Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

For Australians, real estate is something of a national obsession.

That's understandable given our home is often the biggest investment most of us will ever make.

I've been investing in residential property for almost 50 years now, and throughout those decades there have been doomsayers and scaremongers claiming the Australian property market was a bubble waiting to burst.

Reputations were staked on it, bets have been made and the media has offered these property pessimists more than their fair share of air time.

Yet the crash never arrived. Instead, our property markets are booming with a number of capital cities already exhibiting double-digit capital growth this year.

And Australia's economic growth has also confounded the pessimists as we experienced the "V-shaped" recovery that, to be honest, very few expected.

While much of the commentary is about the micro factors – what's happening on the ground in our property markets - I like to regularly get together with property commentator Pete Wargent in these big picture podcasts to look at the macroeconomic factors affecting our economy and the property markets to help give you some more clarity about what the future holds so you can make better investment and business decisions.

The Big Picture with Pete Wargent

Since last month Australia's economic recovery has continued to unfold, more jobs have been created, and the property market continues to grow.

Australia's economy recovery

The latest GDP figures show that Australia has enjoyed a V shape recovery, though that's ancient news now.

Our economic output is now higher than it was before the COVID-19 recession hit, with easy monetary policy, booming commodity prices, demand for resources from the rampant Chinese economy and fiscal policy stimulus all playing a part.

• The public service is doing okay while the private sector has borne the brunt of the Covid 'recession'.
• Australia's robust economic recovery has merited an upgrade to a "stable" footing from ratings agency S&P Global. This has been matched by enthusiastic bets on interest rate hikes.
• As the Reserve Bank of Australia's July meeting approaches, when the central bank will review its quantitative easing program.
• The Reserve Bank at this month's meeting reiterated its position that the cash rate is "unlikely" to rise until 2024 at the earliest.

Biggest lift in business investment in 9 years

• New business investment (spending on buildings and equipment) rose by 6.3% in the March quarter.
• This together with the strong construction industry points to strong overall economic growth.

Why jobs confidence is a big deal

Policymakers are pushing hard for a strong improvement that will see a return to 'full employment that brings an end to the persistently low wages growth that has held the economy back over the last decade.

There are important implications from Aussies feeling secure about their jobs:

• Catalyst for spending
• Additional support for housing demand

Budget deficit

• The economy is in better shape than expected around six months ago and therefore so is our budget. This gives the government options to provide more assistance to have individuals and businesses.
• The recovery has led to a 4% improvement in the deficit so far this year.

Why Australia needs higher-paid migrant workers

Recently the Grattan Institute released a report into Australia's migration policy suggesting we focus on increasing the number of young skilled workers, rather than the government's current emphasis on older less-skilled migrants.

Grattan suggested this would help boost the economy by as much as $9 billion

8th consecutive current account surplus

In the March quarter, the current account surplus widened to 18,300,000 representing 3.5% of GDP.

This is the largest surplus on record matching to 3.5 achieved in June 2020.

Who needs China when Australia's got Tesla:

Why do we need China when we have companies such as Tesla knocking at our door? And don't let Elon Musk's often 'loopy' and weird behaviour distract you! Tesla is a business with a huge future, being a first adopter of the electric car and the biggest proponent of big batteries as an alternative to the power delivered from the grid.

A Tesla electric vehicle (EV) has $5,000 worth of minerals and metals in it and Australia supplies 75% of the lithium and 33% of the nickel in these Tesla cars of the future.

Resources:

Metropole's Strategic Property Plan – to help both beginning and experienced investors

Gets your bundle of eBooks and reports here: www.PodcastBonus.com.au

Pete Wargent Next Level Wealth

Pete Wargent's new book Low Rates High Returns

Shownotes plus more here: The Big Picture | Economic & property trends you must understand – June. With Pete Wargent

Some of our favorite quotes from the show:

"I guess it's fair to say it's probably always been about jobs, but at the moment, the focus is on our labour markets." – Michael Yardney

"We've actually got big war chests, and the more comfortable we feel about our job security, the more likely we'll be to spend it." – Michael Yardney

"Until the vaccinations are rolled out, everyone's had their second shots, or at least enough of us have, I can't see the borders opening." – 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

Our current property boom is going to create a whole new generation of wealthy Australians.

But since most people who become involved in a property boom don't become financially independent, last week I started this special series of podcasts discussing 40 lessons I learned in the last 40 years of property investment to hopefully help make sure that you're one of the ones who does succeed.

Last week, I shared 20 property lessons, and today I'm going to share the other 20.

Last week, I asked, with the benefit of hindsight, would you have bought an investment property in 1980?

What if I warned you about the recessions, pandemics, and other challenges that were coming?

What I wanted to share with you in this two-part series are the lessons I learned in that time period that made me a better investor.

1. No one really knows what's going to happen to the property markets.
2. Don't listen to who most property investors listen to for investment advice.
3. Timing the property market is just too hard. It's much better to buy the best asset you can afford and hold it for the long term.
4. Any property can become an investment property – just kick out the owner and put a tenant in place and it becomes an investment property. But not all properties currently on the market are "investment grade" and will deliver wealth-producing rates of returns.
5. Don't rely entirely on property data – it can be misleading and can be twisted to say almost anything.
6. Property investment is part science and part art – you need to understand and interpret data (science) but you also need an on-the-ground perspective to employ that data (art.)
7. There are 4 ways you make money out of property: Capital growth, rental income, tax benefits, and forced appreciation or manufactured capital growth through renovations or property development. But these streams of income are not all equal. Tax-free capital growth is the most important.
8. Cash flow is important to keep you in the property game, but capital growth will get you out of the rat race.
9. You will never get rich from earned income or savings.
10. Location will do around 80% of the heavy lifting of your property's capital growth.
11. Be greedy when others are fearful and be fearful when others are greedy.
12. Don't do what most property investors do. The majority of property investors fail.
13. Treat your property investments like a business
14. Don't look for fun or excitement in your investing.
15. Diversification is for people who don't know how to invest.
16. Having the right mindset is critical to investment success.
17. While knowledge is important, successful investors take action.
18. There are always risks associated with investing. Don't be afraid of failing, because the biggest risk is not doing anything to protect your financial future.
19. Don't waste your time worrying. Most things you fear will happen never do. They're just monsters in your mind.
20. Never give up. You will have failures along the way – in fact, I'm a real success at failure, but each time I'm knocked down I get up again. You need resilience to be successful.

Resources:

• Get a range of my best eBooks and reports at PodcastBonus.com.au
• Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Shownotes plus more here: 40 property investment lessons I learned in the last 40 years – Part 2

Some of our favorite quotes from the show:

"There are too many enthusiastic amateurs out there at the moment offering investment advice." –Michael Yardney

"You need to make your money work hard for you, even when you're asleep." – Michael Yardney

"Everyone does everything with money, no matter how silly it looks, because at the time it makes perfect sense to them." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

It should come as no surprise that the current property boom will create a new generation of wealthy Australians.

However, if history repeats itself, most people who get into property investment this cycle won't become financially independent.

Just look at what happened during the last property boom, and the ones before that. 92% of those who held onto their property never got past the second property.

You can't develop financial independence from just one or two properties.

Real estate has soared in value by more than 500% in the last 25 years, but most investors failed to develop a substantial portfolio.

So, I've put together a special two-part series to help you make the most of our property markets.

In today's show and the next one, I'm going to share with you 40 property investment lessons I've learned in the last 40 years to help you become a successful property investor and create lifetime wealth.

Let me ask you a question…

With the benefit of hindsight and knowing what you know now, if you had the opportunity to do so, would you have bought an investment property 40 years ago?

I bet your answer would be yes.

But what if you didn't have the benefit of hindsight and there we both were, back in 1980 and just as you were about to invest in a property I told you that in the next year or two Australia would fall into a recession and that in 6 years' time negative gearing would be removed only to be reintroduced a couple of years later.

What if I told you there was going to be a stock market crash in 1987, and a severe recession in the early '90s, meaning that in the first decade of owning your investment property you would have had to face all those headwinds.

Of course with the benefit of my time machine and you still being back in the 1980s as you planned to buy your first property I would also warn you about the upcoming AIDS scare and the SARS pandemic, the Asian financial crisis, September 11th, the Global Financial Crisis, the Coronavirus induced world recession.

Would still have had the courage to buy that property back then in 1980?

The answer for many people would now be: "No…why on earth would I invest in property knowing there are so many challenges, problems, and risks ahead?"

Of course, they would have missed out on some amazing wealth-building opportunities, wouldn't they?

I was already investing for almost a decade back in 1980 and I did buy another investment property that year.

And over the years the capital growth I achieved from my investment properties allowed me to keep adding to my portfolio meaning that today I have a significant "cash machine" that gives me the lifestyle choices I was looking for back then.

Of course, along the way, I've had some great investment wins but I've also made more than my share of mistakes.

And I learned many lessons that I wish I knew back then, so here are…

40 property investment lessons I learned in the last 40 years

1. The economy and our property markets move in cycles. Booms never last forever, neither do busts. That is mainly because most of us get swept up in the optimism or pessimism of others.
2. Despite the ups and downs, the long-term trend for well-located capital city properties is rising values.
3. Even though they are armed with all the research available in today's information age, economists never seem to agree where our property markets are heading and usually get their forecasts wrong.
4. Every year we get hit by an X factor – an unforeseen event or situation that blows all our carefully laid plans away. Then every decade or so we have a major event and the world "breaks."
5. There are multiple property markets in Australia.
6. Property investment is risky in the short term, but secure in the long term. It is definitely not a way to get rich quickly
7. Since property is a long-term game, don't look for "what works now." Instead, look for "what has always worked."
8. Residential property investment is a high growth, relatively low yield investment class. Don't try to make it something different.
9. At times of poor or no capital growth, strategic property investors "manufacture" capital growth through property renovations or development.
10. Residential investment is a game of finance with some houses thrown in the middle.
11. Taking on debt is not a problem. Not being able to repay debt is an issue, meaning cash flow management is a critical part of wealth creation.
12. Property investment is a process, not an event.
13. Strategic investors not only buy properties, but they buy themselves time to ride out the cycle by having financial "cash flow" buffers in place.
14. Wealth is the transfer of money from the impatient to the patient. I must thank Warren Buffet for that quote.
15. The media is not there to educate you, but its job is to get you to click on their links so that they receive revenue from their advertisers. So don't rely on the media for investment strategy or advice.
16. There will always be someone out there telling you not to invest in property.
17. There will always be people out there telling you to invest in property. So, understand their vested interests – they don't usually have your best interests in mind.
18. Savvy investors surround themselves with a great team and are prepared to pay their advisors – they see it as an investment, not a cost.
19. If you're the smartest person on your team you're in trouble.
20. You are going to make investment mistakes along the way and you'll either end up paying a significant learning fee to the market or you can pay your advisors and learn from their experience and mitigate your risks.

Resources:

Michael Yardney 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: 40 property investment lessons I learned in the last 40 years – Part 1

Some of our favorite quotes from the show:

"Don't be surprised when the booms and the busts come around and don't overreact." – Michael Yardney

"Over the years, I've found that it takes the average property investor around 30 years to become financially independent." – Michael Yardney

"Knowing what not to do, in my mind, is just as important in achieving success as knowing what to do." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

You're guaranteed two things in life – death, and taxes.

While taking care of your physical and mental health can lead to a longer, healthier life and stave of the death part, what can you do to legally minimize your tax?

Since everyone wants to pay less come tax time, in today's podcast I chat with independent financial advisor Stuart Wemyss about what options are available to you.

Minimizing Your Tax

Tax isn't necessarily a bad thing.

If you're paying tax, it means that you are making money.

But of course, there's no need to pay any more than you legally have to.

• Minimize your risk
  • Stick within the letter of the law, but explore legitimate ways to minimize tax liabilities
• Many more aggressive tax minimizing measures delay tax rather than permanently reduce it
  • Implementing these strategies may create costs (tax advice fees and documentation) and complexities
  • Sometimes, it's better to keep things simple
• Minimize tax pre-retirement
• Personal exertion income earners have few avenues to minimize tax
  • You can use negative gearing and/or contribute into super, but that's about it
• Contribute to your super
  • After 1 July 2021, individuals can contribute up to $27,500 per year into super and claim a tax deduction for this expense
• Borrow to invest
  • Borrowing to invest (to generate capital growth) often makes good sense, especially if you are more than 10 years from retirement
• Minimize tax on investment returns
  • If there are not many avenues to reduce the amount of tax you pay on your income, then at least make sure you don't pay too much tax on your investment returns.
  • Invest in assets that generate more capital growth than income
  • Make sure the investments are owned in the most tax-effective way
• Minimize land tax
  • Map out a plan and follow expert advice to minimize land tax as much as possible
• Consider capital gains tax
• Self-employment gives you more options
  • Make sure that your business is structured correctly
  • Stuart's new podcast, The Holistic Accountant, is a good way to learn more about this
• You should aim to pay zero tax in retirement
  • A couple can have up to $3.4 million invested in super, and not pay any tax
  • If you plan well, it is a reasonable expectation to pay little to no tax in retirement
• If you can't save tax, focus on investment returns
  • If you earn money, it's likely you will have to pay your fair share of tax. That's life
• Cheating is never worth it
  • The ATO is cracking down on dodgy deductions and the penalties can be up to double the tax plus interest

Resources:

Michael Yardney

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Stuart Wemyss – Prosolution Private Clients

Stuart's Book – Rules of the Lending Game

Shownotes plus more here: How to Minimize Tax – Your Largest Expense, with Stuart Wemyss

Some of our favourite quotes from the show:

"Tax isn't necessarily a bad thing. No one likes paying it, but if you're paying it, I guess it means you're making money." – Michael Yardney

"If you're going to own a property investment business, you should actually own the best assets you can in best locations you can, and land tax unfortunately is a cost of doing business." – Michael Yardney

"Those who invest in their abilities their entire lives, they become the beneficiaries of luck." – 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 a year it's been.

This time last year Australia was heading into its first recession and deepest recession in decades.

Yet last week the Australian Bureau of Statistics confirmed the strength of Australia's economic rebound. It was the fastest economic recovery from a recession in 45 years.

In fact, we are one of only three countries where our economy is ahead of where it was at the beginning of the coronavirus pandemic, but today can race and I unpack the statistics and explain what's going on – the truth behind Australia's economic recovery.

But don't worry if you're not into economics, my chat today with Ken Raiss, Australia's leading property tax strategist, will be in plain English and we'll unpack what's going on so you understand what's ahead- both the good and some of the headwinds that may slow us down, so that you'll be able to make a better-informed investment, and financial, and business decisions.

What you'll be hearing today is a portion of a private webinar we conducted for the attendees of Wealth Retreat to give them some insight before they join us, and while you won't be able to see the slides, I'm sure our description will be sufficient for you to get benefit from our chat.

Australia's impressive economic recovery from the COVID-19 recession was confirmed with the strong 1.8 percent rise in March quarter GDP.

This followed unprecedented growth of 3.2 percent in the December quarter and 3.5 percent in the September quarter of 2020.

Our economic output is now higher than it was before the COVID-19 recession hit, with easy monetary policy, booming commodity prices, demand for resources from the rampant Chinese economy, and fiscal policy stimulus all playing a part.

Back in the first three months of this year when we had JobKeeper, enhanced unemployment benefits, and no lockdowns and Australia roared out of recession.

The GDP figures released at the beginning of June, which were for the first quarter of the year up til the end of March were for the months leading up to the end of JobKeeper.

Australians spent, earned, and produced an impressive 1.8% more than in three months to December, which was itself more 3.2% more than the three months to September, which was itself 3.5% more than the three months before that.

Our growth of more than 8% was the most over three quarters since 1968.

But it followed a collapse in gross domestic product of 7% – by far the worst since the Bureau of Statistics began compiling records in 1959.

The net result over the year to March growth of 1.1%, an extraordinary result which means that, at least until Victoria's (just extended) lockdown, we were producing, earning, and spending more than before the COVID recession.

I today's podcast Ken and I discuss:

• what GDP is and why so much fuss is made about it
• Why I think that having a single overriding 'economic' health measure such as GDP is flawed
• What's happening to unemployment, job growth, business, and private expenditure.

Here are 7 reasons to be optimistic about the future.

1. Covid vaccines will help in underpinning reopening and recovery
2. Global growth is recovering rapidly — driven by vaccines enabling reopening, monetary and fiscal stimulus, and pent-up demand.
3. Growth in consumer spending is well supported
4. Dwelling investment will provide a strong contribution to growth — the surge in building approvals points to more upside in housing construction this year.
5. Business investment is strengthening - — investment plans for the next financial year are up nearly 15% on plans for a year ago which is consistent with high levels of business confidence, excess corporate cash, and the instant asset write-off tax break.
6. Fiscal stimulus will continue
7. Monetary policy will remain easy

However, there are some headwinds.

Economic growth should continue this year and then could slow next year as some headwinds are revealed, the effects of the fiscal measures start to fade, and the housing market slows down a little.

• further coronavirus outbreaks
• economic ramifications of the international border closure,
• the potential for further lockdowns due to the slow vaccine rollout, and
• the geopolitical risks emanating from Australia's "strained" relationship with China.

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 your bundle of eBooks and Reports at: www.PodcastBonus.com.au

Ken Raiss – Director of Metropole Wealth Advisory

Shownotes plus more here: The Truth Behind Australia's Economic Recovery with Ken Raiss

What's ahead for our property markets for the rest of 2021?

That's a common question being asked now that our property markets have been booming for quite some time.

And that's the question I'm going to ask Dr Andrew Wilson, Australia's leading housing economist in today's show.

You'll also hear his thoughts on what's ahead for the rental markets, is inflation on the rebound and should we be locking in on interest rates with the speculation that interest rates are going to rise?

Now you probably know that every week I record a Property Insiders video with Dr Wilson where we give you our thoughts and commentary on the property market and our economy, and today's podcast is the audio of last week video show.

You'll hear Dr Wilson and I explain how our property markets have been bounding along this year. Buyers are still out in force – owner-occupiers, investors, and first home buyers – at a time when available supply is struggling to keep up, keeping pushes prices higher.

In fact, a number of capital city property markets are already showing double-digit capital growth this year.

Listen in as we discuss:

1. What's ahead for our property markets for the balance of this year.
2. What happening in our auction markets as they give a good "in time indicator" of what's happening on the ground.
3. How our rental markets have turned around and vacancies are falling causing rents to rise.
4. Why Dr Wilson doesn't believe we'll get sufficiently high inflation to raise interest rates for some time, and…
5. Why some banks are recommending customers lock in their interest rates and why he doesn't think it's a good idea.

Resources:

Guest: Dr. Andrew Wilson, chief economist of My Housing Market

Metropole's Strategic Property Plan – to help both beginning and experienced investors

Subscribe to my weekly Property Insider video with Dr Andrew Wilson here- www.PropertyInsiders.info

Collect your bundle of eBooks and reports- www.PodcastBonus.com.au

Shownotes plus more here: Now what next for our property markets? With Dr. Andrew Wilson

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes – it's your way of passing the message forward to others and saying thank you to me. Here's how

Why don't most property investors succeed, especially since there's so much information out there and so many people willing to help them?

Well, today I've got three separate segments that are going to help you understand why many investors don't succeed, but of course, the intention of that is to even the odds in your favour, to make sure you do succeed.

I'm going to share with you probably the worst investment mistake I made, but it turned out to be one of the best investment lessons I made.

It was a mistake I made early in my career when I lost 100% of my equity. Boy was it an expensive mistake and a blow to my ego.

I guess it shows that I didn't start off as a successful investor. There are some lessons in that alone.

I'm also going to share with you a discussion I had with Joseph my hairdresser who learned how to invest like the pros. Isn't that something that you'd like to know?

Then, in my mindset moment, I'll help you understand that I'm a real success at failure.

So lots about success and failure in today's show, but the intention of it is to make you a more successful property investor and more successful in all areas of your life.

How to Invest Like the Pros

I was having my hair cut the other day when Joseph, my barber, said, "Michael — I'm going to get into property investing and I'm going to make a fortune because I've learned how to invest like the pros!"

When Joseph told me he knows how to invest like the pros, I had to ask — "OK — how are you going to do it?"

"Easy," he said. "I've been to a seminar and signed up for a course."

Then he pulled out the advertisement in the magazine that attracted his attention.

It promised the ability to control millions of dollars worth of property with none of your own money and bypassing the banks. It also explained how the course presenter had made millions of dollars in seven days.

At that point, I felt sorry for Joseph and for the thousands of novice (and some experienced) property investors who will be taken by the new breed of property spruikers who are once again out in force.

You can't become wealthy in seven days. You probably couldn't even read the course material in seven days.

Here is what the real pros know:

You can't create wealth through property overnight, but you can certainly become very rich in the medium to long term by knuckling down and seriously applying yourself in a dedicated, disciplined, persistent way.

You get there by following a proven system and by having a safe property and finance strategy.

You then implement this by buying the right property, in the right location, at the right price, and holding it for the long term.

Not by adding hot water to a packet of magic beans and counting to seven.

You can and should accelerate the process by learning the strategies of value-adding through renovations and development, but you can't skip the fundamental process.

While property spruikers went quiet during the real estate downturn, unfortunately, the new property cycle is bringing out a fresh group of "property pretenders".

There are now property "experts" out there selling advice and courses despite never having built their own property portfolios.

This makes it timely to remind listeners that seminars promising easy wealth through property have all too often led to financial ruin.

It's just the cycle repeating itself.

Of course, this doesn't mean you should do it on your own.

To become a successful investor, you will need to surround yourself with a team of independent and unbiased professionals — a team of people who are known, proven, and trusted.

Then go ahead and take advantage of the new property cycle, because the future is bright for those who invest sensibly in property.

My worst investment loss

One of my early investments was a complete loss.

I lost 100% of my invested capital many years ago, way back in the 1970s, and the investment mistakes I made that created this disastrous result.

But first I want to explain the 2 main reasons why I'm sharing this story.

1. Losing investments can be great teachers

You'll not only learn from the investment mistakes you make, but you can also learn from other people's investment errors so that you don't have to make the same mistakes yourself.

1. Losses are a natural and normal result of making investment decisions

Don't be so hard on yourself when things don't go as planned because the key to long-term success is what you do when this occurs and the lessons you learn from your mistakes, so you don't repeat them.

So here is the story of my big investment mistake where I lost 100% of my investment capital

You see…I already owned a few investment properties at the time, but I was in a hurry to get rich quickly.

I was offered the opportunity to invest in a Gold Mine.

In fact, one of my friends, Brian, had invested the vast sum of $5,000 (remember it was the 1970's and that was a lot of money) into a venture that was resurrecting an old disused gold mine in Wedderburn, near Ballarat in Victoria.

Of course, my initial reaction was to tell him how silly he was. How he'd lose his money.

But Brian asked me to speak with the promoter, explaining that he tells a compelling story.

One Sunday morning a man called Terry came to our home and described how with the price of gold rising and using new technology it was now viable to reopen an old disused gold mine near Ballarat where the Gold Rush occurred in the 1800s.

He had budgets and profit projections, diagrams, and plans; but things changed completely when he took a shiny nugget of gold out of his pocket and placed it in my hand.

He told a compelling story of how I could double my money quickly investing in his company – The Asian Pacific Mining Corporation (what an impressive name!) – and how I'd receive dividends for years.

My greed glands began working overtime as I swallowed his story – hook, line, and sinker.

The end result was I invested $5,000 of my money and of course, I lost it all.

My investment decision was one big mistake from the beginning.

Here are a few of the more obvious mistakes I made with this investment:

• I gave my money to a virtual stranger without doing enough due diligence.
• I invested in something I didn't understand.
• I bought a story rather than investment fundamentals.
• I was lured by the opportunity of making quick money.
• I was speculating, not investing, and risked money I couldn't afford to lose.
• I had no investment strategy – just a desire to get rich quickly.

I learned many lessons from this experience including:

1. Not everything that glitters is gold
2. Sometimes your best investments are the ones you don't make.
3. Don't invest in anything you don't fully understand. I knew nothing about gold mining, so I was speculating rather than investing. I had no competitive advantage and there was no mathematical expectation to my investment strategy.
4. One of the worst things that can happen to an investor is to get it right the first time. I thought I was smarter than I was when in reality my investment success so far was in large part to a rising property market – a boom that made me look smarter than I was.
5. Don't become overconfident -the market will soon humble you.
6. I didn't understand the incentives of the so-called "advisor" who really had a vested interest which created biases in the recommendations he gave me.

In retrospect…

My worst investment mistake was a cheap lesson

This investment was the first of many learning fees I've paid to the market over the years.

I've made a lot of mistakes and paid a lot of learning fees during my journey to investment success.

It's much easier for investors nowadays – you don't need to do it on your own.

Resources:

Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us

Get a range of my ebooks here: www.PodcastBonus.com.au

Shownotes plus more here: I've learned to invest like the pros | My biggest investment mistake + more

Some of our favorite quotes from the show:

"If you are going to listen to somebody's advice, make sure it is somebody who's unbiased." – Michael Yardney

"Find a credible source, not somebody with incredible promises." – Michael Yardney

"One of the key factors to my investment success is that I always try to learn from my mistakes." –Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

Since the First Fleet dropped anchor in 1788, close to 10 million immigrants have moved from across the world to start a new life in Australia.

They have arrived in waves, encouraged by developments like the 1850s gold rushes, or to escape adverse conditions at home such as the Industrial Revolution's social upheavals in 19th-century Britain, the two world wars, and the aftermath of the Vietnam War in the 1970s.

Collectively these migrants have helped shape what was a uniquely British-based and now multicultural society in Australia.

In today's podcast, I chat with leading demographer Simon Kuestenmacher about the history of migration and how it's changed our culture and our property markets over the years, and what's happening to migration now because of our border restrictions.

Australia is the land built on migration

Immigration to Australia began about 80,000 years ago. And from the 17th century on, the continent was explored by Europeans. European settlements began to crop up around 1788, and the discovery of gold in 1851 drove more activity and permanent settlements. Immigrants have been queuing up to come to the country ever since.

But what's happening to immigration in our nation at the moment?

• About 2/3 of our population growth pre-pandemic came from migration.
  • Only 1/3 came from natural growth.
  • During COVID, the migration has completely disappeared. For the first time, more immigrants went out than in.
• Our country is so much more multicultural than other nations.
  • When people are concerned about migration and focus on asylum seekers, it's not really relevant, because it's such a small number.
• One of the biggest drivers of migration in recent times is international students.
  • One in 6 of those students become permanent residents.
• You can grow the GDP through the sheer number of people added to the country.
• The natures of homes and neighbourhoods have changed because of migration.
  • We can see this in everything from the design of homes to the food available to buy.
• We will still see more people coming into Australia as long as they're allowed.
  • Australia is attractive to international students.
  • We also still need skilled workers.
• Millennials are moving out of their apartments as they age and move on to the next stage, but apartment living remains necessary because of the population size.
  • We will still need apartments, but we may need different ones moving forward. We will need more family-friendly

Resources:

Simon Kuestenmacher - Director of Research at The Demographics Group

As our markets move forward why not get the team at Metropole to build you a personalised Strategic Property Plan – this will help both beginning and experienced investors.

Get a bundle of eBooks and reports www.PodcastBonus.com.au

Shownotes plus more here: Australia: a land built on immigration, but what's ahead? With Simon Kuestanmacher

Some of our favourite quotes from the show:

"Just because of the cost of living, we do need more apartments, but we need different apartments than we've built in the past." – Michael Yardney

"I know it might sound cliché but work a little bit less and play a little bit more." – Michael Yardney

"Remember, most of the things we worry about don't happen, or if they do happen, they're not as serious as we thought they would be." – Michael Yardney

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Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

It's that time of the month – when I have my regular Big Picture podcast where Pete Wargent and we look at the macroeconomic factors affecting our economy and our property markets

This time last year, we were supposed to have a federal budget. Instead, we had a pandemic.

And over the last year many elements of our life were upended due to Covid 19

Around this time last year, our Prime Minister Scott Morrison said he'd build a bridge for us to get to the other side and it seems he did.

The government threw everything it could, including billions of dollars at creating jobs and keeping our economy moving and it succeeded.

And it's still doing so if you look at the federal budget handed down by Treasurer Josh Frydenberg - you'd think it was still raining money.

Never before has a budget done so much to supercharge the economy after the worst of a recession has passed.

But don't worry, this podcast isn't another rehash of the budget, even though there are a few interesting points I want to discuss with Pete – things that haven't been clearly explained but I think we need to understand as investors.

Plus we also will look at the macroeconomic factors affecting our economy and the property markets to help give you some more clarity about what the future holds so you can make better investment and business decisions

Understanding the Big Picture

Our property markets don't operate in isolation, so I believe it's good to regularly have a look at the big picture, the macroeconomic factors affecting not just Australia's economy, but the world economy, and who better to discuss that with than Pete Wargent, a lifelong student of and commentator on our economy.

Since last month there's been lots of good economic news and Josh Frydenberg delivered this year's budget.

The underlying message from this pandemic budget is that while our recovery is running apace, the economy still remains fragile and unable to stand on its own two feet.

The government has no option but to continue spending, and it has given the green light to a number of initiatives to ensure our economic recovery continues.

With all the tax dollars rolling in, what kind of treasurer could resist spending some of that, given ultra-cheap borrowing costs and an election campaign expected within a year or so?

Booming iron ore exports have delivered a bumper company tax take over the March quarter, with the budget's bottom line improving by $30bn since the mid-year economic and fiscal outlook in December.

And our economic recovery is likely to continue, underpinned by strong household spending supported by further lifting of activity restrictions, increased confidence, and the world effects from higher housing prices.

Rapid fall in unemployment could challenge RBA stance

There are now forecasts that expect the unemployment rate to fall to 4.8% by end-2021 and 4.4% by end-2022. And even lower again in 2023 seems likely.

These forecasts potentially challenge the RBA's expectation a rate hike is "unlikely to be until 2024 at the earliest".

• While these forecasts may appear ambitious, they reflect the expectation of a decelerating pace of labour market improvement, particularly in 2022.
• Ultimately, it will be inflation that matters for the RBA, and the most important judgment in our view is the strength of the transition from underutilization to wages, and then to inflation. The RBA is presuming this transition will be very slow, as it was the last cycle, but the risk around this assessment appears rather one-sided.

Sluggish inflation numbers push rate hikes further down the road

The CPI rose by 0.6% in the March quarter, taking annual inflation to 1.1% year-on-year.

Although this is the third increase in a row, we're still well below the target band and underperformed expectations by 0.3% in March.

With a few exceptions, such as jewellery, petrol, and vehicle prices (driven by supply bottlenecks), price pressures remained weak across most of the economy, especially in food and housing.

To some of us who remember the Consumer Price Index (CPI) rising above 10% for much of the late 70s and early 80s, the RBA's present determination to drive up inflation might seem a little counterintuitive.

Investors are back in the market

We know that home loan approvals have been surging, particularly for first home buyers and that investors have taken to the sidelines, but that's changed recently as more investors are now back in the market as evidenced by increasing investor loan approvals.

Building approvals surge to the second-highest in history

Residential building approvals rose 17.4% m/m in March, surprising sharply to the upside and taking the level of approvals to the second-highest in history.

Going forward, we will be looking to see whether the recent strength in detached dwelling approvals will be sustained given the end of the Federal Government's HomeBuilder program (March was the last month to be eligible for the grant).

Since HomeBuilder was introduced in June 2020, detached house approvals have soared by 72% and are driving cost pressures through the industry.

Should we be worried about geopolitical risks?

• The political pendulum is swinging back to the left -
• geopolitical risks are higher than prior to the GFC reflecting three big themes: a populist backlash against economic rationalist policies; the falling relative power of the US; and the polarising impact of social media.
• key geopolitical issues to watch this year are US and Australian tensions with China; Iran/Israel tensions; Russia and Ukraine; the German election; US tax hikes and a possible early Australian election.

Resources:

Metropole's Strategic Property Plan – to help both beginning and experienced investors

Gets your bundle of eBooks and reports here: www.PodcastBonus.com.au

Pete Wargent Next Level Wealth

Pete Wargent's new book Low Rates High Returns

Shownotes plus more here: The Big Picture – May Economic and Property trends you must understand with Pete Wargent

Some of our favourite quotes from the show:

"I recently read that the suggestion was that a huge number of Baby Boomers were going to downsize because of this. I can't see that happening." – Michael Yardney

"When people from outside Australia look at us, Melbourne is the only city of five million people that's actually beaten COVID, and life's moved on again." – Michael Yardney

"If you want to be successful, you need a mentor who's going to help guide you through life." – Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how

I have found most successful people have at least one, but usually a number of guiding principles. Things like phrases or ideas by which they live and work

To help you develop or add to your own guiding principles, in today's show I have rounded up a number of philosophies or thoughts that I'm going to discuss with Mark Creedon, founder of Business Accelerator Mastermind in our monthly Build a Business, Not a Job podcast.

But before we get into the main show, I'd like to share all of the philosophies of Steve Jobs, the late co-founder and CEO of Apple.

Jobs said: "You can't connect the dots looking forward; you can only connect them looking backward. So, you have to trust that the dots will somehow connect in your future."

Another interesting philosophy comes from Michael Jordan how famously said:

"I've missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game-winning shot and missed. I've failed over and over and over again in my life and that is why I succeed."

In today's show, you'll hear Mark Creedon and I talk about failure and how the way you think about it makes a huge difference in how you approach all areas of your life, so welcome to today's show.

Life philosophies that could change your life

You don't have to look far on the Internet to find blogs about the philosophies that successful people live by.

I enjoy reading those blogs and learning what drives successful people.

Interestingly I've found some of the best lessons I've learned are the simple ones.

I'm still a voracious learner and if I haven't learned something new by lunchtime every day, I've had a bad day.

1. Take responsibility for your world

Shouldn't we all?

There's a belief in this world, that I completely resonate with, that everything that has happened to you in your life is a direct result of your actions, either your physical actions or your mental actions.

Thoughts are things. As you think so you become. This belief is The Law of Attraction.

I know everyone doesn't agree with this – but I believe you should be a part of your life, not a passenger.

1. Don't make excuses, take action

"You are what you do, not what you say you'll do" — Carl Jung.

Action creates momentum and momentum matters.

Sure, it's important to make plans and know which way you're heading, in life, in your investments, and in business but plans are just theory unless you take action.

1. You are the company you keep.

Someone once told me that you're the sum of the five people with whom you spend the most amount of time and I couldn't agree more.

Studies have proven this time and time again – a Harvard study found that if your friend is happy, your chances of being happy increase 15%. It doesn't just stop there – if your friend's friend is happy, your chances of being happy increase by 10%, and if your friend's friend's friend is happy, your chances still increase 6% (if 6% doesn't impress you, you'll be interested to know that a $10,000 increase in annual income only increases your odds by 2%).

This rule also works in the negative sense – if your friend becomes obese, your chances of becoming obese increase 57%. The same goes for smoking (61%) and other negative habits.

1. Embrace your limitations.

I know one of my strengths in creating – coming up with the big ideas and implementing them.

Or creating things like blogs and podcasts. However, I know I'm not in my flow when doing other types of tasks.

Trying to change fundamental aspects of your personality is like swimming upriver – you exert tremendous effort with little forward progress. Instead of trying to change these aspects of myself, I've surrounded myself with others who are better at various aspects of our business than me

1. The race is only with yourself.

"Don't waste your time on jealousy. Sometimes you're ahead, sometimes you're behind. The race is long, and in the end, it's only with yourself." – Mary Schmich

When you measure your success against that of another, you create an ever-distancing destination at which you'll never arrive. Develop your own goals and celebrate every achievement.

1. Don't stop when you're tired, stop when you're done

You're going to get tired of being an entrepreneur and you'll probably even get burned out… especially when things aren't going well.

What's helped me succeed over the years is that I am persistent.

It doesn't matter whether I am exhausted, or if I feel that I've put enough hours in the day, I just don't ever stop until things are done.

As long as you keep on chugging along, eventually, you will accomplish your goals.

1. Commit to doing whatever it takes to succeed

Of course, with the exception of causing harm to others!

This discipline underpins all of the above. If we wish for success in life, it's essential we commit to making that wish become a reality. The key to success in life is to go from interest to commitment to taking action from personal power.

1. Honesty is a very expensive gift, do not expect it from cheap people

As an entrepreneur, you are going to have to look to other people for feedback and advice.

Over the years I've learned that not all advice is equal, as some people give better advice than others.

The best advice you are ever going to get is the truth.

The truth may hurt, but it will save you time and money.

Just don't expect the truth from people who care about saving your feelings.

1. Behind every successful person are a lot of unsuccessful years

When people look at what I have accomplished, most of the time they feel that I've done it over the last few years.

What they forget to realize is that I have been an entrepreneur for over 10 years.

And during that 10-year period, I've lost millions of dollars, made more mistakes than I can count, and put countless hours into my businesses.

So as long as you keep pushing forward as an entrepreneur, your odds of succeeding will go up over time.

1. Live in such a way that if someone spoke badly of you, no one would believe it

Businesses come and go, but the one thing you should protect more than anything else is your reputation.

Your reputation affects any new business ventures or a job you may try to get later down the road.

Be so kind and helpful that if someone spoke badly about you, no one would believe them.

1. Just because you are struggling does not mean you are failing

Every great success requires some kind of struggle.

You're going to have to work hard, fight through the tough times and keep pushing forward.

So, when you are struggling, don't give up, keep pushing forward until you see a light at the end of the tunnel.

1. Give Back

"The meaning of life is to find your gift. The purpose of life is to give it away." ―Pablo Picasso.

This is a great philosophy because I feel happiness doesn't result from what we get, but from what we give.

I am blessed beyond imagination in life, and I feel it's my duty to give back.

If I can help others in some way, then I do it. Whether through writing, creating, guidance, feedback, listening, financial, volunteering, etc. There are so many ways to give back.

Links and Resources:

Why not join Metropole's Business Accelerator Mastermind

Learn more about Mark Creedon – Business Coach to some of Australia's leading entrepreneurs

Get a copy of Mark's new book here – Have a business not a job

Get a heap of special reports and eBooks here- www.PodcastBonus.com.au

Shownotes plus more here: 11 Simple philosophies that could change your life with Mark Creedon | Build a Business, Not a Job Podcast

Some of our favourite quotes from the show:

"I do things that I'm good at doing, and in my business and my now partnership, I allow other people to do things that they're good at doing." – Michael Yardney

"If you think about it, you never get everything done. There's always things on your to-do list." – Michael Yardney

"There's also the luck that you create for yourself by doing the right things, by being the right person, by having the right mindset, so when the opportunities come, you actually take advantage of them." –Michael Yardney

PLEASE LEAVE US A REVIEW

Reviews are hugely important to me because they help new people discover this podcast. If you enjoyed listening to this episode, please leave a review on iTunes - it's your way of passing the message forward to others and saying thank you to me. Here's how.