Young Investors

Imagine as an adult what a specific property would be worth if you purchased it while still a teenager or younger! (Or rather if your parents purchased it for you!)

Zephyr Rubidge touches up the stoep of his investment property        Dad gives some directions

What if as a child, you were able to buy (or had the trained help to buy) a property? Naturally such a prospect opens up a few further questions:

• How much would it be worth now?
• What would your capital gain be?
• How much net rental income is there now?
• Would your parents need to fork out the big sums of money to pay for your university/technikon degree, or could it come out of the proceeds or rental income from your property?

Meet Zephyr Rubidge (pictured above); the young investor now three and a half who, with the aid of his mom and dad, bought his first property in late 2004, when he was only one!  It was only a small property – just right for such a small boy who was just learning to say the words:

“high eeld”, “internal rake of return”, “big pwofit” (high yield, internal rate of return, high profit).

In Rich Dad Poor Dad and other books Robert Kiyosaki emphasizes and reemphasizes the importance of learning the vocabulary in investing that make an investor.

This little investment has through careful use of leverage and planning made very significant capital gain and presently makes Zephyr a net profit of R750 per month after all expenses and bond repayments. His mom and dad carefully manage his small property ‘portfolio’ for him, encouraging him to take an interest in the property. The income from this property will ensure that Zephyr has a jump start in life! It will give him the opportunity to use the income generated to:

Ø      Invest in another property

Ø      Go on a lovely overseas holiday after school

Ø      Buy a car when he turns 18

Ø      Pay for his university education

Ø      Set himself up in a business after his studies.

His mom and dad will keep control of the property until Zephyr develops enough financial ‘savvy’ to control his own finances. Tenants will continue to pay the bond, and once the bond is paid off, the income generated will be used to subsidize another property investment!

Getting the kids involved:

• Last week Zephyr, with daddies help showed prospective tenants through his property. He pointed out the living room, bathroom, the bedroom, and even the sea view, and even showed them the current tenant’s pet cockatiel.
• Dad had him busy with tools hammering and chiseling the moss off the front stoep of his little ‘pwopety’ before getting himself and dads nose pretty green with stoep paint.
• Zephyr even had considerable pre-training - prenatal exposure to property viewing and a chance to “eavesdrop” (prenatal hearing is well documented) on moms and dads plans of where to buy next
• Sometimes when the young ones are a bit down then a great boost is available from spoiling them with a treat (sweeties/special DVD/visit to the oceanarium) and plenty of mention is made of how the property pays for it.

In the Art of the Deal and other books Donald Trump never fails to mention the influence his dad had on his present success in real estate.