The Property Couch
Australia’s top property podcast for everyday investors who want real results, not hype.
Originally shaped by long-time hosts Ben Kingsley and Bryce Holdaway, The Property Couch has evolved into a new chapter led by Ben alongside the expanded Couch Crew. The foundations remain the same: practical frameworks, clear thinking, and real stories that help Australians make smarter decisions.
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The Property Couch
604 | Stop Making Bad Decisions – Chat with Brett Burton
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Is fear quietly influencing your investment decisions?
With today's market creating uncertainty, it's easy to second-guess yourself. Headlines, market sentiment and endless opinions can make even experienced investors hesitate.
In this episode, Ben is joined by high-performance coach Brett Burton and KD, Couch Crew, to unpack the psychology behind successful investing—and why your biggest challenge isn't always the market... it's often your mindset.
You'll discover:
- Why uncertainty causes even experienced investors to hesitate
- The mindset loop that drives every financial decision
- How to separate facts from fear during changing markets
- Why patience often outperforms perfect timing in property and personal finance
- Practical strategies to build confidence and make better long-term investment decisions
If today's headlines have you questioning your next move, this episode will help you zoom out, think clearly and answer, “Is the market driving your decision... or is fear?”
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604 | Stop Making Bad Decisions – Chat with Brett Burton
SPEAKER_03Is how I'm thinking now helping me? You know, is what I'm thinking about, is that fact or is it fiction?
SPEAKER_02The reason stems back to this exact concept that we're talking about today, it was fear.
SPEAKER_00This is what the great investors do. You're tuning in to the Property Couch, Australia's number one property, finance, and money podcast. Featuring the titans of the industry since 2015. We're trusted by tens of thousands of investors on their journey to financial peace. This show is powered by more.
SPEAKER_04Thanks to the Indians. Welcome back. Another big episode today. Today we're focusing in on the mindset. There's been a lot of changes in the property market, so we're going to be focusing on the psychology of wealth, mindset, property, and performance. And do I have a great couch crew with me here today? I have former AFL star Brett Burton, who is all things in terms of high performance. He leads a business called Lead Well People, which is a high performance coaching business, and he does keynote speaking in that area. He also has obviously a fabulous neuroscience and performance psychology background with leading people in high-performing teams. And KD, thank you for coming back on.
SPEAKER_02Pleasure. Pleasure to sit here with Storkman again.
SPEAKER_04Yeah, Storkman, Mrs. Birdman, very good. And we're obviously going to explore our emotional challenges. So obviously, we've got our own personal journeys around the property investment journey that we've been on. And so we know what it was like when we first started out. And then we also know what it's like when we're guiding other people on these journeys because right now there's lots of uncertainty. There's lots of questions that we're seeing, obviously, through our business, and just generally people are sort of, you know, reaching out to me and sort of saying, what should we do and what's going to happen in the property market? And recently we've done, you know, a webinar on this, and I'll continue to try and educate people to try to try and bring some sanity around basically all of the thought processes and just go back to that. And so if we've done our job properly today, we're going to be talking through what we call the mindset loop. So Brett will lead us off in that area there. We are going to talk about the sort of failures and stress and resilience that is needed around wealth creation and in some cases a bit of patience as well in terms of watching things play out. And then some of those practical habits for a better financial mindset. So whether that's just money in general or whether we're talking more broadly around the whole property and wealth creation story that we're going on. So hopefully, if we do our job properly, crew, we're going to have a bit of fun with it and uh and get into that. So I want to start, Brett, firstly, by talking about what is the mindset loop and how does it you know fester in our behaviours and how we
Your Brain Is Working Against You
SPEAKER_04how we play.
SPEAKER_03Yeah, so I guess that the first principle we want to understand is is how the mind works. And so, you know, we we spoke uh last time uh on this podcast that we have about 70 to 80,000 thoughts today. Uh so 70 to 80,000, lots of thoughts, mostly happening uh you know subconsciously in the background. But those thoughts trigger our feelings, you know, and our emotions. And so, and we know how we feel, then impacts how we behave. So thinking impacts how we feel, feelings impact how we behave. And so we want to be able to be mindful of how we're thinking because of those 70-80,000 thoughts, uh the researchers say about 80% of them are negative. So we're negatively biased as humans, we're always kind of you know scanning, worrying. Uh, and then about those 80%, another 80% are repetitive. So we're continually telling ourselves the same story.
SPEAKER_02Is this our caveman and woman brain going back to keeping us safe?
SPEAKER_03It is, absolutely, that's where it comes from. It's the uh it's a survival kind of mechanism. And so that helped back then, but in these days we want to be able to be mindful of where our thinking's going and how that's kind of affecting our behaviour. So um that's that's the the thought loop, and so we want to become mindful, and it's very hard in today's world because we're so distracted, we've got the mobile phones, we're busy, busy, busy. So our opportunity to be able to kind of stop, reflect, become self-aware, and and you know, and ask yourself those questions. Is how I'm thinking now helping me? You know, is what I'm thinking about, is that fact or is it fiction? All right, and so that's what we want to be kind of leaning into.
SPEAKER_04So, Katie, when you've obviously, you know, um the current property cycle, uh, we've been through a few of them ourselves. Do you remember what it was like when you were sort of going through the first known, unknown period of your investment journey? And and how did you work out how to get
Fear Is Often the Biggest Deposit You'll Ever Pay
SPEAKER_04yourself through that?
SPEAKER_02Absolutely. I I remember that feeling really, really well. I obviously different times, so different, different purchase prices and all of that. But I remember I bought my first property for about a third of what I was pre-approved for. And the reason stems back to this exact concept that we're talking about today, it was fear. And the one thing that I've found through all my years of coaching is that my primary way to handle the fear and those voices in my head is to try and be a massive control freak. I try and control everything around me so that I have less of that fear. So my way of controlling it with that first purchase was to be much smaller than I could have perhaps been. And uh it it didn't stop the nerves, even though it was a significantly smaller purchase than I could have gone to. I was terrified the entire way through. Definitely.
SPEAKER_04And you think that that that um terror came from the fact that you your upbringing, you told us that story is that.
SPEAKER_02I mean, I have a I have a bit of money psychology? Definitely. I mean, I have a we all have our own different stories. Mine comes from a basis of watching my parents be very entrepreneurial and invest in property, but then also losing it all when I was a teenager. So I definitely have a lot of inbuilt sort of trauma in regards to that. And I didn't want to make the same mistakes that they they did, absolutely. Um, thankfully, I also learnt a lot from what they showed me over the years as well. So I had a lot of really good instruction as well, but none of us want to repeat mistakes that are that are unget-outable of and that's the best way to phrase that. But it is, it's an innovation. Property is such a big deal, you know. I go and I buy a pair of jeans at the shop, my butt looks fat, I throw the jeans out or I give them away. I buy a property that makes my whole situation, you know, feel uncomfortable, and I'm stuck wearing that pair of jeans for quite a while.
SPEAKER_04Yeah, no, no one wants to be trapped.
SPEAKER_02No.
SPEAKER_04I mean, it it is interesting. I remember, you know, my first journey into investing was through shares because I didn't have enough money to buy a property. Um, but I I learned a lot about my investment psychology in the sense that um, you know, I'd see a BHP report and I'd be thinking, that's a that's the business is growing well, the INOR numbers, the volume numbers are good, and the share price would drop 5%. And I'd be going, I don't understand that. And what would happen to your adrenaline then? I don't I can't quite reconcile why that's happening. And then I worked out, it took me you know two or three years. I probably would have started, you know, dad was buying shares for me when I from about 16 years of 16 years old, and then I started buying them obviously at 18, had my own trading account and so forth. And I did work experience on a you know stockbroking company back in the day as well.
SPEAKER_02So I knew a sliding doors moment.
Why Ben Chose Property Over Shares
SPEAKER_02This could have been the share scalp.
SPEAKER_04No, I definitely never gonna be the share scap because I I couldn't control it. So I found a lot of comfort in residential property because it was a tangible thing, and there wasn't too many different things that actually impacted the market. It was an essential need, shelter. So it took me, you know, it still took me 10-15 years to really develop out my true understanding of the the nuances and the market dynamics around, yes, you know, it is a need, but it's also has a want element to it, and that is people striving for showing off themselves through the properties that they own and the location, and so all of those things are nuanced together in terms of how property prices perform. But but that is the backstory for me too. I was one of these people that you know I worked out that I I couldn't I couldn't feel comfortable in having a share portfolio that I was just a number and I couldn't influence it.
SPEAKER_02Whereas you can influence the direction of BHP, but you can't. Correct, you can't.
SPEAKER_04But I could buy a freestanding house and and sort of add value to it or do whatever I need to do, and all but also understand that historically um in growing economies and growing towns and cities, that land value appreciates over time. And so that gave me a bit of comfort.
SPEAKER_03Do you have you have shares now? Oh yeah, yeah, got a lot to do. And so and so that's that's interesting. So so why? Why though? Why do you not fear it now versus you feared it back then?
SPEAKER_04Well, I think I think like like everything, I'm in my super fund, um, I've got a lot of property. So I'm I'm definitely overexposed on the property side. Yep. But diversification and those types of things do matter. And of course, you know, in in running businesses and understanding a lot more about how businesses work and uh markets work and those type of things, I've been able to transfer that skill into those areas. And and so now, you know, I look at big uh thematic themes that run through markets, not only property, but also obviously, you know, in the moment, not and this is not financial advice, but I'm putting a lot of money in America, yes, right? Like because America has the right footings for economic growth, and you know, the you know, they really do have exceptionalism when it comes to building value and economies and those types of things. So in Australia, we're we're probably a little bit more conservative, a bit more reserved, and so I'll I'll still own my properties here in Australia. I won't be doing overseas property, but I'm definitely sort of getting more overweight in the American markets than what I am in the Australian markets, because at the end of the day, AI is going to be a significant force for good, hopefully. There's a bit of bad in there as well, but but at the end of the day, that's where the economic opportunity is, and so that's where value will be created. So that's why I've got a weighting in that. Again, not financial advice people. I'm not telling you to go and invest in the American markets. That's I'm just telling you that that's but but coming back to what you're saying, yeah, uh Brett, in terms of um, I've learnt skills that I've now been able to adopt into other areas, but um, you know, what we're talking about here is mindset. And so I had a limiting belief in terms of um my uh competencies and abilities in a certain skill to or to take action, and I've been able to learn, develop, and overcome that and feel more confident in that in that execution. Now, I understand also from when you're a young person and you only have $10,000, that when you are putting $8,000 of that into a property market or into a share trade.
SPEAKER_02Anytime you put all your eggs in one basket, it has a it has a simplifies it for some people.
SPEAKER_04Like other people just know that some people don't, it doesn't affect them like it does you and I, right? But that's now obviously my wealth base is at a stage where I can, you know, risk 20%, and the 80% is still enough to comfortably cover.
SPEAKER_02That's why it's so tough for first-time property investors. You have one investment property where things are going wrong with the tenant, or you know, there's structural repairs required, and your entire investment portfolio is in the toilet and you feel it. Yes. Whereas once you have a portfolio with a couple of properties, you can spread that risk across, and it's not all panic stations if there's something going awry with one part of it.
SPEAKER_03Yeah, and I think it also leads to you know what's your your personal experience. You've got family, you know, and and you've got a mortgage in your own home, and then you go, well, we've got to get the kids through school and that kind of stuff, and so that risk appetite is less, isn't it?
SPEAKER_04Well it is. I mean, I think you know, at the end of the day, if you've got a low risk tolerance, you're gonna potentially procrastinate and wait too long. Um, and we all know that you know, um, in property especially, timing versus time in the market, if you stay there longer, as long as again your assets in uh an economic environment that's growing. So if you're in a big city, you're pretty confident that that economic flywheel will continue to keep growing. And off the back of that, if the population's growing, um then you're going to see prosperity. Um, you know, but we also know in Japan as another example of a property market that's actually going backwards.
SPEAKER_02Well declining birth rates, correct, and no immigration.
SPEAKER_04So you we're talking about locations where in Japan you can buy very cheap houses, but in Tokyo, which is their economic flywheel and their big agglomeration economy, you know, land values are still at an absolute premium because that's where all the economic activity happens. So again, that's another great lesson in terms of understanding that. But so Brett, when we're talking about obviously the mindset loop, we go from thoughts to feelings to actions. What do we build off the top of that in terms of next steps that we need to be thinking about in terms of taking those leaps and working on our brain to get it to you know, work the muscle that is our most
Why Ben Chose Property Over Shares
SPEAKER_04important muscle in our in our body?
SPEAKER_03Yeah, well I think you know it's it's becoming mindful, you know. We've often heard the term mindfulness in that and that's our ability to be able to track our thinking, and you know, and I'd mentioned metacognition before, which is our ability to think about our thinking. So we don't just, you know, we're not just in this autopilot and just going, oh yeah, I'm fearful of that, I'm fearful of that, that happened last time, to be able to stop and reflect.
SPEAKER_02Let me let me ask you, when you're talking about thinking about your thinking, are you talking about like getting into a meditative state or actually just spending time pondering like why am I thinking that way as opposed to just reacting?
SPEAKER_03Spot on, okay, it's it's it's taking the time to have you know to reflect and pause because we are so busy. Think about your day. You wake up, as soon as you wake up, we're straight into thinking mode. Okay, I've got to get ready for work, I'm gonna get the kids ready, bang, whatever. Yeah, you know, get get ready for work, drop the kids to school, whatever we're doing, go to work, we're we're we're kind of communicating, we're yeah, we're stimulated constantly through our day, get home, eat, you know, get things packed up, get ready for the next day. It's very, very rare that we actually stop and just be. All right, we're human beings. We mentioned that last time, rather than human doings. And so taking the opportunity to sit back and reflect and go, I was just thinking about that. Hang on a minute, why was I thinking like that? And where does that come from? And is that right or is that wrong? And what data do I need? Because you know, what you've kind of just alluded to is that the the share market versus the you know the the property market is that now that you're educated, now that you've gone and got the information, and for the the the listeners out there and the people that are wanting to invest, I'm imagining your advice is you know, go and source the right information, go and you know, learn for yourself, go and listen to podcasts, go and read books, go and get professional services so that you're actually using data that is fact rather than just fiction.
SPEAKER_04Oh, yeah, make no mistake, I read everything I could get my hands on pre-internet, and then the research that I was doing was very laborious. Like I got folders of um you know old local newspapers where I'd rip out the real estate section and I'd track property pro like manual. I've even got some of them in an old filing cabinet out the back there, full of dust and everything like that. But this this property sold at this time, then the internet came along, and then then I could actually then store it, and then all of a sudden, but but it's to your point. And and and I I had obviously uh physical professional advisors that I sought. I mean, very lucky to have again um, you know, sort of stock brokers across the road from my house. So they you know that was always nice to have Kevin across the road. Um but in but in terms of you know, I would be meeting and organizing um events and having proper conversations with professional advisors, my accountants, um, you know, all of the sort of people that I could get in front of, I would happily pay to get educated in some of the courses that I'd also do, I'd happily pay if I'm getting the best uh and brightest giving me the advice that I was getting.
SPEAKER_02So see, I think my story is slightly different in that I educated myself as much as I could, but only really about property. For the longest time I was the least diversified person you could ever meet. Everything in SuperIn property, everything out of super in property. And it's only been in probably the last 10 years that I've really done the research on the shares side of things and gone, oh, do you know what? It's probably not as scary as I thought it was going to be. I probably can have a level of control that's makes it feel safe enough for me without having to have full control.
SPEAKER_04I want to talk about system one, system two thinking. Obviously, that was you know famous by Daniel Conneman and um I'm trying to think of the other guy's name, but thinking fast, thinking slow. Um so we obviously have, you know, to your point, the those uh 80,000 thoughts that we're having. When you are talking about the slow thinking and the internal thinking, and so how did I come up with you know that thought process, I use that same principle when I think about what are the behaviours that are going to happen off the back of say tax reform and how that's gonna potentially play out. Now, it's not easy to predict because there's behavioral economics in terms of and there's lots of different sort of um uh you know biases that we hold, sunk cost bias, um, you know, sort of uh, you know, different types of areas in the and and you're trying to work out which one's gonna be the most dominant of most people because when you're investing in property, you're trying to predict the behavior of a group of people because you can't just predict it on one person and one house. You need a a movement of people and a desire to sort of go into that market to to drive value higher. Um when you're when you're doing your professional speaking and and sort of coaching in that area, when a like let's put it back into a pre professional athlete sort of sense, when when people are having negative thoughts um uh as opposed to abundant thoughts, what's going through their minds and what are some of the sort of techniques that we can use to help um you know get them out of that rut or get them out of that sort of thinking pattern?
SPEAKER_03Yeah, well it's for a start, it's understanding that our our thoughts will trigger an emotional response, uh
You Can't Control Fear—Only Your Response
SPEAKER_03feeling. And and we can't we can't choose how we feel. Literally, uh you know, that the thought happens and bang, we'll get a feeling. But we can choose how we respond. How we respond to how we feel. All right, so we can we can't choose the emotion and how we feel, but we can choose how we respond to it. So if if the the player you know is in front of the goals, is you know, after the siren, 100,000 people, he can't choose the fact that he's gonna get anxious and that the heart rate's gonna go up and he's gonna feel a bit queasy and a bit shaky. But he can choose his response to that, and the response to it is in training to be able to go to the breath, to be able to posit your refrain, look at the opportunity, to be able to talk to himself and go to your routine. You've done this a thousand times before. And so that's the opportunity is to go to that response. And so when we we're fearful of something, and we've had any one of the kind of experiences that we've spoken about today, it's about pausing, going, don't let the feelings dictate your behaviour. How why am I feeling like this? I'm feeling like this because I care, because I am worried, you know, that you know I don't want to lose my investment, I don't want to make this decision that someone has made before me. But what do I need to do? Get the data, get the advice, what is it?
SPEAKER_02Or maybe it is let the feelings dictate your behaviour, but dictate it in a pattern that you've pre-worked out beforehand. When I feel like this, instead of instantly reacting like that, I have a plan. So exactly what you just said there, you know, I work on the breathing and then I do this, so that there's a structure for it. It's a control freak in me coming up.
SPEAKER_03Yeah, yeah, it's quite okay to it's right, it's because again, it goes to that metacognition. If if we're practice thinking about it, thinking, then you know that. You know, responding. I'm not just letting this pattern happen.
SPEAKER_02You're following a blueprint.
SPEAKER_03Exactly right. Following a blueprint.
SPEAKER_04Well, I think I mean Scott Pandalbury, um, obviously broke the game's record um a few weeks back. He um, you know, he talks about process and he also talks about I've done the work. So when you're sort of talking about the practice, yeah, so he's framing in his mind is very much around I've I've practiced this and I've practiced this and I've practiced this. So I'll just go into that mindset of process and I'll go through my process. No different than a golfer standing over a putt to win, you know, the the US Open or the British Open or whatever. They have a set routine, they'll set their line, they'll make sure their feet are in the right area, the pendulum of the of the part will do that. And you know, in terms of the work that Bryce and I have done, uh, and and what we intend to do and and in the business work that we do, everything's process driven. Like our research is process driven.
SPEAKER_01And nothing's an accident. Nothing's an accident.
SPEAKER_04Our algorithms that score our demand, supply scores, all of the stuff that we're looking for is process driven, right? In terms of all of the all of the um the way in which we select lending or whatever it might look like is process driven, and and we have frameworks in terms of what we what we do around you know those selection criteria and how we look at clients. And then that's no different in investing space because even the ASIC regulators tell you that if you're going to give financial advice, there's a process. And the process is you need to understand your customer, you need to understand their objectives, you need to understand their risk profile, and then after those two things, can you then discuss financial products or what solutions you might be providing? But it's off the back of gaining that knowledge, but still following a framework or a process as part of that.
SPEAKER_03Yeah, and and we, you know, you referenced Collingwood, and I know you're a Collingwood man, but if you think about you know uh a couple of years ago when Collingwood always winning those close games, you know, and everyone says, how do they keep on doing it? It just comes back to the system. They'd trained it, they and you speak to you know Craig McRae and it'd come up in in media conferences that that they'd practice when the game plays, you know, at training. And so everyone knew what the system was, and so it wasn't by chance, yeah. You know, yeah, you need a little bit of luck here and there, but they were going back to a system. And so when we think about fear, and and fear just comes from the unknown, we've all heard that before. It's the fear of the unknown. And so what the body does and what the Mind does is when it fears something that it doesn't know, it goes into that reaction. And so if we can actually practice and and go to your blueprint or you know do something over and over and over again, then we suddenly don't fear it. Think about a you know a child when you know when when they first go to to swim or jump in the water, you know, they're fearful, they're anxious because they haven't done it before. We do it over and over and over again, suddenly the mind goes, Oh, it's okay, it's okay, and it becomes automated, we don't have that fear.
SPEAKER_02That's why we do it with them young, isn't it, as well? So that we can take that away. It's interesting, I'm I'm not going to admit to know a thing about football. But I was at the Olympic Games a couple of years ago and in Paris, and I was watching one of our high jumpers who did amazingly well. I believe her name's Nicola, and at the end of every single jump, she'd sit down and she would write in her journal, and I was watching her write in her journal afterwards. That must be part of her process, her way to calm those nerves, competing on the biggest stage in the entire world. There's so much we can learn from the way that peak athletes, you know, take this into their lives as well.
SPEAKER_03Yeah, and Katie, what she's doing there is she's distracting the mind because the mind can't think of two things at once. It's literally, we can only literally have you know one thought. You know, we talk about you know multitasking, we we don't multitask, we we just task switch. And so with the mind can only think about one thing, then by doing that journaling or whatever her system is, she's you know dispelling herself of worrying about the next opportunity.
SPEAKER_02So if I'm someone that verbally processes a lot, which I I do, and I think typically speaking, women are really good at verbally processing. Does that mean my little you know hamster wheel inside my brain is shut off when I'm verbally talking about it as well? Is that shutting down some of it?
SPEAKER_03Yeah, to a degree to a degree because you are you know in that action, you're actually speaking, but you know, also think that um you know females have this ability to be able to think about a lot of things and talk about a lot of things in a good way, in a good way, positive or positive.
SPEAKER_04So when we talk about
When Everyone Else Panics...
SPEAKER_04failure, stress and resilience in wealth creation, yeah, we know that obviously, you know, in any sort of market conditions, people's responses are varied, um, but there is a lot of um you know, sort of follow forward, which is not in not in a positive way, but if a market's correcting significantly, everyone moves into a panic mode, right? So we see this happening time and time again in share markets because it's a more liquid than illiquid asset, and so that again was one of the attractions for property for me. It's like it doesn't have runs like a share market does, like we don't drive home every night and see that our property has just gone down by 14%, and it doesn't affect our behaviours as much. Um, so it's not so much that the markets are reacting unusually, it's the people under pressure responding in different ways because of that uncertainty. So, of course, what we're trying to um articulate on today's show is to just try and get everyone to say, well, if you are uncertain, if there is things that you don't know about, then try to gravitate to the facts, yeah, right, and try to understand. But but I can tell you that that that uh Ben that sounds easy because what happens is there are two sets of facts. There's the immediate facts, which is short term, and there's the long-term facts, right? So this is why you know famously quoted that the share market is a weighing machine and a voting machine, and it's the voting machine which is the short term, and it's a weighing machine, which is the long term. And so the context is like this because if everyone else is panicking, well then I should panic too, right? And so so so I'm I am looking at the data and everyone's selling, and so property prices are going down. So I need to get in and sell at the same time, right? Because that is Ben, you tell me to look at the data. I'm telling you the data is that the price uh, you know, listings are going up, demand for for is going down, well, that's an economic cycle, and you're at a start of that cycle or a downward part of that cycle. Now, in some cases it might be fundamental, like in a business like let's say um Blockbuster as a good classic example. If you're a video hire business and digital's coming, then it's it might have a couple of ups, but ultimately it's gonna finish uh you know out of business. Now, the the difference with residential property and land and so forth is the land you still own, right, in terms of that. Now, but if a town does fall over or or grow at a slower rate, then the reality is the economic engine is going to impact on land values there. So then you sort of how you need to look at the data is to say, well, what's happening in the long term? What's happening in that market over the long term? Is the population growing over the long term? Is there is the economic engine uh too concentrated? Because if it is too concentrated in one or two industries, it's very susceptible to higher impact. If it's a diversified economy or a classic agglomeration economy, then the reality is that come back to the longer term facts. So, and this is what the great investors do. The great investors go, okay, what's the truth over the long term? And so, whilst other people are fearful, that's when I become greedy.
SPEAKER_02Just like the big man says.
SPEAKER_04So, but it's that it's that now, so we know that you know, behaviourally, there are going to be people who are overreacting to the short term. Now, and and we know in in the Melbourne market particularly that that the patience level of people because Melbourne has underperformed, and that's because we've got a crap government and a crap economy.
SPEAKER_02What do you really think?
SPEAKER_04So the reality is completely. And you've got a great Labour leader. We do. You absolutely have a very, very good Labour leader, so it's not just Labour liberal crap. It's actually there's one job that politicians have to do, and that's run a strong economy, and that's not through spending money and creating lots of debt that you have to pay higher taxes on. It's actually getting businesses and people starting businesses and employing people and growing the economic pie. So that's a perfect example, though, coming back to the point I was making, is patience is part of that behavioural process and learning to understand that this is only a moment in time because the reality is that this crap government will eventually get kicked out, and then we'll start to see a realignment back to what a city like Melbourne should be doing, which is growing its economy, right? And not through government spending, but through private investment in terms of that. And once people realise that and they see the sheer size of the Melbourne economy, like it's too big to fail because of the the major number of people here, it's you know obviously an enormous economy, but it can do a lot better, and the moment it does do better, sentiment shifts, and then when that sentiment shifts, you're off to the races. But in terms of property values, will we call it regression to the mean, they'll go back to their long-term trajectory. So Melbourne will most likely over the next decade, if we have a change of government, be the best performing market in Australia because it'll just get back to its its its footings, irrespective of tax reform. Because tax reform is not a major long-term driver, it's a short-term perception in terms of how people have. So that's why we're doing this episode at this time after you know recently seeing the reforms by government. That's why it becomes quite interesting.
SPEAKER_03And just on that, Silvon, so what you're you're you know is saying is the patience is about emotional regulation, isn't it? Yes, is to be able to regulate your emotions during those times of fear and during those times of okay, everyone else was just doing this, so I've got to be part of the you're the herd and join the herd, you know. Um, so it's about that ability to be able to track your thinking, understand your your your how you respond to that, and it's like that great saying, know thyself, you know, know how you that I'm gonna get anxious, I'm gonna get worried, I'm gonna get stressed from this period. But what are the facts?
SPEAKER_04Yeah, I I think even in um uh auction environments, people can, you know, have you bought any properties at auction before? Once.
SPEAKER_02The story's not very good. I got a little
The House KD Bought on a Walk
SPEAKER_02bored and um left my um family gathering, went for a little walk and bought a property at auction that I had never seen before.
SPEAKER_01One bid. Fundamental.
SPEAKER_03You've been drinking, you've been drinking at the talk.
SPEAKER_04Uh you know, sort of you know, quick thinking and slow thinking, you know, fast and third. It was really fast thinking.
SPEAKER_02It was yeah, it was it was not my finest moment. No.
SPEAKER_04A bit of good learning. Well, it's learning. Did we did it end up positive or negative? What happened?
SPEAKER_02Um it ended up being a really weird one. So I I put in one bid, um, I was $1,000 above the underbidder. I then had a really shaky pre-settlement period with the sellers where I just got a really, really bad feeling about it. I went to the underbidder, um, gave them $1,000, and they took the property over. So again, not my finest moment, but I exited it with very little damage. That said, that property would be a lovely addition to my portfolio now.
SPEAKER_04So time fixes some decisions. Okay, that's fair enough. Alright, so if we're talking about that, let's move on to some of the practical habits that we need to. So when we when we are talking about mindset, can you step us through some of the habit behaviors that we can think about and focus on, and then we'll try and bring them into how that might bleed into financial habits?
SPEAKER_03Yeah, well, I think the first thing is is to stop, yeah, pause, reflect, because we are so busy and
Pause Before You Make Your Next Move
SPEAKER_03everything's happening so fast, is to go back and go, okay, just let's take stock here. Let's get some perspective. What do I know about the past? What do I know about the you know, what I want to do in the future, where are my goals, does it fit with my my strategy, and then you know, what do I know about myself? You know, and making sure that we're making decisions based on the fact rather than the fiction and based on not reactive emotions.
SPEAKER_04Well, and I think you know that's the pressure that we often see when markets move beyond what we call fundamental value or fair value and then move into what we call a market price. So a market price is what a willing palette a willing seller and a willing buyer is willing to exchange, right? But you can, you know, from daffodils to ostriches to all sorts of um different fads over time where prices daffodils as well as tulips.
SPEAKER_02Sorry, tulips, thank you. What did I say?
SPEAKER_04Daffodils from thank you for picking that up. Prices can become irrational through what John Maynard Keynes would say are animal spirits and irrational exuberance. And so cryptos and all of these types of things where we see these types of fads. So that was a market exchange. Like even, you know, these digital images or whatever they call what were they called again?
SPEAKER_01Non-fungible tokens. Thank you, non-fungible tokens.
SPEAKER_04Like people were saying, oh, that that photo is unique and it's got no scarcity because a half a second later another photo's taken of pretty much the exact same thing. So once people work out there was no scarcity, but for a moment there, everyone thought that these things had a you know, so that was a that was a rational supposed belief by that people, or it was a pump and dump strategy from the people who were trying to create a market, you know, in terms of that. And so that's what we've seen with crypto as well. We've seen, you know, is there a practical purpose, is there a practical need for that particular thing? Maybe not, you know, digital currencies, but certainly, you know, areas of uh that digital economy are definitely coming through. So we're seeing a digital US dollar, we're obviously seeing um the chain, the blockchain that can also have some practical applications, but it's also about whether that's going to have practical applications at the scale that it needs to have. I mean, the biggest problem with Bitcoin, uh, you know, we're talking about it being a store of value, but the reason why it hasn't necessarily been an exchange mechanism is too bloody slow, right? So we can't have that process happening in terms of those types of things. So these are all the things that you need to understand. So what are the what are some of the practical things that you've done, KD, in terms of when you are thinking about habits and behaviours that you've done, what served you well in terms of executing that from a monetary, financial, or wealth building point of view?
SPEAKER_02I feel like I need to be sitting here and just writing the note to myself pause because I don't do that often enough. I don't, I mean, I'm constantly in motion. I wake up and I'm the person who feels guilty if I'm not productive enough on a Sunday, and I know that there are a lot of other people out there listening to that who will resonate with that. And so when do I actually sit and go, what am I thinking about? How's that impacting? So I've got homework after this, thank you. Um what's worked well for me. I mean, I guess just reading and being a little compulsive nerd, trying to learn as much as I can. That's why I've never invested in anything to do with crypto. I didn't understand it well enough for it to fit within my risk parameters. Um, I I like to understand things. I'm a curious person by nature, and that's probably been what's protected me the most, whether that's in business, partnerships, investing. I'm pretty simple though, really. There's nothing too complex about me.
SPEAKER_04Well, Brett, you've talked about self-awareness, you know, in what we've talked about this morning so far. Um, we've also talked
Failure Is Part of Building Wealth
SPEAKER_04about emotional regulation, so trying to, you know, sort of pause and that. But there's also potentially some reframing that you can also do when you potentially try something and it doesn't work for you. Can you sort of unpack that a little bit more?
SPEAKER_03Yeah, well I think it's it's about you know learning from our failures, you know, and and we all make mistakes, don't we? And we can, you know, I love the acronym, you know, fail first attempt in learning. Okay, no one sets out to make a mistake today.
SPEAKER_02Do you know what NASA's motto is? Failure is an option. That's actually one of their mottos because without failures in the process, they're going to fail when they do the rocket launch. And so they want as many failures as they possibly can during it. I used to have a bracelet that had that from NASA. It said failure is an option. And how much do we learn? You know, you either fail or you either win or you fail. Sorry, no, you either fail, oh gosh, here we go. You either win or you learn. When you fail, you learn. So yeah.
SPEAKER_03And it's that intention, isn't it? It's like no one sets out to have the intention, I want to lose money or I want to make the wrong decision. It's so it's about taking the time, reflecting, what did I learn from that? Yeah, you know, so that we don't make the same mistakes again. And understand not being on hard on yourself.
SPEAKER_04Well, well, I think also when you are putting it into a financial context, the decision to risk um, you know, a thousand dollars if you've got a million dollars is is okay, right? You can put that at risk. But for those people who are thinking about investing for the first time in property, it's a half a million dollar or a three-quarters of a million dollar or a million dollar aspect. Now, for those people who have bought a home, well, you're buying the same thing, but this time you're just gonna rent it out. So a lot of people have a lot more comfort around potentially doing it if they've already bought something. But if you're a rent vestor or something like that, or a first-time you know, home buyer, it it's it's a whole new experience. And the risk feels more amplified because of the known unknown, which is I don't know what's gonna happen off this. But I can tell you that of all, you know, in the street that I grew up, in the in the suburb that I grew up, and in the house that I grew up, they went up in value over the medium to longer term. So I think that's why Australians have a preference towards residential property. Well, yeah, but it's it's also relatively smart. I mean, you know, up until these recent tax reforms, I always used to think, what's a smarter use of my money?
SPEAKER_05Yeah.
SPEAKER_04Like the smarter use of my money was a real clear, I'll go into Resi every day of the week because I can control the asset. Um, I know that the land is scarce if I'm buying in a good location, and and over time, if if I bought in a location that's growing economically, I'm gonna get the natural uplift of that. So it's it's very rare that I'll come out of that with a loss. Whereas in a share market, depending on the business that I'm even investing in, even blue chip businesses go backwards significantly. You only need to look at GE and even CSL, you know, of recent times in terms of the the wealth that they've Sonic, ResMed, Amazon. There's so many of them, right? So, so I mean, if you're listening to this or watching this, um, yeah, it it it is all about context and scale. Um, you know, and so if you need to learn how to invest slowly, then property's not potentially your first way to do it. But what we've always said um on the pod is it's really simple that if you are in a position financially where you've got strong incomes and there's a safe amount of surplus there in terms of those, you've got a reasonable security behind you as well, um, job security is gonna be important because you're gonna be uh servicing the debt, then that's a reasonable time for you to think about taking that opportunity. But if you're also thinking about when to time the market and which market to get in, you're probably gonna need to get some professional advice around what that looks like. And if the advisor is not incentivized to um charge you a commission or you know, sell you something off a stock list, then you've probably got a better chance of getting you know some impartial advice. It's never independent, like we're all still you know receiving money and we still have biases to that point about what that looks like. But that's that to me sort of makes sense around um how you frame up that story and and give yourself the confidence to be able to do you know that particular thing.
SPEAKER_02Maybe also remembering as well, it doesn't have to be this or that, it doesn't have to be property or shares,
Property or Shares? Why Not Both?
SPEAKER_02it can be this and that.
SPEAKER_04Oh yeah, you know over time it will be. Yeah, I mean, look, the the the the simple context that we try and promote on this podcast, and it's I think it's why so many people trust us and trust our message, is because we've never gone into the hype, we've never gone into the hyper bowl of buying in different locations and chasing the next big fad or anything like that. What what we've relied on is fundamental value investing in in terms of what that looks like, and that that means at the end of the day, what is what do we know to be true today that's going to be true in 10 years' time? Like when Warren Buffett talks about the Snickers bar, it's the number one you know selling uh suite in the world when it was in the 1960s and it's still up there in the top five, you know, some 50, 60, 80 years later, right? So so if you think about those types of things, that's when you can obviously get confidence around what that looks like. And so we haven't again been drawn to in fact, we've warned people um against some of the sort of latest fads of trust lending and all those regional town buying in remote areas, um, because we just didn't the fundamentals weren't gonna stack up. And I think part of that story is around uh having the knowledge, and so you know, in terms of my behaviour points, I my number one point is I've got to get educated, you know, which is what you said before. If I if I don't know, if I've got a knowledge gap, I need to fill that knowledge gap. And sometimes that's me reading, that's me asking questions, but I would go to a proven source.
SPEAKER_02And not necessarily Uncle Jim or the person up at the local pub. That's the thing, it's it's where we get our information from. And when you know, going back in time, information say news sources could be so much more trusted than they can be now as well. So making sure that it is it's reputable.
SPEAKER_03Yeah, it's not the mate at the barbecue, is it, you know, and because everyone you know is doing this, oh, I've got to do that, and I then I had fear because the FOMO, I don't want to miss out, and I want to join my mates. So it's again, it's it's fact versus fiction.
SPEAKER_04There is a lot of pressure in that. But I mean, if I look at the likes of Berkshire Hathaway and look at Warren and Charlie and the team
Warren Buffett's Million-Dollar Framework
SPEAKER_04there, they've got a framework.
SPEAKER_05Yeah.
SPEAKER_04Benjamin Graham laid out, you know, fundamental investing and those types of things, the intelligent investor, and the framework they've they've they haven't really changed that framework over a long period of time. Is that is there an economic moat? Does that allow them to get pricing power for that economic moat? Um, what's the management team like? What's their incentives in terms of what that looks like? And it's this framework that they take every decision that they make through. So where have they got most of their investments? Rail, well, it's not easy to build a new rail line. But you know, who's going to spend hundreds of billions of dollars? So you've got an economic moat there, insurance, obviously. So they have you know some of the biggest insurance businesses in the world. So again, big cash flowing businesses that allow them to then turn that cash flow into buying into business, Coca-Cola, so power of brand, pricing position, distribution. So looking at all of those fundamentals, Apple, originally Warren Buffett didn't want to get into Apple because he didn't understand technology, but then once he worked out that they built an ecosystem and it was a closed ecosystem, and obviously it's been one of the best investments that they've made over the journey, and that's why they've got what $300 billion of cash sitting in their bank account, plus obviously a share price and performing business, American Express. Same sort of thing in terms of you know, they've got a fascinating story about whether they were going to stay in American Express because there was a story there where American Express actually ensured a business where the guy was dodgy, and what he said is that all of these tankers he said had this oil in these tankers, but no, what had happened was he put a film of the oil across the top, but everything else was water. And so once they discovered that, um this is the 1960s. The American Express share price started to tank. And Warren Buffett's going, hmm, this is interesting. Is this a buying opportunity? In other words, short-term framing versus long-term framing? And so what did he do? He just said, all right, well, I'm going to go out on the street and I'm going to observe people. And were they still using their American Express card for their transactions? Spent a week out in the streets. Everyone's still got their American Express. So the perception was in the markets. The markets corrected the price, right? You know, in terms of the, but the people on the street, they didn't have a clue. They didn't care about that little bit. So he obviously loaded up, and now it's obviously one of the biggest positions that they that he has. So again, it comes back to knowledge is power in terms of understanding that and then following systems as part of that. Because, and and long-term thinking, right? Think about thematical investments, about what gives them that competitive advantage over the long term rather than the short term. And that's why, you know, in in all of the recent education I've been giving around what's going to happen post these tax changes, is I'm still very, very comfortable in terms of what's going to happen in some property markets, but I'm also fearful in other property markets based off that data. So that that's you know, there's some of my my sort of lessons when it comes to behaviours around that. Have you got any, Brett, in terms of when you when you talk about even with your kids, I mean you've got a you've got a high-performing family.
SPEAKER_03Yeah, well, and I think probably just to add to that is is don't let your emotions lead your thinking. Yeah. You know, don't because as I said before, we we can't control our emotional response, but we can choose how we respond to our emotions. And I think that's just critical because then we, you know, we can you know we can get agitated at times, you know, with the kids, or we can get agitated with our financial decisions, but don't let it control our behaviors and dictate what we do next. Make sure we get into that metacognition, think about what's happening, get the data, be patient, and make good decisions.
SPEAKER_04Yeah, stay the course if the fundamentals still ring true. If there's a if there's a significant shift in the fundamentals, do people have to live in a house? Do they need shelter? That there's no change to that fundamental. We're not going to go and move back into the caves. Yeah. Right? But then it is about, well, if you then understand what drives short and long-term value, short-term value is absolutely fundamentally driven by supply and demand. What drives supply and demand? Access to credit. Because if you give me the money, I'll go and buy it. Like, you know, for investment or for owner-occupied, say when it comes to residential property, because as an owner-occupier, I'm an emotional buyer. So I'll buy with my my my heart, not my head, right? And so investors' smart money follows that, follows that course, right? So that's it, and in the long term, it is the agglomeration, it's the scarcity of the land, it's the size of the economy that improves the land value over time. So that just shows up. Because why? Because in a bigger economy, what happens to workers? They get paid more, they get specialized in that specialization, they get higher incomes. Higher incomes lead to the ability to be able to borrow more. I borrow more because I want a nicer home and I've got status. So it moves from a need to a want, and then you get this meshing of the two, and that's why you have, you know, prestige suburbs and luxe suburbs, and um, you know, sort of chest beating suburbs, and you also just have suburbs that are just standard run-of-the-mill because they just provide the initial sense of shelter. That's the fundamentals in terms of wrapping it up into property. And and again, you know, one of our philosophies here at our business is do our best to not lose money for our clients, right? If it's our money and we go and splash a thousand bucks to have a speculative punt, that's that's our call, our call. But when we're playing with clients' money, it's a zero no-sum gap. We are doing everything we can. And if it means that we might uh move off this idea of being able to get a higher return um in a speculative market in the short term, sorry, there's still too greater risk of basically losing our clients' money, we're not interested. So we'll stay in the value investing camp.
SPEAKER_02You're like doctors, first do no harm.
SPEAKER_04Yeah, yeah. Well, I I and it serves it serves us well. I mean, you know, in terms of over the 4,000 properties that we've bought, there's very, very few that we would say, would we have our time again that we wouldn't buy that same asset? So and and that sort of bodes well in terms of what we're trying to do. Now, of course, we can't control pandemics, um, lockdowns, um, you know, economies that haven't come out of lockdown well, like the Melbourne economy. So we didn't anticipate that. So when we're buying properties in 2019, 2020, 2021, we were confident in terms of the long-term prospects, but it's they are definitely underperformed, you know, and some of our clients can feel a little bit pissed, and they should, because you know, at the end of the day, and they're getting a little bit impatient in terms of when is it going to turn around because the reality is there's still risk, and in this particular case, it's political or regulatory risk that's slowing down the economic activity that's happening in the state. And so when that gets adjusted, because it does, over time everything sort of moves back. Um, you'll start to see you know the market moves.
SPEAKER_03This is one of the fundamentals, isn't it? Is buy and hold. You've been doing it for the long term. Yeah, yeah.
SPEAKER_04If you if you've got a good asset that stacks up today, it should stack up in 20 or 30 years.
SPEAKER_02And that's the beauty of property, really, isn't it? Because we're not just looking for that capital gain, we're getting a return on it while we hold it. We've got someone helping us pay the mortgage down, so there's there's that risk mitigation as well.
SPEAKER_04But it's very true that property investing is a behavioural journey as much as it is a financial one. That's true. Um the market
Property Investing Is a Behavioural Journey
SPEAKER_04does expose your psychology. So when it when things are challenged, how do you hold attention? How do you remain patient?
SPEAKER_01When money's involved, it brings out those big feelings and you know, sometimes the worst.
SPEAKER_04So accept it to your point, Brett, which is the great advice you gave earlier, which is okay, I can't change the feeling I'm experiencing now. Yeah, but how do I think about that feeling a little bit longer and work out what's in behind that feeling and then get the questions that I need, start to answer those questions, but to that point, if I can't answer them, go to a professional who can, who can give you some independent advice in terms of what that looks like. Um, and of course, you know, the final message we have here in wrapping up is well creation rewards consistency, patience, and that emotional resilience. I think is a really good thing there in terms of what that story is. Uh any final comments, mate, before we wrap?
SPEAKER_03No, no, I think it's, you know, we've spoken about think, feel, act, but what I would say is think, feel, think again, and then act. All right, and so I think that and that's the pause, the reflect, be patient, you know, and and understand yourself. Yeah.
SPEAKER_02I'm going home to pause. Just to just that's simple. It sounds so simple, but it's so important. So thank you. Appreciate the learning.
SPEAKER_04And I think for anyone who's, you know, gonna digest this and have some slow thinking about this particular episode, just think about it like
Is the Market Driving You... or Is Fear?
SPEAKER_04this. What mindset story are you telling yourself about money right now? Because it could be detrimental, and you could be making or taking actions off the back of that detrimental thinking. So make sure your thinking is accurate if it is, make sure it's backed up by the data or someone who's got experience to can validate your thinking. So by all means express them, share them, yeah, don't hold them in, don't then think you're making the right decision until you vet them with experienced people. Um, and if you then do that and it still doesn't quite make sense to you, well, maybe that's the time to pull the trigger if you need to. But otherwise, if you do stay the long term, um you'll be rewarded. And investing in wealth creation happens in that space. So thank you. Patience. Patience, patience and pausing. Absolutely. Well, there you have it. Uh, you know, we we tried to uh set off on a journey today um to talk about the mindset loop, and that's also about how your thoughts then impact your feelings and emotions, and then the the rational or irrational actions that you take off that. And that can come in the form of FOMO, the fear of missing out, which can happen in rushing markets and animal spirits environments, but it can also then show up in Fongo, which we haven't necessarily talked about, but we'll talk about more, which is the fear of not getting out, which is potentially what some people might be feeling now in certain markets. So be careful about those. So that was the mindset loop. Then we wanted to share with you the fails in stress and the resilience. So that's the behavioural stuff that we're talking about, and how you frame those things up, how you think about those, and then ultimately some of those practical steps that you take. Um, Brett had some good ones there around obviously making sure that you um you understand yourself, you regulate yourself, um, that self-awareness, that emotional regulation, and also reframing some of those setbacks because we are going to make mistakes. Ideally, we don't want to be making those mistakes or big mistakes or getting impatient when it comes to large financial transactions. Um we can all make a spontaneous purchase like KD did and buying a house and then realizing that wasn't quite right. We prefer those to be the pair of jeans rather than the house. But uh hopefully you got uh got something to take away and think about off there. Bret, is there any um one one final thought uh just came to mind? Is there anything um that you would lead them towards in terms of um education? I know Dr. Gervais is a you're a massive fan of Dr. Michael Gervais, as are we, who we had on the 500th episode of this podcast, but he's got an amazing book. He does. Um would that is that where you'd lead people with?
SPEAKER_03Yeah, I would, yeah, yeah. It's um you know stop worrying about what other people are thinking. Yeah, and um because most of the time they're thinking about themselves, not you. Um but also the um uh atomic habits, you know, yeah, I think that's a clear understanding. We also have on the pod. Yeah, we also check out that episode as well. Yeah, understand the education around that.
SPEAKER_04Some great advice there, so thank you. Thank you. Catch group, great to have you guys on. I'll do it again sometime later in the year. It's a pleasure. Thank you. Okay, until next week, just remember everyone, knowledge is empowering when you've got the right mindset, but only if you act on the right time. See you next week.
SPEAKER_00Hey folks, Epty here, the Smart Money Cidekick InsideMore. Just one quick thing before we sign off. If you're new to the property catch community, welcome. One quick tip to help you get the most value from the show. Our first 20 episodes cover the foundations we build on every week. And yes, listening on one and a half speed is totally acceptable. If you're short on time, download our free binge guide. It distills those episodes into one easy read with heaps of visual diagrams, alongside free tools inside more, your all-in-one financial home, to help you organize your money and plan your next best move. Check out all the links in our show description. And just a quick reminder before you go anything we cover on this podcast is general in nature. It's not considered to be financial advice, and we certainly recommend that you seek out professional advice before making any financial decisions. Once again, everything mentioned is linked in the show description. Ready when you are. Catch you next week.
