Property Investment, Success & Money | The Michael Yardney Podcast

The wealth gap is widening around the world. The rich get richer and the poor get left behind. But why does this happen? According to Tom Corley, the gap is really a parenting gap, not a wealth gap. In today’s episode, we’ll discuss 10 critical habits that the self-made wealthy learned from their parents. This will help you understand the lessons that you should be teaching your children to help them grow up to be successful. And if you haven’t yet learned these lessons yourself, it’s not too late to do so. 10 critical habits the wealthy learn from their parents  You create your life. Your life is not determined by the government, other people or external circumstances. You are the pilot of your life. Take responsibility when things go wrong. Don’t blame others or play the victim. Respect the law. When you break the rules, people don’t trust you and don’t want to do business with you. Seek your main purpose. Kids should experiment with different activities so that they can find and identify their true talents. Pursue your dreams and goals. Define an ideal future life. This creates clarity and helps you see down the road and focus your attentions. Acquiring wealth is a good thing. Wealthy people help fund charities, build hospitals and schools. They should be looked up to. Work hard for what you want. You don’t have to be born wealthy to attain wealth, but you do need to be willing to work hard for it. Respect other people’s property. You’re not entitled to something that another person has. Don’t expect others to give you anything. Improve yourself daily. Parents of self-made wealthy people teach their kids to focus on growth and knowledge. Use time productively. Don’t waste time on distractions. Use your time to learn and improve yourself. Make productivity a habit. Links and Resources: Michael Yardney Metropole Rich Habits Poor Habits Michael Yardney’s Mentorship Program Some of our favourite quotes from the show: “We know that mentors, models are really important in life because we learn a lot of our habits, the things we do on a regular basis, from things we see, things we hear, things we experience as a child.” –Michael Yardney “Clearly, when you make money doing what you love, it leads to a different sort of resilience, it lets you get through the difficult times because all businesses have their ups and downs and challenges. It leads you to your true calling in life. –Michael Yardney “You don’t have to be born wealthy. Most successful people today, we’re not born that way.” –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.

Successful property investors need to own the types of properties that are going to be in continuous strong demand in the future. Demand is driven by demographics. That means all real estate investors should become students of demographics, so in today’s episode, I want to discuss the major demographic milestones that Australia has recently reached. I’ll also share a mindset moment, with a lesson in the kind of people you should avoid. After that, we’ll chat with Ken Raiss about the five essential documents you need for Estate Planning. You really should know about these demographic milestones At the end of August 2018, Melbourne’s population was projected to reach five million people. Victoria accounts for over a third of Australia’s population growth. Melbourne had the largest annual population increase of any city in Australia’s history. Victoria is getting more migrants than anywhere else. All this population growth is a positive sign for the Victoria property market’s long-term prospects. Melbourne is projected to hit 6 million people by 2025, the same year Sydney is projected to hit a similar population. There’s an imbalance between the types of housing that’s being built with what key buying groups want and can afford to buy properties. There are three types of home buyers: first-time homebuyers, upgraders, and downsizers - remember home buyers make up 70% of the market.) Research suggests that demand from young renters and upgraders is going to be declining. First home buyers and downsizers will drive Australia’s housing market over the next decade. First home buyers are getting older. First home owners are looking for room to grow and the ability to add value. Affordability is also a concern. Downsizers are aged between 60-74. About ¾ of downsizers are couples or live alone. Downsizers are looking for low-maintenance, convenience, access to the same amenities near where they’ve been living, but smaller projects. 5 Critical Estate Planning Documents A Will – And this should be linked to a Testamentary Trust which protects your assets and greatly reduces potential taxes. Non-Estate Distributions – Your Superannuation is not technically yours and can’t be passed on in a regular will. You’ll need a Binding Death Nomination or Superannuation Will to pass on control of those assets. Enduring Power of Attorney – If you become unable to handle your finances before death, an enduring power of attorney can authorize someone to act on your behalf. These documents can be very broad or very specific, depending on need. Medical Power of Attorney – Allows you to specify medical wishes and after-death wishes like organ donation. Personal Details – A list of things like passwords, bank account access information, and other personal details that your surviving spouse or relatives will need after you’re gone. Links and Resources: Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Michael Yardney’s Mentorship Program Ken Raiss: Metropole Wealth Advisory Some of our favourite quotes from the show: “We must be cautious about who we surround ourselves with, because of both the short and the long-term implications.” –Michael Yardney “You need to surround yourself with people who can run circles around you in as many areas as possible, people who are exponentially better than you in a variety of ways. Because they’re going to help you grow to the next level.” –Michael Yardney “You can’t expect to live a positive life if you surround yourself with negative people.” –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’ll answer two listener questions. The first question is from Trent who is concerned about what will happen to our property markets if Labor Party’s proposed negative gearing and Capital Gains Tax changes are introduced. Then we’ll answer Joanne’s question about whether you need a will. In my mindset message I’ll talk about 20 regrets people have when they die. You may be surprised by some of them. House prices could drop 10% if ALP policies are introduced A report recently showed that house prices could slide by up to 9% in Sydney and Melbourne if the labor party gets into power and introduces its planned property tax changes. A report from RiskWise Property Research assessed the potential impacts of the proposed reforms to limit negative gearing to new rental dwellings and to halve the CGT tax discount. According to the report, an unintended consequence of the ALP policies would occur in the our national property markets where the proposed changes would be the equivalent to a sudden 1-1.5 % increase in interest rates. This could also cause housing prices to drop by 9 and 10% in certain parts of Australia. These proposals were first muted before the previous election, almost three years ago. But the housing market is very different now. Falling house prices are now making homes more affordable. Yet shadow treasurer Chris Bowen has said that the negative gearing and CGT changes are about making long-term structural adjustments rather than addressing the short-term property cycle Another issue is that property investors will be driven to buy new properties, both apartments (which will generally be in the CBD and houses (which are likely to be in the outer suburbs.) Both these types of property make poor investments because of their locations and will make even worse investments as, once purchased, will be established properties. However, in the long-term, property is going to remain a great long-term investment. Don’t allow these short-term proposed changes to not alter your long-term strategy. Remember…negative gearing is not a property investment strategy, it’s a short-term financial position. My strategy (and yours) should be to build as big an asset base as we can, so in the future we have choices. The bigger the asset base you have, the more choices you’ll have. There will be many, many changes to tax and superannuation laws between now and when you retire, so don’t change your long-term strategy because of short-term ups and downs. Do I need a will? Studies have shown that at least 45% of Australians do not have a will. With no will, the government will decide who gets your money according to pre-determined formulas It’s important to set up the right type of will. An estate lawyer is the right person to do that for you. How your assets will be distributed affects what taxes will be paid, the protection of those assets from one generation to another, and whether your assets end up where you intend them to go. You should have a couple of options for executor in your will, in case one person you’ve chosen doesn’t want the job or isn’t there. There are basically only four categories of people that can inherit superannuation: spouses, children, people who are financially dependent, and interdependent people. Different taxes apply within those groups. Shares and superannuation can be taxed in some circumstances. Links and Resources: Michael Yardney Metropole Property Strategists Ken Raiss – Metropole Wealth Advisory RiskWise Report – The Impact of Labor’s proposed tax changes Some of our favourite quotes from the show: “Another regret people had was not accomplishing enough. I guess the lesson is, start taking action.” – Michael Yardney “Everyone’s got their own idea of what risk is, but you know when you’re living too much in your comfort zone.” – Michael Yardney “Clearly one of the big benefits of having a will is it provides certainty on your death, it gives certainty about your wishes, how you want your assets passed on, how you want them divided.” – 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.

Who’s right about the property markets – the pessimists or the optimists? In today's Podcast you'll find out. Following a couple of booming years where property values in Melbourne and Sydney experienced double-digit capital growth year on year, our markets have moved to the next stage of the property cycle where price growth has slowed in some cities and property values have fallen – particularly in Sydney and Melbourne. Not surprisingly this is allowing some of the property pessimists on the internet forums to rub their hands in glee saying, “I told you so.” Sure, our property markets are experiencing a slowdown, but values are still rising in many locations, and yes prices are falling a little in some locations, however, we’re not in for a property crash and in today’s show I’m going to chat with Pete Wargent to explain why we’re not worried about a property market meltdown. Why our property markets won’t crash One of the most frequent questions I’m asked at present is “how long will this property market downturn last?” Another one is – “Will our property markets crash?” So if you are considering investing in property, or about to buy a home, it would be good to know the answer to these questions. But firstly, remember there is not one property market around Australia. Our markets are fragmented – not only is each state at its own stage of its property cycle, but within each state different segments of the markets are behaving differently. If there isn’t one market, it means it doesn’t really make much sense to say the “Australian property market” will crash, to look at this topic in a bit more detail I’ve got Pete Wargent on the line. What could cause a crash as opposed to an orderly drop in prices We’re experiencing a soft landing. On the other hand, a true collapse in house prices would require some large external shock such as: Unemployment high enough to trigger a wave of forced home sales. High-interest rates that would cause a raft of homeowners to default on their mortgages. Severe credit squeeze A severe recession that would cripple our economy. A significant oversupply of property. A halt to the rising population. Changes to government legislation making property investment less favourable. The fundamentals underpinning our markets World economy behaving itself Australian economy growing at around 3% No likelihood of an interest rate rise any time soon Our financial system/banks are in good shape Employment growth Strong population growth at a time when new constructions are slowing down Have not had a “crash” since the late 1890’s – we have corrections on a regular basis Underpinned by the high percentage of homeowners More families at household formation age (esp immigrants Oversupply of property limited to certain locations only – lots of secondary property and a shortage of A-grade property No real concern about the level of household debt – on the whole, it’s in the hands of those that can afford it No real concern about Interest only loans converting to P&I A culture of home ownership – 70% of us own or are paying off our homes The bottom line: For a number of years now bubblers and doomsayers have been predicting the bursting of Australia’s property bubble. They’ve told us we’re in denial about the impending gloom blinded by the consistent performance of our property markets over the last few years. We’ve just explained what could cause a property market collapse, but we’ve also explained why we don’t think we should be worried. However, we need to be vigilant. As investors, we need to be aware of what’s happening in the world’s economies as Australia does not operate in isolation. And needs to keep cognizant of what’s happening in our property markets Remember there is not one property market and some locations including Brisbane are going to outperform. BIS Oxford predicts an 11% increase in Brisbane property values by 2021. Strategic investors will take advantage of the opportunities our property markets will offer over the next couple of years maximizing their upsides while protecting their downsides. Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Michael Yardney’s Mentorship Program Pete Wargent Some of our favourite quotes from the show: “One of the things that’s been pushing up our property markets has been the rising population that’s been underpinning it, particularly in Melbourne and Sydney.” –Michael Yardney “This is just part of the property cycle. Don’t change your long-term strategy of wealth creation because of a short-term blip in the market.” –Michael Yardney “If you’ve got the cash flow, you’re going to get through.” –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.

To become a successful as an investor you need to own the type of property that’s going to be in strong demand not just now, but in the future as well. So on this week’s show I’m going to discuss a developing demographic change will affect the kinds of properties that will be in demand going forward. I’ll also share a mindset moment and explain why you need a guide to take you to the top of the mountain. And then, I’ll have a chat with Pete Wargent about household finance and mortgage stress. There is a lot of concern that mortgage stress will cause a property market meltdown. The good news is that this story will finish with a happy ending. A major demographic change all investors must understand For a long time, Baby Boomers have driven the property markets, because there were so many more of them than the previous generation Now, Gen Ys are beginning to shape the property markets The population growth in the 20-34-year-old age group has increased rapidly. There are now 5,5 million Australians (35% of our workforce) aged between 24-38. The Gen Y population growth is based on both the natural aging of the children of Baby Boomers and the strong overseas migration Gen Ys are now forming families and moving into homes Gen Ys prefer different homes from their parents. Rather than large houses in the suburbs, they prefer townhouses, family-friendly apartments, and smaller detached houses Gen Ys will seek affordable, smaller homes located closer to the locations where they want to be Gen Ys are looking for walkability, adjacency to parks, and access to public transport Will Mortgage Stress cause a property market meltdown? There’s no chance that 1,000,000 people will default on their mortgage in the next year like some of the property pessimists are predicting Only a very small share of loans are 90+ days delinquent There are more delinquencies in Western Australia because of the economic downturn In Sydney, Melbourne and Brisbane, mortgage arrears are very low Mortgage arrears for investor loans is even lower than that for home loans Links and Resources: Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Michael Yardney’s Mentorship Program Pete Wargent Some of our favourite quotes from the show: “Guides make all mountaintops attainable. And the same goes for success, and for building wealth.” – Michael Yardney “Why on earth would you try to figure out everything on your own when you can learn from someone who came before you?” – Michael Yardney “People have been talking about recession for as long as I’ve been commentating on markets.” – Pete Wargent 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.

Is the media killing our property markets and the economy?  Something is causing a crisis of confidence -- and it’s not the economic fundamentals.  But homeowners and property investors are scared.  They’re reading headlines like: Melbourne and Sydney house prices are falling $1,000 a week. A Shorten government will decimate the property market because of its proposed tax changes. One million investors will need to sell up their homes because their loans will convert from interest only to principle and interest.  No wonder they’re scared.  But should they be? Are the headlines right?  Today I’ll chat with Dr. Andrew Wilson, Chief Economist of MyHousingMarket.com.au and we’ll tell you what’s really going on.  Crisis of Confidence  The regularly reported ANZ-Roy Morgan consumer confidence index is below the longer-term average of 113 held since 1990  Investors are asking us at Metropole if they should sell  So, what’s changed? What’s scaring investors?  Remember, different consumers can be scared about different things but here are the factors that could explain it: I’ve never seen the media with as much negative press about house prices heading south – not even during the global financial crisis Headlines talk about rising interest rates. It’s harder to get money from the banks due to the restrictions placed by APRA and the Royal Commission has scared the banks, The Wentworth by-election result and the fact that we now have a minority Government. This may mean we have another Federal election, which might come sooner than the one expected in late May. The uncertainty of State elections in Victoria and NSW The stock market is pretty negative and crazy right now, with the S&P/ASX 200 index down over 6% in October. Low wages growth – increasing Petrol prices are now at the highest level in a decade, which has to be scaring households on tight budgets.  Highlights of the Interview With Dr. Andrew Wilson  You would have to go back to 2008 to see clearance rates consistently below 50% at this time of the year, and that was at the time of the global financial crisis. Currently, however, the drivers of the housing market are on the opposite end of the scale. We have a strong economy, unemployment numbers show that performance in the labor market is best in six years. We’re creating jobs, we have strong migration, there are booming first home buyer numbers, rents are increasing, interest rates are low and not increasing. Yet the market has lost its nerve.   Banks have tightened their lending which means fewer buyers, which means fewer sellers, and banks see the decline and tighten lending again. It’s a self-perpetuating cycle. When consumer confidence is high, it can take a while to shift it back. It’s even harder to shift low confidence to high confidence. Interest rates will probably go down before they go up again. We have strong fundamentals for property. There’s no financial crisis.  Links and Resources:  Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Dr. Andrew Wilson Some of our favourite quotes from the show:  “Those who can see the big picture opportunities and invest based on fundamentals, rather than making investment decisions based on the media, are going to take advantage of the opportunities the market offers them.”  – Michael Yardney  “The best way to reflect on your failures is to focus on the lessons that you’ve learned and the person that you’ve become, rather than spending your time avoiding failure.” –Michael Yardney  “It’s not the events that define who you are. It’s how you choose to react to what’s happening to you that defines who you are.” –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.

Who make better property investors – women or men? Up till now the answer may have depended on who you asked (or what gender they were) but neuroscientists have uncovered evidence suggesting that, when the pressure is on, women bring unique strengths to decision making and make less-risky decisions under high-stress situations.  According to the neurobiologist Ruud van den Bos, men under stress experience a huge spike in cortisol, which degrades their decision-making ability.   Women experience a smaller spike, which creates urgency but doesn’t impede decision-making. Every pundit and analyst in the business world has repeatedly pointed out that today’s business world is continually getting more stressful. The more stressful things get, the better that women (on average) will become at making decision than men (on average). So, the conclusion I have come to is that when the going gets tough, she gets smarter and you get dumber. And since disruptive innovation means the going is always getting tougher, if you’re not hiring and promoting women, you’re only proving how dumb you are. But back to property investment… Who make better investors? When it comes to property, men have a higher tendency to gamble and are more easily manipulated while women are usually more cautious, seeking low-risk and long-term sustainable capital growth. Riskwise found that Property marketers often use enticement by appealing to men's visual senses. For example, it's common practice for female models to be hired to stand beside professional sales people at property expos. A study of real estate agents who hired models in the past several years is revealing. Typically, the models increased the traffic to their booth by 50 to 100 percent, with a similar increase in the rate of high-quality sales leads, many of which converted into transactions. It was noted by these agents that even a short absence of the model resulted in an immediate and significant decrease in traffic to their booth. And you know those so-called free educational seminars which are designed by real estate spruikers to sell off-the-plan, and often low performing, new properties? Women are more likely to recognise that they are not the client at a free seminar and, in fact, the seminar organiser likely works for a property developer and has a contractual obligation to sell the properties for the highest possible price. Men, on the other hand, are more likely to be swept up in the hype and believe they are the client, and that the organiser of the free seminar will truly act in their best interests. Are women really better property investors than men? And if so, why? RiskWise research shows women are more aware of risks and seek tools to manage it; men tend to ignore the risks. Women's interest in risk and mitigation strategies is 38 per cent higher than men. In fact, studies have shown men are overconfident and have a higher tendency to gamble. Of course this is a concern in the property market, where high-risk ventures can have devastating consequences. Are there differences in the money behaviours of men and women? GAMBLING -- Women gamble less than men. Not only do fewer women gamble, but for the women who do gamble, they gamble less frequently. RISK TOLERANCE -- Men have a higher risk tolerance than women.  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. 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. COMMUNICATION -- Women are better communicators than men. 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. CREATIVITY -- Men are more creative than women. This is physiological. Men have a smaller corpus callosum. The corpus callosum is the bundle of neural nerve fibers that separates the right hemisphere of the brain from the left. Recent studies on creativity have shown that those with a smaller corpus callosum are hardwired for greater creativity. 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. 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 Rich Habits Poor Habits Michael Yardney’s Mentorship Program Some of our favourite quotes from the show: “We can’t make the big jobs in government or business any less stressful, but we can ensure that when the pressure rises, there’s a better balance between taking big risks and making real progress.” Michael Yardney “Gambling is a poor habit. It’s one of the habits that hold people back because they don’t recognize that it’s a tax for people who can’t do maths.” Michael Yardney “They come to the party with different talents, different skills, but if they combine them, work well together, boy have they got unlimited opportunities.” Tom Corley 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.

Who do you ask for property advice? With so many mixed messages and vested interests, who can you really trust? Our annual Property Investor Consumer Sentiment Survey revealed the many and varied sources that property investors consult for advice. But since most property investors fail to achieve the financial freedom they deserve, and with less than 8% ever owning more than 2 properties, a better question to ask would be…who should you be asking for advice? This week’s podcast is designed to help you cut through the clutter: Let’s start with who could you ask for property investment advice? Here are the people you could turn to: No One Friends or family A real estate agent A mortgage broker An accountant Financial planners A property marketer Investment seminars and workshops A property mentor A buyer’s agent When you look at this list you can now see why you need… an independent, unbiased property adviser or strategist. In my mind, it is critical to have a trusted advisor when making property investment decisions. It’s just too hard to do it on your own or by trial and error. There’s a huge learning fee involved — of time, money, effort and heartache. Here’s a list of some of the things a good property advisor can (should) do: A good advisor will first start by getting to know their clients’ hopes and fears and then be future-focused to help them achieve their long-term financial goals.  With so many mixed messages about property investing out there (many coming from parties with vested interests), a good property advisor will help remove his client’s anxiety by simplifying the complex. While most buyers’ agents or property sales people are transactional and think of the current “sale” or purchase, a professional property advisor will aim to develop a long-term relationship and help their clients understand the next two or three steps even before taking the first step.  Many clients come to a real estate advisor looking for the next big thing — some are looking for a shortcut, or the next hotspot, or a way to get rich quickly.Instead, a qualified property strategist will stop their clients speculating by recommending proven strategies that have always worked.  A good independent advisor will not have any properties for sale but will have a list of potential options and refer their clients to a buyer’s agent who is part of their team to find the best opportunity in the market to suit their client’s budget, plans and risk profile. A strategic advisor will never put any pressure on their client to make an investment decision, but their knowledge, research and experience will help their clients select an investment property that is the highest and best use of their funds, and one that will work hard for them over the long term. A wise property strategist will help their clients avoid the big mistakes made by the average investor and will earn their fees simply by helping their clients avoid the devastating errors made by many investors such as those who lost significant amounts of money by investing in mining towns, regional locations, house and land packages or off-the-plan properties. By being a student of history, a good strategist will be able to provide perspective, insights and often optimism at a time when the media is being pessimistic, and vice versa. They will also advise their clients to invest their money the way they do themselves — they must be experienced investors — not enthusiastic amateurs. A good strategist will regularly meet with their clients to objectively assess the performance of their property portfolio and ensure they are heading in the right financial direction. As you can see — it takes years of learning, experience and the perspective that only comes from investing through a number of property cycles to become a great property strategist. Let’s look at some things a property advisor can’t do: Even a good advisor cannot predict the future. They won’t be able to tell you how the market will perform, what will happen to interest rates or what capital growth rate a particular property will achieve.  They won’t be able to find the next hot spot for you, yet many so-called advisors suggest they can. In essence they give their clients what they are requesting, rather than what they need — sound, solid advice. Even the most qualified advisor won’t be able to pick the best time to purchase an investment property other than to remind you that the best time to invest was 20 years ago, and the second best time is today. A good advisor won’t be able to help you get rich quickly or achieve extraordinarily high returns without taking on extra risks.  What is the difference between a property strategist and a buyer’s agent? Buyers agents are order takers — they will fill an order given to them to find you a property and will be biased towards the areas they have expertise in, but this may not be in your best interests.   Only a property strategist has the expertise to design that “order” to suit your specific needs. They will be your long-term wealth creation partner, annually reviewing the performance of your property portfolio, and will provide recommendations on any opportunities as well as when it’s best for you to do nothing.  Here are some signs that you’re dealing with a property spruiker. They have a one-size fits all approach They don’t talk about the risks They talk a lot about investing but don’t do it themselves Beware of someone who: Has a stock list of properties to sell you. Offers you a property rather than an investment strategy. Red Flags Gives “advice” before they’ve found out all about you, your needs, your plans, your risk profile. Offers a “one stop shop.” Particularly if they want you to use their lawyers, rather than your own who should vet any contract carefully. Tells you that negative gearing is a sound property strategy (because it’s not an investment strategy at all — it’s a consequence of how you finance your property.) Suggests property values always keep rising. Offers a rental guarantee to sweeten the deal. Pressures you into saying yes quickly to whatever it is they’re offering, whether it’s deciding to attend a seminar, signing up with their company to gain advice and any other sales tactics. Downplays the risks and related costs that are involved in property investing, and/or has an inability to substantiate their claims of profit and success. If they’ve helped so many people achieve success, where is the proof of that? Links and Resources: Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Michael Yardney’s Mentorship Program Michael Yardney's Property Renovations and Development Workshop Some of our favourite quotes from the show:  “While they may know their local neighborhood, that’s very different to understanding property markets and property investment.” – Michael Yardney “Some mentors are thinly-disguised salespeople.” – Michael Yardney “Put simply, if the advice is free, you’re the product.” – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.

If you want your property investments to outperform the averages, then you need to find locations that outperform the averages. This means you need to understand how to know how to identifying areas that are gentrifying. Gentrification is what happens when a poorer suburb is gradually taken over by more affluent residents. This in turn results an increase in rents and property values. In today’s show, I’ll explain how to find this type of location. I’m also going to tell you a story taught to me years ago by one of my mentors – the story of a Fijian fisherman. And, as you might have guessed, it has nothing to do with fishing Finally, I will have a chat about depreciation with Mike Mortlock. Depreciation is an allowance for the wear and tear of your investment property. Recent changes have been made in how much depreciation you can claim and what properties you can claim it on, and it’s important to understand how this may affect your investment properties. Areas that are gentrifying have: Some of the steps you can take to find a suburb that is improving is to go for a drive and a walk.   You’ll “know it when you see it” because you’ll find evidence that people with money are moving in. They will be spending large amounts of money renovating or extending their homes. There will be white (the new black) SUV’s parked in the driveways rather than old Ford Falcons and Holden utes. The nature of the shops is changing. The gyms are offering Pilates; the cafés sell cold press coffee, and the deli’s serve goat’s cheese pizza. As a property investor, if you can pick an area going through gentrification, one that’s shifting from dreary to in demand, you can benefit from its accelerated growth. And the good news is that you don’t have to get your timing perfect — the gentrification process lasts a number of decades. Things to look for: Growing incomes Top-end cafes or restaurants and higher-end stores Proximity to the city or the water A ripple effect caused by being adjoined to a more expensive neighborhood Amenities like access to a good public school or public transportation Character features, like older houses that are ready to renovate Investment from the local government in infrastructure or beautification programs What property investors need to know about depreciation: In May 2017, the government changed what could be claimed as depreciation. There are two types of depreciation – depreciation of the building itself, and depreciations of the items inside the property. The changes affected properties purchased after May of 2017. Depreciation deductions have been almost halved for people affected by the changes. If you buy a new property and rent it out, you won’t be affected. However, if you buy an investment property and move in before renting it out, it will be considered previously used. Properties built after September 1987 will still have depreciation deductions on the building structure. Improvements on homes built in the 60s and 70s will also qualify for depreciation deductions. If you renovate the property and install new assets yourself, you can claim depreciation deductions on those. Links and Resources: Michael Yardney Metropole Michael Yardney's Property Renovations and Development Workshop Mike Mortlock – MCG Quantity Surveyors Some of our favourite quotes from the show: “Over the last couple of decades, the process of gentrifications saw these ugly duckling suburbs transform into graceful swans.” “Just because a suburb is cheap and there are cheap properties there doesn’t mean it’s destined to become the next growth area.” “Don’t chase happiness, recognize it. If you don’t enjoy the journey, you won’t enjoy the destination.” 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.

You rarely see psychology discussed alongside business and investment, but I believe that psychology is foundational to entrepreneurial success. Your mindset matters when it comes to achievement. In today’s episode, I’m going to chat with Pete Wargent and discuss his 6 rules for wealth creation. Some of them may surprise you. 6 Rules for Wealth Creation: Increase Your Self-Esteem – People with low self-esteem may unconsciously sabotage their own success, because they don’t believe they deserve it. Work on retraining your brain to think positively. Think Long-Term – True wealth is built slowly over time. Follow this principle and exploit the power of compound growth. Study and Counsel with Wise People – If you want to be successful, learn from successful people. Mentors can help you realize your full potential. Pay Yourself First – Make yourself your first priority. Save and then invest a decent sum first, then pay your other bills. Control Your Expenditures – You need to know where your money is going. Study your expenditures and see how you can close gaps where you’re spending money unnecessarily. Take Action – You can’t be successful if you never make a move. Take massive and consistent action and refuse to give up. Links and Resources: Michael Yardney Metropole Property Strategists Rich Habits Poor Habits Michael Yardney’s Mentorship Program Michael Yardney's Property Renovations and Development Workshop Pete Wargent Some of our favourite quotes from the show: “You can change the way you think about yourself, you can change your habits, you can upgrade your financial thermostat, and that’s through personal development.” – Michael Yardney “Most of what you do all day is unconscious, is at the subconscious level. You don’t even realize it.” – Michael Yardney “I think the message is spend less than you earn, and then save that difference, and overtime invest that money.” – 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.