The Finance Bible

ZG#2 - How Trying to Save $400 Blew Up in This Client’s Face

• Zeke Guenthroth and Oscar Don

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🎙️ "When it comes to investing, business, or even everyday decisions, cutting corners to save a few bones can cost you thousands. And today, I’m proving exactly why."

In this episode of The Finance Bible Podcast, Zeke shares a real-life story of a client who ignored expert advice to save just $400 a year on property management—and ended up losing over $5,000 in rental income, unnecessary fees, and wasted time.

✅ Why cutting corners often costs more in the long run.
✅ The hidden dangers of prioritizing price over quality.
✅ How to identify when you're about to make a costly mistake.
✅ Real-world examples of why quality always wins.

💡 "You get what you pay for—and when it comes to your finances, paying for quality upfront can save you stress, time, and serious money."

🔗 Listen now and learn how to avoid costly mistakes:
🎧 Website: https://assetroad.com.au/the-finance-bible/

📢 Help others avoid costly mistakes—share this episode!
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DISCLAIMER:

The information in this podcast is general in nature and does not constitute personal financial advice. It does not take into account your individual objectives, financial situation, or needs. Always consider whether the information is appropriate for you and seek advice from a qualified professional before making financial decisions.

#FinancePodcast #YouGetWhatYouPayFor #WealthBuilding #InvestmentTips #MoneyMatters #QualityOverCost #SmartInvesting #RealEstate #PropertyManagement #FinancialFreedom

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Speaker 1:

In life, you get what you pay for, and when it comes to investing, trying to save a few dollars can cost you thousands. Today, we're going to be diving into why quality always wins in the long run, and I'm going to share real-life examples, one in particular of a client who learned this the hard way, simply put, after choosing the wrong property manager to save just $400 a year. Trust me, you'll want to hear this one. Welcome back to another episode of the Finance Bible Podcast.

Speaker 2:

You're joined with myself, zeke, and your co-host, oscar. But before we get into it, please note that nothing in this podcast should ever be considered as personal financial advice. But if that is what you are seeking, get in touch, let us know and we will hook you up with the correct professionals. Sit back, relax and enjoy the show. Let's get into it.

Speaker 1:

As you would have just heard, we're going to be talking about quality, why quality matters. You've got to choose and figure out what you're happy to pay for and what you're willing to pay for, based on the quality you're going to get and the outcome you're going to get. Now we've all heard the phrase you get what you pay for common sense but what does it actually mean and what are the examples of when it does go wrong or can go wrong? What impacts can it have? So we're just going to jump into it pretty much. We're going to talk about different things, but we'll just break it down really simply and before we get into it, it really does matter. Saving a few dollars on something like an investment property or just any form of investment a house or whatever let's say it's a building and pest inspection Then imagine the outcome that could have. It could cost you literally hundreds of thousands of dollars at the end of the day. I'm going to share with you a real-life client story and we're going to go into the specifics of it and talk about how just $400 cost to someone 12 times more than that. That's just a bad decision. That's all it was. So what actually happened?

Speaker 1:

A client of ours came to us and we were helping them with the process of getting their investment property figuring all that out, buying the property, getting the building and pest inspections done and so on. So when you buy the property you obviously go through everything You've got mortgage broking, you've got sourcing the property, you've got the real estate agent that you buy the property from and each nitty gritty bit, including solicitors, including building and pest inspection, including depreciation schedules, including property managers, including advertising photographers and so on. So we obviously recommend certain people in different areas or states or cities or wherever the property is that we work with and we know can do a good job and get it done. This particular client went ahead with all of our recommendations bar one. So the building and pest inspection, they went with us, which is good, because something like that, if you're not getting a quality building and pest inspection and there turns out to be termites in there or there turns out to be some form of structural damage you didn't know about, there's water behind the bath and that's causing mould and all of these different issues, and then you have to get a full bathroom renovation. You're talking 40 grand there. Termite structural damage you might be talking 100, 110. But anyway, that wasn't the problem.

Speaker 1:

Everything was done, property settled, everyone's happy property manager comes in and they're not overly satisfied with the recommendation on the property management front because it's going to cost roughly between $300 and $400 a year more than another property manager offered. Now when that happens, you might be looking at it going well, 300 bucks a year, that's actually like a bit of it going well, 300 bucks a year, that's actually like a bit of money. If you're renting, that's probably half a week or a week's rent, if you're living with people or whatever the scenario is. But what is the actual reason that they're costing that much more every year? You need to figure that out. You need to work with professionals, you need to look into the logistics behind it. But anyway, anyway, moving on with this example, they go with the other property manager and they're pretty happy with their decision because they're going to save a bit of money and cutting cost is important. But the scenario is where you probably should look into it a bit more.

Speaker 1:

What happened next was we had suggested that that property could rent for between $600 and $630 a week. We were also pretty confident with a vacancy rate of 0.5% in that particular area that we could get it tenanted within a seven-day period of settlement. So if we got the keys, got the advertising done within seven days, we were pretty confident we'd have a tenant saying yep, I want that house sign the agreement. They might not be in there for two weeks, but they'll be in there. It's sold as done. I want that house sign the agreement. They might not be in there for two weeks, but they'll be in there. It's sold as done.

Speaker 1:

This property manager was running the advertising, doing the open homes and so on and so on. But seven weeks later it was still vacant and the client began getting frustrated and calling us and asking for help and all of that kind of thing, as you would. But seven weeks went by where they didn't change anything. If it tenanted for $600 a week, that's $4,200 down the drain just from the wrong property manager. Eventually they did switch, they gave up, they moved on from the property manager because they were terrible, and came on board with our property manager, who did get it tenanted within a seven-day period, mind you, and they also got it tenanted for more than $600 a week.

Speaker 1:

But in this scenario they then had to pay a bunch of different expenses. They missed out on their $4,200 in rental income, or a bit more. They also had to pay the original property manager for their services. They had to pay lease fees, advertising fees and so on with the new one and ultimately it cost them over $5,000 a year. So that $5,000 cost in that seven week period versus the 400 or 300 a year that they would have saved is more than a 12 times multiplier.

Speaker 1:

So they're the kind of decisions that we need to figure out and we need to make. We need to break it down, we need to learn the lesson, we need to see what is going on and why. And here's the truth Saving $400 up front costs the client over $5,000. Trying to save on quality is a gamble and it rarely pays off. Breaking down the lesson short-term savings versus long-term costing. So it's easy, very easy, to focus on saving a little bit of money upfront, but more often than not, the cheapest option can be more expensive in the long term. So you see it all the time in terms of what's another example If you've got Telstra, optus, whatever, vodafone, they might be offering you a plan.

Speaker 1:

You know the first three months are $35 off and it ends up for that first few months costing a lot less than another one, but then it goes up $30 and then, over the period of the 12 or 24 or 36 month contract, it actually costs more because their their average is higher. Then that's another thing where you're like, oh yeah, cool short-term saving, but it costs more long-term, and this is a perfect example of that. So it can be avoided. You just need to do your research. You need to look into what's going on Value over price when you choose a service or when you choose a product, whether it's property management, financial advice or what's an example for blue collar.

Speaker 1:

If you're in blue collar, it could be the tools that you're getting. You know, makita Ryobi or whatever, whatever, even just simple things drills, screwdrivers, that kind of thing. You're paying for experience, efficiency, outcomes, reliability and all of these things matter. A bad choice doesn't just cost you money cost. It costs you time, peace of mind and normally more money to fix the issue later as well.

Speaker 1:

Let's go back to the tool example. If we're talking more, you blue-collar guys out there in the trade industry, so you go, you buy cheap tools. You're like, yep, this whole kit of whatever it might be is $120 less than this other brand. Awesome, you save the money, you get to your site, you're doing your job. However, long goes by and bang it breaks or there's an issue with it. You've got to send it off to the workshop to get fixed or repaired. You know, if it's mechanical, like drills and stuff, then your warranty might be covering it. But now you're out of equipment. For how long? So how do you continue to do your job in that timeframe? Whereas if you had the reliability and efficiency of the other product, would that have happened? So then you buy something to replace that. While you're doing, waiting for the repair cost you more. Anyway, get the repair back, but you should have just bought the better tool in the first place.

Speaker 1:

There's an example for blue collar. If you're buying a car, you've got the same problem. You don't want something that's going to break down in three years time when you can have something for seven years. You don't want to do it with insurance because then there's loopholes and then you don't get. Make claims.

Speaker 1:

Builders, like how many of you go out there and you're like really researching these expensive things. Like you know, if you're building a home, the builder that you want use you really want to make sure it's good, and you want to go through every single part of that contract. You want to go through every single part of the floor plan. You want extra PowerPoints here. You want extra fans there, whatever the changes are. At the end of the day, that's something that you're really focused on and that you really want. You should apply that to everything that you do, every single thing that you do. You should be checking for the quality and comparing it with the cost.

Speaker 1:

So how do you actually make the right choices? How do you ensure that you make the right decision and it doesn't end up stuffing with you in the long term? First of all, research Common sense. Figure it out, sit down, take the time to understand what you actually pay for what you're investing in, and compare each option. Option. How many of you would sit down and compare what's that, mr Meerkat? Compare the market. How many of you would sit down and compare insurance quotes? How many of you would sit down and compare internet bills and stuff like that and look for a better deal? So, with everything you do, do that. Sit down, make the comparisons, do the research. But here's the main thing Not just price the reviews, other people's experience, their experience as a company, the outcomes they deliver and ask for recommendations.

Speaker 1:

If you know people in the industry or if you know people who have used that product before, or whatever it might be, then you need to rely on people that you know and use the trusted referrals. Avoid guessing and gambling. And thirdly, think long-term. Before you choose anything, before you choose a cheapest option of anything, ask yourself all right, what's the cost if this doesn't work? What is the cost if I run into an issue and you need to actually sit there and go? All right, this is cheap in the meantime, but in two years, in three years, in four years, what will the outcome be? And figure that out. In the end, you do get what you pay for. You really do. Choosing quality over cost is not just about spending more, but it's about getting the results you need and having that reliability. I've said it before, I'll say it again reliability.

Speaker 1:

Avoid the stress, avoid the financial hit of poor decisions. As this real client example shows, saving $400 isn't worth losing thousands in rental income or paying double for the same job. Ultimately, that $400 a year. It would take them 12 years to get that back if they had the cheaper property manager because the $5,000 they ended up spending. There you go and that's it. It's just a short, simple think about decisions. If this episode resonated with you, share it with someone who needs to hear it. Whether it's about property management, investing tools, life in general, the lesson's simple Always focus on value, not just cost. If you're unsure about financial decisions, reach out to us. We'll connect you with trusted professionals. They'll guide you, help you make the right decisions. Thanks for tuning in. As always, let's make smart decisions together. Ciao, dale. As always, we hope you enjoyed the episode and if you did, you know exactly what needs to be done.

Speaker 2:

Hit that follow button, subscribe. Share it to friends, family or even your co-workers, as sharing this podcast helps not just us, but everyone in the world to learn about their finances. Thank you, darling.

People on this episode

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Oscar Don

Co-host
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Zeke Guenthroth

Co-host