Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

Australia may just have side-stepped another recession by the skin of its teeth after recording a small uptick in GDP growth over the June quarter. After an initial "miracle" V-shaped recovery, our economy did a U-turn as much of Australia was locked down at the end of the June quarter. And economists seem united about the outcome of the current September quarter – we will be seeing a steep drop in economic output. So what's ahead for our economy and our property markets, that's what I'm going to be chatting about with Australia's leading housing economist Dr Andrew Wilson today. And while you'll hear him give six reasons why we are optimistic about the economy moving forward, you'll also hear why we won't have the miraculous V shape recovery many were expecting. Now if you have been a subscriber to this podcast for a while or followed my blogs or YouTube videos you'd know for the last 3 years I have recorded a weekly Property Insiders video chat with Dr Andrew Wilson. And his assessment of and forecasts for our economy and property markets have been remarkably accurate so whether you're a beginning property investor or an experienced I'm sure you'll benefit from my chat with Andrew today which is the audio of one of our recent Property Insider videos. I'll leave a link in the show notes so you can see all the charts that support the information we'll talk about, but in general that won't be necessary – Andrew explains his position well. I'll also be sharing my regular mindset message where I'll discuss 5 common money myths and mistakes I'm seeing many people make. There will be a lot written in our history books about the Coronavirus pandemic, how the world changed, how we live and the economic fallout that resulted from it. Last year there were a lot of letters being tossed out about the shape of the economic recovery from the short sharp recession Australia experienced: U, V, W, etc. There was even talk of a Nike swoosh shaped recovery. Well, the recession we had last year was not a normal recession. Government lockdowns and the fear of getting sick kept consumers at home, while the shutdown of supply chains, shortages of workers, the inability to source inputs, and the sudden fall in international tourism, students and migrants devastated businesses. Then all of a sudden it looked like we experienced a V-shaped recovery marked by a steep, dramatic decline in the economy in the middle of last year (the first half of the "V"), followed by an equally rapid upturn to pre-recession levels, (the second half of the "V"). But just look what's happened over the last few months with half of Australia in lockdown at a time that many of the government supports measures we enjoyed last year not there anymore. So, what's next for the Australian economy and for our property markets? These are some of the questions I'll be asking Australia's leading housing Economist, Dr Andrew Wilson chief economist of My Housing Market Our economy lifts again and posts record growth over the year Australia may just have side-stepped another recession by the skin of its teeth after recording a small uptick in GDP growth over the June quarter. After an initial "miracle" V-shaped recovery, our economy did a U-turn as much of Australia was locked down at the end of the June quarter. And economists seem united about the outcome of the current September quarter – we will be seeing a steep drop in economic output. In today's podcast Dr. Andrew Wilson gives 6 reasons why he's confident about Australia's recovery. Australia dodged a recession with strong economic growth over the last year. Australia's economy (as measured by gross domestic product GDP) grew by 0.7% in the June quarter after rising by 1.9% in the March quarter. Over the year economy grew by a record 9.6% – admittedly of a pandemic and use low base. The level of the Australian dollar and the strength of our share market are a good indication of what's ahead. Unemployment levels are low, and our participation rate is high Australia's economic recovery is creating jobs. Interestingly the number of Australians working multiple jobs has never been higher, as insecure work surges. The economy is creating jobs but not necessarily the ones Australians need. The latest ABS figures have peeled back another layer on the labour market, revealing Australians are doing it far tougher than the headline number would suggest. The number of people working multiple jobs surged by 15,100 in the three months to June to its highest number on record. Over the last 12 months, the number of Australians with at least two jobs has swelled by 32.6%. Headline unemployment fell to 4.6% in July, ahead of expectations and despite lockdowns coming into force. As economists have pointed out, the 'improvement' has largely been the product of hordes of people giving up on finding work altogether, discounting them from the survey. It shows in the fact that over the month Australians worked 3 million hours less. At the same time, opportunities to get into the workforce are declining. On the back of eastern state lockdowns, new job ads have declined nearly 10% while total job vacancies hit a ceiling. Despite all the challenges consumer confidence is holding up well. Strong consumer sentiment is important for our property markets and for our economy in general. When we don't feel confident about our financial futures we don't spend, and in particular we don't buy high ticket items like new homes or investment properties. Australians are richer than ever Rising house prices and a stronger share market and increasing dividends from stocks mean Australians are richer than ever before. Aussies have stashed their cash Over the last quarter the Household Savings Ratio eased from 11.6% in the March quarter to 9.7% in the June quarter, but thanks to lower mortgage rates and the raft of government stimulus measures rolled out over the past 18 months Aussie households are sitting on a record war chest of $1½ trillion in cash, so when we are let out of our Covid Cocoons we'll be keen to spend it. Australians have wiped $1.1 billion from their credit card debt in a single month A surprising financial upside to spending so much life indoors is that Australians have wiped $1.1 billion from credit card debt in a single month. Coinciding with the first full month of NSW in lockdown, Australians have managed to pay off over $1 billion in personal credit card debt according to the latest Reserve Bank of Australia credit and charge card data. It seems that as households settled into lockdowns in New South Wales and Victoria during July, they locked away their credit cards and began paying down their debts. That saw credit card spending plummet 11.4 per cent to $19.5 billion in July. The value of purchases dropped by 9.29% or $2 billion in July with the total value of purchases sitting under $20 billion for the first time in 9 months, while the number of purchases also dropped by 15 million from the month prior. The lockdowns obviously offer limited opportunities to spend on credit cards and have prompted many people to prioritise paying down debts amid growing economic uncertainty. Resources: Dr. Andrew Wilson, chief economist My Housing Market Subscribe to my weekly Property Insiders video chat with Dr. Andrew Wilson – www.PropertyInsiders.info As our property markets move forward why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors. Get a bundle of eBooks and reports www.PodcastBonus.com.au Shownotes plus more here: Here's 6 reasons why we're optimistic about Australia's economic recovery, with Dr. Andrew Wilson Some of our favourite quotes from the show: "Another positive for our future is that Australians, in general, are richer than ever." – Michael Yardney "Becoming financially free is about your habits." – Michael Yardney "Money shouldn't be feared, shouldn't intimidate you – it's merely a means to an end." – 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 you just starting out in property investment? What fee will you choose to pay? You're probably hoping for none. In today's show, we're going to talk about learning fees that you could end up paying as a property investor. While some are obvious and paid-up front, it can quite often be the less obvious fees how much they may cost you over the life of your investment. And if you're not looking for them, some of those fees may appear not to have a cost at all – at least not one that you discover until later. So it's important to know how to look for them. Let's take a look at two fees you should avoid and one that you shouldn't 1. The Built-In Fee Beware the shiny brochures, champagne launches, rental guarantees, slick sales offices, and other false prophecies. You are paying a fee for all of this, on top of the kickbacks and commissions for all and sundry. It is all built into the purchase price. On a $1 million purchase, that means you could be giving the developer anywhere from $50,000 - $200,000 and that should be your money- not his. 2. Opportunity Cost It can be difficult to admit that we got it wrong and easier to hold onto an asset in the hope its time will come... someday! Pride, ego, and emotion can get in the way of making a logical and rational decision. Just 1% or 2% growth better growth per annum may sound like an insignificant amount, but just look at the difference it makes over decades. The results can be gobsmacking, with the learning fee running well into the hundreds of thousands of dollars, even millions in some cases. 3. Up-Front Fee Then there is the up-front fee. The concept being that you pay someone a learning fee before you just jump in. You pay them to ensure you get efficient and effective results, in the shortest possible time frame. Your independent strategist can assess your situation and provide a solution and as a result, they are paid to help you arrive at the outcome. You'll find the most expensive advice you get is free, and the best value advice you'll get will cost but stop you from making the mistakes the average investor makes – and this is worth a fortune. 6 More Learning Fees You Don't Want To Pay as a Property Investor. The "Oops, I bought the wrong property "learning fee" Did you know that statistics show 20% of investors sell up their property in the first year and 50% in the first 5 years? So, you decide to sell within the first year or two and regardless of what price you sell the property for, you need to remember the huge costs associated with buying and selling real estate. There's the stamp duty when you bought it (plus the stamp duty for the new place), legal fees when buying and selling, selling agent commissions and marketing costs and, of course, the cost of moving twice in quick succession. This means your learning fee is likely to be tens of thousands of dollars and more when you take into account lost opportunity costs. The "capital non-growth" learning fee This is the fee that you pay when you buy an investment with poor capital growth because it's in the wrong city, suburb, or street. Perhaps it grows at 2 or 3 percent per annum when buying the right property may have achieved 6 or 7 percent capital growth – it may not seem like a lot, but adds up to more than you think. The "renovation reality" learning fee This is the learning fee that you must pay when you realize that renovations are hard work and not as easy as the reality TV shows or property blogs would suggest. This learning fee could easily cost you tens and tens of thousands of dollars as well as a waiting period of many years as you wait for the market to improve enough to get your money back. The "I got eaten by a shark" learning fee Here we have Sam and Susan, a couple of 25-year-olds who charge off to one of those investment property seminars that promise you'll make a million dollars in six months. Instead, our bright young things end up knee-deep in cash flow tables, bank documents, and a signed investment home contract that results in their off-the-plan, out-of-town, so-called whiz-bang investment property growing at a miserable 1.3 percent per annum over the next 10 years. The learning fee in this scenario is especially scary as that "shark advice" could end up being a millstone around their necks for many years. The "buying with emotion" learning fee You can end up paying this fee in 2 ways. Firstly, when you fall in love with a property and overpay. Now while this may be allowed when you buy your home, it's a big mistake for property investors. The second way you pay this fee is when you miss out on an opportunity because you have an unrealistic expectation of what the property's price is and offer well below an acceptable price. The "negotiation" learning fee This is the extra cost to you when you are too afraid or too inexperienced to negotiate on price. Many property purchasers are shark bait to real estate agents who are highly trained negotiators who are taught how to get the top dollar for their clients – the seller. So what should a property investor or home buyer do? Rather than pay a learning fee to the market, why not pay a buyers' agent to act on your behalf during your property investment journey? Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Get a range of my ebooks here: www.PodcastBonus.com.au Shownotes plus more here: Warning Property investors must avoid these learning fees at all costs Some of our favourite quotes from the show: "Despite the alarming statistics highlighting how badly the majority of investors get it wrong, many investors still just want to go it alone." – Michael Yardney "There's definitely locations and certain properties that so far this year, despite the strong growth, haven't been growing much at all." – Michael Yardney "Positive thinking breeds rich habits." – Michael Yardney PLEASE LEAVE US A REVIEW Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

What's the outlook for the Australian property markets for the rest of 2021 and beyond? This is a common question people are asking now that our real estate markets are experiencing the challenges of lockdowns. However, despite a sequence of fifteen State or Territory lockdowns so far this year, property prices have been largely unscathed. And even though the rate of house price growth is slowing, property values keep rising in almost every market around the country and our capital cities are in line for strong double-digit property price growth this year. So what does an investor need to do to succeed in today's market? Some rules will be different while others will remain the same. In today's show, I'm going to chat with Brett Warren, about nine rules that you need to follow to succeed in today's property market, so welcome to today's show. Then you'll hear my mindset messages about happiness. Rules for Property Success Let's look at 9 key beliefs for property investment, no matter what point of the economic or property cycles we are in. Rule 1: Your long-term aim should be capital growth Capital growth, or capital appreciation, is simply an increase in the value of your investment over time. And this should be the ultimate goal for every property investor. Because while cash flow keeps you in the investment game, it is capital growth that gets you out of the everyday rat race. Rule 2: Demographics will drive our property markets Understanding demographics could and should be the final piece of the puzzle for you during the decision-making process. After all, we are looking for locations that can ride out a downturn and produce above-average rates of return in the good times. And Covid-19 lockdowns are accelerating this trend further as a large chunk of white-collar workers realize they can easily work remotely and neighbourhood has become more important to them than ever. Rule 3: Location, location, location Find a location where there is strong economic growth which will lead to job growth which will lead to population growth which will lead to demand for housing. Then, given the long-term trend of the rich getting richer and the widening gap between the rich and the average Australian is not going to change, you should look at wages. And you should only buy in areas where the local demographic has higher income levels so they can afford to both improve and pay more for properties. Rule 4: Remember rent affordability is linked to wages As with the above, make sure you take into account the local going rate for rent when researching an investment property. Because, as obvious as it might sound, rent affordability is linked to wages. When you eventually retire and enjoy the longest holiday of your life, your income will depend upon your tenant's ability to pay the rent. Rule 5: Focus on continued strong demand Location is one thing but buying the right type of property in the correct location is also very important. Investors should always look for a property that will be in continuous strong demand by owner-occupiers. If you can walk out of your home and you're within walking distance of, or a short trip to a great shopping strip, your favorite coffee shop, amenities, the beach, a great park, you will appreciate the benefit of the third-place – the importance of your neighborhood. Rule 6: A brand new property is like a brand new car Depending on the make and model of the car, you can lose anywhere between 10% – 15% of a new car's value disappears once you drive it off the dealership lot. And you can apply the same concept to those brand-new properties you've been looking at. So, remove the emotion of looking for something shiny and new. Rule 7: Have a financial buffer in place Always, always have a financial buffer in place to see you through the rainy days. How much you need as a buffer varies depending upon your money management skills and cash flow circumstances, but it is often wise to hold between 6 and 12 months of living expenses in an offset account. Rule 8: Be careful who you listen to Remember, as with anything, there will always be pessimists around willing to give their two cents worth of advice. And they're usually wrong. While the Property Pessimists and Negative Nellies will tell you to avoid investing in property, there will always be people who tell you to buy property, or to buy a particular type of property or in a particular area. But make sure you're wary of their hidden agenda. These people are likely to represent the seller, not you. Rule 9: Avoid negativity Similar to the above, when embarking on your property investment journey, try to avoid the negativity. Sure, the future is uncertain, Covid-19 and continued lockdowns are taking their toll on us all, closed borders are leaving many frustrated, and climbing property prices might cause a feeling of despair for some. But as the saying goes: This too shall pass. The bottom line It is always the property fundamentals that really matter. The long-term view outsmarts short-term thinking. Over the last year or two, the residential property market has shown its resilience. People will always need somewhere to live, and homes are the true "safe haven" in the current environment. It is always challenging to invest when everyone else is running around worrying about the end of the world. But you shouldn't make 30-year investment decisions based on the last 30 minutes or even the last 30 days of news Resources: Michael Yardney Brett Warren – National Director Metropole Property Strategists Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Shownotes plus more here: 9 rules for success in today's property market with Brett Warren Some of our favourite quotes from the show: "The middle class are disappearing at the moment, and there is a stark divide between rich and poor." –Michael Yardney "We've got to understand that location is going to do the heavy lifting." – Michael Yardney "No matter how carefully you assess every situation, we often end up in relationships that have soured, or things that once excited us become boring." – 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

Why have you been so successful in reaching some of your goals, but not others? It turns out that even brilliant, highly accomplished people are pretty lousy when it comes to understanding why they succeed or fail. It's not as simple as you are predisposed to success because you were born with certain talents or lacking in others. That's just one small piece of the puzzle, so today we're going to discuss nine surprising things that successful people do differently from the average person in this month's Build a Business Not a Job podcast with Mark Creedon. Three Categories of Thought The question of how the wealthy think was discussed in our private Facebook Group for Business Accelerator Mastermind. This opened up some great discussions amongst our tribe that we want to share in today's podcast. There are nine thoughts we're going to discuss, and they fall into three categories. What is their internal process – how are they thinking? What is their focus? What are they doing? How successful people think They see themselves as the creator of their wealth – the creator of the circumstances. They take responsibility for their lives They are committed to the process of wealth creation – Not just interested, but continuously thinking about how their actions might produce or erode wealth. They're constantly doing the work. They think big – They think what if it were possible, how could we do it, instead of assuming things aren't possible. What Successful people focus on They manage themselves first – Their mindset, their behaviours, their attitude, their actions, their growth. They are value-driven – The wealthy understand we are living in a value exchange economy – they don't focus on price or cost; they focus on adding value to others They are net worth focused. They are focused on building a portfolio of assets – Real Estate, shares, a business that will deliver multiple income streams – a money machine that allows them to live their life without putting a lot of effort in. What Successful people are doing? They play to win - While the average Australian plays not to lose, the wealthy are playing to win They are in a constant state of self-growth - they are constantly trying to grow, improve, have a bigger impact. They run in successful circles – You should surround yourself with people that will hold you to a higher standard and help you get to the next level. Links and Resources: Why not join Metropole's Business Accelerator Mastermind Learn more about Mark Creedon – Business Coach to some of Australia's leading entrepreneurs Get a copy of Mark's new book here – Have a business not a job Get a heap of special reports and eBooks here- www.PodcastBonus.com.au Shownotes plus more here: Here's how the wealthy think differently from the average Australian, with Mark Creedon | Build a Business not a Job Some of our favourite quotes from the show: "The benefit of a Mastermind team is you come up with a lot more." – Michael Yardney "What you're committed to will rise to the top when you look at those actions, and what you're just interested in maybe you're not going to have achieved." – Michael Yardney "There's that third group of people who are what we say on the green line, where they're actually taking advantage of this uncertainty period to set themselves up for when we get through all this." – 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 are your mentors? Who do you turn to for knowledge, to help you set goals, to help support your growth, to help you keep accountable, and to offer encouragement? It's impertinent to think that you can achieve the type of success on your own that took others decades to achieve. I guess mentors are a shortcut to success and they also stop you're going down the wrong path and point you in the right direction. Stand on the shoulders of your mentors and you'll be able to see a lot further. Despite having a very substantial property portfolio, and a very successful national business, I still have coaches and mentors in today's show I'd like to discuss with you how I got Warren Buffett as one of my mentors. I'm also going to have a chat with Brett Warren about the type of properties that could end up the equivalent of the disastrous mining towns that we saw a couple of decades ago so that you will avoid them. How I Got Warren Buffet As My Mentor I found the perfect mentor early in my investing career: Warren Buffet. In fact, Warren's been mentoring me for quite some time now and it's been inspiring. But to be honest… I've never actually spoken to him. And he's not really a property expert. But he's generously created a means for me to get inside his head and learn how he thinks about investing. We have access to his way of thinking through his annual letter to the shareholders of his company Berkshire Hathaway. One of the early lessons I learned from my mentor was: "Be greedy when others are fearful (like now) and fearful when others are greedy." Here are three lessons I took from his thoughts: Fear and greed drive our markets and cause them to cycle – all too often too far in both directions. Trying to predict these market cycles is a fool's game. As an investor, you simply need to know that these cycles keep recurring and be prepared not to overreact. WARNING: What Will Be the "Mining Town" Type Investment of This Decade? With Brett Warren I've been investing long enough, close to 50 years now, to see many fads come and go. I'm old enough to remember timeshare – the ability to buy a week or two's worth of property if you couldn't afford to buy the whole property and share the property with a bunch of other investors who simply couldn't afford to own a property. We did turn that into a disaster. Then there was the fad of investing overseas – I remember there was a time when you could buy a property in the United States for the price of a car here – 30 or $40,000. Of course, you can imagine the type of property you would buy at that price and how naïve investors lost out, but promoters made a fortune. And then there was the mining town investment fad of the late 2000s. It began in around 2003 when prices for commodities like iron ore and coal began rising, and this led to significant mining infrastructure construction causing a property boom in many mining cities and towns around the country. Property hot-spotting websites popped up and many naïve investors bought "investment" properties in places they'd never even visited. Unfortunately, when the boom ended and infrastructure spending in these tiny one-industry towns stopped, and there wasn't a requirement for tenants in these small one-industry mining towns, property prices in these locations began to free fall. So, what will it be this time around? Warning signs for inner-city high-rise apartments There are already some major warning signs that these apartment owners may face: Structural Defects – Newer high-rise apartments are not like the old "solid brick" construction blocks from the 1970s or '80s and builders now opt for cheaper products to cut costs and boost profits. Fire Issues – The inferior cladding being used is a case in point for above, with 629 buildings in Vic and nearly 450 across NSW at risk. Water Issues – While more of a nuisance, the leaking balconies, showers, and roofs can usually be fixed, but it comes at a cost. High Commissions and costs – Kickbacks, commissions, champagne sunsets, and rental guarantees are all built into the purchase price. COVID Changes COVID has also forced a host of changes, in particular closing our borders and the way we want to live. The high-rise, inner-city apartment is often in high demand from overseas investors, new arrivals, and students that come to study here. This means that many new planned projects may not have enough presale take up to even get off the ground. In Summary Will the inner-city, high-rise apartment, become the mining town type investment over the next decade? There are ample examples of structural and building issues on top of high commissions and demand for certain spaces post-COVID. Despite that, some investors and homebuyers will be drawn in by perceivably cheap prices. These types of properties are cheap for a reason and that will remain so moving forward. Resources: Michael Yardney Brett Warren – National Director Metropole Property Strategists Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Collect your property reports and ebooks here: www.PodcastBonus.com.au Shownotes plus more here: How I hired Warren Buffet as my Mentor | These will be the "mining town" type of investments this decade Some of our favourite quotes from the show: "Evidence is overwhelming that we know much less than we think we do." – Michael Yardney "The lens through which you see the world shapes your world." – Michael Yardney "There's a whole generation of new people coming in who don't know the hard-luck stories that people have experienced in previous cycles." – 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 have a better lifestyle you don't actually need to earn more money, you just need to use the money you earn now in a better way. These are the words of my guest in today's podcast, Angela Santalia, who has written a book called The Money Messenger, and today you'll hear her thoughts on how to control your money and live the life you want. Now while many people listen to this podcast because they're interested in property investing, money management is a critical part of any type of investing, and especially real estate investing. You need good money management to save your first deposit and once you own a property or two, money management is even more important. And even if you don't have money problems, I think you'll enjoy my chat with Angela today as she says she has some financial strategies to become wealthier by making your money work for you. And of course, I will also be sharing my regular mindset message with you. The Money Messenger Navigating the world of personal finance can be overwhelming, yet with some smart planning, a good strategy, and an understanding of the basics you should be able to develop the money-management skills you need to get your finances under control. Angela Santalia has over two decades of experience working in the Australian Financial Planning industry as a Financial Paraplanner Strategist. Her clients are other financial planners and through her experience, she has learned a lot about money, people, and which spending habits do and don't work. Angela runs a thriving website called The Money Messenger, which features a blog, resources, tools, YouTube videos, and more where Angela shares her money management knowledge with the public. Angela was 'Young Investor of the Year' Runner Up in 2017 for Your Investment Property Magazine. Subjects Angela and I discuss: Angela's The Money Messenger blog, where she aims to get young Australians talking about money. Angela shares her own financial planning and investment experience along with tools and resources. Angela believes that young people need to learn about money because the things you do in your 20s and 30s continue to affect you in your 40s and 50s. Financial mistakes can follow you for years. Angela explains that young people may have parents that don't necessarily understand money either. Life is also very different now, with different job and life roles, different kinds of debt, and different family structures at different times Young people today also want more freedom, choice, and flexibility than their parents had. Angela recently published a new book, The Money Messenger She wrote it because she saw a problem with a lack of financial knowledge among people in their 20s and 30s. People in their 40s also like the book and wish they'd had it when they were younger. The purpose of The Money Messenger is to teach readers how to get wealthy by using their own money correctly and investing wisely Angela explains why people need more than one bank account. She also talks about the importance of paying off credit cards. According to Angela, one of the biggest complaints from millennials is that they can't save. Most other complaints stem from that main one. Angela believes that young people need a plan for the future and that they'll never have enough without investing. Resources: Michael Yardney Angela Santalia – The Money Messenger As our markets move forward why not get the team at Metropole to build you a personalized Strategic Property Plan – this will help both beginning and experienced investors. Get a bundle of eBooks and reports www.PodcastBonus.com.au Shownotes plus more here: You can't control everything in life, but you can control your money Some of our favorite quotes from the show: "In fact, the average Australian's wealth grew more in the last year than it did during the preceding three years combined." – Michael Yardney "Part of the reason you can't save is because you've got no idea where your money's going." – Michael Yardney "The truth may hurt, but the world doesn't owe you anything." – 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

As the world works its way through the confronts of the Covid related economic issues, lockdowns, and health challenges, one thing has become clear. The rich keep getting richer. They seem to do this through pandemics, through good times and bad. And this has led a lot of people to ask why? How? What do they do differently? That's what we're going to discuss in today's Rich Habits, Poor Habits episode of the Michael Yardney podcast. Even if you come here to learn about property, success or money, at the end of today's show you're going to understand some new research that Tom Corley has uncovered which should help you in your future endeavours. The Four Paths to Wealth There are four predominant paths toward accumulating wealth. The "Savers-Investors" path is the easiest, while the other three involve much more risk. The Saver-Investors path Just less than 22% of the millionaires in Tom's study chose to take the Saver-Investors path. Not only is it the easiest way to build wealth, but if you start early, it almost always guarantees a lot of money. The Saver-Investors had four things in common: A middle-class income A low cost of living and preference for saving to save A habit of saving 20% or more of their income. An early start to investing their savings The Dreamers path This is perhaps the hardest path to building wealth because it requires the pursuit of a dream, such as starting a business, becoming a successful actor, musician, or author. Approximately 28% of the folks in Tom's study were Dreamers, and they accumulated an average net worth of $7.4 million — far more than any of the other groups — over a period of about 12 years. Those who want to take this path, however, must be willing to work long hours and able to handle financial stress. The Dreamers in my study worked more than 61 hours per week before finally achieving their dreams. Weekends and vacations were almost non-existent. The Company Climbers path Climbers are individuals who work for a big company and devote all of their energy to climbing the corporate ladder until they land a senior executive position. This is the second-hardest path to becoming a millionaire, and about 31% of the rich people I studied fell into this group. It took them an average of 22 years to accumulate a net worth of $3.4 million or more. In most cases, their wealth came from either stock compensation or a partnership share of profits. To be a Climber, you must have strong relationship-building skills. Networking and making lasting connections with powerful people in your industry are essential. The Virtuosos path Roughly 19% of the participants in Tom's study chose this path. Virtuosos are among the best at what they do in their profession. They are paid a high premium for their knowledge and expertise, which sets them apart from the competition. It took the Virtuosos in my study about 20 years to reach an average net worth of $4 million. Some worked in the medical field, while others worked in law. A handful either worked for large, publicly-held corporations, or they were small business owners with highly profitable enterprises. Links and Resources: Tom Corley - Rich Habits Michael Yardney - Metropole Get your own copy of our international bestseller Rich Habits Poor Habits 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: You really need to understand the 4 different paths to wealth | Rich Habits, Poor Habits With Tom Corley Some of our favourite quotes from the show: "I think something we should remind people is that most millionaires weren't born that way." – Michael Yardney "Entrepreneurs often have to count their pennies carefully in the early days." – Michael Yardney "You need resilience, because you're going to have troubles, you're going to run into challenges, there are always going to be hurdles." – 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 resurgence of Covid-19 across the country is causing concern. It wasn't that long ago that we experienced minimal, or no cases of Covid around Australia and we thought we had this Coronavirus thing licked, and all of a sudden we are confronted with lockdowns, uncertainty, and everything that goes with it. As Australia's circumstances continue to rapidly evolve, many are wondering what this means for the economy and our property markets. As our property markets don't operate in isolation, to be a successful, strategic investor it's important to have a telescopic view – a big picture view of the macroeconomic factors affecting not just Australia's economy, but the world economy and that's why each month I have these Big Picture podcast chats with Pete Wargent, a lifelong student of and commentator on our economy. After that, I'll share my mindset message. The Big Picture When we recorded last month's Big Picture Podcast Australia's economic recovery was continuing to unfold, jobs kept being created and our property markets keep surging. And this month's headlines are full of concern and mixed messages. Let's look at the macroeconomic factors affecting our economy and the property markets to help gain some clarity about the future. Some of the topics that Pete and I discussed: Monetary policy is not going to change based on the current interruption to the recovery Although the new lockdowns and restrictions will have costs to the economy, the banks remain optimistic It's also expected that the current surge will be a temporary problem and that economic conditions will bounce back quickly once it's over Despite the negative news, household wealth in Australia continues to boom This is a good sign for consumer spending. Property prices have been largely unaffected by the lockdowns Property values continue to rise, even though the rate of house price growth is now slowing Renters, however, are having difficulties and facing rental stress The Federal Labor party has formally dumped its contentious negative gearing policy and dropped its opposition to the federal government's stage three tax cuts for high-income earners. The shape of the recovery is changing again. It was previously touted as a V-shaped Now, it's being described as a K-shaped recovery, with jobs in public service and big business on the risking arm of the K and tourism, hospitality, and small businesses on the falling arm. The current surge of the Delta strain of COVID has affected the recovery and may continue to cause problems. As a more significant part of the population is vaccinated, lockdowns and restrictions will become rarer The economy will continue to rebound as that happens If household wealth continues to remain high and grow, it sheds a positive light on recovery over the next 6-12 months. Resources: Metropole's Strategic Property Plan – to help both beginning and experienced investors Gets your bundle of eBooks and reports here: www.PodcastBonus.com.au Join Michael's Property Update private Facebook group by clicking here Pete Wargent Next Level Wealth Pete Wargent's new book Low Rates High Returns Shownotes plus more here: The Big Picture – economic and property trends you must understand – August 2021- with Pete Wargent Some of our favourite quotes from the show: "When we get through this, the cash that we've stashed is going to help make the economy rebound." –Michael Yardney "But look how well all those people who made their decisions a year ago are doing in the property market." – Michael Yardney "Entitlement gets us nothing but heartache." – 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

Tim Ferris, #1 New York times bestselling author has written a new book - Tools of Titans. In it, he shares the tactics, routines, and habits of billionaires, icons, and world-class performers. You could read this great book which is well over 700 pages long or you may instead enjoy my chat today with Mark Creedon who will share the top seven lessons he got from this book in this month's Build a Business, Not a Job podcast. The lessons we had a chat about will be relevant for everybody and particularly if you want to succeed in life whether it's in your career, investment, your profession, or in business. 7 Takeaways from Tools of Titans Rather than reading the whopping 707 pages of Tim Ferriss's Tools of Titans, I to ask Mark Creedon, founder of Business Accelerator Mastermind and business coach to some of Australia's top business people and entrepreneurs to unpack a number of the lessons for us. Lesson number 1: You are the average of the five people you most associate with You should never underestimate the detrimental effects that your pessimistic or unambitious friends have on you. If someone isn't making you stronger, they're probably making you weaker. Ferris says that "giving your time and energy to negative people is masochistic". In a nutshell, and I'm sure you've heard it before, you are the average of the five people you most associate with. Lesson number 2: Don't wait until you're ready It's worth remembering that often, reasons come first, and answers come second as Carl Brian often says. Waiting until everything is perfect before making a big change is just a self-protection mechanism. The stars will never align, and all the traffic lights will never be green at the same time so sometimes you just have to make the hard decision to bring about change in your business, to employ that next level to help you scale out; to put systems and structures in place so that you can spend less time in your business and more time in your life. Lesson number 3: Be the best at one thing Focusing on one thing at a time and being great at it is the fastest way to scale your business. Focus on perfecting one thing at a time in your business and don't get distracted by implementing new features or new products all the time. Narrowing your focus will help you broaden the lens and see even more opportunities for success. Lesson number 4: Being in your own business doesn't have to be an all-or-nothing wager. The idea of testing a business idea for a period of time and building both confidence and cash flow makes a lot of sense. It's worth remembering that being successful at business and entrepreneurship is 90% psychological. If you can get the headspace right and you've got an idea that has "legs" then you're well on your way to success. Lesson number 5: Getting preferential treatment can come from being more assertive. You don't have to be aggressive or the biggest dog in the yard, but you do need to be clear on what you want to achieve, standing your ground on the journey to get it, and being assertive where it counts. I suggest the best way to achieve that is to work out what is negotiable and what is nonnegotiable. In your journey to business or professional practice success, there are some things worth fighting for because they are simply not negotiable and that's when you must be your most assertive. Lesson number 6: Fear is a good thing. Tim makes a great observation when he says, "what we fear doing most is usually what we most need to do." Fear is what keeps you focused and motivated. The reality is that your fears often provide you advance notice of exactly what you need to be doing more of. Lesson number 7: Success is way more possible than you think Everybody has wild dreams. The problem is that most of us think they aren't achievable. If we believe they aren't achievable then we never even try. I encourage my grandchildren to aim for the stars because as Richard Branson showed just last week, you might just hit them. It doesn't mean that becoming a wildly successful entrepreneur is easy, but it does mean that it is more possible than you might think. Links and Resources: Why not join Metropole's Business Accelerator Mastermind Learn more about Mark Creedon – Business Coach to some of Australia's leading entrepreneurs Get a copy of Mark's new book here – Have a business not a job Get a heap of special reports and eBooks here- www.PodcastBonus.com.au Shownotes plus more here: Tools of Titans – learn the tactics of Billionaires with Mark Creedon | Build a Business, Not a Job Podcast Some of our favourite quotes from the show: "It's not only the people that you deal with day to day but what you choose to learn, what you choose to read." – Michael Yardney "I think that you actually have to show respect to others and do it with integrity." – Michael Yardney "All the good stuff is just outside your comfort zone." – 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 property industry, and investors in general, welcomed the Labor party's announcement that they won't change the rules of negative gearing if they got into power. So, is this the end of the debate? Not necessarily according to Stuart Wemyss who still has some concerns that we're going to talk about today. We'll also discuss the concept that sophisticated investors shouldn't have to jump through the same hoops that beginning investors do. Then, in my mindset message, we're going to talk about the fears that may be holding you back. Is this the beginning of the end of negative gearing despite Labor's promises? One of the aspects of finance I discuss with Stuart is negative gearing. What is negative gearing? Negative gearing allows investors to offset property investment losses against other taxable income (such as employment income) to reduce their tax liabilities. Why do people negatively gear? The only reason that you would negatively gear is that you anticipate that the property's capital growth will eventually dwarf its income losses. Is negative gearing at risk? There are three main reasons why tax benefits resulting from borrowing to invest in property will not be as substantial as they have been in the past. As such, investors should not rely on negative gearing tax benefits when making investment decisions. Reason 1: Government will probably (eventually) limit negative gearing The expansion of federal government debt to over $1 trillion dollars means the government must generate more revenue to service and eventually repay this debt. One way to do that is to grow the economy (GDP) which will generate more tax revenue, even if tax rates don't change. Another way is to raise taxes or limit deductions. Reason 2: Persistently low interest rates reduce tax savings Gross property residential rental yields typically range between 2% and 3.5%. After allowing for expenses (such as management fees, maintenance, insurances, and so on), net rental yields typically range between 1% and 2.5%. With interest-only investment rates starting at 2.5% p.a. (fixed rates), a property's pre-tax income loss can range from nil to 1.5% of a property's value (being net yield less interest rate). This means if your property is worth $1 million, your pre-tax loss probably won't exceed $15,000 p.a. Consequently, your tax benefit (savings) won't be more than $,7,050 (being 47% of the loss). Reason 3: Stage 3 tax cuts will reduce tax savings It was reported last week that the ALP will likely support the government's stage 3 tax cuts which are set to become effective in the 2024/25 financial year. This means that there will only be two tiers for taxpayers that earn in excess of $41,000: $41,001 to $200,000 = 34.5% tax rate including Medicare; and Over $200,001 = 47% tax rate including Medicare. Sophisticated Borrowers Shouldn't Have to Jump Through the Same Hoops Anyone who recently made an application to get more finance would have realized how much harder it is, how many more questions you have to answer, and how much longer it takes today. Stuart recently wrote a great article where he suggested that sophisticated, more experienced borrowers shouldn't be required to jump through the same hoops to get finance that less experienced borrowers need to. What do you mean by that? We discuss the retail versus wholesale investor rules The Corporations Act makes a distinction between wholesale and retail clients (or "sophisticated investors" if being offered bonds or direct shares). A wholesale client is someone that meets either of the below two tests: Asset test – having a net worth of over $2.5 million; or Income test – having a pre-tax income of at least $250,000 in each of the past two years. The Act also includes other exemptions in addition to the above including professional investor test, product value test, and small business test. These asset and income hurdles were struck back in 1991 and are now vastly outdated. Adjusting for the impact of inflation, the income threshold should now be over $490,000 and asset value over $4.9 million. Wholesale clients are assumed to be financially savvy enough to make informed decisions and are able to protect their own interests. In short, they can decide whether an investment is appropriate so there's less onus on the provider or advisor. Also, there are fewer obligations (on financial advisors and product issuers) when dealing with wholesale clients such as there is no need to provide a Financial Services Guide, Statement of Advice, Product Disclosure Statements, etc. The current system is broken The fact that someone with several millions of dollars in the bank is subject to the same assessment as someone with very little financial resources highlights that the current regulations are inadequate. Banks must be given a robust framework but enough discretion to operate within that framework to achieve acceptable outcomes. Distinguishing between retail and sophisticated borrowers seems to be a logical step in the right direction. Resources: Michael Yardney Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us Collect your bundle of eBooks and reports here: www.PodcastBonus.com.au Stuart Wemyss – Prosolution Private Clients Stuart's Book – Rules of the Lending Game Shownotes plus more here: Is this the beginning of the end of negative gearing despite Labor's promises? With Stuart Wemyss Some of our favourite quotes from the show: "Finance is going to be critical for us as property investors – property investment is a game of finance with some house is thrown in the middle." – Michael Yardney "In this environment, fear is not unusual. It's not uncommon. In fact, I guess it's normal." – Michael Yardney "Fear of change causes some people to become stagnant, and they miss out on a lot of the really great opportunities." – 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