Jean Galea

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Gambling v Investing: The Similarities and Differences

Published: June 05, 2019Leave a Comment

Investing in the stock market carries inherent risks. Just like gambling, it involves the risking of capital in the hope of future financial gains. Both involve speculating on an outcome that can’t be guaranteed – however, there are also some key differences to bear in mind. Let’s take a look at the similarities and differences between gambling and investing.

The Similarities

  1. Falling back on a safe option

Both gambling and investing offer the chance to fall back on a safe option. For gamblers, this might be playing on slot games that have a high payback rate – though offer less than you might stand to win at a high-risk slot. In blackjack, there are certain approaches to the game – and ways of budgeting – which can make a big difference to the house edge you’re up against, and how much you walk away with.

For example, the Martingale means you double your previous stake for every losing bet you make – so if you eventually win a hand you’ll have adequately compensated for your losses. We’d recommend putting these to the test when playing American blackjack before taking the table for real. Who knows, you might even prefer the experience, as so many gamblers do.

In investing, you can also choose to take a punt on tried-and-tested shares that have been rising in value incrementally over months – as opposed to throwing all your eggs into the same basket and investing in a start-up.

[Read more…]

Filed under: Money & Investing

Should You Buy North or South Facing Property in Spain?

Last updated: March 22, 2020Leave a Comment

A common question in the property scene is whether one should buy a south or north facing property.

South facing provides the best conditions for sunlight, considering factors like the difference between morning and afternoon sun. Suitable lighting and direct sunlight impact directly in a very significant way many things from mood to electricity costs. A south-facing apartment tends to be warmer in winter, and breezy and not as hot in summer.

You should also think about how you are going to use the house? Are you a night owl or an early riser?…..sunset or sunrise? How will you use it at different times of the year? Now that so many kids go to daycare and most parents work, many prefer a West-facing house or apartment because you get the sun and light in the evening when you are home from work.

However, when buying a property as an investment, it might be worth thinking twice about automatically going for a south-facing property. A study in Japan found that North-facing property is actually a better deal if you plan to resell that property.

On average, north-facing units tend to increase in value after purchasing from the developer, while South-facing units tend to depreciate.

This is an interesting point to consider when you are looking to purchase a new apartment from a developer.

Data on over 196,000 apartment sales from 2006 to 2010 was collected by Attractors Lab. The price of north-facing units on the second-hand market increased by an average of 11.4% from their original price when new.

The price of south-facing units, however, decreased by an average of 5.4% from new.

Some of the reasons for the change in prices are:

  • Developers price south-facing units higher, and north-facing units lower.
  • In the second-hand market, units of various types and directions appear randomly for sale.
  • Purchasers will prefer a north-facing unit with a wider frontage and good views over a south-facing unit with narrow frontage and less impressive views.
  • Many people prefer an open view that is not blocked by other buildings and are less concerned about all-day sunlight if they are both working full-time and return home late in the evening.

I’ve lived in both south and north facing apartments in Barcelona, and found advantages and disadvantages in both; I personally don’t have a firm favorite if I have to choose between the two.

Do you prefer south or north facing properties? Why?

Filed under: Money & Investing, Real estate

How to Evaluate Private Real Estate Investment Proposals

Last updated: March 22, 20203 Comments

Peer to Peer and crowdfunding real estate platforms are an excellent way to get into the property investment game, but as you get more involved into this industry, you are likely to come across private off-market investment opportunities.

By private I mean off-market opportunities that are typically reserved to a much smaller pool of investors and are found through connections in the real estate world. By writing about real estate crowdfunding and talking about it to my friends and connections at conferences, I eventually got in touch with some big players who deal in specific types of property investments.

While the crowdfunding platforms tend to offer a wide variety of properties, such as student housing, new developments, buy-to-sell, buy-to-rent etc, typically the private investment scene tends to be more specific in type and geographical region.

The reason is simple. You will typically find a person or small team who have been working in the industry for many years and have become experts in the market of a particular city or region as well as a specific type of property.

To take Barcelona as an example, I know real estate experts who specialize in obtaining some of the most dangerous and untouchable properties in the city (occupied by squatters, drug dealers, etc), clearing them out and totally refurbishing them to go on and sell for a tidy profit.

Others focus on foreign buyers who tend to be looking for higher-end finishing and specific locations and types of apartments when compared to the local buyers. Since most local developers focus on the local buyers’ needs, there is a niche that opens up that presents nice profits if you manage to meet the high needs of the foreign buyers as well as be able to market to them.

These are real niches with lower competition due to the extra skills needed to succeed. In the first case, you need to be able to know how to deal with very difficult and possibly dangerous people and probably employ people who will do some brute forcing to clear the spaces, and you need to be good at marketing to convince buyers that these black spots are now a great buy.

In the second case, you need to have knowledge of the traits of foreign buyers and speak their language. This will make it much easier to design an apartment for that specific buyer profile as well as know where to market it and then be able to seamlessly tour the apartment with potential buyers and deal with any concerns they might have.

[Read more…]

Filed under: Money & Investing, Real estate

Renting a Car in Europe – Excess Insurance

Last updated: April 05, 2020Leave a Comment

Traveling by car is one of the most enjoyable parts of our travel, and personally, I feel very relaxed when driving a hired car in most places around the world. I have driven in both North America and Europe (as well as motorbikes in Asia) and it’s been an awesome experience every single time.

[Read more…]

Filed under: Insurance, Money & Investing

🥑 How I Evaluate Online Investment Opportunities – Avo Owner Review

Last updated: April 06, 20206 Comments

I typically receive 2-3 investment proposals per week, mostly from online investment platforms. Very few end up convincing me enough that I actually invest my money in them.

A friend recently came across an interesting opportunity that he sent over to me to get my opinion.

Here’s the quick analysis I made; I think it’s a good case study to get an insight into some of the things I look at when evaluating opportunities.

The opportunity in question is a very novel one called Avo Owner. It consists in buying avocado trees in South Africa on a usufruct basis. So you don’t own the land but you own the trees and reap profits on the sales of fruit and the appreciating value of the trees themselves.

It might very well be a good investment, but I typically need to see more information before investing in something, especially since it’s something that I’ve never come across before.

I start by taking a look at the homepage and notice an immediate red flag:

The site says that this is a “Safe and secure investment opportunity that will generate a 3 year cumulative capital growth and return of more than 113%”.

Whenever a platform guarantees or implies a guarantee of profits like that it’s wise to stay away. What if the crops are destroyed by some bad seasonal weather or infestation? And how do I trust this guy with my money?

So far this sounds like anything but a “safe and secure” investment. Investments returns are almost always shown on a yearly basis, so putting a 3 year period to arrive at the 113% is misleading. It also makes little sense; am I getting a 113% capital growth or return from sales of avocados? If not downright scammy it hints at a level of unprofessionalism.

Doing a Google search returns very scant extra information. There’s a YouTube video which shows the orchards and the owner of the operation, but it’s something they produced themselves. I can see that they were crowdfunded through Seedtribe, although there are no specific details available there either.

Just to explore how the site works, I tried buying a few rows of orchards costing around $10,000. It sent me to the checkout page, asking for some basic information before I hit the button to purchase, as it if were some $10 electronic item you’d purchase online.

Moreover, the checkout page itself is not even secure. Nowadays most sites are completely secured using SSL, but this site doesn’t even have the checkout page secured. This prompted me to check out the code of the site, which looks pretty basic and amateurish, and definitely didn’t cost much to build, given the shortcuts taken and lack of professionalism in the code.

My conclusion is therefore that the opportunity is quite risky due to the scant information available, and I would definitely not invest in it myself.

If I were absolutely in love with the idea and lived anywhere close to the orchard, I would perhaps actually get to know the owner and then think about doing some investment after having gathered the extra information needed.

However, as an online investment, it simply doesn’t make sense in my opinion.

Filed under: Money & Investing

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Jean Galea

Investor. Dad. Global Citizen. Padel Player.

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