‘gratas’ on the blue carpet of the Ballina RSL or Max the Web Wizard, sozzled on a veranda, warning against depositing your silver holdings into a bank vault, you can trust just about anyone for sound investment advice. Anyone, that is, except for an accredited professional such as a solicitor, financial planner or accountant. Remember, if they wear a suit, work out of an office, and issue reasonable, prudent advice in exchange for a modest tariff, you have two choices: either avoid like the plague, which is best; or, alternatively, rack up so many billable hours that you take a juicy bite out of the value of the investment in question.
‘First offers count’
Much like first impressions, for a Heinrichs, first offers are decisive. When it comes to a deal, always dash in headlong. Waiting, weighing offers, evaluating the market – each of these activities carries with it the danger of extracting an unnecessarily inflated price for your asset. Always sell to someone with a tangential connection to the family – for example, a venal neighbour or the real estate agent’s boyfriend. A compelling personal story offsets market value by at least 30 percent. And, if you’re really shrewd, they might even split the cost of the valuation with you: that’s 150 big ones you just saved. You’re welcome!
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