In this week’s episode, Bryce makes a guest appearance on the Wealth Time Freedom (WTF) podcast, hosted by Terry Condon!
They cover a wide range of topics including:
This bonus episode is all about the courage to pursue passion over expectations, cultivating financial resilience, and playing the long game of property investment!
Free Stuff Mentioned
Additional Resources
LISTEN TO THE FIRST 20 EPISODES HERE >>
MOORR MONEY MANAGEMENT APP:
👉 Apple: https://apple.co/3ioICGW
👉 Google Play: https://bit.ly/3OT86bW
👉 Web platform: https://www.moorr.com.au/
FREE MASTERCLASS:
- How to Build a Property Portfolio and Retire on $2,000 a week >>
FREE BEST-SELLING BOOKS:
- The Armchair Guide to Property Investing
- Make Money Simple Again
FIND US HERE:
- Website
- Instagram
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- Youtube
In this week’s episode, Bryce makes a guest appearance on the Wealth Time Freedom (WTF) podcast, hosted by Terry Condon!
They cover a wide range of topics including:
This bonus episode is all about the courage to pursue passion over expectations, cultivating financial resilience, and playing the long game of property investment!
Free Stuff Mentioned
Additional Resources
LISTEN TO THE FIRST 20 EPISODES HERE >>
MOORR MONEY MANAGEMENT APP:
👉 Apple: https://apple.co/3ioICGW
👉 Google Play: https://bit.ly/3OT86bW
👉 Web platform: https://www.moorr.com.au/
FREE MASTERCLASS:
- How to Build a Property Portfolio and Retire on $2,000 a week >>
FREE BEST-SELLING BOOKS:
- The Armchair Guide to Property Investing
- Make Money Simple Again
FIND US HERE:
- Website
- Instagram
- Facebook
- Youtube
Hi folks, welcome back to the Property Couch podcast, and I recently was invited as a guest on the Wealthtime Freedom podcast, chatting with Terry Condon, and we covered far ranging topics, which include horrible, tolerable and productive debt, the difference between investment grade property and everything else. We also talk about the demographic shifts in the government policies that are likely to impact property prices over the next five to ten years. We cover a lot in this episode. Thought it would be useful for you folks to have a little listen behind the scenes of the conversation that I have with Terry. So hopefully you get a lot out of this and hopefully you enjoy the conversation I had. Let's cut to it now.
Speaker 2:Bryce, thanks so much for coming on, mate. Hey, thanks for having me. Terry Tell me about the man in the Ferrari Paradox.
Speaker 1:Yeah, the man in the Car Paradox. I like it. It's a concept that I found from Morgan Housel, who wrote a book called the Psychology of Money. It's really had a profound impact on me because I think it's probably the number one thing that's changed my thinking over the last decade, and it goes like this If you see a Ferrari go down the street, quite often we think, oh, you know, that would have bit me, respected and admired so much.
Speaker 1:But the reality is I think Morgan found this out when he was valet parking really expensive cars and the epiphany dropped for him.
Speaker 1:But whenever we see this car, we actually never say to ourselves wow, that driver is so cool, that would be amazing to do that.
Speaker 1:What we actually do is we project ourselves into the car and we go wouldn't it be cool if I had that car?
Speaker 1:So that everyone would think that I was cool, and we totally miss the point that we never even acknowledged the driver of the car.
Speaker 1:So we never want to be the driver of the car, we want to own the car, and we forget that when we're actually sitting in the driver's seat, no one's giving a rip about us whatsoever, because they are actually thinking well, wouldn't it be cool if I had that car, because I'd be in the driver's seat and everyone would think I was cool, and so you can project that onto houses or holidays or Instagram shots or anything you want to and I'm not fully cured on that, I'll be honest but I'm more than 50% of the way, so no one gives a rip about what car I'm in, what house I'm driving. If I want to get respect and admiration, it's probably quicker for me to find ways to add value through humility and mentorship and being kind to people than it is for any car that I'm going to drive. So that's the man in the car Paradox, morgan Housel, and I reckon it's the number one paradigm shift I've had in my life in the last decade.
Speaker 2:When you told me that I thought I've got to start there because I haven't heard it explained or sort of the impact of it explained that. Well, what do you think?
Speaker 1:because, you know when you go into the house of mirrors and do you know how you look at the mirror? And there's one behind you and one in front of you so you can keep seeing the reflection. But what happens is, as it gets closer to infinity, it just curls out to the point where it's just not infinity. And it's the same with the man in the car Paradox. Every single person next in line, next next, is thinking, oh, wouldn't that car be cool? Because everyone will think I'm cool, and the person looking at them is thinking the same thing. So we're just going through this rolling infinite loop of everyone would think I'm cool, but no one is.
Speaker 1:Yeah, I always think the best way to think about that too is when's the last time you thought about the Queen of England? Yeah, I don't think I thought that often, but she was a 70 year monarch who'd probably accumulated more wealth than most people ever will. Reigned as a woman for 70 years, which was unusual for the time. And here we are not thinking about it. So think a combination of those but no one's thinking about us when we go on and no one's thinking about us while we're here helps us prioritize what's really important.
Speaker 2:Anyway, it's sort of a different angle, but I always call it like the Truman Show Paradox, which is like everyone thinks they're in the Truman Show and everyone's looking at them at all times, yeah, yeah, and nobody's looking at each other, so nobody gives a damn.
Speaker 1:Yeah.
Speaker 2:But other signals are pretty weak signals, aren't they? Yeah?
Speaker 1:I like it 100%. Yeah, if we just think about how can I add value to as many other people as I can, you'll get more respect and admiration from doing that, from any other thing that you have in your life, and the funny thing is that stuff appreciates, it doesn't go away.
Speaker 2:It actually only becomes more powerful over time. Yeah, having conversations with people that you worked with 10 years ago, it still stays. Yeah, crazy, mate. Let's go back to the start, though. I want to sort of really get a sense of this. You told me that you got started in property in 1998. I calculated just 25 years in property, so you've been around. Where did this all start for you? How did you come into it, mate? I lived in Perth.
Speaker 1:So for those people who are listening to this are familiar with WA. In Perth I lived on the south side in a suburb called Bibral Lake and my mum and dad still live there and I went to Murdoch University. If I had my lecture started at 8.30 in the morning, I could leave home at about 8.17 and that was enough time to park the car, walk to the lecture and still be on time. That was a positive and a negative, but the positive was that I would go home for lunch and sit there and have my lunch and I put on the TV and back then there was a show called the Midday Show and it was hosted by Ray Martin, and so he had a lady by the name of Jan Summers on the show and she had a whiteboard. In my mind she's the pioneer in this country for property investing knowledge, pre-podcast, pre-youtube, pre-email newsletters. She was just the OG right. And so she just pretty much got up there with a whiteboard pen and pretty much said the tenant and the tax man, I'm buying properties because the tenant and the tax man pay most, if not all, of my bills, and I couldn't get that out of my head. The tenant and the tax man pay most, if not all, my bills. And I was thinking to myself why isn't everyone doing this? So to build some context 1996 I was 21.
Speaker 1:As I get a bit older and a bit more gray hair, I realized that property investing is 80% between the ears and 20% of the mechanics. But back then I didn't know. So I was just thinking. I was looking around, thinking to myself oh, if this secret gets out, it's going to go somewhere. So from that moment I was hooked.
Speaker 1:One of my best mates had just bought an investment property, asked him a bunch of questions and he said oh, my dad said I should buy because I'll get some tax benefits and it'll go up in value. And I was just kind of on this mission to find out as much as I could. And then I stumbled across the club. It was a property club and I'd go there every Monday night and I'd turn up and I was the youngest by far and it was just usually old blokes in their 40s and 50s up there talking about property and mate. For me, in the absence of YouTube and in the absence of podcasting and in the absence of any other resource other than the Australian Property Investor magazine at the time I just was lapping it up and I'd go to these meetings and just get involved. So that was where the spark started for me to get involved, and Jan Summers, and then I got the good privilege of interviewing there on our podcast and it was the greatest loop circling experience for me just to have that conversation with her.
Speaker 2:We've got a novel idea the club.
Speaker 1:Yeah, yeah, yeah, yeah, yeah, yeah.
Speaker 2:So there's a footy club and there's a soccer club, and then there was a property club. That's amazing. So was there anything that you felt might have predisposed you to want to really understand this and understand the game of this?
Speaker 1:I think we're upbringing. My dad was born in 1939 and my mum was born in 1948. So dad was pre-baby boomer and so he was born in the shadows of austerity and wars and depressions and all those sorts of things and so he instilled in me classic Rich Dad, poor Dad stuff. Right, you get a good job and you stick with it for a long time. Because that's what he did and I must admit I really didn't want to buy into that and I remember buying Rich Dad, poor Dad. I remember where I was sitting.
Speaker 1:I remember devouring it in one session because it kind of articulated the rough thoughts that were running around in my head that I didn't have the wisdom or the maturity to articulate.
Speaker 1:I didn't want to do Poor Dad's path, I wanted to do Rich Dad's path but I didn't know how to bring it all together. But I think the fact that he said get a safe, secure job, I stuffed around at high school I wanted to be an electrical engineer. I didn't get the score I wanted because it was just implied I was going to uni. So I just went down the list and I thought, oh, commerce, honestly didn't know what commerce was. I had a friend who was doing commerce and I think, all right, I'll do that. I got the score and I just went along, so I was kind of just this bumbling along, go with the crowd, but deep down I had this urge to find out about how money work and probably to break a little bit of the conditioning that my dad had given me that I had to make a decision that was a life altering decision, at the age of 17 and a half or 18, that could never be altered, ever again.
Speaker 1:Ridiculous, ridiculous, but not for him right, so just to build context, my dad, when he retired, retired at 24 years and six months and part of the agreement that he had to accept the redundancy that he was offered was if they acknowledged that he got a 25 year certificate for working where he was, because it meant so much to him. So I had to remember that what was important to his generation and try and honor that. But when I'm young and think I know everything and angry at the world and angry at some of the things that he was conditioning me with, I wasn't able to see that. But I look back now and I go, huh. So equally, he conditioned me that anyone in sales was a snake oil salesman. That's hard, that's a bunch of stuff that you have to shake right.
Speaker 1:So therefore, any label around people who were in their own business maybe a bit shonky salesman, steak or salesman I think it was all just some of the conditioning that he was dealing with, it being born around wars and depressions that he was projecting onto me. So that was the spark, that was what got me into it. I just remembered I felt like I need to work this money thing out, but I think I'm also trying to break free from a, I guess a path that I saw that I probably didn't want to go on, but I didn't really know how to get off it Robert Kiyosaki's got so much to answer for, because I read his book at 16 and it's like that movie, Inception.
Speaker 2:It doesn't go away. And I can't remember who was telling me, but one of the athletes that I was working with very early in my career and I reckon the first year I got a job, my first full time job, I was doing a dream job and he said man, you were talking about running your own business straight away. I was like just never left me. I was like I'm doing this for a period of time, I'll be doing something else.
Speaker 1:It sounds like you and I've got a similar path. We just aid up the concepts in this book and then he brings out cash flow quadrant and you go yeah, yeah yeah, I want to be on that side. That side I don't want to be on the left, I want to be on the right and ideally, I want to be in the bottom right.
Speaker 2:Yeah.
Speaker 1:Powerful stuff.
Speaker 2:Really, really powerful stuff, Absolutely. And then he said obviously then you started getting invested. People are listening to this.
Speaker 1:They can't see me, but I have a real baby face. And here I am at 48. I probably got a few extra miles on my face. But back then I was in this club. I was up doing some of the presentations and I was coming from my day job, which was as a chartered accountant in West Perth, and at night I'd go and do this property stuff because I just loved it and I remember getting up there and this lady just looks at me with disdain on her face. She goes you're just a baby in a suit. Because another thing that my dad had said to me is kids should be seen and not heard. And I'm thinking well, I look like a kid, so if I look like a kid and kids should be seen and not heard, I tried harder than the average person to try and prove what I knew. So I just got involved in this club and all these older men could see how enthusiastic I was. But wait, I'm a graduate accountant on $27,000 a year. I'm barely able to make my car payments, my $9,000 car loan that I had at the time. So I just couldn't see a way between how I'm going to get one and my ambition.
Speaker 1:And then the guy who led the club, who was a very successful property investor. He just pulled me aside one day and he goes we're going to buy a property together. And I went what do you mean? It tested my energy and my enthusiasm and my commitment. He goes if you want to get up and stand up in front of these people and tell them, you know that they should be investing, you should be doing that from a position of being a property investor yourself. And I said I know, as soon as that can happen, I promise you I'll do it. And he goes well, let's do it together.
Speaker 1:So we ended up buying the first property together. It was in a suburb called Victoria Park in Western Australia. And then after that I don't know fast forward, maybe 15 months he rings me and he goes let's do it again. That first property, he was 80% owner, I was 20% owner and on the second property we went 50-50. So then I got into my first two properties very early, thankfully because of him, and then I just was walking the talk. And then it goes from there. You build up some equity, you're in a position where you can buy some on your own right. And that's at me on the path where I am now.
Speaker 2:What about that for just a life principle just get around people who are talking about and doing the thing you want to do, because then you get someone like that. What an opportunity for someone to literally just hold your hand through the path that a lot of people are going to wait three, four, five years to do. You're just like no, I'll just go straight to the far line.
Speaker 1:Incredibly blessed, so that was a wonderful thing. The thing that was the most important is he was stretching my mind. He was stretching my thinking. So all of a sudden, the paradigms that I had in my mind were being blown. And then I was seeing the way that because he was a very wealthy man, so the way that I was seeing him think about different approaches to property, and it was just game changing stuff back then and again, for anyone who's listening to this, you've got to rewind pre-YouTube, pre-podcast. It was groundbreaking information. All you had back in those days was direct mail, so you'd see an ad and someone would send you direct mail.
Speaker 2:Dan.
Speaker 1:Kennedy yes.
Speaker 2:Yes, dan Kennedy.
Speaker 1:Oh, there was a guy back in Perth. His name was Mal Emery, but that's the exposure that I had to that sort of stuff, so you know I ate it up.
Speaker 2:I loved it. And then, what was the step from there to starting your own shop? I think it was October 98.
Speaker 1:I first got exposed to this club and then I was a graduate accountant. I'd previously decided to work at the casino at Perth while I was at uni and it was kind of floating. I knew that I'd got this degree that I didn't want to do. And then I just I saw all my mates going off doing their professional year in accounting. I saw the sacrifice they were making to get that professional year and I thought I'm not sure I'm up for that, given that I have zero passion about being an accountant. My father was an accountant. There you go, so the fruit doesn't fall far from the tree, but I have zero passion for it. So I was just at floating a bit and then I thought to myself after a while I thought I'd better go and get a job. I've got this degree, I've got no other real meaningful plan at this point in time. But I was doing the property club on the side at Turnitl Business. Because what happens is I got after and I said, hey, this is what I've done. Do you want to do it? And back then I was called a support member and so what you do is you build up a database of names and my mentor said as soon as you have 300 people on your list, they will start calling you more than you start calling them. Okay, so that was my goal. I'm just going to get 300, 300 names on this list.
Speaker 1:So, old school. The guy would send me an old publisher, two page publisher. I'd go off to Officeworks, I'd print them off back inside, then I'd get the stamps and then I'd get the labels from Officeworks, I put them through my printer and I'd lick all the stamps whilst I was watching the footy and I'd send out these letters out to these people. I'd do that every month and I remember it was costing me money, so I had to pay for the postage, I had to pay for all the cost at Officeworks and I had zero idea to run a business and had zero people in my family tree who could mental me, and so when I was starting to get wobbly around spending the cash on this stuff, all I could remember is 300 people, 300 people, 300 people.
Speaker 1:Once I got to 300 people, what happens is people come to these workshops that we're doing. They'd come, and if they got excited about being a property investor, I would help them buy a property, and then, as you know, in the property game. There's a success fee that comes from doing that. So I was making about $40,000 in my spare time and I was making $27,000 a year in my full time job, which I hate it. So what happened is? I remember everyone was concerned about the Y2G bug back in the year 2000. But I was worried about leaving my safe, secure job, that my dad was really proud of me having to go and work in my business full time.
Speaker 2:So that's how I transitioned. This is what I think is interesting. I think people would look at like the outward version of this and go well, I just goes after what he wants. But I would say that's very risk averse, Like wait, you waited a long, long time to manage to actually go. Well, actually, I'm proving myself here. I know how to do this thing here, and now I've got enough demand over here. I've already proven that I can replace my income before I actually replace it. Such a misconception, isn't it? I reckon it's all about risk management, not just reckless risks.
Speaker 1:My 100% and back then no social media. So at the moment, all we get to see is people's highlights real but no one gets to see the behind the scenes. Well, this is my behind the scenes. I'm an overnight success after 20 years, right? So that's part of the grinder that I was doing the crucible, yeah, so just staying committed to it. And then in 2002, I moved from Perth to the East Coast for through the same business and then met some good people, tried some new adventures, backed myself in, got myself right up against the wall on a number of occasions, but always just kept the. I think the North staff for me was I was too proud to come home with my tail between my legs because my whole intention at the time was to break the conditioning that I was going to work for someone else for the rest of my life, and so, if that was my North staff, every activity and every action I took was all designed to make sure that I never ended up fulfilling that.
Speaker 2:Was there ever a time where you thought, shit, I'm actually going to have to go back and get a job here?
Speaker 1:Yes, 100%. And then I pushed through that, but then during the GFC, I'd moved from Melbourne. My wife is a Victorian, I'm a Perth boy, so a suit. After we got married in 2008, we went up to live in Brisbane because I'd accepted a role up there. But what happened is we got up there and then the GFC happened and I was holding too many properties at the time, you probably remember.
Speaker 1:But just before the GFC, interest rates were climbing and then, after the GFC hit, they continued to climb, and so all of a sudden, I'm in the position of weakness here. My income is dropping through the floor. Most of the time I was a property counselor where people were ringing me up and got because it's the first crisis that anyone's experiencing, including me, and so I'm navigating the emotions for the first time whilst clients are ringing me for reassurance. So that was the first time I got to understand some Warren Buffett quotes, because I had to print them out and I had to remember be fearful when others are greedy and greedy when others are fearful, because up until that point I didn't even know that statement existed. But I just had to get these affirmations in my head and know how to reassure people who were also wobbly at a time when, to be honest, had no experience on how to help them navigate a crisis that I'd never experienced before, and I didn't know how to navigate.
Speaker 2:How would you advise yourself? If you were coaching yourself, then now through it. What would you say to you when you're at the lowest ebb?
Speaker 1:I would probably spend a bit more time trying to break and rebuild false beliefs in my mind, because some of the challenges that I was facing at the time were prisons only in my mind, and the reality is that most of the challenges were there. So, for example, you've got young kids, terry. So when you play with your kids when they're really young and you throw the ball and they don't catch it, the first thing that doesn't run through your mind is a parent is to berate them.
Speaker 1:I cannot believe that you did not catch the ball, the first instinct we have is to pick up the ball, take one step closer and throw the ball again. And if they drop it, we pick up the ball, we take one step closer and we throw it again. And so that's the metaphor. I wish I had a known back then, because what I did is I suffered in silence and, being an introvert, melancholy personality type, I took on all the stress internally, whereas if I had, I've actually just reached out for help.
Speaker 1:Instead of thinking that those people were going to think I was a failure, those people would have actually just lent in and said what do you need and how can I help? And I reckon it would have given me a ton of confidence and knowing that, hey, even though the sky appears like it's falling in, this is not the first rodeo there have. There has been cycles in the past where this has happened and, let me tell you this, two shell pass. So that's probably what I said. I would have tried to break and rebuild some of the mooring lines I had in my mind.
Speaker 2:Yeah, I think these kind of concepts and models are so important to have in your back pocket. I reckon there was one that I came across that really did help me understand particularly when I was educating myself around investing that it's actually the volatility that you're experiencing right now is the reason you get paid your premium on whatever your investment is. That is the reason. So don't wish it away. Understand that this is going to happen and it's going to happen again, and that's why you're getting paid.
Speaker 1:Yeah, nice one, I like it. The other one good one too is just to lean into. That is the concept called scary ugly. Evan Lucas is a friend of mine. He wrote a book called Mind Over Money. I think it's chapter eight. He's got this thing called scary ugly. I'm like, ah, isn't that interesting? And whenever we read a book even in my own book about property investing, we always say that property goes up on average 7% every year, which means it doubles every 10 years on average. But what we know through having the experience of now investing the last 25 years, there is nothing linear or smooth about that. Doubling 50% of it happens in one year for three years. There's nothing. So he has this graph, he goes assume it goes up to 7%. It looks like this beautiful exponential graph, right? And then you turn the page and he goes. Let me tell you what that looks like. And it's this volatile, fluctuating ugly graph that gets you from the same starting point to the same ending point. But it doesn't have this beautiful straight line.
Speaker 1:And I think it sort of highlights what you said before because as a mentor and advisor in the space that you and I occupy now, we got to help our clients ride those bumps long enough to play the decades game, and if they do, they're rewarded handsomely.
Speaker 2:Zooming out is just the most powerful thing you can do. Yep, the most powerful thing. Just keep zooming out, zooming out, zooming out. And if you have tools to be able to do it I think I've got it from Alex Salmazi, actually this 80 year old frame and you just go what would 80 year old? You say to you right now? And it usually works so good, okay, cool. So then you've started to sort of help other folks with this. Tell me about the podcast. Where does the podcast come in for you?
Speaker 1:I'll give you the long story, but the short version. I was on a plane and one of my great friends, jane Slechsmith, hands me a book called the Millionaire Messenger and it was by the name of Brendan Beshard. So you're nodding, your family with Brendan Back then. It was a new name, he was very early in his journey and basically what it said is shows you how to create information products around your expertise. And I thought, wow, this is so good. And it showed you what to do. And it showed you and it was a bit of a concept that Gary Vaynerchuk later did jab, jab, jab, right hook. He had give value, give value, give value, ask for the sale. I thought, huh, isn't that interesting.
Speaker 1:So what I did is I embarked on a journey of going across to the US and getting in the room with some of these really amazing minds, and the big takeaway for me was give as much value as you can to people and then, as a result, you will better educate them, create trust, and then they wanna use you. And so I thought to myself we've got this business. Where in our industry, in the property industry, so many people get spruped by shiny taps around brand new property and you know, just full disclosure. As an advisor, I reckon you should buy established property. We can lean into that later if you'd like, so brand new property. And so I would walk through the halls with my business partner Ben and say mate, I just spoke to another person who got stung, and then another person who got stung, so I said there's this concept over in the US where there you create information, you give it away for free. So what do we do this podcast thing? And he goes what the hell's a podcast? And I went through my hands in the air, blah, blah, blah. You know it's obvious what one is now. But back then. And so he goes do you know how to do? Why don't I win that? And so we had the unknown in our trio. You know, podcast is the Stig Ivers. And I went up to her and I said Ivers, do you know how to do a podcast? She goes no, but leave with me for a day. So she comes back, she goes, I can't work it out. So she gets her old what a weapon. She had an old Samsung phone and we just started recording on that and the first episode was called we Fix Bad Advice.
Speaker 1:And so it started with the analogy of what do you do if you have a barbershop that you've had for 25 years? You've been cutting people's hair for 25 years and you charge $25 for a haircut and then, in your 26th year of business, someone opens a business next door to you. They're another barber and they put a shingle out the front that says $10 haircuts. So what do you do? And so you've got two choices. Obviously, with the $25 haircuts, you one, you drop your price to $10 to price match. Or two, you put a sign out the front that says haircuts $25, we fixed $10 haircuts. Yes, so that's how the podcast was born, on the back of that analogy, right? Because if you do the $25 haircut, what you actually end up doing is paying 25 for the haircut plus the $10. So you actually end up paying more. Yeah, love it. So that was the premise of people buying property that they were going to get stung.
Speaker 2:I just want to really zero in here for a second, because what I want to make note of here is like you're on the frontier here. I know people that knew you at the time. I think it was some of the mortgage choice boys, might be Ash Coney, some of those guys in that and they were like Bryce. I remember when Bryce was talking about this podcast, we would have thought he was bloody nuts. We just thought he was crazy, and it's always the case, right For me. I always think to myself if people are looking at me sideways, I'm probably under something.
Speaker 1:Yeah, yeah, I didn't know it was going to be such a tug by the tail, mate. We've been doing it for eight years. We've our episode ends up in the top 10 shows each week, bar just very few all on an organic reach. So we do not have big distribution lists. We started from scratch, and I think it comes from some of the learnings that I found in the US was the hero's journey right? So I spent a bit of time learning and studying that the fundamental premise of the hero's journey is a hero meets a guide, and what we were finding in the property industry at the time was there was a hero, the client needed a guide. But they're encountering another hero IE. The guys at the time Peter Spann, henry Kay, ralph Deruz they were all these big names. Even Robert Kiyosaki was coming to town.
Speaker 2:So like personalities, right.
Speaker 1:Personalities, but they were the hero of the story, mate. Let me tell you about my private jet, Let me tell you about my big house, Let me tell you, let me tell you about me. And so I think I quickly learned earlier that the hero needs a guide, not another hero, Because if they encounter another hero, they're like oh that's good for you, mate, Great story, no worries, Good luck with your life. But I'm actually looking for a guide. And so the way that we structured all of the conversations that we were having with our audience was this is what we do every day in our business. These are the conversations we're having with heroes, AKA our clients, and this is what we're doing to guide them. And that was also groundbreaking at the time, because most people they just want to tell you about them.
Speaker 1:Ben and I took a different approach. If you look at the front page of our book, there is no wanky status symbol. On the front page of our book, it is just me and him sitting in a warehouse looking down the camera. It was a revolutionary, changing approach to say this is how we would advise you, rather than how good are we? And I guess it hikes back to the original the man in the car. Parabolic right, no one's interested in us. They want to be the driver of the city in the car.
Speaker 2:Exactly right. Yeah, no, I love it. It's funny because I'm just remembering like early days, right at I. We're like, how good are we? We're going pretty good here with the podcast. It's starting to really grow. And then we're chatting to you and you're like, yeah, we do 70,000 downloads a week. I was like, okay, we got a ways to go Teach me. But how was it linear for you? Did it go straight away? Because I know podcasting back then wasn't necessarily a behavioral norm. Like today, though, podcasting it's in everybody's sort of atmosphere. So how did it start and how did it play out?
Speaker 1:Yeah, so the growth was pretty exponential, if I'm honest, because if you have word of mouth in any business, you don't need a marketing department. We had word of mouth People were telling other people. Here's the learning that I had to Terry was do you know, when you're at high school, you're actually incentivized, when you were doing a test, to put your hands over your answer, so the person next to you can't copy, and it makes total sense. Well, I had to change my paradigm to go. Actually, as an adult, that doesn't apply anymore. If I want to do this value add through content game that was in its infancy, I've actually got to do the exact opposite. I'll actually go everyone. Come and check my answers, come and see what I've got. And not only that, it puts pressure on me to go, and if I want to stay relevant, I better keep sharpening the saw.
Speaker 1:But here was the growth in it, right? I just thought, well, if I tell everyone all my secrets, they're never going to come and use me for the business and we're going to go broke. That's what I thought. But history is now proven. It was a wonderful way to get people to trust us as the trust our message before they trust the messenger, and there's a portion of the population who want it done for them and our business serves that and there's a portion of the population who want to do it themselves and the podcast. I've had many people reach out and say, hey, listen, we've applied the principles that you talked about. This is what we bought, this is the result we got. Thank you very much, and I can promise you, mate, it's just as rewarding for those people.
Speaker 2:I agree, I'd say that less than 5% of our audience actually comes through and does business with us, but we get messages from the rest of these guys all the time and I love it.
Speaker 1:Yeah, your podcast. You guys get the hero guide thing really well, but the good news for us is a lot of people don't get it, mate, most of the podcasters do not get it, so we've got nothing to worry about.
Speaker 2:You know what's interesting, though and I'll be interested in your take on this I think I've learned more about investing from starting the podcast than I learned learning about investing, because starting the podcast is an act of faith, and you're making an investment in somebody else that you don't know is gonna pay off, and you do it and you keep doing it, hoping that one day that's gonna come back to you, and the biggest thing I've learned is that the more you give, the more you receive. So if you wanna receive more, you just have to figure out how to give more. And how do you do that? You just listen, find out what people are kind of resonating with, what they want more of, and try to do more and more of that, and do it more often. I think I've learned more from that, from an investing point of view, than anything else.
Speaker 1:And because you were a teacher, as soon as you changed the frame to an investor, to a teacher, the responsibility goes up for you, Terry, which is why you got a responsibility to an audience, and if you wanna stay true to the values and the ethics that I know that you and Ryan have well, then you gotta continually stay sharp and on the point and be able to synthesize your message in the most simplest way. So I agree, mate, I'm a much better property investor and property advisor because of the podcast, because it's forced me to sharpen up how I think and still like for me.
Speaker 2:I'm like I just love learning this stuff and the best way to learn is to teach. So I'm like trying to figure out, what does this actually mean? But for me, to be able to try to condense these ideas, that's actually how I'm solidifying things as we go, so I kinda love it. Anyway, that's definitely a two-way street, for sure. Yeah. So, mate, starting this, this is obviously gonna make the business go boom. Now, roughly how many folks have you helped over the years getting to property?
Speaker 1:Well, we celebrated last year. Our 10,000 clients helped and we've reset it to 15,000. So we're on track to hit 15,000 in September next year. So the exponential growth for our business has been enormous. But basically our business started as a mortgage choice franchise in 2004.
Speaker 1:In 2007, it rebranded to Empower Wealth and so my business partner, ben, was helping people get loans for property and then he said to his wife I don't know how many of these I actually need. Do I need 10? Do I need 20? That all these magazines are saying. So we set about meeting our other business partner, michael, and the two of them got an Excel spreadsheet when they started building macros and formulas and tabs and everything to try and work this out. So our now online simulator started as a trustee Excel spreadsheet and so it's like OK, we can get them the loan. We know how many we need. Then we start out OK, now we know how many we need. We better get a buyer's agency business to go and buy the assets. Now that we bought the assets, we started a research business so that we could actually buy the best locations for these assets If the plan says that we need to help them buy two or three investment properties and they're getting into peak debt between one half and two and a half million.
Speaker 1:We need to build some protection around them, a defense strategy. So then we started our financial planning business to protect their income and life insurance, those sorts of things. Then finally, in 2021, if we have the integrated solution to help them, from how many do you need to executing on building the portfolio? The last piece was to maximize the legal tax advantages that they can get in this country. So we're now in our fourth season of our tax business, helping our clients maximize their tax refund. But our business didn't start from a let's create a business plan on how we can make money through a business. It started from a need of getting a loan. Then how many do we need? Then let's buy some, and so it just sort of evolved to what it is now. So when it's 10,000 plus clients help, it's across our whole business.
Speaker 2:That's amazing and it's interesting too, Like we actually had a good chat about some of the observations and you had some counterintuitive takes. You wouldn't expect to hear from someone like you about debt as a controller. I would love for you to just go into that concept for me.
Speaker 1:The way that we are all controlled, I think in most civilized societies, is through the use of debt, right? So the easiest example it's when we chat of the other days, if you think about the recent COVID vaccination. So there's three camps for COVID vaccinations. There was those that were the hell yes, get me all my doses as quick as we can. There was the other end of the spectrum, which was the hell knows. And then you had the middle crew, which was the folks that were not keen but did it anyway.
Speaker 1:And if you think about, well, okay, if they weren't keen, but they did it anyway, why was that so?
Speaker 1:And I think it comes back to debt, because for most people with a material income in this country, they will invest it in real estate, their principal place of residence, unless they've been blessed by a lotto win or an inheritance. The majority of us are not. We have to go into debt to be able to afford the principal place of residence. So, to be able to afford the debt, we need to have a job. So, in order to be able to pay off our debt, if we lose our job, everything the house of cards comes crashing down. So therefore, that's how that middle group was coerced into doing something against their will, and so, whatever your view is on that, I'm not here to debate it. All I'm here is it's just a proxy to show us that debt is the ultimate control tool that societies and governments and anyone has. If people are in debt, they are more likely to be more compliant. So the conversation you and I had is if that's the case, let's use it to our advantage.
Speaker 1:Let's use the period of time where we are under control to maximize our leverage, because that's what I found so interesting.
Speaker 2:Right, you wouldn't expect somebody who essentially sells debt to be saying debt's a great controller, but there's the other side of the coin, which is also, if you actually understand how to use debt, it's also going to be a fantastic liberator, and that's obviously what you guys do. So I would love to get into what you talked about as like horrible, tolerable and productive kinds of debt. Yeah, brilliant.
Speaker 1:Most people say that all debt is bad, particularly if you talk to someone from my dad's generation pay cash for everything, don't get into debt, okay. But it's a bit like the story where someone at Christmas time, they get the ham and they just chop off the end of the ham and they put it into the pan. And then the daughter goes mum, why don't you chop the end of the hammer? And mum goes oh, that's because what my mum did. She goes okay, no problem. So then we go to grandma and we go grandma, why did you chop the end of the hammer? And grandma goes oh, back in my day the pots were so small we couldn't fit the ham in, so we had to chop it off so it fit in the pan. But it goes on for generations. So it's a bit like debt.
Speaker 1:Back in austerity times, debt was bad, but it's just been passed on to generations. So now, if you can see debt as horrible, tolerable and productive, it certainly helps you. So horrible being debt that you get to things that go down in value. So I think credit cards or holidays or TVs tolerable, debt being okay. Well, I'm by a roof over my head. And the reason it's tolerable is because there is a grand division here that one day I'll pay it off and I'll have a roof over my head in retirement, which is the single most important thing for anyone who retires is to have a roof over their head that they've paid off. And then productive debt is income producing assets purchased with debt as a form of leverage. And so if you can see it in those three ways, I think it really helps change your paradigm. And you ask me what would I do back then if I could go back, change some of these false beliefs in my mind? That's one of the false beliefs that I think that everyone should try and reprogram 100% for me.
Speaker 2:I think I had a massive aversion to debt before I actually understood how the monetary system actually works and you start to realize well, debt's risky, but also not having debt Super risky, yeah yeah, yeah, yeah, 100%.
Speaker 1:I actually think shares is a better investment than property. I'm the property guy and I think shares are better investment than property. So there you go. So how do you reconcile that I'm in property when I think shares is better?
Speaker 2:Leverage.
Speaker 1:Leverage. I've got a hundred thousand bucks that I put into shares and it returns 15%. Or I've got a hundred thousand dollars I put into property and it returns 7%. Chances are that over the journey I'll make more on property because I can control a larger asset. That's it. That's the central umpire. I've had many a debate about property versus shares. I don't care. I reckon you should have a bit of both.
Speaker 2:And actually you'd kind of overarching strategy does incorporate that right, because I remember you talked about super being your equity base and your diversification sort of tool, if you like, and you've got a capital base that you're building through your property portfolio. Do you want to talk a little bit more about that? I want to butcher it, but I think you'll do a much better job.
Speaker 1:Well, if you go to the Australian taxation office, statistically, of all the property investors, there's about 2.2 million property investors right. Of all those 2.2, 73% stop at one and a further 9% stop at two right. So, combined, 91% of all property investors have one or two and the overwhelming majority have one. So therefore, the thought that you're going to have 10 plus, unless you're an outlier, unless you're active, unless you are a special type of person who is comfortable being outside of the norm, most people aren't going to do that. So therefore, our plans that we do with the clients are really simple Pay off your home as quickly as you can, contribute to super and buy two or three investment properties. That's it.
Speaker 1:It's pretty simple because the combination of the super with the investment properties means that our flagship is to retire on 2000 bucks a week in today's dollars. So when you retire it'll be more, but in today's dollars it's 2000. Now, for most people, if they pay off their home and they pay off their cars and their kids leave home, 2000 bucks a week is probably ample, because a lot of people go 2000 bucks a week. I own more than that Now. I can't get my hands beat.
Speaker 2:Yeah, your costs go down yeah.
Speaker 1:Imagine when your costs go down no dependence, no loans, it's just you and your life partner together doing life. It's probably enough. So that's the premise of our plan, but super is a big part of that. It is one of the beautiful parts of our economic system in this country that the Hawkeet and Government introduced, and when it creeps up to 11.5%, if you can actually put it in the lowest fee index matching environment that you can, it's a wonderful wealth creation tool with an amazing taxation environment and taxation benefits. But here's the deal they will continue to taper with super, oh yeah.
Speaker 1:And so, therefore, if it's your only vehicle for wealth creation, I think you're leaving yourself vulnerable.
Speaker 2:The better that actual tool works, the more likely they want to go into the honey pot to figure out why, to get it the money. So that is the thing to keep in mind. I don't think you want to overindex on super, but you do want to contribute, for sure, for sure.
Speaker 1:Definitely. And so people say, well, should I salary sacrifice into super? Well, first of all, we can't give you advice on this podcast, but here's something for you to consider as an alternative Using that additional surplus that you would invest into super environment, you might want to consider quarantining that and buying a property instead. Then you get the best of both. You're maxing out super contributions based on your income and creating leverage through real estate or buying two or three of these things. That again, consult your financial planner for that, but that's at least something for you to consider.
Speaker 2:There's a really key insight in this which I love and we completely agree with here is that it's actually time that the asset that we're trying to manage here isn't it?
Speaker 1:Yeah, yeah. So it's a three decades game that we're playing here. So the sooner you get in, the better. Is it too late to start? Generally not, unless you're in certain circumstances in your sixties, but generally speaking because we're going to be working longer. But we did the analysis on a $600,000 property and I see if I can remember the numbers, but it was, if you see the results over 30 years in the first decade, the dollar amount that you would get over the 30 years 14% in the first decade. In the second decade it's 28% and then in the third decade it's about 57%. So what does that mean? If you can hang in as long as you can, you'll find each decade that you hold it. The percentage of return in the final decade is enormous. So one of my properties I bought in 2002 for $191,500, mate, it was expensive Shut up.
Speaker 2:It was expensive.
Speaker 1:And now I think there's another one comparable that's selling for $740. It's 150 meters from the beach in the Gold Coast. So, but, mate, I'm walking the talk. I don't have these stories unless I'm actually playing. I mean, I'm now in the third decade of holding that property and I'll continue to hold it because it's not part of my plan to sell it down.
Speaker 2:That's why your grandma's selling her $2.2 million home that she bought for $30,000.
Speaker 1:Yeah, do the maths. Just think about what your house is worth now, discount it by half and rewind 10 years. You probably go, yeah, that sounds about right. And then discount that by half again and rewind another 10 years before that and you go, huh, that sounds pretty good. And then do it again so it works in the rear vision mirror, but everyone says, nah, it's not going to work in through the windscreen.
Speaker 2:Yeah, I know. I think that can help you feel a lot better about the tolerable stage of debt, can make it more tolerable if you don't understand that, because it is going to get easier over time, even though right now we're seeing rates very high. Obviously servicing costs are up, it's harder to get loans, this kind of thing. But I think if you keep zooming out, you just see that the direction only goes one way. It is the way of more money in the system, which means prices for things like scarce assets, like property, go up including land.
Speaker 1:Now, if we go back to original question around control, here's my view If you're going to be controlled by debt, people are going to be able to pull the springs and get you to do things, largely because you have this master of debt In that window of time.
Speaker 1:My argument is why wouldn't you load up in that window the amount of exposure to debt that you have because you're going to be exposed to it anyway so that when you get to the other side and you've retired out of the debt because our plan is to pay off your own home and, ideally, retire out the debt on all the investment properties too. Because remember back when I started in the game, the predominant philosophy of the time was use debt to fund a lifestyle. So what that meant is the first framework I was exposed to is by seven properties in seven years, but seven properties in seven years. And then in the eighth year you would have equity harvest from the first property and you would borrow the amount of money that you need to live on. And then in the ninth year you would harvest equity second property and then the tenth year.
Speaker 1:So you've got no taxable income. No taxable income. You're using borrowed money, so no tax. But here's the deal. If you had have done that, it would have actually worked for a select few, but now you've been a world of pain because the servicing calculators wouldn't let you do it, and the problem was that you would have this ever-increasing, escalating debt, whereas now that we talk to our clients about is, the whole goal is to retire out all the debt, so that then you lose that period of time where debt is in control of your life and then you become debt free and then totally in control of all of your decisions. All autonomy is back to you once you've done that.
Speaker 2:Do you know what I love about that concept? Time is the asset. It's actually true on a couple of levels. Time is the asset you're trying to manage. The longer your money is at work, the harder it will tend to work, and time is the only thing you never get back. So, like, what are you optimizing for in everything? Just time, just time, 100%. Like you can bank on that. It's not going to change. That's not going to change.
Speaker 1:And the third thing to think about is we all have the same amount of it. So all self-made millionaires through property, through shares, through crypto, through whatever their vehicle is, they're all, by nature, self-made. Therefore, we all have the same amount of time, and it's just what activities and what actions we choose to do in our periods of time which will separate the likes of you and me, terry, because we not only believe in investing, we actually invest, because the amount of people who believe in investing and who don't invest is surprisingly high, true.
Speaker 2:Mate, let's get to some lessons. You're going to have 25 years worth here. You mentioned something before about established property. Just tell us a little bit more about that. You said oh, my recommendation is to always buy established property. What are you juxtaposing that against?
Speaker 1:So the predominant marketing to property investors usually first time property investors is to buy a brand new, and it's usually because of the bling, shiny taps, all the depreciation you get. Tenants love it, it smells great, so you get a premium on the rent. But rent is what keeps you in the market. Capital growth is what you get out of the market, right. So if the predominant thing that we're chasing is growth, we're not interested in maximizing tax deductions and the tenants having 100% vacancy at the expense of growth. We actually want it round the other way. So if the three filters that I think you should buy property are owner occupy appeal, scarcity and investment grade, if we stack that up to let's call it a high rise off the plan apartment complex Owner occupy appeal not really the bigger the density, the less owner occupy appeal there is.
Speaker 2:I still feel like a dummy with a lot of this stuff, so I really want to make sure we get these terms right. For a lot of people Owner occupy appeal that just means people will want to live in this house. Someone's going to want to buy it off me 100%.
Speaker 1:So another way to look at it is an owner occupy buys real estate with their heart and investor buys real estate with their calculator. Mostly First time investor still dropped their heart in it. But let's work that through. If I was to buy student accommodation and then I put an owner occupy out in front of it, they're like no, not buying it, there's no heart investment in it. I don't want it. If I was to put an owner occupy in front of a hotel, I can buy a hotel room in a managed complex. No, there's no heart in it.
Speaker 1:I put him out the front of a double fronted brick house with four bedrooms and a backyard and a Hills Hoist surrounded by a garden on a quarter acre block. The owner occupies heart's going to start beating out of their chest. They go oh, the school's around the corner and there's a cafe with the favorite child artis down the road and my sister lives around the corner and look at the beautiful tree line street and my neighbors are so amazing and when I push up my door at night no one's looking in on me. That's the truest sense of owner occupy. Repeal Right, and I understand it's moved, but that's the truest sense.
Speaker 2:And the reason why is because that's a steady source of demand that doesn't change that human nature based.
Speaker 1:Seventy percent of the market in this country is driven by owner occupies. So you are mad not to go where the herd is as an investor and the shift of people's minds hang on. But I'm an investor. Sure, you can be an investor, but you play in that pond. Don't play in the investor pond. Don't go by purpose built student accommodation. Don't go by assets that the banks don't like. That's your first clue. If you go and ask, if you go and buy one bedroom apartment 30 square meters, the bank doesn't like it. That's your first clue. It's too small, minimum 50 square meters. Or if you were going to go and buy an investment in a holiday service accommodation apartment in Byron Bay, I promise you the banks don't like that, right. But if you go and buy a house on a block and you go to the bank and there's nothing, you know, there's no power lines the bank goes yeah, no problem, 80%, 90% will in 95% of that. So that's your first clue. So owner occupier appeal is really important.
Speaker 2:The second one wasn't scarcity. You said scarcity. Yeah, Tell us more about that.
Speaker 1:So as a buyer's agent, I go out the front of an auction and there is something that is standalone. I will compete with another buyer and I will do it without a motion because I'm acting with a very clear set of instructions. But I don't want to muck in against an owner occupier. I just know that they've come with a budget of 700,000, but I know dad standing next to them and dad gives him a little nudge and they go to 705. And then I go straight back at 710 and dad gives them a little nudge and go 750. So I know that they clearly came with a budget of 700, but at the end they bid me up to 739. Right, and in some cases my budget 738, they buy up to 739.
Speaker 1:And so that is a clear case that if I was an investor I would actually have hard lines. I would have no emotion attached to it, but as an owner occupier, she or he went over by 39,000 bucks. That is the inefficiency that we want to exploit as property investors. So stay in the lane that's got the highest pool owner occupiers and stay in the lane where there's the most scarcity. So the alternative let's go back to the high rise and there's two properties for sale and there's 400 in the block.
Speaker 2:Not very scarce.
Speaker 1:No one's fighting for that, no one's doing an auction and they're going. I'm going to comply. In fact, the two in the block mean that they want 700, but they probably only get 630, and so owner-occupier appeal, scarcity and then investment grade. So investment grade for me has a combination of things, but the first of all it needs to be in a price point that is suitable for investors. So you and I both live in Victoria, terry.
Speaker 1:So if we went and bought a house in Turac, which is some of the most amazing real estate in the state, chances are if we could hold it for 10 years we'd make a lot of money. But the problem is we probably wouldn't be able to hold it for 10 years because we would go bust. We would run out of money very quickly because the yield compared to the purchase price is so disparate that we would run out of cash. So therefore, the bandwidth purchase price has to be investment grade. So for a lot of people, as soon as the price gets over 1.3, 1.4 million, they generally have to be on very high incomes to be able to afford that Right. So there's a price bandwidth that makes it for investment grade, and the other thing that I have for investment grade is it needs to have some history that I can backtest. Let's go back to that one. We're at the front, where our hearts were invested in and there's two people fighting for it. I could go back and see it sold in 2007 for X, it's sold in 1996 for Y and back in 1980, it's sold for 23,000 bucks or something. So what I can actually do is I can actually do a compound annual growth rate on all of those sale events to actually give me a historical precedent on what this property is actually done.
Speaker 1:I can actually get some confidence because you know how in every prospectus it says past performance is no guarantee of future performance In property. I actually think it generally is, because even in towns that have mass murders there's a small period of time where there's a big stigma but water finds its own level and then after a decade it resets. So not much changes with real estate. It's not like a new CEO comes in a new board, disrupted technology it's still shelter, it's still land. They're not building enough of it, particularly in this country.
Speaker 1:So if I can actually backtest the property, get confidence on its performance, I can usually have that as a reasonable guide going forward versus. Let's go back to the high rise apartment and I'm buying it off the plan. There is zero history. In fact I've back tested that many apartment complexes. I can assure you that, generally speaking, most of the sales in the first five years have negative outcomes what they paid, what they sold them for, because of the lack of scarcity. So if you apply owner-occupy appeal and scarcity and then investment grade those three filters when you're looking at a property generally, you'll be in good stead, and that's the stuff that you're like.
Speaker 2:These are the things that don't change.
Speaker 1:These are principles, these are things you can bank on, basically 100 percent because they are never going to go out of fashion. In this country, we have a situation where our housing policy does not match our immigration policy, meaning that the bar is full, the plug is in and the government is still got the tap on at the top and it's tripping over the sides, right, there is not enough houses being built to match the amount of people that are coming here Now. Granted, when they first arrive, they stay close to the CBD and they rent, but eventually they want to take a photo at the front of their house with a selfie with their arm around their partner that they can send back home to say look, we made it. This is the reason why we moved to this country, right? So they want to have that demand in property.
Speaker 2:We had an interesting discussion about state of play right now and Hito. If you read the news, you would think that this is all going to crater and everything's going to go away and the balloons going to burst. But you had an interesting take on this as well and you just sort of pointed to it with the immigration policy. There are a couple of other drivers we discussed. I would love you to go into those a little bit more and sort of look at the outlook, Because I remember you recently went back to an old podcast to yours and you talked about how you were in the depths of the market and you thought it was horrible. And now you're like I'd give anything to go back. Can you just talk a little bit more about that and take us forward into sort of how you're seeing it playing out? So yeah, so we recently on the podcast.
Speaker 1:We reviewed some of the principles that we did back in 2015, the first three episodes of our podcast to see if they were as relevant today and I remember at the time there was a bit of a part of the narrative was I know we're in a bit of a tough market now, but play the long game, because you will definitely be happy that you did so. Here we are in 2023 reviewing those. 2015 is going huh. We give our hat and our coat to go back to 2015 to actually buy as many properties as we could. Ok, so fast forward to now. Let's project to 2033.
Speaker 1:Everyone who loves property, who's interested in the market, who wants to buy more, will look back and go. We should have bought more properties back in 2023. And we didn't because of this external event or this interest rate rise or this geopolitical conflict that's happening over in the Gaza Strip. So there's always the reasons in the moment why we shouldn't buy, but every single time we look in the revision mirror in the past, we go gosh, I wish I had bought some more. So if you and me were just on the moon right now, terry, we were building a checklist of we go, there's a little blue planet down there. We want to land there, but before we get there, we want to make sure we're super clear on where we want to live. So let's write our list of criteria, of the things that we think are really important. Ok, we need to have a sovereign island to live on where we've got no shared borders. Ok, we'd want it to be politically stable, so no corruption. We'd want the banking system to be stable, probably having an A plus rating, because that's going to help us. We want to be able to have our own food be a food bowl, I'll buy the way. We want to have some sun and some great weather and some really nice coastal locations. So you can see what I'm doing here.
Speaker 1:If anyone around the country around this globe is going, oh, here's a laundry list of really cool things that I would love in my world. Australia is just an untapped, empty island that with 25 million people. It will be the envy of people, particularly all the geopolitical instability. So it's Australia's super parents why our GDP growth is the 12th largest economy in the world, despite only having 25 million people. So the reason being is our superpower is we get to get people come in through our population growth and that's what keeps our economic activity driving over. So therefore, if that's the case, we're going to become more attractive than ever and we have a housing policy and an immigration policy that are so grossly out of alignment and we're struggling to build enough homes and we have a ton of bureaucratic nonsense that means getting supply out of the ground is just a freaking nightmare.
Speaker 1:Kind of makes sense that you want to put your name on as many titles as you possibly can during the 20s so that by the time you get to that reflection point in 2033, you look back and you go, huh. I'm glad that I did that. The same as the reflection point we have now, where we go back and look at 2015,. We go, huh, aren't we glad we did that? The same as what I said to you before. As I look back at February 2002, in Perth, I paid 199,940 bucks for a thought. It was a fortune. So we always look back and go. That was a lot of money at the time. But it's very difficult to make the decision in the moment now, with everything that's going on, because we think what we're experiencing externally is the first time that it's ever happened, but there's nothing we're experiencing now that's never not been experienced before.
Speaker 2:I read this concept called emotional forecasting and essentially what it is. Think of it like a steady state, homeostatic state, just an internal I feeling OK, feeling good. And then I get a bit of information and if the information points up then I draw a straight line into the future. Everything's going good forever. If the information is down, I draw a straight line down forever and I go everything's doomed. And it's like the brain it just does this and the news plays into it and we get sucked into these very short term sort of thinking and we stop thinking in these. You buy a house for you said 30 years, right, so why would you care what the two hour news cycle says?
Speaker 1:My listeners need to just rewind that. That is the most wisdom that has been said on this entire time that we've been chatting. Why would you care about the short term if you're playing a long term game?
Speaker 2:It is so profound and yet so many people miss it the arcs everything like it's just always a zooming out, going, hey God, because, look, you're going to be forecasting anyway. You're going to be doing it with your emotions, but if you just did it the other way, like you said, look backwards, not into the future, look backwards and then trace that trajectory. Just keep doing that.
Speaker 1:It's incredible wisdom. What you just dropped in Property investing is a cash flow game, right? So what we should do is we should buy it and never check the result until we have to refinance to buy the next one or whatever. So that's the balance sheet game. We should just be playing a cash flow game. Do I have enough buffer to absorb any expactor event that could come, including interest rates rising, because even during historical lows of 0.1% cash rate, we still put all of our plans back at the long term interest rate of 7.5%.
Speaker 2:Yeah, this is why financial forecasting is so important, because if you don't do it, you'll do the emotional forecast. You'll be doing it anyway. You might as well do one that serves you. I love that.
Speaker 1:Emotional forecasting. I like that. That's a good one. We'll write that down.
Speaker 2:But it's interesting though and I actually completely agree with that sentiment, and I've been seeing this I'm actually a little bit concerned about what's going to happen when we do go back into an easing cycle, because if prices are here now and then we go back into easing, like where are prices going to be? And they think that they're going to solve this property crisis through some of these shorter term policies, I just feel like it's completely like they're dreaming.
Speaker 1:Well, let's break a myth here, terry. What a lot of people think is they look through the wind screen, because we've just talked about the revision mirror. When we look through the wind screen, everyone goes just too hard to see how these prices going to keep going up. And they quote DTI debt to income ratio. Our DTIs are maxed out. How can people afford these loans?
Speaker 1:Well, if you study demographics, you'll see that the baby boomers, this large basketball moving through garden homes.
Speaker 1:In fact there's more X's than baby boomers and more Y's.
Speaker 1:But the reason the baby boomers get so much attention is because, compared to the generation before them so my mum's generation is a baby boomer compared to my dad's generation, as a builder generation there is so much more, so they drove industries just being ahead of the curve. There is trillions of dollars about to be inherited by Gen X and Gen Y as baby boomers move through the cycle. So most people assume that the purchase price needed to pay for a house in Sydney, which is so expensive and out of region, unaffordable for most people, is going to be paid through debt funding. But it's not.
Speaker 1:A lot of people are going to be paying high prices still with a very large deposit that might have come from an inheritance where mum and dad sadly moved on and so the kids sold the family home and they received large sums and those large sums were probably put into their mortgage. So therefore they have enough money to be able to afford to buy the higher prices. So that kind of helps dispel the number one blocker that a lot of people have in their mind. From as long as I've been investing since 1998, mate, where people go yeah, I can see how it's worked in the past. I just can't see how it's going to continue to keep going up in the future.
Speaker 2:You know, the one that's really interested me was I saw a graph and it's a long term graph of debt loads, and as debt loads increase, rates have to decline, even if at certain periods they'll try to go up. They actually have to go lower and lower over time in order to make it actually feasible for the system to continue. And so you can look at Ray Dahlia's work and you can say we're away at the end of that long term debt cycle, but the end could be like 20, 30 years. You just don't quite know. But you can actually see the pattern if you look at it. You see debt loads go up and you see rates slowly declining, and that is the way it always goes 100% all of the time. Every time, every single currency follows the same pattern.
Speaker 1:Yeah, because the system is more important than the individual within the system and most of the house prices are guaranteed at the ballot box because no government of the day will let houses plummet on their watch.
Speaker 2:Yeah, that's the only reason we're talking about the housing crisis now, because it's got to a fever pitch and so we're going to put out this special report and talk about how much we're going to find it and none of that can actually happen. Crazy, right? This has been such a valuable chat. I really love this conversation. So much wisdom shared. Is there anything you want to leave our audience with? I would love you to just put yourself in the shoes with somebody who potentially, is looking and wanting to probably get into property, but just has felt because, at the right time or not quite sure, how would you advise this person right now to kind of work their way through it?
Speaker 1:I'll just quote the words of my great mentor, which is Jan Summers, who, if we rewind back to the whiteboard back on the midday, show her philosophy is simple buy the right property correctly, finance it and hold it for the long term. And it's timeless wisdom that I would say to those folks. And the number one determinant of success, having invested now this is my 25th year of property investing and it's also happens to be my 2060 year of advising, because you remember my stories I advised before I bought my first one is that the number one attribute for success for any property investor is taking action. That's it. So do you remember that newsletter I was talking about, where I had to take office works and fold it and lick the stamps and all that? One of the stories that the club used to do in that is Mr and Mrs Wait-and-See and Mr and Mrs Do it Now. And it was a really comical way of trying to highlight that Mr and Mrs Wait-and-Now were going to wait for the government to change. Like. These are the narratives at the time we'll wait for the government to change or wait to see if the taxes come down.
Speaker 1:But here we are, fast-forwarding 25th. Nothing's really changed. We still have Mr and Mrs or partner and partner Wait-and-See and partner and partner Do it Now. Now nothing really changes in that regard, so the majority of people won't invest in a property. Of those who do invest in a property, the majority of them will stop at one.
Speaker 1:So if you can actually just build a plan that allows you to maximize your super, pay off your home as quick as you can and buy probably now with super going up, you probably only need two investment properties, but two or three it's not a bad plan. You're not that big an outlier if you have three. Statistically and generally speaking, if you can play the long game and hold on for long enough, the choices that you get to make back to your point around the time and what you do and who you get to spend it with is infinitely better than most. So that was a long answer to your question. The number one takeaway I hope that everyone takes is just to take some action, just to do something, just to get in the arena, because unless you do, you just want to let those people talk about the one that got away.
Speaker 2:And speaking of somebody who has a tendency to want to get it right, can tend to want to procrastinate one of the best pieces of advice that I could give is that know yourself. Like I didn't buy my property, I got an agent to buy my property for me, and the reason why is because I was buying time. I realized it's probably going to take me nine to 10 months to figure this thing out because there's all these unanswered questions that guess what other people have already answered, and so one of the best financial decisions I ever made in my life was to decide not to be the one to buy the property, to actually get somebody to help me with it. So I don't have any incentive like I'll just say this to anyone just find somebody that you can trust. If you're unsure of that yourself, don't let that be the blocker for you. It doesn't have to be.
Speaker 2:I love that concept of who, not how. Find the who that knows the how, and work with them to get the what, get what you want. To me, I was in and out from decision to property, six weeks done, and not only did it save you the nine or 10 months, I would have gone another 50 grand at auction, based on what I actually bought the property for. So I just think it's priceless. So if you're listening to this and you're thinking, oh, that's all sounds great, but it just feels like a too big a thing for me, okay, let somebody else help you. Yeah, and, by the way, there's no financial incentive for me to say that while Bryce is on here, I'll say it with any person.
Speaker 2:I've said it multiple times on other podcasts. It's just so true, particularly with this, because I think it's the biggest barrier, right, because it feels like a quite a big financial decision and it probably will be the biggest financial decision. And what you just said is exactly the insight I had it is an insider's game, it's an inefficient market and, to sort of tell my story, the property that we bought here right, I'm inspecting it and the buyer's agent that we end up using I already know her, amy Lunati. You might know her, and she inspected it at the same time and I was like, damn it, you're inspected this, I'm probably going to lose, but I don't want to go up against you to buy this property, and anyway. So she reached out to me a day later and said, oh, these guys that I was working with pulled out. And I said, good, you work for me now. And so look.
Speaker 2:I got to benefit and piggyback off all the prior work. She knew the vendors personally, and so the property was going to auction. We took it off the market. We had a weekend of going back and forth to kind of make it happen. There was a little bit hairy for my wife, but amazing result, amazing result. I didn't have to figure out the whole process because it's already been figured out. People know how to do it.
Speaker 1:Yeah, well said, mate. So if you are someone who can take the concepts we've talked about and take action, great done, get it done. If you're someone, to Terry's point, who is struggling to get to the starters line, that's very good hack. But ultimately, most of the time, we're not trying to solve a knowledge gap, we're trying to solve an accountability gap. So people taking action, lowering their action threshold because the incentive for status quo is so strong, because, particularly in a financial game, particularly for males, we do not want to drop our status by making a wrong decision. Therefore, it's easier to make no decision because we get to blame someone else, something else the economy.
Speaker 1:So, yeah, yeah, that's why it's called status quo because we do not want to run the risk of decreasing our status in any way.
Speaker 2:Yeah, mate, hey, give folks a hand off. Where can we learn more about you, the podcast, what you're doing on the Power Wealth?
Speaker 1:If they go to the property couch on anywhere, they listen to podcasts on YouTube and in Power Wealth it's just in PowerWealthcomau.
Speaker 2:Amazing. Thanks again, mate. Really appreciate the time you've taken.
Speaker 1:Hey folks, bryce here again. I just wanted to catch you real quick before you go. If you're new to our community, I want to encourage you to listen to our very first 20 episodes, as the concepts we share in EPS One through 20, are foundational principles, pillars and frameworks that you need to know for you to get the best value from our content week to week on our show. My little tip is to listen to it at one and a half speed. Now, for those of you that are time poor and don't have the option to go back to the beginning, don't worry, because we've got you covered as well.
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