The Smartest Investment Strategy Starts With This | FUNdamental Fridays

In this Friday Fundamentals episode, Ben is joined by Glen James to explore one of the most overlooked ideas in wealth creation:

The best investment is often in yourself.

From pay rises and career growth to business income and automated investing, this conversation unpacks why the biggest returns early on often come from increasing your earning power — not from chasing speculative returns in a small portfolio.

Glen explains how human capital becomes real capital, why personal contributions matter so much in the early wealth-building years, and why improving your income can be one of the safest and most effective ways to grow your financial future.

If you’ve been focused only on products, platforms or properties, this episode is a useful reminder that the real engine of wealth may be much closer than you think.

Got a question or a “hill” you want us to unpack? Send it through here 👉 https://thepropertycouch.com.au/topics/

⏱️ Timestamps

00:24 – Welcome back to Friday Fundamentals
00:54 – Glen’s hill to die on
01:17 – Why the best investment is in yourself
01:45 – The $10,000 portfolio thought experiment
02:36 – Why chasing huge returns can mean huge risk
03:03 – What a $10,000 pay rise really means
03:49 – Why career growth is a low-risk wealth lever
04:44 – How long-term earning power compounds
05:22 – Why your own contributions do the heavy lifting early on
06:18 – The difference between earning more and capturing more
07:12 – The waterfall analogy for income
08:00 – Business as a wealth-building engine
09:19 – When it becomes a career discussion, not a job discussion
10:03 – Final thoughts and practical takeaways

LISTEN TO THE FIRST 20 EPISODES HERE >>

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Transcript

SPEAKER_01 0:00

Because a lot of people still have investment portfolios that are quite small and want them to grow fast. Also, when you look at through the lens of having a $10,000 portfolio, you've just doubled your investment portfolio and got a hundred percent return on that investment portfolio in a very safe way. 100%.

SPEAKER_00 0:19

The biggest investment is in. It's another Friday. That's right, it's a fundamental Friday. So I have with me Glenn James from Money Money Money Podcast Fame, and also one of Australia's leading property finance gurus. Mate, welcome to Fundamental Friday.

SPEAKER_01 0:41

And isn't it fun? It's just so fun. It's fundamentally fun.

SPEAKER_00 0:46

It's fundamentally Friday, fun one. All right. We're talking about the hill that you will die on. I haven't even given you any context. I don't know what you're about to say next, but what is it that what's the hill you'll die on?

SPEAKER_01 1:02

I reckon any property spruker who flogs brand new off-the-plant apartments are legends. No, no. No, no, no. Okay. All right. Well, we the hill that I'll die on is I don't think there is a better investment than your own career and your own transfer of human capital into real capital. See ya.

SPEAKER_00 1:29

Yeah, okay. Well, that's a wrap, everyone. We'll see you next week. So that's it. Well, obviously that's a profound statement. How did you get to that statement?

SPEAKER_01 1:37

Well, I can play a bit of a game with you that will help your viewers um just understand this concept. Yeah, okay. Let's start. If you had a portfolio of shares, $10,000. Okay. Okay. Yep. To grow that money to $20,000, we would need a return even over a year of 100%.

SPEAKER_00 2:00

Correct.

SPEAKER_01 2:01

If we didn't put any other investments into it, had that $10,000, moved it to $20,000, one year 100% return. And that $10,000 was our whole share portfolio. Right. Right. Yep. There is no way on the planet we would want to have that capital exposed, 100% of our portfolio exposed to the chance of a 100% return. Okay.

SPEAKER_00 2:26

Well, because obviously those types of returns aren't guaranteed. Yeah, 12 months is a very quick time to get such an exorbitant return.

SPEAKER_01 2:36

So we don't want to be hanging around there with our money. Yep. Okay. So my theory is if, for example, we had that $10,000 and we wanted a 50% return, still, I don't want my money hanging around to try and get $5,000. $5,000 or a 50% return for the lion's share of my portfolio. Right. Too risky still. Too risky still. Got it. Like we just don't hang around in those parts. Yep. So on that basis, what if we had an income of $100,000? Yep. With our income and with our work, or even $80,000 if your income is $80,000. It's actually not out of the realm of a possibility. And we still, because a lot of people still have investment portfolios that are quite small and want them to grow fast.

SPEAKER_00 3:21

Yep.

SPEAKER_01 3:22

Yep. What if we got a pay rise? What if we did some extra study? We put some extra time in and generated maybe another $10,000 a year. Okay. 10% pay rise. 10% pay rise. Yep. When you look at the through the lens of having a $10,000 portfolio, you've just doubled your investment portfolio and got 100% return on that investment portfolio. Which is a speculative return at best. But in a very safe way through a pay rise. And I don't know many people who get a pay rise and then the next year they take it away. So your income, your ability to earn your career is an annuity that can be worked on in a very low-risk way.

SPEAKER_00 4:05

100%. So so let me see if I can replay this back to you. The biggest investment in my in my future me is in me and my professional earning capacity. Absolutely. And through that lifetime of earning, so we've always talked about doing 40 for future, right? So you've got you're roughly going to be working 40 years for your financial future. Yep. Now the decisions that you make or the earning that you do during that time matters. And to your point, if I am actually gainfully employed for that 40-year period, effectively every year I'm getting 100% return on my time because I'm earning 100,000, 100,000. But if I also get a salary increase, I'm also getting 110% on what that original factoring is.

SPEAKER_01 4:50

And it's a real low risk way. And I know, you know, people might be like, oh, it's not a 10,000. Yes, it's an allergy. It's all right. It's for concepts. And it's passive versus active. We get all of that. So then if we go, we look at it another way, people are trying to build wealth and maybe want to grow their investment account. Because I talk a lot of shares and ETFs. Like I like property. I'm a capitalist pig, like the next property guy. I'm I got property. Don't worry about that. I like that.

SPEAKER_00 5:15

Shares are good. Mate, let's mix it up.

SPEAKER_01 5:17

So if you had, so if someone wanted to start an ETF portfolio, really anything up to $100,000, the heavy lifting of that portfolio is your own capital contribution to start with. So even if you had a $50 grand portfolio at $100 a week over that year, you've got a 10% return. Is that right? Yes. I've done four four episodes today. I'm fried. So it's fine. That's right. So the capital that you add to that share portfolio is where the main return is coming from until you know. Because then once you get to 100 grand and you might have an 8% a year return, once you get to that critical mass, that's when the actual investment itself will do a lot of the heavy lifting in comparison to your income. So I'm a huge believer. Huge. Forget investing, forget doing anything until you invest in that thing in the mirror because that will be an annuity that will keep on spitting out money.

SPEAKER_00 6:18

So exertion income is the foundational means by which we can create wealth. Yep. And I know you've also, you know, you planted this idea of dollar cost averaging. So I heard that in your conversation as well. Yeah. Which is probably another question for you. Um, you've got to trap some of it, don't you? Yeah. Like, you know, let let's let's we can't have that, you know, that discretionary spending and you know, burning all of that cash for toys and things that depreciate in value. So is there a little, you know, a a plus one sort of comment you want to add?

SPEAKER_01 6:51

Yeah. So I you've just got to have this analogy with your life that if your income is a waterfall, yep, you really want to make sure, and particularly for business owners, you probably have a lot of business owners watching your stuff. It's like there's a lot of people that turn over so much money in their business, but they don't catch much of it to bring home. So the the art versus science of it is to maximize your employment income, maximize your own business income. So part 2.0 of the best investment you'll make in your career is if you've got a business and you do that right, you'll buy any property you want. And we've got to make sure we capture money as it's flowing through our hands as much as possible. And you do that by having strategic spending plan, systems, and processes and automating your investing.

SPEAKER_00 7:42

I remember uh is it Marcus Padley? Is that from Marcus Today or whatever it is? Oh, yes, sure. I think yeah, I was I was hearing him one. Hi Marcus, if you're listening, friend of the show. Friend of the show. I was listening to him speak one day at a at a you know, back in the day that you know, we used to have these events where where actually humans turned up and pulled expos right years and years ago. 88, I think it was. That's right. And Marcus Padley was asked the question about what's the best investment? Yeah, you know, and you can say, well, obviously he did actually repeat what you said. He said the best investment is in you, and then in what about shares? And he goes, Well, shares are good, but one of the other best investments you can make is starting your own business. Right. Absolutely. If you're starting your own business, potentially you got put more control and potentially more upside in that destination. So I think I was just adding a little bit of dust, a little bit of dust, a little bit of cake dust.

SPEAKER_01 8:30

You know, in turn, and this is really for the business owners, like you you might look at proper, like what's an average Melbourne capital city property return per year? Like eight at the moment?

SPEAKER_00 8:41

Uh well, long term, if we're going right back to 1973, because I love the data, uh 1974 value of general data, it's still sitting in Melbourne at around 7.8%. Okay, so that's that's right across the board. But the percent. The blue chips, the blue chips are still around 8.5.

SPEAKER_01 8:57

Okay, so you look at eight percent, long-term average Australian share market over the last hundred and dickety years, probably around the same. Yep, you do a business right, you'll spit out 30% a year sometimes pretty conservatively. So the best investment is always you and what you can control. And if you're like, well, Glenn, I'm in a job where I'm a I'm in a pay scale that could be a teacher, could be a a public service worker. I can't get a pay rise. I'm like, uh-huh. You've now got a discussion, not a job discussion, a career discussion.

SPEAKER_00 9:36

Yep.

SPEAKER_01 9:37

I I get it. You can't just not everyone can go and say, I want not to do pay rise. Like, well, here's your level four, see you later. Okay, it's no longer a job discussion for you. Yep, it is a career discussion. What do you want to do with your career?

SPEAKER_00 9:48

And if you still love your career, that's okay. Totally. Start doing some passive investing, such as ETFs and dollar cost averaging into those, and take Glenn's advice in terms of what he says in his books. You know, these books tell you how to do it. Or not.

SPEAKER_01 10:03

Don't do what I say. I'm sleeping just as well tonight. We gotta even wrap up.

SPEAKER_00 10:08

Well, there we go. It's another fundamental Friday rap. Thanks, crew, in the back there, for giving us all the direction. Thank you for that peaceful. Until next time, knowledge is empowering, but only if you act on it.