Property Investment, Success & Money | The Michael Yardney Podcast

There are many definitions of what it means to be rich. In today's podcast, we're going to discuss the #1 factor that makes poor people rich. Being rich is more a state of mind than a dollar amount, though – the rich can be poor and the poor can be rich. Being rich is really more about having what you want and being able to enjoy your wealth. You need a sense of balance, and true wealth isn't about money or how many properties or shares you have. You need your health. You need time to enjoy and appreciate things. You need somebody to love and someone to love you. You've got to have the ability to give back to the community. You need spirituality. You need to be able to grow and learn. In these podcasts, I talk a lot about money, but money isn't a zero-sum game. One person's wealth can't stop you from becoming wealthy as well. And in today's episode, you'll hear more about building the habits that can help you become wealthy. How can poor people become rich? If no poor person on the face of the earth ever rose from poverty to wealth, you might have a case that it's impossible to become rich if you were born and raised poor. But, reality paints a very different picture. There are thousands of poor people every day who become rich. According to Forbes Magazine, just in America, there are approximately 1,700 working-class people a day who become millionaires. And, according to Tom Corley's Rich Habits study, 41% of the 177 self-made millionaires he studied were born and raised in poverty. What was the #1 factor that helped them shake off the chains of poverty and become wealthy? Changing their daily habits. Changing your habits can be hard, especially if you don't know how. Here are some short-cuts to changing habits. Habit Merging When an old habit does not perceive a new habit as a threat, it does not wage war against the formation of the new habit. Law of Association Old habits can be triggered by the individuals you associate with. If you are trying to get rid of some old, bad habits you need to limit the time you spend associating with those individuals who act as a triggers for those bad habits and begin associating with individuals who possess the new good habits you are trying to adopt. You can find these new individuals in network groups, non-profit groups, trade groups or any group that is focused on pursuing similar goals. Changes in Your Environment It is much easier to abandon old habits and form new habits when your environment changes. New home, new neighbors, new friends, new job, new colleagues, new cities, etc., all offer an opportunity to forge new habits. When your environment changes, you are forced to think your way through each day. Start Small It is far easier to change your habits if you start with small habits. Small habit change involves adding habits that require very little effort. Examples include drinking more water during the day, taking vitamin supplements or listening to audiobooks while you commute to work. Schedule Your New Habits Sixty-seven percent of self-made millionaires in my study maintained a to-do list. To-do lists are a way of processing success into your life. One of the tricks self-made millionaires use is to incorporate certain good daily habits onto their to-do list. Firewall Your Bad Habits One trick to habit change is to make it harder for you to engage in a bad habit by creating some type of firewall between you and the bad habit. Links and Resources: Michael Yardney Tom Corley - Rich Habits Get your own copy of our international bestseller Rich Habits Poor Habits Join Michael Yardney and Tom Corley at Wealth Retreat 2020 – click here and register your interest Wondering what's ahead for our property markets? Organize a time to speak with the team at Metropole by clicking here Shownotes plus more here: The #1 factor that makes poor people rich | RICH HABITS, POOR HABITS Some of our favourite quotes from the show: "At no other point in history have so many people escaped bitter poverty in such a short time as in China." – Michael Yardney "Small changes give you momentum. They increase your confidence." – Michael Yardney "I think the message is, if other people can do it, you can do 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.

We're heading for the biggest crash since the great depression and it's just around the corner, according to Harry Dent. He's doing a virtual seminar telling anyone who's prepared to listen that we're headed for a stock market crash, a major depression, and the value of your home dropping 40-50%. Today we're going to have a chat with Harry Dent, and I'm also going to have a talk with Pete Wargent.Before we get into the interview, a word of warning. Especially for the fainthearted. Harry makes some really scary predictions. Please listen to the whole interview, and don't sell up your assets before you listen to my views and Pete Wargent's. Topics Discussed With Harry Dent Why Harry thinks that we're approaching an economic winter with fallout worse than the Great Depression Why Harry believes we're in a bubble Whether bubbles have to burst – can't they just deflate? What the demographics are indicating will happen next to our economy The trigger that will burst the bubble Whether Harry believes there are safe ways to invest What business owners should be doing right now What Harry sees happening to the property market in Australia How immigration underpins Australia's real estate market The upsides that Harry sees on the other side of the downturn What Harry would say to people who heard his previous predictions The message that Harry has for Australians in his virtual seminar Topics Discussed With Pete Wargent What a bubble really is and what happens when one bursts Whether the average Australian household has taken on too much debt The government's current response to the crisis What the government has learned from previous downturns When the recovery will begin How Australia's demographics compare to other countries The soundness of Australia's banking system What could cause a collapse in the value of property in Australia Australia's culture of homeownership Where there are likely to be the most difficulties in the property market 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 Harry Dent's website Harry Dent's Australian virtual seminar Pete Wargent Next Level Wealth Pete Wargent's new book Low Rates High Returns Shownotes plus more here: Will the bubble burst or do we burst Harry's Dent's Bubble? | Interviews with Harry Dent and Pete Wargent Some of our favourite quotes from the show: "Well, we have some features of a bubble, yes, but we're actually not in a bubble." – Michael Yardney "Here we've got 70% of properties owned by homeowners, half of them without debt, and those of them that do have debt, it's in the hands of those who can afford it." – Michael Yardney "In the rest of the world, a lot of people expect to be tenants all their life; here in Australia people would rather eat dog food than give up their homes." – 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

The coronavirus has clearly infected Australia. And it doesn't discriminate rich or poor, young or old. I heard it said that we are all in the same boat. But it's not like that. We are in the same storm, but not in the same boat. Your ship could be shipwrecked and mine might not be or vice versa. For some, quarantine is optimal. A moment of reflection, of re-connection, taking life easy, or having a cocktail or coffee. For others, this is a desperate financial & family crisis. For some that live alone, they're facing endless loneliness. While for others it is peace, rest, and time with their mother, father, sons, and daughters. Some are getting money from the government through JobKeeper and JobSeeker while others are working more hours for less money due to pay cuts or loss in sales. Some want to go back to work because they don't qualify for unemployment and are running out of money. Others want to kill those who break the quarantine. Some are home spending 2-3 hours a day helping their child with online schooling while others are spending 2-3 hours a day to educate their children on top of a 10 to 12-hour workday. So, we are not in the same boat. We are going through a time when our perceptions and needs are completely different. Each of us will emerge, in our own way, from this storm. It is very important to see beyond what is seen at first glance. Not just looking, actually seeing. We are all on different ships during this storm experiencing a very different journey. And in today's podcast, I want to chat about how the coronavirus crisis is going to affect different demographics and generations with leading demographer Simon Kustenmacher. As always you'll find my chat with him educational, informative, and lots of fun, so welcome to today's episode of the Michael Yardney podcast. Topics We Discuss in This Episode: We will see a slowdown of migration intake for at least two or three years Australia will have 0 net migration or negative net migration for 2020 Migration was the main driver for the housing market, so this will have a major impact on property The small towns will be hit first – bad news for regional Australia Temporary visitors like students or short-term workers will be affected as well. This, in turn, affects the short-term rental markets, like student accommodations and Airbnbs. Regional Australia is somewhat reliant on temporary workers, so this is more bad news for them Different generations will be affected differently Baby boomers who are now about to retire will see their super balance shrink by 20% or more Some may have to put off retirement Holidays overseas are also probably canceled for some time to come Local tourism may be on the rise, which may be beneficial for Australia Baby boomers may find themselves supporting adult children who have lost jobs Gen Xers will probably suffer a lot from the coronavirus Xers are at a time in their life when they're most likely to be overextended and spending every penny they earn Millennials are in a better position to ride out the next few years They're reaching family formation stage of the life cycle More likely to have jobs where they can work from home and will want homes that allow for that. Millennials will need larger homes They may look for homes in the suburbs or in satellite cities Gen Z is concerned with global issues They're in a position to ride out the pandemic and recession before kickstarting their career The pandemic may be the kickstart needed for working from home to happen on a large scale Links and Resources: Michael Yardney In these challenging time why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors. Simon Kuestenmacher - Director of Research at The Demographics Group Follow Simon on YouTube Shownotes plus more here: We're all in the same Coronavirus storm, but not in the same boat. Who will be hit the hardest? With Simon Kuestenmacher Some of our favourite quotes from the show: "Economic growth comes, I guess, from certain efficiencies and producing things more." – Michael Yardney "Even though we all think we're unique and different and special, we're really all much the same as others." – Michael Yardney "Humans aren't logical. We believe we're rational, but we're not, and at the moment emotion is driving a lot of what we're doing." – 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

2020 usually refers to someone with perfect vision, so it's ironic that in 2020 we have such a poor picture of what lies ahead of us. We're moving through challenging, interesting times. We're making history as we work through the coronavirus crisis and how it's affecting our lives, our economy, and our health. But to give some clarity on what could be ahead, I'm going to have a chat with property researcher John Lindeman, who's got some interesting thoughts about what's going to happen in the short term and what's going to happen in the medium to long term. We're going to talk about what's happening in the rental market, what's going to happen to property prices, what's going to happen to the supply and demand ratio, and how the rush for toilet paper relates to property prices. You see.. Many of us were amazed by the recent scenes of people stampeding to buy toilet paper, and some of us may even have joined the frantic rush to grab a few rolls before supplies ran out. Supermarkets were left without toilet paper for weeks afterwards and with toilet paper supplies only now slowly returning back to normal, many of us are left wondering "What was all that about?" This event was a classic "self-fulfilling prophecy", which is when the prediction itself causes the result. The same kind of panic buying events can also occur in the property market. It starts when we hear about certain locations where properties are selling faster. We are urged to be quick or miss out. As more investors rush in to buy, they create the shortage that is being predicted. This is why you need to make sure that any property opportunity you are interested in is backed by actual rental or owner-occupier demand, not just by speculative demand. The COVID-19 pandemic will likely result in significant changes to our housing markets. But you also need to keep in mind that the short-term impacts are likely to be very different from the long-term outcomes. Property markets where buyer demand is falling right now include those relying on tourism, short-term accommodation, and recreation. Markets at risk from falling rents are short-term business, holiday, Airbnb, and student rental locations. This has caused owners of short-term rental properties to list them as longer-term rentals instead, which is leading to a rise in rental vacancies. Rent could fall in some locations as a result. However, this is also likely to be short-lived, because restrictions on movement and assembly are lifted, these markets are likely to bounce back quickly. We expect a general surge in housing demand to occur after the current crisis is over and the restrictions on movement and assembly are lifted. Rental demand will rise as tourism and holiday markets recover and we will experience an influx of migrants from other countries. As a result, many suburbs will experience excellent growth, with buy prices right now at their lowest. 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 John Lindeman – Lindeman Reports Shownotes plus more here: The correlation between the toilet paper panic and property prices | John Lindeman Some of our favourite quotes from the show: "Migrants come in and they buy refrigerators and televisions and carpets, and they grease the wheels of industry." "It's easy to forget that even though the external circumstances are different, the downturn in the property cycle is a normal part of the cycle." "The first major lesson in life to learn is how to handle the winters." 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 so much uncertainty around us, we're even more keen to get a level of certainty. But let's be honest, we're pretty terrible at working out what's going to happen in the future. When the future doesn't cooperate, we spend even more time trying to change the next bit of the future so it winds up more like what we were hoping for. But no matter what you do and how stressed you get; the future is going to take care of itself. Having said that, I am going to spend a little time trying to predict the future with Pete Wargent today. But I want to go beyond the recession we're going to have and take a look at what life might be like after the recession. Clearly the past couple of months have been a period of immense uncertainty. And despite the actions of governments and banks, 2020 is now expected to see a sharp decline in GDP. The world is going to go into recession. Australia is going to go into recession. But at some point, we're going to cross that bridge, the virus will be under control, and things will go back to normal. But what will normal look like? Will it be the same, or will it be different? That's what Pete Wargent and I will discuss today. Some of the topics we discuss: We might be able to start easing restrictions sooner than we'd feared. Any way you look at it, we can expect low-interest rates for a long time to come. The low rates won't apply to every product, but new borrowers will see the lowest mortgage rates they've ever seen. Governments all over the world are piling on new debt. Australia is now borrowing at the lowest rates in history and we're relatively well-placed. Once we cross the bridge, the government will have to do other things to get the economy moving again. The government will need to create jobs, infrastructure projects, healthcare projects. Some people will probably need to stay in the workforce for longer. The government is hoping this will be a business-led recovery, and that the budget will be balanced just by getting the economy moving again. The media has changed. People are turning to different sources. There are fewer hard-copy publications and more internet sources. Retail is going to be different. We were moving to online retail anyway, but this will speed up the transition. Tourism is changing. There are going to be fewer departures, more staycations, and holidays at home. Resources and commodities may go through a boom. People are going to be working from home more. This may lead to a change in the type of properties they want to live in. People will want more spacious properties with room to work. Links and Resources: Michael Yardney Pete Wargent Next Level Wealth 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 2020 in October –find out more here Pete Wargent's new book Low Rates High Returns Shownotes plus more here: What will our economy look like after the Coronavirus led recession - with Pete Wargent Some of our favourite quotes from the show: "There are always opportunities that occur during a downturn." – Michael Yardney "I think we've also changed who we trust when it comes to looking for relevant, for factual information. We're going to different sources." – Michael Yardney "The trend of living in big cities is going to continue, but maybe the sort of properties we're going to live in will be a bit different." – 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

Have you noticed how the desire for economic forecasts surges right when our ability to accurately forecast plummets? That's really the case today. In today's show, I'm going to tell you what I say when people ask what's going to happen to our property markets, and my answer may surprise you. Then, I'm going to have a chat with Dr. Andrew Wilson about who's going to pay for all the government benefits and handouts. I'll also share a mindset moment about how you're making history right now. By the end of today's show, you'll hopefully have some more clarity about your economic future. What's going to happen to property? The truth is, I don't know. But there are some things that are certain. In 12 months' time, it will be April 2021. At some point, we will pass a line that I called the Survival Line.This Survival Line will occur when people's level of desire to move forward overtakes their fear. On the other side of that survival line will be many opportunities to thrive. Not just in property but in business as well. Property investors, business owners, and entrepreneurs seem to be thinking in one of three different ways: Fear focused: Those who are fear focused are panicking. They think the world is coming to an end. They are closing businesses or selling investments. They can't see a future for themselves or their businesses. They won't make it to the survival line, which may sooner than they think. Hibernation mode: People in hibernation mode bunker down. They buy rice, pasta and toilet paper. They want to stay low to ride it out. They will cross the survival line but will experience lots of ups and downs in the meantime and lose a year or so of their life in the process. Positioning themselves for the future: The property investors, business owners, and entrepreneurs who are positioning themselves for the future are those who realize that there is a strategic window between now and the survival line where they can get themselves set up to take advantage of the opportunities that always occur after a severe downturn. In which of these three groups of investors do you want to be? Who's going to pay for the government handouts with Dr. Andrew Wilson Right now, the government is throwing money at everything and anything in the hopes of keeping the economy afloat. But at some point, the lockdown will end and the handouts will stop. Then what happens? Who's paying for all the government handouts? Some of the topics we discuss: Where the money is coming from for the various stimulus packages meant to keep businesses afloat and help ordinary Australians keep food on the table What "quantitative easing" really means Whether the debt created by these stimulus packages will be paid back Whether government stimulus packages will lead to inflation down the road Links and Resources: Michael Yardney Dr. Andrew Wilson, chief economist of MyHousingMarket.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: I really don't know what's going to happen to property + Who's going to pay for the government handouts with Dr. Andrew Wilson Some of our favourite quotes from the show: "I know that what we're going through currently is temporary, like every other crisis we've been through before." – Michael Yardney "By the way, here's another certainty. On the other side of that survival line, there's going to be great opportunities." – Michael Yardney "At the moment, you may feel stuck at home, but at least you're safe." – 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 drives property price growth? That's what I'm going to discuss in today's episode. Then I'm going to have a chat with Kate Forbes about the surging population growth in Melbourne. Melbourne is likely already Australia's largest capital city. That doesn't mean you can invest just anywhere in Melbourne, but we're going to give you some ideas of what to look for when you're considering where you should be investing. What drives property price growth? Some people say that supply and demand drive price growth. But in my mind, that's too simplistic. There's more to it than that. Let's take a look at the macro effects that drive the general property markets. Household formation: This is how many new households are being formed and the demographics of those households. Land component: Not all land is created equal. Some land is more valuable than other land. It doesn't matter if there's a property on the land – you need to look at the land-to-asset ratio Affordability: This doesn't mean cheap property. Affordability refers to the flow of money – interest rates and money supply. The economy: The economy creates jobs, and jobs create people who can afford to buy homes and upgrade homes. Market sentiment: How people feel about the market. Worries about the market cause potential buyers to sit on the sidelines. Past performance: Recent past performance isn't as important, but long-term past performance can tell you what future performance will likely look like. The returns: What sort of capital growth, rental incomes or alternative investments you can get. The X factor: Unexpected events that drive our markets. Is Melbourne already Australia's biggest capital city? The latest forecast suggests that Melbourne's population is going to overtake Sydney's sooner rather than later. But maybe this has already happened. How is this possible? There are different definitions of what the boundaries of the capital cities are. Some definitions include the Central Coast in the Sydney population count, but leave Geelong out of Melbourne's population count. Remove the Central Coast, and then Melbourne already has a higher population than Sydney. Even with the given definitions, though, Melbourne is on the way to having more people than Sydney by 2026. Why has Melbourne done so well? There are a few reasons: It's consistently rated one of the most livable cities It's had significant economic growth, which means more jobs It's one of the more affordable cities Links and Resources: Michael Yardney Kate Forbes – National Director – Property Strategy at Metropole Organize a time to speak with Kate Forbes or her team at Metropole by clicking here Shownotes plus more here: These are the factors that drive property price growth | Is Melbourne already Australia's biggest capital city? Some of our favourite quotes from the show: "When fear or greed comes into the market, when investors come into the market, we get these big swings." – Michael Yardney "If you fast-forward four years, Melbourne's population is going to increase about 10%" – Michael Yardney "Buy the best property you can afford. No question about that." – 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

The world completely changed a month or two ago. You're socially distancing, you're washing your hands a lot more, you've been sitting at home in quarantine for how many days now? Maybe you've lost count. How are you going to take advantage of this time? When you find yourself struggling through times of uncertainty, like we all are right now, you've got a choice to make. Are you going to be a victim of circumstance or a warrior for growth? That's what we're going to discuss in today's podcast, which is a joint episode between my podcast and The Elephant in the Room podcast. Change doesn't mean you have to accept a fate you don't want. This is the time to focus on taking advantage of the opportunities that are going to arise in our property markets when we get to the next stage – when we cross that proverbial bridge. In today's podcast, we'll be discussing wealth, property, and finance with Chris Bates and Veronica Morgan, the hosts of the Elephant in the room podcast. Some of the Topics We Discuss: We've survived market downturns in the past. That experience is valuable. Learning from prior experiences can help us get through this one. In times of uncertainty, some things are certain. For example:- In 12 months' time, we'll be in April 2021. Somewhere between now and then, we'll come to a survival line. Once we cross that line, desire and greed will overcome fear. Fear is holding a lot of people back, but that won't last. There are risks that buyers and sellers need to be thinking about right now. For example, loan preapprovals from before the coronavirus are now invalid. Certain sectors of the market are going to suffer more than others. Immigration is probably going to slow down for a while but will pick back up in the long run. People want to come to this country, so we can afford to be selective. Some industries, such as the travel and manufacturing industries, are probably going to be different after this. Some attitudes toward homeownership may change. There could actually be more owner-occupier demand. People may also want different sorts of homes. If working from home is working out for most people, we may need fewer office buildings and homes with more at-home workspace. Our attitudes toward debt may change. Some may not want to buy a new car or upgrade their home, because they'd rather avoid debt. The density in Sydney CBD is as high as it is in Wuhan. People may not want to live in those high towers anymore. People may have more choices about whether they work from home or in the office in the future. The biggest risk in development lies with the investor. The less experience an investor has, the bigger the risk. Links and Resources: Michael Yardney Chris Bates – Wealthful Veronica Morgan – Good Deeds Buyers Agent The Elephant in the Room Podcast Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Show notes plus more here: Don't believe everything you hear about property - with Veronica Morgan and Chris Bates Some of our favourite quotes from the show: "If you're going to look for bad news, you're going to see it, but if you look for good news, there's also a lot of good news out there in the medium to long term." – Michael Yardney "There is a segment of the market that's overcommitted, but overall, the fundamentals are strong with owner-occupiers usually in good financial condition." – Michael Yardney "That's what people are paying us for in these uncertain times. To give them some clarity. To give them some direction. To give them better results." – 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

The world completely changed a few weeks ago. Most of us are locked down with social distancing policies. How many days have you been at home now? Are they starting to blend together? But it's times like these when focusing on your personal and business growth becomes more important than ever. And that's what we're going to talk about today. Even if you don't have a business and you're not an entrepreneur, though, if you want more success in your life, today's message is relevant for you too. The Imperative Nine In troubling times of high levels of anxiety and uncertainty you need structure, then more than ever. Here are nine things you can focus on, practical steps you can take to help navigate your way through these confronting times, to help you cross that bridge to the inevitable upturn. We call them the Imperative Nine. Your Team is Afraid This is a time when you need to focus your efforts and actions on others. As a leader, it is imperative that your team see you as in control and on the job. They need to know that there is someone (you) at the helm and steering your organization through turbulent waters. Your Clients are afraid In times of commercial upheaval and uncertainty your clients will be afraid. They will be afraid for their families, their work, their business and the future in general. You may not be able to remove that fear completely but again you may be able to normalize it. The Public is afraid. As a business owner, the community will look to see what you are doing, what confidence you have and remember this, you can't complain about a lack of consumer confidence if you are part of feeding that lack. Risks have to be minimized In every situation like this there are clearly identifiable risks. There are always some unknowns as well but now is a time to critically examine your business, understand the risks which have and will come from the current situation and work to minimize them. Information needs to be accurate and limited It is important that you stay up to date but if you took to heart every piece of news that the mainstream media delivered you would soon be completely overwhelmed. Opportunities abound Whatever your business, there will be some opportunities out of the current situation. It is your job to identify them and then act on them. Pivot your message The message you are putting out to your clients and prospects now has to match the current climate. Have a communication plan Good communication in business never just 'happens'. It is a part of a plan and a schedule. Make it Proactive Sitting back waiting for the phone to ring or emails or messages to come to you is a useless strategy in the best of times. 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 Show notes plus more here: https://propertyupdate.com.au/podcast-9-things-business-owners-should-be-doing-about-coronavirus-but-are-not-build-a-business-not-a-job-podcast/ Some of our favourite quotes from the show: "You've got a choice to make. Are you going to be a victim? Are you going to be a victim to the circumstances, or are you going to be a warrior for growth?" – Michael Yardney "It's what you do now that's going to determine how successful you are when we cross that survival line." – Michael Yardney "I'm giving as much free information as I can. I'm not looking for something in the short-term. I'm playing the long-term game." – 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.

Did you know that as investors and even as entrepreneurs or businesspeople we can sometimes be our own worst enemy? It's not because of the decisions we make, the opportunities we consider or the investments we miss out on, but rather, it's due to the way we think. It's because of our Cognitive Biases. You see, most of think we're rational people. But we're not. There is no shortage of cognitive biases out there that can trip up our brains. Cognitive biases are patterns of thinking that don't rely on logic. And if you don't check your reasoning, they can lead to judgements and decisions that negatively impact your business. You can't eliminate them all, but you can become more aware of how they function and ways to counteract them. And that's what I'm going to discuss today with Pete Wargent Types of Cognitive Bias Confirmation bias People tend to search for information that confirms their view of the world and ignore what doesn't fit. In an uncertain world, we love to be right because it helps us make sense of things. We do this automatically, usually without realizing; partly because it's easier to see where new pieces fit into the picture puzzle we are working on, rather than imagining a new picture. Confirmation bias also prevents us from looking objectively at an investment we've already made. One way to counter confirmation bias is to read things you're going to disagree with. In other words, read all you can from reputable sources, whether it's confirming your original view or not. Another is to look for reasons your strategies could be wrong, rather than right. Anchoring bias We have a tendency to use anchors or reference points to make decisions and evaluations, and sometimes these lead us astray. Anchoring explains why you'll pay $6 for an hour of parking after seeing $10 at a car park down the street. Whether we like it or not, our minds keep referring back to that initial number. It's important for you to evaluate any property deal based on its own fundamentals and all the information you have available from your research and due diligence at the time. Awareness bias How are your investments performing – are you happy with the results you're getting? There's a chance that even if they're not doing so well, you may not even recognize it. In fact, it's been shown the poorest performers in all arenas of life are the least aware of their own incompetence. Lacking the capacity to realize how badly a task is performing is known as the Dunning-Kruger effect. If you're the smartest person on your team you're in trouble. It's best to work with mentors and professional advisors. Positivity bias Many people view residential real estate positively, considering it an asset class through which they can grow their wealth – and they continue to do view it in this light, even if their investments fail to prosper. In the face of lack of capital growth, prolonged vacancies or inflated expenses, they still continue to believe that their investment will turn the corner "one day." The problem with this is that when all signs point to a dud investment, it likely is one – but positivity bias can stand in the way of an investor taking action to rectify the situation. Overconfidence is a real risk for property investors – one of the best things an investor can do is admit what they don't know and get a good team of professionals around them. Negativity bias Just as some investors can be overly positive this is the tendency to put more emphasis on negative experiences rather than positive ones. property information People with this bias feel that 'bad is stronger than good' and will perceive threats more than opportunities in a given situation. Psychologists argue it's an evolutionary adaptation – it's better to mistake a rock for a bear than a bear for a rock. Fact is: there will always be property pessimists around telling us why not to invest and reminding you of all the things that can go wrong and the reality of real estate is that it is a cyclical investment class. However, you can minimize your risks and maximize your upside if you educate yourself and become financial fluent, follow a proven strategy and get a good team around you. Status quo bias This describes our tendency to stick with what we know whether or not it's the best course of action. It could be as simple as buying the same name-brand groceries that you always have or as complex as holding on to that underperforming property. People do this partly because they want to avoid costs, even when it's apparent that those costs will be offset by a larger gain, being the long-term growth of a better performing property. Psychologists have shown that most of us disproportionately stick with the status quo because "doing nothing is within the power of all men" as we often weigh the potential losses from switching from the status quo more heavily than the potential gains. That's why all the successful investors, businesspeople and entrepreneurs I know have mentors coaches and mastermind groups to help them see their blind spots and to encourage them to keep moving forward. Survivorship Bias The misconception here is that you should focus on the successful if you wish to become successful, while the truth is that when failure becomes invisible, the difference between failure and success may also become invisible. You see…if all you're looking at are other people's successes, you could be missing the most important lessons for getting ahead from those who got it wrong. If you spend your life only learning from "survivors", buying books about successful people and reading property investment success stories, your knowledge of the world will be strongly biased and enormously incomplete. The trick when looking for advice is to not only learn what to do, but also look for what not to do. Bandwagon bias This is the psychological phenomenon whereby people do something primarily because other people are doing it. This tendency of people to align their beliefs and behaviors with those of a group is also called "herd mentality." Herding is the phenomenon by which animals and humans herd or stick together as a mechanism to enhance our safety. The bandwagon effect has wide implications but is commonly seen during strong property markets where the media stirs up a frenzy and it's one of the factors that leads to asset bubbles. It pays to remember that just because everyone else is doing it, that doesn't mean you should follow the crowds. In fact, smart investors tend to invest counter cyclically. I've found "the herd is usually wrong" or if not they're late. Unfortunately, excellence is the exception rather than the rule and that's why I believe you should aspire to be unique and not part of the herd. As Warren Buffet said: "Be fearful when others are greedy and be greedy when others are fearful." Restraint bias Following on from bandwagon bias, restraint bias is the tendency for people to overestimate their ability to control impulsive behavior. Will you have that extra chocolate when you're watching your weight? business data success Will you spend that extra hour on the Internet when you have more important things to do? But, when the time arrives, panic kicks in… and they react just like so many others and sell up, often near the bottom – just before the cycle turns. As a property investor you should consider getting the independent property strategists at Metropole to not only help you formulate a property strategy that is proven and has stood the test of time, but also to help you annually review your property portfolio objectively. Bias bias Failing to recognize your cognitive biases is a bias in itself. Arguably this is the most damaging bias, because having blind spots means you're less likely to recognize any of these psychological influences in yourself. When you think you're more objective than you really are, you may be at risk of having bias bias. Investor takeaway The reality is that everyone comes into investing with their own predispositions and we are all prone to errors in judgment. The sooner you realize and acknowledge these tendencies in yourself, the more open you will be to improving and making better investment decisions. Simply becoming aware of these biases means half your battle against your own worst enemy – yourself – is won. The bottom line: We all want to think they we are rational, and biases are things that afflict other people. However, our brains are designed with blind spots and one of their clever tricks is to confer on us the comforting delusion that we, personally, do not have any biases. This is why so many of us are not only bad with money but make the same mistakes over and over again. We're blind to our blindness. Links and Resources: Michael Yardney Metropole Property Strategists Pete Wargent Next Level Wealth 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 2020 in October –find out more here Pete Wargent's new book Low Rates High Returns Show notes plus more here: https://propertyupdate.com.au/podcast-believe-it-or-not-this-is-probably-whats-standing-between-you-and-investment-success-with-pete-wargent/ Some of our favourite quotes from the show: "You actually don't treat real estate investing as you do stock market investing. It's very very different." –Michael Yardney "You do need cash flow coming in from other areas so it's a balance." –Michael Yardney "I've often said that there's no such thing as a rich victim." –Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. 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