How I Escaped the Negative Gearing Trap

Financially conscious people know how important it is to save for the future. Ever since I was a boy, my parents taught me that this is something I should always keep in mind.

So I did. Using what sounded to me to be a good long-term strategy, I started investing in property. My wife Christine and I thought we were making smart decisions buying negatively-geared properties. 

We thought we could live with putting a crimp on our cash flow for the sake of financial security in the future. After all, I had a good day job and we could write off our losses of $36,000 a year. What’s not to like? 

But then we saw the crippling flaw in this approach.

After some major changes in my job, my income wasn’t secure anymore. On top of raising 4 daughters, there was no way we could afford to throw away $36,000 every year.

What’s more, our negative portfolio kept me in paid employment instead of financial independence. This is when I realised that things needed to change quickly.

We sold all our properties at a huge loss. Our negative gearing mistake cost us $300,000. But it also cleared the slate for a fresh start. This time, I knew I had to do it the right way.

That’s when it hit me – not only can affordable housing bring positive cash flow, it can be positive enough to support my family. I’d be able to live my life without having to worry about money.

I don’t have to sacrifice cash flow for the sake of future profit – I can have both.

This is when I started Small Is the New Big, and I can’t tell you how much happier I am with this approach. By tapping into affordable housing, I managed to break free from negative gearing and add to my accounts instead of draining them every month.

If you’re still stuck in negatively-geared properties, you might want to reconsider your strategy. To see why affordable housing is a much better option, sign up for my free masterclass.

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