Property Investment, Success & Money | The Michael Yardney Podcast

Around this time every year, a little animal creeps out.  They’re called naysayers. And they find all the bad things that are going on in the world, rather than seeing the good things. Rather than being grateful.  Interestingly, in the 40-something years, I’ve been investing, the naysayers always come out.  And interestingly, they’ve always been wrong.  So in today’s episode, I’m going to explain to you why these are the good times – why these are the times you should be enjoying and appreciating.  Then we’ll have a chat with my business partner Brett Warren about why he left $50,000 on the table by not doing a property deal. Some great information there.  And there will also be a lesson in my mindset moment that I think is going to help excite and stimulate and influence you to go for some great things.  Why These Are the Good Times The steady stream of “bad news” we receive via our 24/7 news cycle is enough to get anyone down. It’s easy to buy into the doom and gloom hype in the media these days. So, it’s no wonder many of us are pining for the “good old days”. But what if I told you that you’ve won the lottery and right now, we are living in the best country in the world and at the best time in human history? Thanks to the internet, we have a whole world of possibilities our parents and grandparents would never have dreamed possible. We can video chat with friends and family on the other side of the world, work from home and even gain qualifications through prestigious overseas universities, all without leaving the couch. We have limitless news and entertainment right at our fingertips. International travel has never been cheaper platforms such as Airbnb enable us not only to travel on a budget but also to make some cash on the side when our home is empty. Most of us can afford to eat at restaurants and buy takeaway on a regular basis, even if we don’t have a huge income. And if we can’t be bothered going out, we can have the finest cuisine brought to our home using apps like UberEats. So what is wrong with this picture? Human nature is such that with all these advances and improvements, we can’t help but want more, more, more. But none of it is real. Real happiness and real financial security can’t be found at the bottom of an award-winning bottle of wine in a fancy restaurant. It’s gained through hard work, discipline and maintaining your priorities – spend a little here, save a little there, until you reach a point where you’re no longer dependent on your weekly wage to make ends meet. Until that time, you’re never truly free, because you’re always at the mercy of your creditors, your employer, or the economy. Becoming financially free isn’t about having the best of everything – you have to make sacrifices in some areas so that you’re able to splurge on the things that really matter to you. It’s called delayed gratification. Then follow these three simple steps to financial freedom: Spend less than you earn (otherwise you’ll always owe money.) Save and invest wisely in income-producing growth assets like residential real estate. Reinvest your money and use compounding and leverage to grow your asset base until you have a cash machine. Now don’t underestimate the importance of this simple message. Every little step you take towards that dream is progress, even if it doesn’t seem that way at the time. Why I said no to a $50,000 profit with Brett Warren  Never make long term decisions, based on short term information. It’s easy to focus on the short term: In this case a possible $50,000 profit as a one off hit flipping a property.  But it’s an error to assume that everything will go according to plan. In this case, to achieve the best-case scenario, you would need to hope that:  The purchase would go to plan at the right price There would be no significant issues with the renovation It would be easy to find a tenant paying the desired rent  The valuation would stack up at the end  You need a backup plan in case one or two (or more) of these factors don’t work out as you hoped.  This is the risk of the transaction alone, let alone the idea of holding on to the asset and renting it out for the long term. The better plan is to focus on the longer-term and reduce risk. Focus on areas with a higher percentage of Owner Occupiers  Homeowners are in it for the longer term and will not give up their homes so easily, this leads to less market volatility. At Metropole, we look for suburbs where the locals have a high disposable income. We look for locations where the wage growth is higher. We also look for locations where jobs are plentiful. The people living here will generally be able to ride out the difficult times. We also look for aspirational suburbs and gentrifying suburbs. As a result, these locations perform significantly better with less risk. Links and Resources:  Michael Yardney Metropole Property Strategists Brett Warren – Metropole Properties Brisbane Organise a time to speak with Brett by clicking here   Show notes plus more at the show page: Believe it or not, these are the good times | Why I said no to a $50,000 property profit with Brett Warren Some of our favourite quotes from the show:  “We want everything and we want it yesterday, and this mentality leaves us open to the relentless pursuit of keeping up with the Joneses.” – Michael Yardney  “One day you’re going to wake up and realise you’ve made it. And it will be totally worth it.” – Michael Yardney “You only need one thing to succeed: forget all the reasons why it won’t work, and believe in the one reason why it will.” – 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 made any mistakes in your investment career? If you’re an investor, you almost certainly have made some mistakes.  Nobody starts out as a great investor – property investment is a learned skill. Today, I’m going to share with you one of the biggest mistakes I made early on in my investment career. I hope you’ll learn something from my mistake today.  I’m then going to have a chat with Pete Wargent about 3 demographic trends you need to understand as a property investor. I also have a great mindset message for you.   My Worst Investment Loss Exposed!  I’m keen to tell you the story of how I lost 100% of my invested capital many years ago, way back in the 1970s, and the investment mistakes I made which 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.  Most investors pay the market a huge learning fee in the way of mistakes.  Studies show that around 50% of investors who buy an investment property sell up in the first 5 years.  Clearly, they’ve done something wrong.  And most investors who stay in the game don’t make it past their first or second property, so clearly, they’re not doing things right. So why not learn how to avoid their common mistakes?   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. 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 In reality, 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 quick. 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 for 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. 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. Nobody starts out as a great investor.  Property investing is a learned skill. You now have indisputable proof that I began life as an investment sucker.  Few people have made more mistakes in their investment journey than I did. In fact, I’ve often said I’m a real success at failure.  Yet, I’m a successful investor today, and it’s largely because I’ve learned from my mistakes. I hope you’ve also learned something from my mistake. Highlights from my conversation with Pete Wargent about Demographics Demographics drive the property markets One of the big changes ahead are the technological advances that will change the way we work. As many as 30-40% of the jobs today may not exist in their current form by 2030 Property price growth is linked to wage growth so it’s important to understand what’s going to happen to wages Livability becomes more challenging as cities become larger and infrastructure and transportation don’t keep up People will want to live near where they work and near public transportation, especially in cities large enough for car ownership to not be realistic for many people 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   more notes and details at the show web page: My biggest investment mistake exposed | 3 demographic trends all property investors must understand with Pete Wargent Some of our favourite quotes from the show:  “I’ve actually learned to say no to more opportunities that come up than yes, and I’ve made more money by saying no to them.” – Michael Yardney “One of the key factors to my investment success is that I always try to learn from my mistakes.” –Michael Yardney “Your mentors are the people that you hang around with that you learn habits from.” – 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

Wherever you look property is in the news. And while there are many more good news stories than there were at the beginning of the year, there is also a lot of conflicting information. So to bring some clarity to some of the recent news stories, I have a chat with Australia's leading housing economist, Dr Andrew Wilson chief economist of myhousingmarket.com.au.  We discuss the following: Is the property market recovery real? One of the interesting stories that has been creating some debate In the media is whether the property market recovery is really happening in Melbourne and Sydney. It started when Nerida Conisbee,  chief economist of realestate.com.au  suggested that their figures did not reflect the housing boom as seen by CoreLogic. Corelogic report that both Melbourne and Sydney property values have increased over 5% in the last quarter. Of course these markets are playing catch up, as they are the markets that had the largest decrease in value during the recent downturn. Sure the lower turnover means that stats may not be as reflective of the general market as when there were more sales, but REA came out with their view despite them not really having an index. They seem to just look at clicks on their site. I can tell you that on the ground the segments of the market  wear Metropole have been buying investment-grade properties and A grade homes in Sydney Melbourne and Brisbane are definitely on the move. Tax rules blamed for Australia’s property obsession  The Australian newspaper reported that a panel of experts has declared Australians “dangerously obsessed” with housing, pinning the blame on tax rules that have lured waves of baby boomers into investment properties and fuelled an unsustainable credit boom. “Boomers, they’re using the second, third, fourth and fifth property as retirement funds, and they’re not investing to get a decent yield. They’re betting the house, literally, on the capital gain,” said the article. On the other hand, you will hear Dr Andrew Wilson and I explain there is nothing wrong with having the ambition to own your own home or create wealth through property investment. Sure Australians have taken on debt, but in general it is in the hands of those who can afford it and secured by income producing assets, or the family home and currently the rate of mortgage default is very, very low. I would say Baby Boomers recognise that the government isn't going to look after them in their golden years and that superannuation isn't enough – so yes they are obsessed with securing their financial future. But is there anything wrong with that? The latest finance figures – owner occupiers are driving the housing rebound The September housing finance approvals showed a much stronger than expected rise in owner occupier loans but a pull-back in the value of investor loan approvals leaving the total value of approvals broadly in line with expectations. The number of owner occupier loans surged 3.6% in the month, well above market expectations of a +1.1% gain and a clear signal confirming the market recovery already evident in the auction, price and turnover data. The number of loan approvals is now up 11.4% from its April low and 0.5%yr. The number of first home buyer approvals dipped slightly in the month. Overall, the result confirms the clear upturn in activity since mid year is carrying into year end and suggests that rather than the more balanced upturn shown a month ago, the gains are being driven more by owner occupiers than investors. This is important for the medium term market outlook as it suggests the upturn will be more sensitive to affordability than the previous investor-led cycle. However, when comparing mortgage approvals to those to the levels of 12 months ago, we have a long way to catch up. The RBA has downgraded its forecasts. Dr Andrew Wilson and I  discuss the RBA's recent forecast downgrades for inflation, wages growth and economic growth and what that could mean for you. Links and Resources: Michael Yardney Metropole Property Strategists Metropole's Strategic Property Plan - to help both beginning and experienced investors Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au Show notes plus more here:- Are Australians really obsessed with property? A worrying statement from the RBA plus more - PROPERTY INSIDERS with Dr. Andrew Wilson PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes – it’s your way of passing the message forward to others and saying thank you to me. Here’s how

If you’re a property investor, in business, or an entrepreneur, you’re really going to enjoy today’s show.  Simon Kuestenmacher, Director of Research at The Demographics Group, is joining the podcast today, and we’re going to talk a bit about demographics – how many Australians there are, where they’re living, where they want to live.  But more importantly, we’ll talk about what the big trends are and how they’re going to affect our property values and the economy. We’re going to speak about what the right sort of property is going to be in the future for our burgeoning population, where they’re going to want to live, how they’re going to want to live, and where property values are going to increase.  It really is people who are going to create the need for property, so let's understand what those people are going to need.  Highlights from today’s conversation with Simon Kuestenmacher: Population growth is one of the major demographic trends that will influence Australia’s property markets.  Despite the large Baby Boomer demographic, Australia’s population is aging at a slower rate because the country has so much migration New migrants tend to move as close as possible to job centers and knowledge centers. But established migrants act on the housing markets like everyone else.  Large populations of immigrants aren’t a problem if distribution and infrastructure are handled correctly. But over the last 10 years, infrastructure hasn’t grown at the same rate as the population, and that’s created problems. Inner suburbs are not densifying. Distribution of the population requires that developers are on board to help create the housing needed at the pace required.  There are two ways to build housing at a rapid pace: by building skyscrapers in city centers or bulldozing land to build homes on the greenfield sides. Housing at scale is not being added in the inner suburbs, so people who want bigger housing have to look outward. This is a good time to build high-quality and beautiful housing that will last inter generationally. Town planning and regulations are an issue. To densify the missing middle, you must contend with local government regulations and concerns.  Any kind of property in the inner 10 km of a capital city will likely continue to be a good long term investment. Links and Resources: Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Simon Kuestenmacher - Director of Research at The Demographics Group Show notes and more details at our show page: The most important things investors need to understand about demographics with Simon Kuestenmacher   Some of our favourite quotes from the show: “Australia’s been built on migration going all the way back to the 1800s and the gold rush.” – Michael Yardney   “The challenge is firstly town planning, and also NIMBYs.” – Michael Yardney “We are so lucky that we live in the best country in the world.” – 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

Where’s the best place to be born?  Where you’re born will make a big difference in your life, in your lifestyle, the amount of wealth you can get, and the health you’re going to have. That’s one of the things we’ll discuss in today’s episode. For people interested in property investment, John Lindeman has a great cash flow surprise for you.  Then, in my Mindset Moment, I have a lesson for you from one of my mentors. Where’s the best place to be born at the moment  Even if you weren’t born there, Australia is a great place to live. And many of you are living there now.  Both Melbourne and Sydney earned perfect scores in this year’s The Economist Intelligence Unit’s Global Livability Index. Melbourne last year ended its 7-year run as the top city in the survey. This year, Vienna topped it by .7 of a point out of 100.  Melbourne took the number 2 spot this year, Sydney moved up from 5th to 3rd, Adelaide was 10th, and Brisbane and Perth came up in the next ten. So, 5 of our capital cities ranked among the top 20 cities in the world. Aren’t we lucky to live in Australia? We’re in the best place in the world at the best time in history. So why are so many people miserable? The Economist has found that being rich helped people’s happiness. But it’s not everything. Other factors included crime rates, trust in public institutions, and the health of the family.  According to the 2019 World Happiness Report, there are three important factors to finding happiness: Relationships Money Health How wealthy you are has a lot to do with living in the luckiest country in the world, and if you’re living in Australia, you’re living in the luckiest country right now.  And it’s about to get a whole lot better. The latest Roy Morgan Wealth Report revealed a very positive long-term trend. Australia has performed very strongly over the past 12 years compared with other OECD nations – particularly in Europe where many nations went backwards over the same period. Since 2007, net wealth per capita in Australia has increased by 65.1%, with gains across all levels. The wealthiest 10% of Australians with an average net wealth of over $2 million (up by $811k from 2007), hold 47.9% of net wealth. The poorest 50% of Australians with an average of $31k (up by $11k), who despite gains have seen their total share of net wealth fall from 3.9% to 3.7%. Our geographic neighbors China and India will outpace us in private wealth growth, but if we play our cards right, not only will we be providing these nations with natural resources, but with education, health and technology. And there is the real opportunity for our tourism industry to flourish as we become the playground of a rich new middle class in Asia, just as we were one of the preferred holiday destinations for the Japanese in the 1980′s. Australians and particularly property investors seem to have lost their mojo. Sentiment is improving, but consumer confidence has been low for some time and many potential property investors are sitting on the sidelines waiting for someone to ring the bell confirming the market has bottomed. They’re being fed by the media who in general have forgotten that we’re the lucky country. They forget that as a nation of around 25 million people we punch well above our weight with the world’s 14th largest economy. Australians tend to take many things for granted. Yet despite all our challenges, in certain respects, times have never been so good for us. Our economy is in second gear, not in reverse. Our political system is solid, and our banking system is sound. Income levels are at or near historic highs and our life expectancy continues to increase steadily. We should feel very lucky for the situation we find ourselves in and naturally being a great place to live is strongly positive for our housing markets. The fact is, as Australians we have every reason to be proud of where we live and excited about our future, including the long-term health of our property markets. Cash flow comes to the rescue of property investors The average gross rental yield over the history of Australia is about 11.2%. At the moment, it’s 4.3% -- much lower than average.  Although long-term growth hasn’t been phenomenal, it’s been steady. With the continuous price growth, the yield drops if rents don’t go up. However, this is an abnormal situation. Population growth is continuing at a fairly high rate, and 60% of those are overseas arrivals, and they need to rent for a number of years. So rent demand is rising, and rents are going to raise dramatically over the next couple of years.  Links and Resources: Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors John Lindeman – Lindeman Reports  Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us More details at the episode web page: Where’s the best place to be born at the moment | Cash flow comes to the rescue of property investors Some of our favourite quotes from the show: “We’re lucky that we live in Australia.” – Michael Yardney “If we get it right we could be the playground to a rich new middle class of Asians.” – Michael Yardney “We learn by what we see, so pay attention.” – 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

Can property investment really fund your retirement?  Will this really be possible at a time when the banks are being stricter with their lending making it harder to grow a significant portfolio and at a time of lower capital growth?  That’s what we’re going to discuss in today’s episode as I have a chat with Pete Wargent. We’re going to look at how you can take control of your financial future, why many investors fail, and the strategies of debt in retirement and how to reduce debt before you retire.  What you need to know about self-funding retirement through property Over 2 million Australians invest in property.  You’re probably one of them. These investors are looking to take control of their financial future and hope to one day live of the rents of their property portfolio. But is this still possible in today’s more restrictive lending environment – how many properties do you need to live off your property portfolio and how do you handle your debt when you retire? Most property investors fail They never build a sufficiently large property portfolio to be able to live off its fruits – why is that? They start too late The don’t buy the right assets – they don’t get sufficient capital growth They don’t stay in the market long enough – it takes 20 and more likely 30 years to grow a big enough asset base We don’t know what the future holds The rules have changed since the global financial crisis with more restrictive lending and the world will change again in the future. We don’t know if there will be a pension, what the superannuation rules will be, whether you will be able to negatively gear One thing we do know: if you have a substantial asset base, you’ll have options The 3 stages of wealth creation  Asset growth – requires leverage Transitioning to lower LVR Living off your property portfolio How are you going to repay all your loans before you retire?  Part of successful investment is having a strategy – a strategy for property purchases, a strategy for asset protection, a finance strategy and an exit strategy knowing how you're going to repay your debt before you retire. You don't need to fully pay off your debt before you retire, but you must assume that the banks will not be comfortable extending you further debt unless you can prove serviceability. In my mind, it's not necessary to repay all your debt before you retire but debt serviceability is very dependent upon interest rates and therefore it is important to go into your retirement years with the level of debt that is easily manageable and there would not choke you financially if interest rates changed. With that in mind how I like to structure our clients’ portfolios is that when they go into retirement, they have a mixture of assets: their home with no debt against it superannuation which should be bringing them income a property portfolio that is no longer negatively geared, and if it does have debt against it the LVR is such that the portfolio generates income. This does not need to be a lot of income but needs to be sufficient so that your property portfolio is not draining your cash flow having no debt may not be an optimal strategy as a conservative amount of leverage going into retirement could work well for some people Often our clients will live off their superannuation for the first 10- 15 years of their retirement years allowing their property portfolio to once again double invaluable and therefore naturally lowering the loan to value ratio allowing the portfolio to spin off cash flow. Other clients achieve their cash flow in retirement through the dividends from shares or from the positive cash flow of commercial property investments Strategies to reduce debt During the investment journey stage where you lower your loan to value ratios, the following strategies can be used slowly lower your loan to value ratios by not buying further properties and allowing the natural increase in the value of your well-located assets to keep growing and at the same time lowering the LVR's paying principal and interest replacing growth properties with cash flow positive properties, but not secondary properties – instead of adding commercial properties which have strong cash flow and still some growth to the portfolio renovating or redeveloping properties in the portfolio to increase cash flow selling one or two properties – remember capital gains tax and bank repayments of existing mortgages will be required meaning you won't end up with this much money as your equity may have suggested. Selling assets in your SMSF which would not attract capital gains tax and then distributing the proceeds tax-free to help pay off debt outside the SMSF.  Strategies to be used during retirement Downsize your home – this doesn't often work as well as some would expect as selling up and buying a good apartment, townhouse or villa unit in the same location may not give you much change Withdraw some funds from super - after 60 you could withdraw funds tax-free, either to live off or repay debt.  Of course, in retirement, super is a zero-tax environment (if your balance is less than $1.6 million), so it’s wise to keep as much money in your super account for as long as possible.  Does Living off Equity still work? This is very hard nowadays because you need to prove serviceability and to do that you need strong cash flow which would mean you'd have to have a very low LVR and probably a number of commercial properties in your portfolio which would produce substantial cash flow 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 Read the full show notes of this page: Can you really self-fund retirement through property? With Pete Wargent Some of our favourite quotes from the show: “You can’t save your way to wealth, so you’ve got to borrow and buy income-producing capital growth assets.” – Michael Yardney “You’ve actually got to have debt that’s at a level that’s going to be manageable and not choke you financially if circumstances change.” – 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

Are men and women different when it comes to their wealth habits? The simple answer is yes and in today’s episode you may find out a little bit more about how you’re wired.  You see… we all have some rich habits and some poor habits, so after this episode, you’ll be able to adopt some great rich habits and eliminate some of your poorer habits.  Differences Between Rich Habits of Men and Women #1 Gambling Women gamble less than men.  Not only do fewer women gamble, but for the women who do gamble, they gamble less frequently. #2 Risk Tolerance Men have a higher risk tolerance than women.  Men are by nature hardwired to be more aggressive than women. This aggressive nature gives men a higher risk threshold. This is a good thing and a bad thing.  A low risk tolerance is a good thing when it comes to making big purchasing decisions.  Women are more apt to study the details of a major purchase than men. The devil is always in the details, so understanding the details can save you from making a big purchasing mistake. #3 Reading Women read more than men. That’s the good news.  The bad news is that women read more for entertainment. Men, conversely, read more for learning and self-improvement. #4 Communication Women are better communicators than men. In fact, the average woman speaks 7,000 words a day compared to 2,000 for men.  Good communication is a Rich Habit. Miscommunication damages relationships, businesses, negotiations and can lead to mistakes and failure.  Because women are better communicators, they are better at seeking feedback. Feedback is critical to understanding what to do and what not to do. Good feedback minimizes mistakes and reduces the probability of failure. #5 Creativity Men are more creative than women. This is physiological.  Men have a smaller corpus collosum. The corpus collosum is the bundle of neural never fibers that separates the right hemisphere of the brain from the left.  Recent studies on creativity have shown that those with a smaller corpus collosum are hardwired for greater creativity. #6 Organizational Skills Women have greater organizational skills than men.  Because they pay more attention to details and are more cautious by nature, they tend to do more planning. This makes them better organized when it comes to facts then men. #7 Saving Money Women are better at saving money. They are more cautious with their money. They comparison shop to get the best deals. They look for discounts.  Links and Resources:  Michael Yardney Metropole Tom Corley Rich Habits Get your own copy of our international best seller Rich Habits Poor Habits  More details at the episode page: 7 Shocking Differences Between Rich Habits of Men and Women | RICH HABITS, POOR HABITS Podcast Some of our favourite quotes from the show:  “The habits that you have are the reason that you either live in a beach house or in a slum in the outer suburbs.” – Michael Yardney “Poor communication damages relationships, it’s not as good in business, it makes it hard for negotiation, and it leads to misunderstanding, mistakes, and failures.” – Michael Yardney “You are today the result of all the things you’ve chosen to do and all the things you’ve chosen not to do.” – Michael Yardney  PLEASE LEAVE US A REVIEW  Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

If you’re a property investor, today’s episode is a must.  Why? Because the tax man is after you – you and all property investors.  Recently, the tax department recognized that 90% of property investors’ tax returns contain an error. 9 out of 10!  They’ve found a number of common errors, and today Ken Raiss and I are going to tell you what they are and how to avoid them.  Remember, if you follow the letter of the law, you’ll have no reason to worry even if you do get audited. Will your rental property make you a target for the tax man? The Australian Taxation Office might be taking a much closer look at your tax return this year than you would like. Due to significant increases in the ATO’s operating budget particularly with technology, property investors are in the ATO sights.  There are several key areas that the ATO sees as possible ‘errors” made by property taxpayers and 2019 will see a doubling of taxpayers being audited.   And with the ATO estimating that over 90% of tax returns contain errors it’s easy to understand their new-found enthusiasm in reviewing property investors deductions.    Some of the more common areas taxpayers must pay particular attention to include: 1. REPAIRS VS. MAINTENANCE    The tax man wants to ensure you don’t get immediate tax write-offs for improvements by calling them repairs.  In short, a repair brings an asset back to the same condition it was in when you first acquired the property.   An improvement, on the other hand, is improving the asset beyond its original condition and/or changing the nature of an asset and is depreciated as opposed to written off in the year of expenditure.   The cost of repairs can be claimed in full in the year they are incurred whereas an improvement must be depreciated over its useful life.  It is not always easy to ascertain whether a cost is a repair or improvement or both, so in many situations, you should obtain tax advice.  2. INTEREST EXPENSES    The deductibility of the loan will be determined by its purpose.  So, make sure your loans are correctly structured. Keep good records i.e. you can demonstrate what investment asset each loan relates to. Errors include incorrectly claiming interest that was not tax-deductible (i.e. debt was not used to produce taxable income e.g. a home loan) and/or the loan purpose was not able to be proven by the taxpayer e.g. they mixed purposes in one loan. 3. PROPERTY DIVESTMENTS    If you sell an investment property you will need to calculate the capital gain (or loss)   This capital gain will be taxable and if your property is owned for over 12 months you will benefit from a 50% general discount if purchased with the intention to own the property as an investment. If you purchased the property with the intention to sell it at a profit, you can’t claim this CGT discount.  Capital works depreciation (the depreciation benefit you claim against your tax) needs to be added back to your profits thus increasing the profits from your sale. 4. PERSONAL EXPENSES INCLUDING HOLIDAY HOMES     The ATO’s main concern is making sure that any deductions claimed with respect to holiday homes that are rented out for part of the year are correctly apportioned.   If you rent out your holiday home, carefully apportion your  expenses taking into account whether the property was rented at a rate below market (to friends or family), whether it was available for rent during peak periods, if the owners unreasonably refused tenants and whether the owners genuinely took steps to find tenants during periods it wasn’t occupied. If you own a holiday house that is partly rented out and partly occupied, ensure you use the services of an experienced registered tax agent. 5. RENTING PART OF YOUR HOME    If you are renting part of your home, you must declare the income.  Costs associated with the income are proportionally deductible. The renting of a room or the total property on say AirBNB must also be reported to the tax office. Renting part of your home will create annual tax liabilities and therefore a proportional loss of the Main Residence Exemption you receive for Capital Gains Tax when you sell – in other words, you’ll have to pay some CGT when you sell your home. 6. SUBSTANTIATION OF EXPENSES - RECEIPTS    The onus is on the taxpayer to prove a tax deduction is legitimate.   In the absence of this proof, the ATO will simply deny the deduction.   The ATO found that many taxpayers failed to produce sufficient evidence of expenses claimed e.g. receipts.  A simple answer to this is to ask your managing agent to pay for all expenses from the rental income they collect for your property.   Doing this means you no longer need to take responsibility for record-keeping. At the end of the financial year, your property manager will provide you (and your accountant) with a report itemising all your income and expenses for the year.    What about the penalties?  The number of penalties that the ATO seeks to charge for ‘errors” will depend on the circumstances and they will normally range from 25% to 75% of the tax liability plus interest.   Talk to your property tax specialist to ensure you will be able to legitimately claim any expenses as well as identifying what you can claim.  As an example, if you own property with another person then you need a specific type of depreciation schedule to allow you to maximise the initial year’s deductions. Links and Resources: Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Ken Raiss - Metropole Wealth Advisory See the full show notes here: Attention property investors – the tax man is after you and here’s what he’s looking for Some of our favourite quotes from the show: “Occasionally investment loans get tainted with private issues as well, and the tax man is looking at that a bit more carefully.” – Michael Yardney “The idea is to put all your excess cashflow – and often the rent – into your offset account, but it’s really important to document everything very carefully, keep thorough records.” – Michael Yardney “The tax man is after you, but they don’t even know who you are. You’re just a number. Don’t be scared by it, but prepare yourself by putting your house in order before you start.” – 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

Do you want to become rich? In today’s show we’re going to look at the habits you’re going to have to form to become richer, more successful, and get further in life.  This podcast is part of a series I’ve been doing with Finder.com.au. and in this episode, Mark and Sally ask me some of the same questions that you’re probably also been thinking about with regards to what makes the rich different, apart from the obvious – they have more money.  Self-made millionaires exhibit some of these Rich Habits: They plan their future - set daily, weekly, monthly and long-term goals Making money is one thing, but creating wealth is an entirely different thing. They wake up early and plan their days  For many, their most productive hour is early in the morning before all the interruptions start They exercise and remain physically fit You need to be fit emotionally and physically to fire on all pistons. They’re good savers – the spend less than they earn, save the difference and invest They put together a financial plan, they budget, they focus on increasing their incomes and they automate their savings  They get an early start with wealth building and allow compounding to work in their favour. They understand the importance of delayed gratification There's a mindset that's prevalent these days. It's one of instant gratification in an on-demand society that looks for quick results with very little effort. The rich know that life doesn't work that way. You need to put in the sweat equity if you're looking to gain serious results They educate themselves, they’re always learning They read daily for education – not entertainment They upgrade their skills and knowledge to make themselves more valuable They hang around the right people You are the average of the 5 people you hang around the most There’s a saying: “Your network is your net worth.” In other words, if you lie down with dogs, you'll come up with fleas. They seek advice and have mentors – prepared to pay for it Be very careful selecting your mentors – there are many life coaches, business coaches and mentors out there who haven’t achieved much in their own lives and while they are well many, often caring people – but they can’t teach you something that they haven’t really achieved themselves. Find someone who has already achieved what you want to achieve. They have earned efficient time management  Everyone in this world has the same amount of time. The 24 hours of each day is life's greatest equalizer. But it’s what you do with your day that will make a difference to how productive you are, how much value you add and how much money you make. They don’t gamble The poor see gambling as their easy way out of the rat race. The Rich know gambling is a tax for people who can’t do math. They are generous – give to charity The rich believe that if you get to the top you have to send the lift down to bring others up.  Links and Resources: Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors Get the book: Rich Habits, Poor Habits This show originally appear on the Finder.com.au Pocket Money Podcast You can read a transcript of the show on Finder or here : Want to get rich? These are the habits you need to learn Some of our favourite quotes from the show: “Your outside world is really a reflection of what’s going on inside.” – Michael Yardney “If you eat like healthy people eat and you exercise like healthy people exercise and you think like healthy people think, you’re going to change your body shape and your weight and your health, and much the same with successful people.” – Michael Yardney “It’s never too late, but it takes a long time to create wealth, particularly in today’s low interest rate, low wages, low return environment.” – 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

In today’s show, I’m going to teach you the most important money lesson you can teach your children to help them become successful in life.  This lesson is relevant to you as well, so even if you don’t have children, you can learn something from listening to this episode.  Today’s debt equals tomorrow’s slavery  Limiting your debt obligations when you’re younger will mean having more control over your personal finances later in life and avoid the financial chains that bind your freedom to choose how you live life.  He who dies with the most toys is not the victor The truth is possessions don’t make for a rich life, it’s the experiences and people – the things that money can’t buy – that make you truly wealthy.  Taking responsibility makes you the master of your own destiny The truth is if you’re courageous enough to cast a critical eye over your life, recognise you are where you are as a direct result of your own choices and take ownership of your decisions, you build confidence, self-esteem, and self-respect.  Patience and waiting is luck is made through hard work Understand the difference between wants and needs and recognise that all the money you spend on those material items you just ‘had to have’ today, is less that you’ll have to fund your retirement with tomorrow.  Luck is made through hard work While a handful of people have lucked out by winning the lottery, truly successful people do the hard yards to reach the pinnacle of their chosen field or endeavor.  You don’t need millions to achieve financial freedom Financial freedom is not dependent on money itself, but on your relationship to it and the level of personal responsibility and fiscal discipline, you’re prepared to exercise throughout life.  Spend less than you earn…and invest the rest Aim to invest at least 10 percent of your earnings and the power of compounding will take care of the rest. And speaking of the power of compounding…  Your youth won’t last forever, so use it wisely Given enough time, compound interest is so effective that Albert Einstein called it the most powerful force in the universe.  The bottom line  Unless we teach our children good daily success habits and level the playing field, the rich will continue to get richer and the poor will continue to get poorer.  So it just might pay (literally) to give them a bit of your time.  The most important lesson to teach your children about money  Patient people are more likely to save their pennies than seek “easy” (and expensive) credit because they are happy to wait for a new car or big screen TV.  But we need to remember that this skill isn’t natural for most people.  Humans are wired for instant gratification. That’s one of the reasons many high-income earners are not ‘rich.’  You’ll often find the more they earn, the more they spend and they end up on a treadmill where they tend to spend more than they earn because they need to support a lifestyle that has little or no enduring value but has high fixed costs to maintain.  Learning delayed gratification isn’t easy but it can become a skill in your Rich Habit toolkit if you follow a few simple tips.  Write down a list of money goals and put them somewhere that you can see them every day.  Every time you’re tempted to purchase something consider whether it’s a want or a need.  We all can develop the Rich Habit of delaying gratification and accepting what good things are worth waiting for.  Links and Resources:  Michael Yardney Metropole Property Strategists Metropole’s Strategic Property Plan – to help both beginning and experienced investors  Some of our favourite quotes from the show:  “Most Australians don’t teach their children anything about money, meaning, we’re raising our children to be financially illiterate.” –Michael Yardney  “The fact is, there’s no such thing as rich victims.” –Michael Yardney  “When it comes to a gadget or a fad, most of us just don’t have self-control.” –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