Property Investment, Success & Money | The Michael Yardney Podcast

Why don’t most property investors succeed, especially since there’s so much information out there and so many people willing to help them? Well, today I’ve got three separate segments that are going to help you understand why many investors don’t succeed, but of course, the intention of that is to even the odds in your favour, to make sure you do succeed. I’m going to share with you probably the worst investment mistake I made, but it turned out to be one of the best investment lessons I made. It was a mistake I made early in my career when I lost 100% of my equity. Boy was it an expensive mistake and a blow to my ego. I guess it shows that I didn’t start off as a successful investor. There are some lessons in that alone. I’m also going to share with you a discussion I had with Joseph my hairdresser who learned how to invest like the pros. Isn’t that something that you’d like to know? Then, in my mindset moment, I’ll help you understand that I’m a real success at failure. So lots about success and failure in today’s show, but the intention of it is to make you a more successful property investor and more successful in all areas of your life. How to Invest Like the Pros I was having my hair cut the other day when Joseph, my barber, said, “Michael — I’m going to get into property investing and I’m going to make a fortune because I’ve learned how to invest like the pros!” When Joseph told me he knows how to invest like the pros, I had to ask — “OK — how are you going to do it?” “Easy,” he said. “I’ve been to a seminar and signed up for a course.” Then he pulled out the advertisement in the magazine that attracted his attention. It promised the ability to control millions of dollars worth of property with none of your own money and bypassing the banks. It also explained how the course presenter had made millions of dollars in seven days. At that point, I felt sorry for Joseph and for the thousands of novice (and some experienced) property investors who will be taken by the new breed of property spruikers who are once again out in force. You can’t become wealthy in seven days. You probably couldn’t even read the course material in seven days. Here is what the real pros know: You can’t create wealth through property overnight, but you can certainly become very rich in the medium to long term by knuckling down and seriously applying yourself in a dedicated, disciplined, persistent way. You get there by following a proven system and by having a safe property and finance strategy. You then implement this by buying the right property, in the right location, at the right price, and holding it for the long term. Not by adding hot water to a packet of magic beans and counting to seven. You can and should accelerate the process by learning the strategies of value-adding through renovations and development, but you can’t skip the fundamental process. While property spruikers went quiet during the real estate downturn, unfortunately, the new property cycle is bringing out a fresh group of “property pretenders”. There are now property “experts” out there selling advice and courses despite never having built their own property portfolios. This makes it timely to remind listeners that seminars promising easy wealth through property have all too often led to financial ruin. It’s just the cycle repeating itself. Of course, this doesn’t mean you should do it on your own. To become a successful investor, you will need to surround yourself with a team of independent and unbiased professionals — a team of people who are known, proven, and trusted. Then go ahead and take advantage of the new property cycle, because the future is bright for those who invest sensibly in property. My worst investment loss One of my early investments was a complete loss. I lost 100% of my invested capital many years ago, way back in the 1970s, and the investment mistakes I made that created this disastrous result. But first I want to explain the 2 main reasons why I’m sharing this story. Losing investments can be great teachers You’ll not only learn from the investment mistakes you make, but you can also learn from other people’s investment errors so that you don’t have to make the same mistakes yourself. Losses are a natural and normal result of making investment decisions Don’t be so hard on yourself when things don’t go as planned because the key to long-term success is what you do when this occurs and the lessons you learn from your mistakes, so you don’t repeat them. So here is the story of my big investment mistake where I lost 100% of my investment capital You see…I already owned a few investment properties at the time, but I was in a hurry to get rich quickly. I was offered the opportunity to invest in a Gold Mine. In fact, one of my friends, Brian, had invested the vast sum of $5,000 (remember it was the 1970’s and that was a lot of money) into a venture that was resurrecting an old disused gold mine in Wedderburn, near Ballarat in Victoria. Of course, my initial reaction was to tell him how silly he was. How he’d lose his money. But Brian asked me to speak with the promoter, explaining that he tells a compelling story. One Sunday morning a man called Terry came to our home and described how with the price of gold rising and using new technology it was now viable to reopen an old disused gold mine near Ballarat where the Gold Rush occurred in the 1800s. He had budgets and profit projections, diagrams, and plans; but things changed completely when he took a shiny nugget of gold out of his pocket and placed it in my hand. He told a compelling story of how I could double my money quickly investing in his company – The Asian Pacific Mining Corporation (what an impressive name!) – and how I’d receive dividends for years. My greed glands began working overtime as I swallowed his story – hook, line, and sinker. The end result was I invested $5,000 of my money and of course, I lost it all. My investment decision was one big mistake from the beginning. Here are a few of the more obvious mistakes I made with this investment: I gave my money to a virtual stranger without doing enough due diligence. I invested in something I didn’t understand. I bought a story rather than investment fundamentals. I was lured by the opportunity of making quick money. I was speculating, not investing, and risked money I couldn’t afford to lose. I had no investment strategy – just a desire to get rich quickly. I learned many lessons from this experience including: Not everything that glitters is gold Sometimes your best investments are the ones you don’t make. Don’t invest in anything you don’t fully understand. I knew nothing about gold mining, so I was speculating rather than investing. I had no competitive advantage and there was no mathematical expectation to my investment strategy. One of the worst things that can happen to an investor is to get it right the first time. I thought I was smarter than I was when in reality my investment success so far was in large part to a rising property market – a boom that made me look smarter than I was. Don’t become overconfident -the market will soon humble you. I didn’t understand the incentives of the so-called “advisor” who really had a vested interest which created biases in the recommendations he gave me. In retrospect… My worst investment mistake was a cheap lesson This investment was the first of many learning fees I’ve paid to the market over the years. I’ve made a lot of mistakes and paid a lot of learning fees during my journey to investment success. It’s much easier for investors nowadays – you don’t need to do it on your own. Resources: Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a range of my ebooks here: www.PodcastBonus.com.au Shownotes plus more here: I’ve learned to invest like the pros | My biggest investment mistake + more Some of our favorite quotes from the show: “If you are going to listen to somebody’s advice, make sure it is somebody who’s unbiased.” – Michael Yardney “Find a credible source, not somebody with incredible promises.” – Michael Yardney “One of the key factors to my investment success is that I always try to learn from my mistakes.” –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

Since the First Fleet dropped anchor in 1788, close to 10 million immigrants have moved from across the world to start a new life in Australia. They have arrived in waves, encouraged by developments like the 1850s gold rushes, or to escape adverse conditions at home such as the Industrial Revolution’s social upheavals in 19th-century Britain, the two world wars, and the aftermath of the Vietnam War in the 1970s. Collectively these migrants have helped shape what was a uniquely British-based and now multicultural society in Australia. In today’s podcast, I chat with leading demographer Simon Kuestenmacher about the history of migration and how it’s changed our culture and our property markets over the years, and what’s happening to migration now because of our border restrictions. Australia is the land built on migration Immigration to Australia began about 80,000 years ago. And from the 17th century on, the continent was explored by Europeans. European settlements began to crop up around 1788, and the discovery of gold in 1851 drove more activity and permanent settlements. Immigrants have been queuing up to come to the country ever since. But what’s happening to immigration in our nation at the moment? About 2/3 of our population growth pre-pandemic came from migration. Only 1/3 came from natural growth. During COVID, the migration has completely disappeared. For the first time, more immigrants went out than in. Our country is so much more multicultural than other nations. When people are concerned about migration and focus on asylum seekers, it’s not really relevant, because it’s such a small number. One of the biggest drivers of migration in recent times is international students. One in 6 of those students become permanent residents. You can grow the GDP through the sheer number of people added to the country. The natures of homes and neighbourhoods have changed because of migration. We can see this in everything from the design of homes to the food available to buy. We will still see more people coming into Australia as long as they’re allowed. Australia is attractive to international students. We also still need skilled workers. Millennials are moving out of their apartments as they age and move on to the next stage, but apartment living remains necessary because of the population size. We will still need apartments, but we may need different ones moving forward. We will need more family-friendly Resources: 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. Get a bundle of eBooks and reports www.PodcastBonus.com.au Shownotes plus more here: Australia: a land built on immigration, but what’s ahead? With Simon Kuestanmacher Some of our favourite quotes from the show: “Just because of the cost of living, we do need more apartments, but we need different apartments than we’ve built in the past.” – Michael Yardney “I know it might sound cliché but work a little bit less and play a little bit more.” – Michael Yardney “Remember, most of the things we worry about don’t happen, or if they do happen, they’re not as serious as we thought they would be.” – 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’s that time of the month – when I have my regular Big Picture podcast where Pete Wargent and we look at the macroeconomic factors affecting our economy and our property markets This time last year, we were supposed to have a federal budget. Instead, we had a pandemic. And over the last year many elements of our life were upended due to Covid 19 Around this time last year, our Prime Minister Scott Morrison said he’d build a bridge for us to get to the other side and it seems he did. The government threw everything it could, including billions of dollars at creating jobs and keeping our economy moving and it succeeded. And it’s still doing so if you look at the federal budget handed down by Treasurer Josh Frydenberg - you’d think it was still raining money. Never before has a budget done so much to supercharge the economy after the worst of a recession has passed. But don’t worry, this podcast isn’t another rehash of the budget, even though there are a few interesting points I want to discuss with Pete – things that haven’t been clearly explained but I think we need to understand as investors. Plus we also will look at the macroeconomic factors affecting our economy and the property markets  to help give you some more clarity  about what the future holds so you can make better investment and  business decisions Understanding the Big Picture 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, and who better to discuss that with than Pete Wargent, a lifelong student of and commentator on our economy. Since last month there’s been lots of good economic news and Josh Frydenberg delivered this year’s budget. The underlying message from this pandemic budget is that while our recovery is running apace, the economy still remains fragile and unable to stand on its own two feet. The government has no option but to continue spending, and it has given the green light to a number of initiatives to ensure our economic recovery continues. With all the tax dollars rolling in, what kind of treasurer could resist spending some of that, given ultra-cheap borrowing costs and an election campaign expected within a year or so? Booming iron ore exports have delivered a bumper company tax take over the March quarter, with the budget’s bottom line improving by $30bn since the mid-year economic and fiscal outlook in December. And our economic recovery is likely to continue, underpinned by strong household spending supported by further lifting of activity restrictions, increased confidence, and the world effects from higher housing prices. Rapid fall in unemployment could challenge RBA stance There are now forecasts that expect the unemployment rate to fall to 4.8% by end-2021 and 4.4% by end-2022. And even lower again in 2023 seems likely. These forecasts potentially challenge the RBA’s expectation a rate hike is “unlikely to be until 2024 at the earliest”. While these forecasts may appear ambitious, they reflect the expectation of a decelerating pace of labour market improvement, particularly in 2022. Ultimately, it will be inflation that matters for the RBA, and the most important judgment in our view is the strength of the transition from underutilization to wages, and then to inflation. The RBA is presuming this transition will be very slow, as it was the last cycle, but the risk around this assessment appears rather one-sided. Sluggish inflation numbers push rate hikes further down the road The CPI rose by 0.6% in the March quarter, taking annual inflation to 1.1% year-on-year. Although this is the third increase in a row, we’re still well below the target band and underperformed expectations by 0.3% in March. With a few exceptions, such as jewellery, petrol, and vehicle prices (driven by supply bottlenecks), price pressures remained weak across most of the economy, especially in food and housing. To some of us who remember the Consumer Price Index (CPI) rising above 10% for much of the late 70s and early 80s, the RBA’s present determination to drive up inflation might seem a little counterintuitive. Investors are back in the market We know that home loan approvals have been surging, particularly for first home buyers and that investors have taken to the sidelines, but that’s changed recently as more investors are now back in the market as evidenced by increasing investor loan approvals. Building approvals surge to the second-highest in history Residential building approvals rose 17.4% m/m in March, surprising sharply to the upside and taking the level of approvals to the second-highest in history. Going forward, we will be looking to see whether the recent strength in detached dwelling approvals will be sustained given the end of the Federal Government’s HomeBuilder program (March was the last month to be eligible for the grant). Since HomeBuilder was introduced in June 2020, detached house approvals have soared by 72% and are driving cost pressures through the industry. Should we be worried about geopolitical risks? The political pendulum is swinging back to the left - geopolitical risks are higher than prior to the GFC reflecting three big themes: a populist backlash against economic rationalist policies; the falling relative power of the US; and the polarising impact of social media. key geopolitical issues to watch this year are US and Australian tensions with China; Iran/Israel tensions; Russia and Ukraine; the German election; US tax hikes and a possible early Australian election. Resources: Metropole’s Strategic Property Plan – to help both beginning and experienced investors Gets your bundle of eBooks and reports here: www.PodcastBonus.com.au Pete Wargent  Next Level Wealth  Pete Wargent’s new book Low Rates High Returns Shownotes plus more here: The Big Picture – May Economic and Property trends you must understand with Pete Wargent Some of our favourite quotes from the show: “I recently read that the suggestion was that a huge number of Baby Boomers were going to downsize because of this. I can’t see that happening.” – Michael Yardney “When people from outside Australia look at us, Melbourne is the only city of five million people that’s actually beaten COVID, and life’s moved on again.” – Michael Yardney “If you want to be successful, you need a mentor who’s going to help guide you through life.” – 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

I have found most successful people have at least one, but usually a number of guiding principles. Things like phrases or ideas by which they live and work To help you develop or add to your own guiding principles, in today’s show I have rounded up a number of philosophies or thoughts that I’m going to discuss with Mark Creedon, founder of Business Accelerator Mastermind in our monthly Build a Business, Not a Job podcast. But before we get into the main show, I’d like to share all of the philosophies of Steve Jobs, the late co-founder and CEO of Apple. Jobs said: "You can't connect the dots looking forward; you can only connect them looking backward. So, you have to trust that the dots will somehow connect in your future." Another interesting philosophy comes from Michael Jordan how famously said: "I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life and that is why I succeed." In today’s show, you’ll hear Mark Creedon and I talk about failure and how the way you think about it makes a huge difference in how you approach all areas of your life, so welcome to today’s show. Life philosophies that could change your life You don’t have to look far on the Internet to find blogs about the philosophies that successful people live by. I enjoy reading those blogs and learning what drives successful people. Interestingly I’ve found some of the best lessons I’ve learned are the simple ones. I’m still a voracious learner and if I haven’t learned something new by lunchtime every day, I’ve had a bad day. Take responsibility for your world Shouldn’t we all? There’s a belief in this world, that I completely resonate with, that everything that has happened to you in your life is a direct result of your actions, either your physical actions or your mental actions. Thoughts are things. As you think so you become. This belief is The Law of Attraction. I know everyone doesn’t agree with this – but I believe you should be a part of your life, not a passenger. Don't make excuses, take action “You are what you do, not what you say you’ll do” — Carl Jung. Action creates momentum and momentum matters. Sure, it’s important to make plans and know which way you’re heading, in life, in your investments, and in business but plans are just theory unless you take action. You are the company you keep. Someone once told me that you’re the sum of the five people with whom you spend the most amount of time and I couldn’t agree more. Studies have proven this time and time again – a Harvard study found that if your friend is happy, your chances of being happy increase 15%. It doesn’t just stop there – if your friend’s friend is happy, your chances of being happy increase by 10%, and if your friend’s friend’s friend is happy, your chances still increase 6% (if 6% doesn’t impress you, you’ll be interested to know that a $10,000 increase in annual income only increases your odds by 2%). This rule also works in the negative sense – if your friend becomes obese, your chances of becoming obese increase 57%. The same goes for smoking (61%) and other negative habits. Embrace your limitations. I know one of my strengths in creating – coming up with the big ideas and implementing them. Or creating things like blogs and podcasts. However, I know I’m not in my flow when doing other types of tasks. Trying to change fundamental aspects of your personality is like swimming upriver – you exert tremendous effort with little forward progress. Instead of trying to change these aspects of myself, I’ve surrounded myself with others who are better at various aspects of our business than me The race is only with yourself. “Don’t waste your time on jealousy. Sometimes you’re ahead, sometimes you’re behind. The race is long, and in the end, it’s only with yourself.” – Mary Schmich When you measure your success against that of another, you create an ever-distancing destination at which you’ll never arrive. Develop your own goals and celebrate every achievement. Don't stop when you're tired, stop when you're done You’re going to get tired of being an entrepreneur and you’ll probably even get burned out… especially when things aren’t going well. What’s helped me succeed over the years is that I am persistent. It doesn’t matter whether I am exhausted, or if I feel that I’ve put enough hours in the day, I just don’t ever stop until things are done. As long as you keep on chugging along, eventually, you will accomplish your goals. Commit to doing whatever it takes to succeed Of course, with the exception of causing harm to others! This discipline underpins all of the above. If we wish for success in life, it’s essential we commit to making that wish become a reality. The key to success in life is to go from interest to commitment to taking action from personal power. Honesty is a very expensive gift, do not expect it from cheap people As an entrepreneur, you are going to have to look to other people for feedback and advice. Over the years I’ve learned that not all advice is equal, as some people give better advice than others. The best advice you are ever going to get is the truth. The truth may hurt, but it will save you time and money. Just don’t expect the truth from people who care about saving your feelings. Behind every successful person are a lot of unsuccessful years When people look at what I have accomplished, most of the time they feel that I’ve done it over the last few years. What they forget to realize is that I have been an entrepreneur for over 10 years. And during that 10-year period, I’ve lost millions of dollars, made more mistakes than I can count, and put countless hours into my businesses. So as long as you keep pushing forward as an entrepreneur, your odds of succeeding will go up over time. Live in such a way that if someone spoke badly of you, no one would believe it Businesses come and go, but the one thing you should protect more than anything else is your reputation. Your reputation affects any new business ventures or a job you may try to get later down the road. Be so kind and helpful that if someone spoke badly about you, no one would believe them. Just because you are struggling does not mean you are failing Every great success requires some kind of struggle. You’re going to have to work hard, fight through the tough times and keep pushing forward. So, when you are struggling, don’t give up, keep pushing forward until you see a light at the end of the tunnel. Give Back “The meaning of life is to find your gift. The purpose of life is to give it away.” ―Pablo Picasso. This is a great philosophy because I feel happiness doesn’t result from what we get, but from what we give. I am blessed beyond imagination in life, and I feel it’s my duty to give back. If I can help others in some way, then I do it. Whether through writing, creating, guidance, feedback, listening, financial, volunteering, etc. There are so many ways to give back. Links and Resources: Why not join Metropole’s Business Accelerator Mastermind Learn more about Mark Creedon – Business Coach to some of Australia’s leading entrepreneurs  Get a copy of Mark’s new book here – Have a business not a job Get a heap of special reports and eBooks here- www.PodcastBonus.com.au Shownotes plus more here: 11 Simple philosophies that could change your life with Mark Creedon | Build a Business, Not a Job Podcast Some of our favourite quotes from the show: “I do things that I’m good at doing, and in my business and my now partnership, I allow other people to do things that they’re good at doing.” – Michael Yardney “If you think about it, you never get everything done. There’s always things on your to-do list.” – Michael Yardney “There’s also the luck that you create for yourself by doing the right things, by being the right person, by having the right mindset, so when the opportunities come, you actually take advantage of 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.

With more of us trading backyards for balconies and courtyards; apartment and townhouse living has become the norm for more Australians. At the same time, budget constraints mean that many investors buy apartments rather than houses. And since there is no doubt that apartment living is going to become more prevalent moving forward, you really need to understand your rights and responsibilities when owning an apartment. Where does your apartment end and where does the common property start? Who is responsible when things go wrong in the common areas? And what six things do you need to know before buying into a strata building? That’s what I’m going to discuss in today’s show with strata law specialist Amanda Farmer. The inspiration for this chat came from an article I recently read about a Melbourne schoolteacher who thought she done all her homework when buying her first property. She looked around her chosen area in Melbourne is northwest, found an apartment building she liked, and commissioned to building inspection report before she bought the property. But now two and a half years on, she’s facing financial ruin. Her block’s owners are taking its builders to court over allegations of severe defects in its construction, and she’s having to pay for both repairs and her share of spiralling legal fees. Sure, she had a pre-purchase report done by an expert – but he only examined her apartment, and nothing of the building in which it sits, or its communal areas, which all owners are responsible for. She didn’t realize, either, that she should also have ordered a strata report that would have revealed, through the minutes of the Owners Corporation, the ongoing battle with the builders. This is a tragic story – a 32-year-old financially ruined through owning the wrong apartment.  But it’s a story I’ve heard before, so I hope you’re going to get a new insight into what you need to do before buying into a strata property in my chat with Amanda Farmer today. What you need to know when buying a strata property If you’re considering buying or already own an apartment, townhouse, or villa unit, whether as a Let’s begin with the obvious – what is a Strata unit? Effectively it means: you own your unit or apartment as well as sharing ownership and responsibility for common property if you own your unit, you are automatically a member of the owner’s corporation which has responsibility for common property and makes key decisions affecting the strata scheme you contribute to the cost of running the building through paying quarterly levies you also have to pay money into a capital works fund, for future long-term expenses such as painting the building or replacing guttering there will be lifestyle restrictions in a strata scheme. 6 THINGS YOU ABSOLUTELY MUST KNOW ABOUT WHEN OWNING A STRATA PROPERTY:  1) By-laws  Includes pets, air conditioning units, noise, renovation works, hard flooring, washing, landscaping, use of swimming pool/gym, short-term letting, rules around moving in or out  2) Levies  Quarterly levies can range anywhere from $200 per quarter for a small, self-managed building (ie: with no strata manager’s fees) to in excess of $5,000 per quarter for a city penthouse in a luxury harbourfront building with concierge service and numerous facilities.  3) Lot property vs. Common property  When you purchase a unit in a strata building, you are essentially purchasing air space. That air space is known as your “lot”. Anything outside of your lot is either someone else’s lot or “common property”.  4) Meetings  Important decisions are decided in meetings: eg - whether to add to, alter or erect a new structure on the common property for the purpose of improving or enhancing the common property.  5) Strata manager  The duties of the strata manager include receiving and distributing correspondence, issuing levy notices, arranging tradespeople, keeping the owners’ corporation’s books and records in good order, including financial records.  6) Committee A decision of the committee is taken to be a decision of the Owners Corporation, though a committee cannot decide on anything that can only be decided by the owners in general meeting.  Links and Resources: Michael Yardney Amanda Farmer- Director Your Strata Property Get access to my exclusive Special reports library – a bonus for listening to my podcast 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. Join us at Wealth Retreat 2021 – click here to find out more Shownotes plus more here: 6 tips for investors when buying a strata property with Amanda Farmer Some of our favourite quotes from the show: “I’m actually proud that Australia was the country that was the beginning of strata law.” – Michael Yardney “I know that if I buy a house, I’ve got to do a building and pest inspection because it’s my responsibility – if there’s termites or if there’s rising damp, I’ve got to pay for it. What if I buy an apartment?” – Michael Yardney “Jim Rohn taught me that neglect is like an infection.” – 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

Property prices have been climbing at a breathtaking pace in 2021. This has been good news for homeowners but heartbreaking for house hunters. At the same time, there have been mixed messages in the media about what’s ahead. Of course, there’s always the Negative Nellies wanting to tell anyone who is prepared to listen to them the market is about to crash, but other more solid commentators are suggesting our property market is slowing down. And I agree, I believe the pace of capital gains has peaked, but I’m not suggesting home values are about to dip, far from it. Rather I believe we’ve moved from a peak rate of growth to a pace of capital gain that will be more sustainable. I was recently interviewed by Jarrad Mahon for his Perth Property Insider podcast, and because the questions he asked me were more general in nature, rather than related to Perth I asked his permission to replay the interview with you as I hope you’ll get benefits from my answers to his questions. You’ll hear me answers questions like how much more life is left in the property cycle and you’ll be pleased to know that it’s not too late to be early for this property cycle – I’ll explain how long I believe is left in this cycle and where the opportunities lie. Topics I discussed with Jarrad Mahon Last year when many of the bank economists predicted a 15%, 20%, 30% fall in property values I disagreed with them I’m on record in March and April last year suggesting that well-located A-grade homes and investment-grade properties would only fall about 5% in value and secondary properties would fall close to 10% in value and I got that right. I also called a turning point in our property markets in October last year when we could see on the ground what was happening long before it showed up in the official statistics. However, I didn’t really expect the market to rebound so quickly. All the property markets are stronger than they were 12 months ago. In the last three months, Melbourne’s grown closer to 6%. We’re in a cycle of upgrading Based on affordability I expect 20- 25% growth this cycle And while this will be a general increase in value around the Australian property market some areas are going to outperform others, as they always do and a lot of this will have to do with demographic High-end properties will outperform, and capital cities will outperform the regions In cities, the apartment market will languish While normally investors make up around 30% of our property markets currently, they’re making up around 20% of all property purchases. This will increase and as more Australians become comfortable with their financial situation and hear how well the property markets are performing, we will have a whole new wave of property investors, as has happened every other cycle. The unfortunate thing is that most investors will fail – they will not get past the first investment property and if history repeats itself 50% will sell up the properties within the first five years. Affordability and the deposit gap will slow growth Apra and the RBA said they are not going to interfere as long as lending remains responsible. It’s unlikely interest rates are going to go up, but we could see. It’s not really population growth that drives our property markets and more demographics which in part includes how many of us there are but also how we want to live and where we want to live. Population growth per se does not cross property price growth family formation does – my daughter just had a baby but doesn’t need any extra house. The return of cashed-up ex-pats is having to property price growth. It has been estimated that hundreds of thousands of people return to Australia over the last year, with many of them coming from cities that have more expensive property markets. Many are returning with plenty of Real Estate dollars behind them off in a stronger currency is the Australian dollar which supercharges their buying power even more. Ex-pats from expensive cities like London, Hong Kong, and New York often don’t consider our property prices unaffordable I’m not happy to pay whatever is necessary to secure a prestigious property in the desired location Immigrants often rent for a while because they’re not sure where to live and this is definitely affected our rental markets, particularly in the big capital cities. Immigrants don’t know where to buy – all they know is there a place of employment or maybe the university, so they are often start as tenants. Australia has a business plan to increase our population to 40,000,000 people by 2050. We plan to get to 30,000,000 people by 2030 – that’s unlikely to happen – more likely to be 29 million. But that means if you get into the property market today, you’re ahead of 3 ½ million other people are going to be buying property in the next 8 to 9 years There is no doubt that people move from one location to another because of affordability, but more important than that is jobs. The ability to work, live, and play all within 20 minutes’ reach is the new gold standard desirable lifestyle. Imagine being able to carry out your daily activities within a 20-minute walk from home. Resources:  Get a range of my eBooks and reports as my gift at www.PodcastBonus.com.au Jarrad Mahon Investor’s Edge and the Perth Property Insider Podcast 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. Shownotes plus more here: It’s not too late to be early this property cycle with Jarrad Mahon Some of our favorite quotes from the show: “It really has been just the huge change in consumer confidence that I don’t think anyone really expected.” – Michael Yardney “I say this is a cycle of upgraders, and it’s happening at all levels.” – Michael Yardney “Clarity is knowing exactly what you want in life, and what you need to do to get what you want.” –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

Today, I’d like to share with you my top insights into creating accelerated wealth. Now, the show is a little bit different, because it’s actually the audio of a webinar I conducted with my friend Louise Bedford who asked me to share with her audience my insights into creating wealth in this new business, property, and economic cycle. It came at a great time because I was preparing the curriculum for Wealth Retreat this year that we’ll be holding on the Gold Coast in June, and I was reviewing my notes from previous years and speaking with previous attendees. I was blown away by the feedback as previous attendees explained how the Wealth Retreat changed the way they handled their investments, their business and their lives. That’s high praise from people who are already very successful. So, I hope that sharing my insights will also benefit you and help you take advantage of the opportunities that lie in front of us in 2021. My insights into wealth creation The first step along the investment path is educating yourself. It’s what I still do today to keep growing and it’s what all successful investors do. Experience is an expensive teacher. I recognised that we all have personal ceilings of achievement that are based on our current thoughts and habits. The answer is to grow yourself into a bigger cup so that you attract and keep more wealth. You do this by upgrading your wealth programming – the way you think and react about money. We all need to learn from mistakes – this helps you get it right and move forward. The only question is, whose mistakes? Yours or those of the successful investors who have already achieved what you want to achieve? Remember, building wealth all on your own is not only hard work, but it’s slower and riskier. Alone you are vulnerable and will never reach your fullest potential. But when you connect with the right mastermind group, the chemistry will literally propel you to heights you never dreamed possible. The biggest obstacles we need to overcome to become financially free Obstacle #1: Isolation: It’s hard to build wealth on your own You see…alone you are vulnerable. You will never reach your fullest potential. But when you connect with the right people, a whole new set of options you never dreamed possible opens up to you. In fact, one of the main reasons people attend Wealth Retreat is to have an instant peer group of movers and shakers. Obstacle #2: Fear One of the greatest obstacles to building financial freedom is fear. And with all the mixed messages in the press at the moment with concerns about, the after-effects of the Corona Virus on our economy, what will happen when JobKeeper ends, growing social unrest in Australia – not just overseas, the challenges with obtaining finance and talk of a property bubble developing, many of us are more fearful than ever. This fear can be taken many forms, but the big 4 fears I come across are: Fear of failure – this is especially prevalent. Fear of debt – most of us have been taught that debt is bad and not to take on more debt. Strategic investors recognise that debt in itself is not necessarily bad, rather it’s not being able to repay your debts that’s a problem. Fear of success – Interestingly, some beginning investors put off their investment decisions because they are haunted by a fear of success. While this may initially seem strange, this fear generally stems from a feeling of unworthiness, where people convince themselves that they are undeserving of wealth or wanting to accumulate wealth makes them a bad person. Fear of the unknown – Who wants to go into a dark room? Who wants to go to a party where you don’t know anyone? Who is not nervous about buying their first investment property? Whenever the outcome is uncertain, fear rears its ugly head. Another fear I have commonly seen is the fear to follow your passion. Obstacle #3: Uncertainty The third major obstacle I’ve observed our Wealth Retreat graduates had to overcome was confusion. They had heard so much conflicting financial advice over the years that they quite simply didn’t know which direction to move in. How to overcome these obstacles One of the most valuable benefits of Wealth Retreat for attendees was that it simplified the complex world of wealth building and business planning so that they had a crystal clear, specifically defined plan of action to pursue their personal wealth building. Alone you are vulnerable; connected we are strong It really struck me how easy it is to fall back into old habits and let negative outside influences dramatically impact our mindset and financial results when we are on our own. We cannot be our best selves in isolation from the world. We need other people. The key is making sure we’re spending time with people who inspire, empower, and encourage us. Your peer group is contagious One of the things that struck me on the first night at Wealth Retreat, when we all got together for a special surprise event (the details of which I can’t reveal here, otherwise it would spoil the surprise for the attendees) was how quickly people connected with each other. It’s ultimately up to you to find and create the peer group that will help you live the life you want to live. After a “Loss” we tend to go back to what we knew One of the most important insights that I want to share is that when most people suffer a “loss” financially, their natural tendency is to pull back and isolate. Some are fearful… others embarrassed… But isolation only makes things worse. You need to accurately assess the situation, learn your lessons, and move forward. Beating yourself up is of no benefit. This is why your peer group and mastermind team are so essential. Your Mastermind Team Apart from the opportunity for participants at Wealth Retreat 2021 to have one on one sessions with our expert faculty, one of the exciting parts of Wealth Retreat this year will be the small group breakout sessions. This is a masterminding technique where you ask a focused power question to your mastermind group and they have time to brainstorm as many possible answers to your question as possible. Resources: Join us at Wealth Retreat 2021 – find out all about it here Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a range of my ebooks here:  www.Podcastbonus.com.au Shownotes plus notes here: [Podcast] My Top Insights into Accelerated Wealth Creation with Louise Bedford Some of our favourite quotes from the show: “If you’re in the room with a group of already successful movers and shakers, it makes you think different and you come out different.” – Michael Yardney “Isolation is one of the largest obstacles to building wealth.” – Michael Yardney “People need to convince themselves that they’re deserving of wealth.” – 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  

Perhaps it’s a reflection of how old I am, but as I keep seeing the stories in the media about rapidly rising house prices, I simply think: here we go again. There are already those out there telling us we are in the housing bubble that’s going to crash. Then there are others who are warning us how the Reserve Bank or APRA are going to interfere and slow things down. And then the banks that only 12 months ago forecast house prices would fall 10, 15 or 20 percent are now suggesting house prices could rise by 10, 15, or even 20 percent in this year alone in some areas. While these periods of rapid house price rise essentially come down to the forces of supply and demand, each sprinkled with varying quantities of irrational exuberance, the precise forces behind each of the housing booms I’ve invested in over the last almost 50 years are not the same. I remember just after I bought my first investment property early 1970s inflation boomed when the Whitlam Labour government came in. At that time interest rates were much higher than they are now. Inflation had the effect of reducing the real value of mortgages, but it was also a time of strong wage growth. Then I remember the great property boom of the late 1980s which was one of the factors that led to the recession we had to have in the early ’90s and particularly remember the boom in the early 2000s, when investor demand was a significant factor driving up house prices, in part because of the changes made to the capital gains tax regime at the time. Looking at the current housing boom, there are some very interesting features that contrast with previous cycles. The first is that population growth is currently very low, in fact, net immigration actually caused Australia’s total population to fall over the past 12 months. That’s very different from previous booms — particularly in the middle of the last decade — where strong immigration was an important driver of rising house prices. Another interesting difference is the relative absence of investors in the current housing market compared with owner-occupiers. This is reflected in the much stronger demand for standalone houses rather than apartments. In February this year investors only made up about 20% of all home loans while traditionally this is closer to 30%. And it’s not just local investors that are missing. There is also the absence of foreign investors. During the last boom Asian investors, particularly from China were an important force driving up property prices and buying many of the high-rise apartments being built in our CBD. They are nowhere to be seen this time around. So far, a significant factor of this property boom has been the presence of first homebuyers assisted by various federal and state government initiatives including the homebuilder program, the first home loan deposit scheme, and various deputy concessions. While our banks are keen to lend to First Home Buyers, I’ve heard that the Bank of Mum and Dad is now is the fifth largest lending institution in Australia. Here homeowning parents who sitting on significant equity in their property help their children get into the housing market either with gifts, loans or they assist by guaranteeing their loans. So how can you make the most of this property cycle? Is the Reserve Bank going to interfere and raise interest rates? Will APRA slow down lending as it has in the past? These are all questions I’m going to ask of my regular podcast guest, financial adviser Stuart Wemyss.   Truths about the housing boom Our property markets have been surging this year with double-digit growth in sight for all our capital cities. And now that more Australians feel secure about our economy in general, and their jobs in particular, this will only place more impetus under our markets. And it’s clear that FOMO (fear of missing out) when homebuyers and investors are scared the market is running away from them is driving many decisions. Buyers feel they must get into the market and this is showing with even secondary properties selling well above their vendor’s expectations. Normally at the beginning of the property cycle, there is a flight to quality – people remember the type of properties that held their values well during the downturn and avoid secondary properties. But currently, I’m seeing some home buyers so worried the market is going to pass them by that they are compromising their selection criteria just to get into this market. Unfortunately, we’ve seen how you end up when the market eventually slows down, and it’s not always a pretty sight. So what’s ahead for the markets this year and how can you take advantage of our current property boom without getting burned? That’s the topic of my discussion today with independent financial adviser Stuart Wemyss. Will the RBA increase the cash rate? The lowest 40% of income earners have been affected by COVID-19 the most. An increase in interest rate would adversely affect low-income owners when they could least afford it. An increase in interest rates would be bad news for the federal and state government budget deficits. The federal government’s total borrowings attempt to reach $1 trillion meaning 1% of price interest rates would cost the government an additional $10 billion a year – not an attractive prospect. Will APRA introduce macroprudential controls? Chairman Wayne Buyers said APRA’s primary responsibility is financial stability, not soaring house prices, and it is not seeing activity right now that would compel it to intervene. However, more commentators are suggesting there will be a role for changes to potential lending standards. How might this be done? Increase interest rates for investor mortgages and leave owner-occupier rates unchanged (investor mortgage rates are already 0.4-0.8 percent higher than owner-occupier rates). Limit the maximum loan to value ratio (LVR) for investment loans. At the moment, investors can borrow up to 90 percent of a property’s value, meaning they only need a 10 percent deposit plus costs. The government could reduce these LVR limits, like the Reserve Bank of New Zealand did last month. Increase the benchmark interest rates for investors. A benchmark interest rate is used when a lender calculates your borrowing capacity. It provides a buffer to provide for future interest rate increases. The higher the benchmark interest rate, the lower your borrowing capacity. While a new round of macro-prudential policies is looking increasingly a matter of when, not if, as I see it, the catalyst for such a policy intervention is more likely to be based on a worsening in the quality of lending standards or increase in mortgage-related household debt rather than as a response to heat in the housing market. Tighter credit conditions would probably have an immediate dampening effect on housing market activity while continuing to let record-low interest rates support the ongoing economic recovery. It’s very likely that the government (through APRA) will tighten borrowings criteria for investors sometime over the next six to 18 months. Of course, this is dependent on property prices. If price rises are considered sustainable, borrowing rules do not need to change. For property investors, it is time to lock in access to as much capital as possible over the next six months. Depending on the type and location of your property, I would probably be inclined to wait for one to two months before getting your properties revalued. This will allow for some more comparable sales to occur. Then, around April or May, I would ask my mortgage broker to revalue my properties and lock in my borrowing capacity to 80 percent of those new valuations. The exact timing of this does depend on your circumstances. Notwithstanding the prospect of future lending rule changes (as discussed above), it is always a good idea to maximize your access to borrowings, even if you have no immediate plans. So, what should someone interested in getting into property be doing now. Lock in access to as much equity as possible over the next 6 months. Depending on the type and location of your properties, I would probably be inclined to wait for one to two months before getting your properties revalued. This will allow for some more comparable sales to occur. Then, around April or May, I would ask your mortgage broker to revalue your properties and lock in my borrowing capacity to 80% of those new valuations. The exact timing of this does depend on your circumstances. How important is timing the market? Ultimately the price you pay for a property is largely irrelevant. What is far more important (by a factor of 10) is the quality of the asset you buy. Property is a long-term investment. You should plan to hold it for many decades. So there’s no point getting anxious over a few months. Discretionary vendors will be encouraged by recent results. As such, we should expect the supply of properties on the market to increase. This may have a cooling effect on prices or at least temper price rises. We must remind ourselves that prices are able to move in both directions. One thing is almost for sure. Interest rates are likely to remain low for an extended period of time, and that’s an opportunity. Resources: Michael YardneyGet the team at Metropole to help build your personal Strategic Property Plan. Click here and have a chat with us Get your bonus ebooks and reports – www.PodcastBonus.com.au Join us at Wealth Retreat 2021 Stuart Wemyss – Prosolution Private Clients Stuart’s Book – Rules of the Lending Game Shownotes plus more here: Some home truths about this housing boom with Stuart Wemyss Some of our favorite quotes from the show: “It’s not just you and me who are going to have to pay more. The government’s borrowings would cost them more.” – Michael Yardney “I see property price growth slowing later this year. Not prices going down, but the growth slowing.” –Michael Yardney “I’ve come to realize that too many people worry about failing, about getting it wrong.” – 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

We are experiencing extraordinary times with a booming economy and surging property market yet if history repeats itself, most investors won’t become rich. So, in today’s podcast, I want to share three lessons with you to help even the odds in your favour. Firstly, I’m going to explain six reasons many property investors don’t become rich, and they’re probably not ones that you would’ve thought of. I would then like to discuss a controversial topic with you - that debt can actually be an asset, not a liability. Of course, not everyone agrees with me, but I hope once you’ve heard my point of view you will understand why the rich are getting richer because they know how to use it wisely, especially in today’s low-interest-rate environment. And then I’m going to share 5 things that you can do differently to make your future better. The reasons why property investors don’t become rich Reason 1 – Most people wait too long to start Many investors are waiting for everything to be “perfect” before they get going.  Which means they never get going. The longer you wait to get started with your investing, the longer it will be before you get the money, success, and freedom you want. Reason 2 – Fear stops them Fear keeps many of us from getting what we want, especially in matters of money. Some fear taking on more debt, others fear failure and some even have a fear of success. Successful investors have learned to harness their fears and rather than focus on the negatives, they use fear to force them into positive action. Reason 3 – Waiting until they know enough The fear of not knowing enough prevents other investors from getting started. However, the irony here is that the more you learn, the more you learn that you don’t know! The way out is to recognize that while you don’t know it all, and you never will, you do know enough to get started with your investing and you will learn more along the way as you apply your knowledge in the real world, surviving any mistakes and challenges along the way. Reason 4 – Focusing on linear income instead of passive income Some income streams are linear, and some are passive. Linear income is what you get from a job. Passive income is when you work once but continue to get paid over and over again from work you’re no longer doing. The way to become wealthy is having passive income coming in whether you go to work or not. Reason 5 – Not using systems for making money A system for making money is something that takes the emotion out of your investment decisions and makes the results more reproducible. My preferred system is investing in high-growth property.  Once you create a proven system for making money, there is no limit to the money you can make. Reason 6 – Not being patient Warren Buffet once said: “wealth is the transfer of money from the impatient to the patient.” To become a successful property investor requires patience and persistence.  You must not only get started, but you must continue on and follow through. How debt can be an asset You were probably taught by your parents to get a good education, a good job, buy a home, work really hard, and pay off your debt. But, in my mind, that’s not a productive use of the equity in your home. Instead, you should recycle the equity in your home and convert it into productive debt to buy income-producing assets. The three types of debt Bad debt: This is debt against assets that depreciate in value. Bad debt generally refers to things like credit cards or other consumer debt that does little to improve your financial outcome. Necessary debt: This is the non-tax-deductible debt against your home, but it’s something essential that can’t really be avoided. Good debt: This is a tax-deductible debt against income-producing and appreciating assets. Think loans against residential investment properties business loans. A seven step guide to debt recycling Over time you will have paid down a portion of your home mortgage with a principal and interest loan and during that time your home would have increased in value. The bank will often lend you up to 80% of the value of your home as long as you can show serviceability. You would take out a new investment loan using your available home equity as security and the purpose of this loan would be to use the funds as a deposit on an investment property. You could use this to invest in assets that produce both income and capital growth such as a managed fund, shares, or as the deposit against an investment property. You could even use the income generated from your investments, plus any tax advantages of a geared investment, to pay off the non-deductible debt in your home loan. Over time you will build your wealth as your investment property or share portfolio should increase in value over time and the cash flow you receive in the form of rental or dividends should also increase. At the same time you will slowly be paying down the mortgage on your home, so that when you reach your retirement years and start enjoying the longest holiday you will have in your life, you will own your own home with no debt and have an investment portfolio of properties or shares (preferably both) with a manageable level of debt. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan. Click here and have a chat with us Join us at Wealth Retreat 2021- find out more here Shownotes plus more here: Believe it or not, debt can be an asset | 6 reasons property investors don’t become rich + More Some of our favorite quotes from the show: “The more you learn, the more you learn you don’t know.” – Michael Yardney “The difference between the current value of your home and the outstanding amount of your mortgage is your equity.” – Michael Yardney “The quality of the results you get has a lot to do with the questions you ask yourself.” – 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

Property investment may be simple, but it’s not easy. It’s simple if you follow the rules and the right strategy, but it’s not easy because there are so many moving parts, and most people don’t even recognize that. Successful property investment requires the collaboration of a team with expertise in property, finance, tax, the law, and financial planning. If you’re a regular listener, you’d know I try to give you a mix of all of those things to give you a holistic overview of property investment. Today’s episode is no different. I’ll be talking to Ken Raiss, my business partner at Metropole Wealth Advisory, about the best ownership structures for property investment. After that, I’ll share my mindset message with you. Highlights from my chat with Ken Raiss: What are ownership structures? They’re a way of controlling your assets without owning them. It’s a way to get all of the benefits of having them, like wealth and the ability to pass assets on to your children, without actually owning them. They give you a better way to manage cash flows, tax, and asset protection while separating you from the asset. People’s lives and circumstances change. So even if you already have your portfolio and structures in place, it could make sense to change it now, depending on your circumstances. Types of structures: In general there are Companies and Trusts They’ve both been around for a long time, but they’re now coming into use by ordinary people. Companies are very regulated. They must meet the minimum regulations set by the government. There are no government laws or rules about what needs to be in trust. Trustees may hold the cash, but they have a legal obligation to use it the way that the trust says they have to use it. Trusts have lots of flexibility concerning who you can give it to and what you can use it for. Benefits of using a trust: A more efficient way of distributing cash flows Be able to manage their own tax affairs Better control and management of the estate on death More flexibility Asset protection Common mistakes people make when using structures: Setting up a company, particularly for a business, then becoming the individual shareholder Setting up a company when trust would be more appropriate Setting up a trust when you’d be better off with a company Getting the wrong type of trust Selling a property from a trust in such a way that the depreciation is added back to the trust once or twice Failing to take the trust’s end date into account Links and Resources: Michael Yardney Ken Raiss, director Metropole Wealth Advisory Have a chat with Ken Raiss to ensure you have the correct asset protection strategies in place – click here In turbulent times like this why not get the team at Metropole on your side – find out more here Get your own copy of What Every Property Investor Needs To Know About Finance, Tax and the Law. Shownotes plus more here: What is the best structure to buy your property in, yet protect and pass on your wealth, with Ken Raiss Some of our favourite quotes from the show: “Before people panic too much, there are things that can be done to amend trustees.” – Michael Yardney “Many trusts have very broad definitions of who beneficiaries can be.” –Michael Yardney “I guess one way of summarizing the habits of successful people could be: successful people start before they feel ready.” –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