Andee soon contacted me and we realized that we both live in the same city (Melbourne, Australia … well I split my time between Melbourne and Chicago) and share similar philosophies on personal finance.
This ‘video post’ explains the ultimate goal of Andee’s unique Personal Finance game (called Where’s The Money Gone). Andee’s video can be accessed by clicking on the image below; I really think that you enjoy it …
Have you heard of the ratio 80% LVR. This stands for 80% loan to value ratio. Another way of expressing ratio is this :- 400% Debt to Equity!!!
If people continually focus on looking at the lower ratio they will be lured into buying overvalued assets, funding them with too much debt and then wondering why they’re struggling with their cash flow when they’re supposed to be feeling wealthy.
In this video I explore a better ratio to focus on. This means wealth creation is built more sustainably and with less risk.
Thanks for the video, Andee!
It really helps to explain why people go broke in buying too much property (home and investment) and/or other investments on finance, even though we’ve always been told to borrow more to invest more. In upcoming posts, we will explore the link between Andee’s ‘twin equations’ and our own Equity and Income Rules …
BTW: Andee filmed this video in the lovely (if a bit dry due to the extended drought) Stephens Reserve – a section of parkland near his office in Vermont (an outer suburb of Melbourne); Andee plans to do a ‘video tour’ of Australia, filming a number of videos at scenic locations around the country … or, perhaps the world!? If you want to keep an eye out for these videos – which are sure to be instructive and entertaining – I suggest that you check in at Andee’s blog from time to time.