Property Investment, Success & Money | The Michael Yardney Podcast

What does it take to become a successful investor? You know, one that builds a large property portfolio rather than selling up over the first few years like happens to about half of those who get involved in property. What does it take to be part of the 1% of property investors who build a portfolio of six or more properties? Now that was a question asked of me recently by Aaron Christie Davies for his Australian Property Investor Podcast and I think I know the answer to this because an audit of our clients at Metropole showed that they are 7.3 times more likely to own 6 or more properties than the average Australian property investor I believe Aaron elicited some great insights from me by asking the right type of questions, so I asked for permission to replay his interview with me audience of my podcast. So, whether you are beginning the property game or well on your way to being in the top 1% of investors, I'm sure you'll get some benefit. Topics I discussed with Aaron Christie Davies The value of giving How Michael's property investment journey started Michael's beliefs on time in the market vs. timing the market Michael's process for building his portfolio Michael's business, Metropole, and how it unfolded What happens when portfolios lose their momentum How Metropole helps clients reach the next level The message of rich habits and poor habits and why it's important The importance of a good team and a strategy Links and Resources: Michael Yardney Aaron Christie- David - Atelier Wealth – Australian Property Investment Podcast Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a bundle of free eBooks and reports at www.PodcastBonus.com.au Shownotes plus more here: The secrets of the top 1% of property investors Some of our favorite quotes from the show: "I didn't start off knowing what I wanted, I didn't have a plan, I didn't have a strategy, other than I knew I wanted to be rich and I wanted to be like those other, wealthy property owners." – Michael Yardney "You can get to a particular level, but not many people get to the next level." – Michael Yardney "So, the difference between the rich and the wealthy is the wealthy don't have to worry about money while the rich do." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Our current property boom is going to create a whole new generation of wealthy Australians. But since most people who become involved in a property boom don't become financially independent, last week I started this special series of podcasts discussing 40 lessons I learned in the last 40 years of property investment to hopefully help make sure that you're one of the ones who does succeed. Last week, I shared 20 property lessons, and today I'm going to share the other 20. 40 property investment lessons I learned in the last 40 years – Part 2 Last week, I asked, with the benefit of hindsight, would you have bought an investment property in 1980? What if I warned you about the recessions, pandemics, and other challenges that were coming? What I wanted to share with you in this two-part series are the lessons I learned in that time period that made me a better investor. No one really knows what's going to happen to the property markets. Don't listen to who most property investors listen to for investment advice. Timing the property market is just too hard. It's much better to buy the best asset you can afford and hold it for the long term. Any property can become an investment property – just kick out the owner and put a tenant in place and it becomes an investment property. But not all properties currently on the market are "investment grade" and will deliver wealth-producing rates of returns. Don't rely entirely on property data – it can be misleading and can be twisted to say almost anything. Property investment is part science and part art – you need to understand and interpret data (science) but you also need an on-the-ground perspective to employ that data (art.) There are 4 ways you make money out of property: Capital growth, rental income, tax benefits, and forced appreciation or manufactured capital growth through renovations or property development. But these streams of income are not all equal. Tax-free capital growth is the most important. Cash flow is important to keep you in the property game, but capital growth will get you out of the rat race. You will never get rich from earned income or savings. Location will do around 80% of the heavy lifting of your property's capital growth. Be greedy when others are fearful and be fearful when others are greedy. Don't do what most property investors do. The majority of property investors fail. Treat your property investments like a business Don't look for fun or excitement in your investing. Diversification is for people who don't know how to invest. Having the right mindset is critical to investment success. While knowledge is important, successful investors take action. There are always risks associated with investing. Don't be afraid of failing, because the biggest risk is not doing anything to protect your financial future. Don't waste your time worrying. Most things you fear will happen never do. They're just monsters in your mind. Never give up. You will have failures along the way – in fact, I'm a real success at failure, but each time I'm knocked down I get up again. You need resilience to be successful. Resources: Get a range of my best eBooks and reports at PodcastBonus.com.au Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 40 property investment lessons I learned in the last 40 years – Part 2 | Summer Series Some of our favorite quotes from the show: "There are too many enthusiastic amateurs out there at the moment offering investment advice." –Michael Yardney "You need to make your money work hard for you, even when you're asleep." – Michael Yardney "Everyone does everything with money, no matter how silly it looks, because at the time it makes perfect sense to them." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

It should come as no surprise that the current property boom will create a new generation of wealthy Australians. However, if history repeats itself, most people who get into property investment this cycle won't become financially independent. Just look at what happened during the last property boom, and the ones before that. 92% of those who held onto their property never got past the second property. You can't develop financial independence from just one or two properties. Real estate has soared in value by more than 500% in the last 25 years, but most investors failed to develop a substantial portfolio. So, I've put together a special two-part series to help you make the most of our property markets. In today's show and the next one, I'm going to share with you 40 property investment lessons I've learned in the last 40 years to help you become a successful property investor and create lifetime wealth. Let me ask you a question… With the benefit of hindsight and knowing what you know now, if you had the opportunity to do so, would you have bought an investment property 40 years ago? I bet your answer would be yes. But what if you didn't have the benefit of hindsight and there we both were, back in 1980 and just as you were about to invest in a property I told you that in the next year or two Australia would fall into a recession and that in 6 years' time negative gearing would be removed only to be reintroduced a couple of years later. What if I told you there was going to be a stock market crash in 1987, and a severe recession in the early '90s, meaning that in the first decade of owning your investment property you would have had to face all those headwinds. Of course with the benefit of my time machine and you still being back in the 1980s as you planned to buy your first property I would also warn you about the upcoming AIDS scare and the SARS pandemic, the Asian financial crisis, September 11th, the Global Financial Crisis, the Coronavirus induced world recession. Would still have had the courage to buy that property back then in 1980? The answer for many people would now be: "No…why on earth would I invest in property knowing there are so many challenges, problems, and risks ahead?" Of course, they would have missed out on some amazing wealth-building opportunities, wouldn't they? I was already investing for almost a decade back in 1980 and I did buy another investment property that year. And over the years the capital growth I achieved from my investment properties allowed me to keep adding to my portfolio meaning that today I have a significant "cash machine" that gives me the lifestyle choices I was looking for back then. Of course, along the way, I've had some great investment wins but I've also made more than my share of mistakes. And I learned many lessons that I wish I knew back then, so here are… 40 property investment lessons I learned in the last 40 years The economy and our property markets move in cycles. Booms never last forever, neither do busts. That is mainly because most of us get swept up in the optimism or pessimism of others. Despite the ups and downs, the long-term trend for well-located capital city properties is rising values. Even though they are armed with all the research available in today's information age, economists never seem to agree where our property markets are heading and usually get their forecasts wrong. Every year we get hit by an X factor – an unforeseen event or situation that blows all our carefully laid plans away. Then every decade or so we have a major event and the world "breaks." There are multiple property markets in Australia. Property investment is risky in the short term, but secure in the long term. It is definitely not a way to get rich quickly Since property is a long-term game, don't look for "what works now." Instead, look for "what has always worked." Residential property investment is a high growth, relatively low yield investment class. Don't try to make it something different. At times of poor or no capital growth, strategic property investors "manufacture" capital growth through property renovations or development. Residential investment is a game of finance with some houses thrown in the middle. Taking on debt is not a problem. Not being able to repay debt is an issue, meaning cash flow management is a critical part of wealth creation. Property investment is a process, not an event. Strategic investors not only buy properties, but they buy themselves time to ride out the cycle by having financial "cash flow" buffers in place. Wealth is the transfer of money from the impatient to the patient. I must thank Warren Buffet for that quote. The media is not there to educate you, but its job is to get you to click on their links so that they receive revenue from their advertisers. So don't rely on the media for investment strategy or advice. There will always be someone out there telling you not to invest in property. There will always be people out there telling you to invest in property. So, understand their vested interests – they don't usually have your best interests in mind. Savvy investors surround themselves with a great team and are prepared to pay their advisors – they see it as an investment, not a cost. If you're the smartest person on your team you're in trouble. You are going to make investment mistakes along the way and you'll either end up paying a significant learning fee to the market or you can pay your advisors and learn from their experience and mitigate your risks. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 40 property investment lessons I learned in the last 40 years – Part 1 | Summer Series Some of our favorite quotes from the show: "Don't be surprised when the booms and the busts come around and don't overreact." – Michael Yardney "Over the years, I've found that it takes the average property investor around 30 years to become financially independent." – Michael Yardney "Knowing what not to do, in my mind, is just as important in achieving success as knowing what to do." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Not all investors are created equal. If you want to become a successful property investor you really need to understand the five levels of investing which is a model that I've designed to explain how most investors progress along their path to financial freedom. Just to be clear, this has nothing to do with your level of income. It has a lot to do with your financial fluency and financial intelligence. If you want to work your way up the rung of investors, you're going to have to understand which level you're at right now present and what you have to do to work your way up to the next level. After today's episode, you'll understand more about the levels and where you fit into them. After I've explained the five levels of investing, I'm going to share a mindset message from one of my mentors. The Five Levels of Investing Level 0 – The Spender Those at level 0 end up with a high level of debt because they spend and borrow, living paycheck to paycheck. They aren't really investors at all; they're spenders and borrowers. Level 1 – The Saver Those at level 1 have one main investment – their home. They save money, but they save it to spend it later, not to invest it. Savers are often unwilling to take any risks with their money and fear financial matters that look risky. Level 2 – The Passive Investor Those at level 2 are aware of the need to invest in order to grow wealth. However, they don't necessarily understand the rules of money and may be hanging on to outdated ideas about finance. Passive investors look for outside sources and "experts" to tell them what to do with their money instead of educating themselves, which can make them easy prey for get rich quick schemes. Level 3 – The Active Investor Those at level 3 are actively involved in their investment decision and take responsibility for their own financial futures. They focus mainly on growing their asset base. Active investors understand that they can't do it all themselves, so they form networks of advisors and peers or join Mastermind groups. Level 4 – The Professional Investor Those at level 4 have risen to a level where they have built and now manage their own investment business. They have a substantial asset base that generates enough passive income to pay for their lifestyle, and they continue to grow their portfolio whether or not they work a real job. Professional investors retain control of their investments while employing a team to help them continue to achieve consistent results. Where do you fall in the levels of investors? Not everyone makes it to Level 4. In fact, few get that far. But you can, once you understand why the rich keep getting richer. Links and Resources: Michael Yardney Metropole Property Strategists Metropole's Strategic Property Plan – to help both beginning and experienced investors Join us at Wealth Retreat in June this year – find out more here: Wealth Retreat 2020 Shownotes plus more here: Do you understand the Five Levels of Investing? | Summer Series Some of our favourite quotes from the show: "Level 4 investors rarely stop educating themselves." – Michael Yardney "A final point about Level 4 investors is that they teach their financial knowledge to their children. They pass on their family fortune to future generations." – Michael Yardney "You can be a low-income earner when it comes to your day job, but still be a level three investor and have financial security." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

If you want to take advantage of our property markets and become financially independent, today's show is for you, because I've got 3 segments during which I share a number of concepts that will help you along the way. First, we discuss whether property investing is an art or a science. Spoiler alert: it's both. But you still need to listen to the balance of the show because I'm going to explain how and why they interact. I'm also going to discuss the concept of becoming a borderless investor – investing in another state. I know a lot of people find this difficult. I see this particularly among intelligent and analytical people because they want more control. But bear with me as I explain some of the benefits and why you should at least consider becoming a borderless investor. Then in my mindset moment, I'm going to share a lesson that's made a difference to how I structure my life and I'm going to talk about the big rocks in the jar of your life. Is successful property investing an art or a science? So, Let's look at the three types of property investor. The passive investor A passive investor tends to spend little time doing any due diligence and is keen to buy one of the first properties they come across. They aren't really interested in understanding all of the ins and outs that go along with creating a property portfolio such as finance, tax laws, compounding and so forth. Instead, a passive investor tends to let their emotions get involved in their investment decisions, which we know can lead to disastrous results. The active investor An active investor puts in some degree of work in order to find a good investment prospect, including conducting some due diligence in the hope they can increase the likelihood of making a good and viable investment purchase. They generally look to gain a basic understanding of the principles involved in property, finance and taxation and would look to seek professional advice for help with structuring a portfolio. The analytical investor An analytical investor is the far extreme of a passive investor. Instead of undertaking little research and due diligence, this type of investor tends to go overboard and spend months, or even years, examining data, seeking advice and reading material in order to look for the 'ultimate' investment property. While it may seem that an analytical investor is more likely to make successful investment decisions, it's actually not the case. The problem with property data There's no doubt that it's important to understand the property fundamentals and research appropriate and reliable property data, and the more extensive the data research is and the longer it goes back, the more accurate it is in forecasting future trends. But the problem is, data is often wrong. Unfortunately, the most commonly-reported data - median price data - is actually very unreliable. There are three reasons: Because median prices fluctuate depending on the way the property is sold. In many suburban areas, where property sold a number of years ago and vacant land has now been replaced by new homes, this data is irrelevant. Similarly, new apartment or townhouse developments can skew median house prices of other local properties. Gentrification and renovation changes the nature or quality of properties which again, results in the median house price for the area being incorrect. Using median price data is risky for investment purchases and can cause costly investment mistakes. Just because median prices go up in the area doesn't mean that value of any local property also increases. So is property investing an 'art' or a 'science'? Both. It's true, successful property investors need research and data to aid an investment decision, but it's not enough on its own. Investors also need to compliment any applicable data with local area knowledge and expertise, plus experience and perspective in order to make the best-informed choices. Someone looking at data can make it say almost anything they want; the trick is knowing how to take that information and use it in conjunction with some practical experience in order to accurately make an investment decision. In other words, data and research is a critical step in getting ready to invest, but it is only one of the many important steps. What's the key lesson here? Property investment is an expensive game, and you can't afford to get it wrong. Engaging with experts with many years of experience can help you avoid making the costly mistakes made by so many naïve investors. Remember, property investment data is crucial when making an investment decision, but it's only half of the work. Should you become a borderless investor? You know…invest in another state? The short answer? Yes, absolutely! The long answer? There's so much you need to consider when investing in property, and the location and your proximity to the property is just one of them. Investing interstate is not without its risks. But to be a successful property investor who creates sustainable, lasting wealth from your property portfolio, it's my belief that you need to adopt a diversification strategy. This is because (and I may sound like a broken record here to people who have read my articles or seen me speak on this topic before), there is not one "single" property market in Australia. Our country is made up of many real estate markets, which don't always move in sync – they each have their own cycle. Just look at the significant variance of the different property markets in 2020 for evidence of that. Values have been falling in one market and rising in another, a dynamic that sometimes plays out at a suburb level. By that I mean, one suburb can be experiencing growth, while a nearby suburb may not. Investing in a city other than your own can be a wise way to spread your risk across multiple markets, and take advantage of growth cycles that may be stronger than your local area. Think about it: if you limit your investment options to your own backyard, are you really setting yourself up for financial success? Furthermore, searching for properties in your local area is not really "researching". Rather, it's searching for facts to support your ready-made preconceived opinion that the area is a good place to live or invest. And here's the truth about property investing... Diversification of location is key. This is very different to having a philosophy of diversification of investments, which is a whole other ballgame (on which I have very strong opinions!) It's those investors who have diversified property portfolios who will find they benefit, as different capital cities each have their own day in the sun – as their cycles peak at different times. There are also land tax issues to take into consideration. If you acquire a number of property assets within one state, you could end up paying a whopping land tax bill every year. By spreading your risk and buying properties in various locations, you may minimise the amount of land tax you're required to pay. This is not a reason to diversify, it's just one of the possible benefits. Now don't get me wrong… I'm not suggesting investing in other states just for the sake of it. What I'm recommending is that as investors build their property portfolios, they should add investment grade properties in the 3 big capital cities in Australia to their assets. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: Is Property Investing an Art or Science? Becoming a Borderless Investor + More | Summer Series Some of our favourite quotes from the show: "Instead of undertaking appropriate due diligence by closely looking at property data, many investors are making emotional purchases and it's causing poor decision making." – Michael Yardney "Failing to combine the science and the art of property investment could end up costing you a fortune." – Michael Yardney "By spreading your risk and buying properties in various locations, you might minimize the amount of land tax you're required to pay." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

If you're looking for more success in life – be it in your property investing, wealth, or money management, today's episode of my Podcast is for you. I'm going to share 2 sessions with you – in the first one, I will discuss 21 reasons many people are terrible at managing money. And even if you've got your finances under control, I bet you'll learn something from the lessons I want to share. And then I'll be chatting with Brett Warren, national director of Metropole Property Strategist about something very interesting he found when he sat down with potential clients of Metropole. He realized that their homes often performed better than investment properties they owned. I'm going to ask him why. 21 reasons you're terrible at managing money Morgan Housel wrote a great column at Fool.com where he explains that people usually get better at things over time, but there's something about money that gets the better of us. It's one of the only areas in life we seem to get progressively dumber at. He then outlined 77 Reasons You're Awful at Managing Money. Here are 21 of my favourites: You suffer from the Dunning-Kruger effect; lacking enough basic financial knowledge to even realize that you're making mistakes. For every $1 raise you receive; your desires rise by $2 or more. You spend lots of money on material stuff to impress other people without realizing those other people couldn't care less about you. You have never been able to predict what the market will do next. You get upset when you hear on TV that the government is running a deficit. It doesn't bother you that you heard this on a TV you bought on a credit card in a home you purchased with a no-money-down mortgage. The single largest expense you'll pay in life is interest. You're thrilled that the credit card you're paying 22% interest on offers 1% cashback on all purchases. You work in a stressful job in order to make enough money to have a stress-free life. You see no irony in this. You're a pessimist in a world where far more people wake up in the morning trying to make things better than wake up thinking we're all doomed. You try to keep up with the Joneses without realizing the Joneses are buried in debt and can probably never retire. You associate all of your financial successes with skill and all of your financial failures with bad luck. Rather than admitting and learning from your mistakes, you ignore them, bury them, make excuses for them, and blame them on others. You say you'll be greedy when others are fearful, then seek the fatal position when the market falls 2%. You let confirmation bias take control of your mind by only seeking out information from sources that agree with your pre-existing beliefs. You think you're too young to start saving for retirement when every day that passes makes compound interest a little bit less effective. You're investing for the next 50 years but get stressed when the market has a bad day. You don't respect the idea that "do nothing" are two of the most powerful words in investing. You feel especially smart after last year's market rally without realizing that you had nothing to do with it. You seek advice from a doctor to manage your health, an accountant to do your taxes, a lawyer to manage your legal problems, a plumber to fix your plumbing, a contractor to build your house, a trainer to help you exercise, a dentist to fix your teeth, and a pilot to fly when you travel. Then, with no experience, you go about investing willy nilly, all by yourself. You think financial news is published because it has useful information you need to know. And here's two bonuses one for you: You forget that the single most valuable asset you have as an investor is time. A 20-year-old has an asset Warren Buffett couldn't dream about. You nodded along to all of these points without realizing I'm talking about you. Why your home may outperform your investments with Brett Warren My business partner Brett Warren wrote an interesting blog recently explaining what he found when he spoke with potential clients of Metropole who were existing homeowners and also owned one or two investment properties. He found that while often their homes had performed strongly growing significantly in value, yet in many cases, their investment properties have struggled and, in some cases, fallen behind. So, today I ask Brett why this happens so frequently. Brett Warren says that while people may keep fundamentals firmly in mind when looking for their homes, they often overlook them when it comes to investments. Take a look at some of the fundamentals that investors tend to overlook. Supply and demand Understanding the intrinsic land value The neighbourhood features If you wouldn't compromise on these factors when buying a home, you also shouldn't compromise when investing in a property. Links and Resources: Michael Yardney Brett Warren – National Director Metropole Property Strategists Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 21 reasons many Australians are bad with money| Why your home may outperform your investments with Brett Warren Some of our favourite quotes from the show: "It's optimists who are successful in this world, not pessimists." – Michael Yardney "By the way, successful investors have a long-term horizon." – Michael Yardney "What a neat philosophy – to never quit looking for another way to get where you're supposed to go." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

What's ahead for our property markets in 2022? Even though the situation is improving, there will clearly be continuing issues with Covid 19 affecting our local economy in the new year. And the socio-political problems that plagued the world over the last few are unlikely to disappear. Yet most analysts and economists agree that our property markets should perform strongly in 2022. But the markets won't be the same – capital growth won't be as strong as we experienced last year, and we are likely to end up with a two-tier property market. So, what lessons can we take from 2021 to make you are a better investor in the new year? Today I plan to share 21 lessons from 2021 with you, in the hope of making 2022 a better year for you. Lessons from 2021 to carry into 2022 It's been an extraordinary year, hasn't it? Looking back to this time last year, we thought we had this Covid "thingy" licked didn't we, but look what then transpired. Nobody could have foreseen all that's happened, including the coronavirus, its economic fallout and the way our lives changed. But as we head into 2022, I can't help but reflect on what Australia as a country has accomplished and what I've achieved personally, what I've overcome, and the lessons I want to carry with me into the New Year. Expect the unexpected Every year an unexpected X factor comes out of the blue to undo the best laid plans – sometimes on the upside (like the miracle election result in mid-2019) and sometimes on the downside like Covid19 in 2020. But the biggest risk is what no one sees coming, because if no one sees it coming no one is prepared for it and if no one is prepared for it, it's damage will be amplified when it arrives. Focus on the long term The strong performance of both our property markets and our share market showed us to ignore the numerous pessimistic property predictions by the so-called "experts" - don't make 30-year investment decisions based on the last 30 minutes of news. It's the media's job to entertain you – not educate you Remember… it's the media's job to get eyeballs on the advertisers' content, rather than to educate you. And unfortunately, being overwhelmed with misinformation led many people to live in a state of fear and anxiety and caused some to make disastrous investment errors. Take economic forecasts with a grain of salt If you're reading something frightening in the business section, or hearing it on TV, or learning about it from your neighbor, it's almost certainly too late to act — because the information is already reflected in the market – in either the share price or property prices. Don't believe the Doomsayers Last year, in 2020 at the beginning of the pandemic, the doomsayers found their moment and told us how our property markets would crash – they were wrong of course. Don't let them stop you from achieving your financial dreams – the doomsayers are always wrong, at least in the long term. No one really knows what's going to happen to the property markets So as a real estate investor, while it's important to have mentors, make sure you're listening to somebody who has not only built their own substantial property portfolio but someone who has kept their wealth through a number of cycles. There is no such thing as the "Australian property market." Local factors have always driven property market performance. So, avoid paying attention to commentary that gives broad generalizations about the Australian property market or even the Melbourne, Sydney, or Brisbane property markets. Don't try and time the market Rather than timing your investment purchases (or sales), if you buy the right investment-grade assets, time in the market is much more important than timing the market. The crowd is usually wrong Market sentiment is a key driver of property cycles and one of the reasons why our markets overreact, overshooting the mark during booms and getting too depressed during slumps. Property Investment is a game of finance with some houses thrown in the middle Maybe you should consider locking in a portion of your interest rates at today's low rates. I'm not suggesting you try and time the interest-rate cycle, but I always lock in a portion of my loans on fixed interest rates to secure my cash flow. Invest for Capital Growth Capital growth should be the key driver for your investment decisions, rather than cash flow. There will always be reasons not to invest Where investors get into trouble is that rather than focusing on their long-term goals, they see these crises as a once-in-a-generation event that will alter the course of history, when in reality they are just the normal path of history. Property investment is risky in the short-term, but secure in the long term Those who stay in the game benefit from the power of compounding growth which builds wealth but takes time. Many people get into property investment to improve their cash flow position, but if they don't have good money habits to start with taking on more debt only compounds the problems. Plan for the worst and look forward to the best I've learned to protect myself and my investments because I don't make forecasts - instead, I have expectations. An expectation is an anticipation of how things are likely to play out in the future based on my perspective of how things worked in the past. You can't rely on one stream of income You've probably noticed that successful investors, business owners, and entrepreneurs enjoy multiple streams of income. They strategically go to great lengths to make sure they have money coming in from all directions, or in other words "they don't have all their eggs in the one basket." Sure, it's hard enough for some people to figure out how to create a single source of income, little loan multiple streams, but in my mind, you have no choice. There are always risks associated with investing Don't be afraid of failing, because the biggest risk is not doing anything to protect your financial future. Sometimes negative experiences, mistakes, and failures can be even better than success because they teach you something new which another win could never teach you. Cautious optimism is better for your investment health than permanent pessimism. Optimists are more successful in all areas of life than pessimists, or so-called realists. And this includes the realm of investing. Those who have high expectations usually rise up to meet them. Time is a limited resource – don't waste it We all have 1,440 minutes every day, but some of us squander it, waste it, or don't use it efficiently. On some level, most of us know that life is short, but 2020 taught us and solidified the fact that we don't get a second chance and the importance of truly appreciating what and who we have in our lives whilst living to the fullest. The only certainty is change Changes are a normal part of life; the problem is most of us don't like change – we like certainty. The more I feel in control of the life my life, the more comfortable I feel and the better I perform in all areas of my life. Worry Better Worrying about the right things can motivate you, but if you find it unproductive, try to take your mind off things by getting engaged in other activities: I was taught the concept of telling myself to put a limit of say 5 minutes or 10 minutes on my "worry time" and then forcing myself to move on by focussing on other tasks or engaging in other activities. This too shall pass How often do we need to hear the world as we know it is coming to an end before we realize that the world as we know it has not come to an end? Now is the time to take action and set yourself for the opportunities that will present themselves in 2022. Links and Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: Twenty-one property investment lessons from 2021 you don't want to forget Some of our favourite quotes from the show: "There's always going to be somebody out there telling you not to invest in property." – Michael Yardney "There are just too many enthusiastic amateurs out there offering investment advice at present." –Michael Yardney "Remember, each property boom sets us up for the next downturn, just as each downturn sets us up for the next upswing." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

How has the pandemic re-shaped your life? It would be very unusual if you hadn't had some major upheavals over the last couple of years, but what's going to remain as a long-term trend, a legacy of the lockdowns, and what fads are soon going to be forgotten. I'm sure many of us would like to forget the last couple of years, but they will be pretty hard to forget. In fact, it's likely Covid will leave scars on some of us, how we do things what we feel comfortable with and how we want to live, but Covid has also brought with a couple of positive innovations, it has brought forward a number of trends which were probably going to happen anyway and these will improve our lives. In today's show, I want to discuss these because whether you are a property investor, a business owner, or a professional understanding these social trends post-Covid will be critical for your success. And who better to discuss them with than our regular guest, leading demographer Simon Kuestenmacher, so welcome to today's show. How has Covid changed social trends? As we move into a new world of what some will call Covid normal, what will we look back on as a short-term fad, and what will last forever. Which trends will last? Online shopping? Working from home? Where do we want to live and how do we want to live? That's what I'm going to ask leading demographer Simon Kuestenmacher, director of the Demographics Group because if we understand how the pandemic re-shaped our wish list, not just for housing and property, but for many things in life, it will make us better investors, business people, and entrepreneurs. Let's look at a number of social trends that will shape demand and the way we will be living moving forward. Work from home Before Covid, just 5% of workers worked from home. During lockdown, at-home workers approached 50%. It's likely that the trend of working from home will continue moving forward. If nothing else, employers and workers will work out hybrid arrangements – workers will be partially remote, partially in-person In the longer term, the proportion of the workforce working from home could settle at about the 10-15 percent mark. The future of the CBD There will be a rise of work near home workspaces Overall, through the next 2 or 3 years, the area will completely recover However, it won't happen immediately The importance of neighbourhood The 20-minute neighbourhood - The ability to work, live, and play all within 20 minutes' reach is the new gold standard desirable lifestyle. COVID created a more intense sense of community Home improvements The collective dwell time in the family home has been boosted by the work from home revolution pandemic. The greater the dwell time the greater the tendency to invest in the family home with new appliances, technology, furniture, furnishings. Millennials These are the children of the Baby Boomers born 1984-2002, now aged 19-37, and who over the next five to six years will push into their late 30s and early 40s These upgraders will trigger a surge in demand for family-friendly residential property in the suburbs. Boomers born 1946-1964 and who are now aged 62-75. They will reinvent this time (65-plus) in the life cycle as the most exciting time of all: kids off their hands, mortgage paid out, health still okay. The 2020s are their time to spend the kids' inheritance and to methodically tick off activities from their ever-expanding bucket list. VESPAs - Virus Escapees Seeking Provincial Australia Work from lifestyle regions Scootering out of capital cities in search of affordability and serenity in a lifestyle town. FIZOs You've heard of Fly-in Fly-out or FIFO workers? Well, how about Fly-In Zoom-Out or FIZO workers? Workers who are remote most of the time, but are required to work in person for at least a couple of events Links and Resources: Michael Yardney Simon Kuestenmacher - Director of Research at The Demographics Group As our markets move forward why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors. Subscribe to Simon's YouTube channel here Read Simon Kuesetenmacher's blogs on Property Update here. Get a bundle of eBooks and reports www.PodcastBonus.com.au Shownotes plus more here: What's ahead? The post-Covid social trends that will stick, with Simon Kuestenmacher Some of our favourite quotes from the show: "They're upgraders now, they've upgraded homes rather than apartments, and that's going to create a huge demand for certain sorts of properties in the family-friendly residential suburbs." – Michael Yardney "Continuing on with the Vespa analogy, they're going to be scootering out of the capital cities and moving into the regional areas." – Michael Yardney "Those who succeed in life do not think they're going to fail, they know it." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

According to Core Logic, over the last 12 months, their home value index has risen by 30% in Sydney, 26% for Brisbane, and almost 20% for Melbourne. There is no doubt that these levels of property price growth are unsustainable in the long term, so are we in a property bubble? Are our property markets going to crash? And if so when will this happen? That's what I'm going to discuss in today's podcast with independent financial advisor Stuart Wemyss, as we go back in history to see how much property values have fallen in the past – I think some of the stats that Stuart will share will surprise you. Are Our Property Markets Going to Crash? If So, When? The average household in a raft of suburbs around Australia will be pushed into mortgage stress if interest rates climb just 1%. Well…That was a headline doing the rounds not that long ago. At much the same time modelling by one of Australia's most publicized property pessimist suggested that a minimum mortgage rate hike combined with a higher buffer rate as required by the recent APRA edicts to the banks would send thousands of residential landlords into financial stress and could fuel house price falls by the end of next year. So, will higher inflation lead to higher interest rates that will tip the scales and spell the end of the current property boom? And more importantly, will it create a property market crash like a number of commentators are predicting? The problem is that some people know just enough to think they are right and not enough to realize they are wrong The reality is that property has always seemed relatively expensive. What is mortgage stress? There are various definitions of what mortgage stress is, but it's most commonly defined as a household spending more than 30% of their pre-tax income on their home loan repayments. Yet looking at mortgage defaults or mortgage arrears with our banks would suggest that very few Australian households are currently suffering mortgage stress, and many are well ahead in the mortgage payments. Let's look at what could cause a housing market crash There is no doubt that at some time in the future we will experience a cyclical property market correction, but there is no need to worry about a house price "collapse" like some property pessimists are suggesting. House prices "collapse" when people are forced to sell their homes and there is no one willing to buy them. A true collapse in house prices would require a significant external shock such as: Unemployment is high enough to trigger a waiver forced home sales, and that's not going to happen. Interest rates rise so high that they would cause a raft of homeowners to default on the mortgage. The Reserve Bank wants this about as much as it wants another strain of coronavirus. A credit squeeze – APRA is currently making it a little bit more difficult to borrow money, but they don't want to crash our property market either. A severe recession that would increase unemployment and cause homeowners to default – that's not on the cards. A severe oversupply of property – currently we have an undersupply of the right type of properties that most homeowners want. So, while a crash is not on the cards, a correction will occur one day and at that time some properties will hold the value better than others. Obviously, that's the type of property you should own. Australian property price bubble? According to Core Logic, the home value index has risen by 30% in Sydney over the 12 months to October 2021, 26% for Brisbane, and almost 20% for Melbourne. Whilst recent property price growth has been unsustainably high, it's more important to consider medium-term growth, especially considering negative returns in 2017-2019. Over the 5 years to June 2021, the median house price in Brisbane, Sydney, and Melbourne appreciated by between 4.7% p.a. and 6.9% p.a. (according to REIA), which is below the long-term average. Whilst some commentators have recently predicted that property prices will fall, it is interesting to note that medium-term returns (5 years) tend to be a good predictor of price falls. I picked the largest price falls since 1980 in Melbourne, Sydney, and Brisbane. Here's what I found: Median house prices in Sydney fell by almost 15% between 2017 and 2019. The 5 years prior to this period prices rose 13% p.a. In Melbourne, the median house price fell by 11% over 2011/2012. The 2 years prior to this period house prices rose by 24% p.a. Median house prices in Brisbane fell by almost 8% over 1986/1987. The 5 years prior to this period prices rose 11% p.a. The conclusion is that price growth must be above average for an extended period of time (more than 2 years) for there to be a risk of a correction. Property prices in Melbourne, Sydney, and Brisbane have merely made up for the poor growth rate since 2017. Today's property prices will seem cheap in 2031 The best way to reduce your risk of entering a seemingly "expensive" property market is to buy a property that has the highest likelihood of generating the highest possible capital growth rate. As the above table demonstrates, you can double your return if your property can generate 9% p.a. versus 7% p.a. over 40 years. A relatively small increase in growth rates can have an unexpectedly large impact over many decades. Buy the 'right' property and play the long game The best response to any concerns about property prices is to level up on a property's quality and focus firmly on long-term outcomes. As a staunch proponent of evidence-based investing, you must apply a rules-based approach to selecting an investment-grade asset. But also, since the property is part-art, part-science, it's critical that you get advice from a local area expert. Links and Resources: Michael Yardney Stuart Wemyss – Prosolution Private Clients Stuart's Book – Rules of the Lending Game & Investopoly Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a bundle of free eBooks and reports at www.PodcastBonus.com.au Shownotes plus more here: When will the property market crash? With Stuart Wemyss Some of our favourite quotes from the show: "One of the problems for beginning investors is if they get it right the first time, they think they're smarter than they are." – Michael Yardney "The only reason the reserve bank would raise interest rates would be to slow down a booming economy. At the moment they're keeping them low to grease the wheels of industry." – Michael Yardney "This change in seasons that we're experiencing is a welcome reminder that we're not living in a never ending now." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Australia's economy and our property markets don't operate in isolation, so I believe it's good to regularly have a look at the big picture, the macroeconomic factors affecting not just Australia's economy, but the world economy to help us understand what's ahead for us, and I do this once a month in these Big Picture Podcasts with Pete Wargent. Since this will be our last Big Picture podcast for the year Peter and I will give a short review of what happened over the last year and our thoughts on what's ahead for the world economy, Australia's economy and our property markets. Economic and property trends you must understand As I look back, 2021 the year seems to have gone quickly for me, even though I know for a lot of people it has been a slow and difficult year. It's been a great year for my business at Metropole where we help more people are ever secure their financial future through independent wealth and property advice and advocacy and its been the best year in my memory for the growth of my property portfolio, and I know for most people who owned property it's been a very good year also. Yet I recognize that some people have experienced tough times related to their health, to their business or financially. And I'm not saying that flippantly – in most cases this was totally out of your control and it just doesn't seem fair does it? So what's ahead for us? What will 2022 bring? That's one of the many topics I'm keen to discuss in this month's Big Picture with economic analyst Pete Wargent. Lockdowns have been removed in Australia However, Europe seems to be seeing a new wave of Coronavirus The UK's numbers of infection have been high, but hospitalization rates are going down The third set of vaccines is helping to reduce serious cases The economy hasn't performed as strongly as some had predicted the beginning of the year This is because of the Delta strain of coronavirus and lockdown is in Melbourne and Sydney However, analysts expect growth in the December quarter not only to overtake its pre-Delta peak but to keep going. The large war chests Australians have built from saving their cash will help drive the economy. Now that 80 percent of Australians aged over 16 are fully vaccinated and restrictions on activity have been significantly eased, the RBA sees our economy recovering rapidly. Their upgraded economic forecasts will see a buoyant environment in the lead up to the federal election we'll most likely be having in either March or May next year. The RBA said that, with the economy now opening up, the momentum evident before the Delta outbreak is expected to resume. Rising inflation isn't all bad Rising inflation will reduce the impact of ballooning government debt. At the same time, property investors will benefit from a higher range that usually comes along with higher inflation In the September quarter, our current account surplus hit a record $24bn, according to the official data from the ABS, up from the only slightly less spectacular $23bn in the June quarter The pandemic has shown that without students and migrants we face skills and general labor shortages across the nation If the scenario of 250,000 migrants by 2023 eventuates house prices could jump about 5 percent by 2023 and rents would lift about 7 percent. A number of the banks have updated their forecasts for the next few years They all agree our property markets are slowing down in terms of capital growth but will still perform strongly in 2022 They also all suggest property values will drop in 2023. It's been a surprise how strong the markets performed and APRA's sudden intervention It's also been surprising that there are unusually low rental vacancies It's been reported that widespread money laundering is contributing to Australia's inflated property prices Australia's weak anti-money laundering policy, flaws with the corporate registry, and the lack of a beneficial ownership register all contributed to the problem Links and Resources: Michael Yardney Metropole's Strategic Property Plan – to help both beginning and experienced investors Join Michael's Property Update private Facebook group by clicking here Pete Wargent's new Podcast Shownotes plus more here: The Big Picture, economic and property trends you must understand - December 2021| With Pete Wargent Some of our favourite quotes from the show: "In general, the economies of most of the world are going to perform well next year, aren't they? So we're not operating in isolation." – Michael Yardney "You're a migrant, I'm a migrant, in fact, most Australians are, and if it's controlled, if it brings in skilled people who are going to pay taxes and buy goods, then that's actually good for the economy." – Michael Yardney "I'm not sure that a rise of 1% is going to be enough to put people into mortgage stress, especially if it's done slowly, over a period of time." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how