Property Investment & Wealth Creation Australia | The Michael Yardney Podcast

Are you looking at buying your first home now or in the future?

Then this episode is for you.

I'll be talking with Marc and Sally from Finder.com.au about things first-time homebuyers need to do to make the most of their purchase and the mistakes they should avoid.

Even if you're not a first-time buyer, the property information we discuss is valuable for those who have been through the process before as well.

Mistakes First Home Buyers Make

1. Buying emotionally – Your first home is not likely to be your last home, so it's better not to get too emotionally invested in the process. Instead, think of it as an investment, and a stepping-stone to your next property.
2. Not factoring in all of the real costs – Everyone looks at the price of the property first, but it's important not to let all of the other costs, like stamp duty, conveyancing, moving costs, rates and taxes and insurance and maintenance, body corporate fees, and mortgage fees get left out of the equation.
3. Overextending financially – A mortgage broker can help you navigate loans and work out a budget, so you don't end up taking on more than you can really afford.
4. Not doing your proper due diligence – Don't forget the seemingly little things like building and pest inspections. These can help you avoid potentially big problems down the road.
5. Not understanding the contract you're signing – Once you've signed a contract, you're obligated to fulfill the terms, so it's important to understand what you're getting into. Your legal representative can help make sure that you're fully informed before signing on the dotted line.
6. Not getting finance pre-approval – When you get your finances organized ahead of time and get a loan pre-approval, you'll know exactly how much you have to spend and be at less risk of overextending yourself.
7. Trying to do it on your own – Buyer's agents, mortgage brokers, and solicitors are all examples of professionals whose expertise can help make sure that your buying process goes smoothly and you get what you want and understand what you're getting. Don't try to go it alone.

Links and Resources:

Michael Yardney

Metropole Property Strategists

The original episode of this show appeared on The Pocket Money Podcast - finder.com.au

Join Michael Yardney and a group of Australia's leading experts at his annual Property and Economic Market updates – in Sydney, Brisbane, and Melbourne Use the coupon code PODCAST and come as our guest.

Show notes plus more here: 7 common mistakes first home buyers make

Some of our favourite quotes from the show:

"And the other thing is, if you buy emotionally and overpay, it's going to cost you a lot more than you need, and that's going to be an extra cost in stamp duty and interest for a long, long period of time." –Michael Yardney

"When you rent, you don't think about paying things like rates and taxes and insurance and maintenance, body corporate fees, those sort of things." – Michael Yardney

"Today, in this current lending environment, it's much, much harder to get a loan, there's a lot more hoops you've got to go through, it takes longer than it used to." – 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

Not all investors are created equal.

If you want to become a successful property investor you really need to understand the five levels of investing which is a model that I've designed to explain how most investors progress along their path to financial freedom.

Just to be clear, this has nothing to do with your level of income. It has a lot to do with your financial fluency and financial intelligence.

If you want to work your way up the rung of investors, you're going to have to understand which level you're at right now present and what you have to do to work your way up to the next level. After today's episode, you'll understand more about the levels and where you fit into them.

After I've explained the five levels of investing, I'm going to share a mindset message from one of my mentors.

The Five Levels of Investing

Level 0 – The Spender

Those at level 0 end up with a high level of debt because they spend and borrow, living paycheck to paycheck. They aren't really investors at all; they're spenders and borrowers.

Level 1 – The Saver

Those at level 1 have one main investment – their home. They save money, but they save it to spend it later, not to invest it.

Savers are often unwilling to take any risks with their money and fear financial matters that look risky.

Level 2 – The Passive Investor

Those at level 2 are aware of the need to invest in order to grow wealth. However, they don't necessarily understand the rules of money and may be hanging on to outdated ideas about finance.

Passive investors look for outside sources and "experts" to tell them what to do with their money instead of educating themselves, which can make them easy prey for get rich quick schemes.

Level 3 – The Active Investor

Those at level 3 are actively involved in their investment decision and take responsibility for their own financial futures. They focus mainly on growing their asset base.

Active investors understand that they can't do it all themselves, so they form networks of advisors and peers or join Mastermind groups.

Level 4 – The Professional Investor

Those at level 4 have risen to a level where they have built and now manage their own investment business. They have a substantial asset base that generates enough passive income to pay for their lifestyle, and they continue to grow their portfolio whether or not they work a real job.

Professional investors retain control of their investments while employing a team to help them continue to achieve consistent results.

Where do you fall in the levels of investors?

Not everyone makes it to Level 4. In fact, few get that far.

But you can, once you understand why the rich keep getting richer.

Links and Resources:

Michael Yardney

Metropole Property Strategists

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

Join us at Wealth Retreat in June this year – find out more here: Wealth Retreat 2020

Show notes plus more here: Do you understand the Five Levels of Investing?

Some of our favourite quotes from the show:

"Level 4 investors rarely stop educating themselves." – Michael Yardney

"A final point about Level 4 investors is that they teach their financial knowledge to their children. They pass on their family fortune to future generations." – Michael Yardney

"You can be a low-income earner when it comes to your day job, but still be a level three investor and have financial security." – Michael Yardney

PLEASE LEAVE US A REVIEW

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

Have you ever wondered why there is so much bad news out there?

Maybe it's because people find bad news more interesting than good news. That applies to property, the economy, politics, and everything else.

A recent study that I read concluded that on average, people pay more attention to negative news than positive news. I've found that blogs and podcasts with subject lines that are more negative get more attention.

The problem is that people do have a bias toward negative news, and if you have that tendency, it's going to affect the way you think, the way you feel, and the actions you take. Remember, your thoughts lead to your feelings, your feelings lead to your actions, and your actions lead to your results.

Pete Wargent and I discussed why those bloggers who are continuously negative about property and our economy get so many more followers than the positive people, and that's what we'll talk about in today's podcast.

We'll talk about how you can overcome this negative bias, what is causing it, and how we can move forward in the new year and take advantage of all of the positive things that are happening.

How negative news affects us as businesspeople, investors, and entrepreneurs

Turn on the news these days, and you'd be forgiven for thinking that the world is about to come to an end.

Negative and bad news seems to surround us everywhere we go.

The problem isn't just that bad things re happening around the world, but it's partly that our brains are wired to pay more attention to unpleasant news. This is called negativity bias.

How does this affect us as investors, businesspeople, and entrepreneurs?

There's a strong body of evidence that demonstrates the human tendency to prioritize negative things. We're hardwired to respond to negative words and negative events.

Negative headlines affect the way you think, the way you invest, and whether or not you're willing to take risks.

There are different dynamics when it comes to finance and the economy, as opposed to subjects like war or crime. Schadenfreude is a huge driver of interest in financial and economic topics. That's because people understand that there are two ways to get ahead of your peer group: either you succeed, or they fail.

Some people take a curious comfort in negativity or the economy struggling and falling on hard times. That's because most of us believe that we're better than average, and negative economic news can appear to confirm this.

In reality, success tends to get skewed toward people who take action.

Another factor is the tendency to use social media as a news source. This can obscure your perception of reality. After all, what you're seeing are other people's highlight reels. You don't see the things that wind up on the cutting room floor.

If you want to be successful, it's more effective to follow people who've achieved what you want to achieve and emulate them than to fixate on negative news.

People are driven by the need to be right or contrarian, but you miss out on a lot if you're consistently negative.

It's also important to remember that news is about things that happen, not things that don't happen. In other words, no one reports on wars that don't break out, or economic crashes that never occur.

Herd mentality kept us safe in the old times, but it's not the best investment strategy. If you do only what the average person does, you're likely to get only average results.

There are plenty of good things happening out there, but you might have to consciously look for them. If you look for the good things, you'll find them.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Pete Wargent Next Level Wealth

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

Join Michael Yardney and a group of Australia's leading experts at his annual Property and Economic Market updates – in Sydney, Brisbane and Melbourne Use the coupon code: PODCAST and come as our guest

Some of our favourite quotes from the show:

"It's the developers that are going to build all of those big apartment buildings that will allow more of them to buy homes in the first place." – Michael Yardney

"Those who take action, can become wealthy." – Michael Yardney

"Despite us thinking we're rational, we're not. We think irrationally." – Michael Yardney

Show notes plus more here: Why do we pay more attention to negative news than to positive news?

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 ahead for property this year? Is this the end of interest rate cuts?

We started this year with optimism, but now we have our fair share of turbulence. We have the coronavirus epidemic, the bush fires, political tensions overseas.

How will these affect our property markets and our economy?

Those are some of the things we're going to talk about today with Dr. Andrew Wilson.

We're also going to discuss auction trends, the home loan trends, what's happening to interest rates, and what's happening to inflation, as well as employment, consumer confidence, and our housing markets.

There's a lot of information in this episode that will make you a more informed property investor.

We're just over 10% into the year 2020, and we've already had our share of X factors that have upset the forecasts.

Auction trends

Let's start with property trends. A number of data sets are suggesting property values have continued rising around Australia.

The property upturn which started in Sydney and Melbourne in the middle of last year has become more widespread with housing values rising in January across every capital city.

There's plenty of competition among buyers. There are not only higher clearance rates, but there are also higher numbers of properties being offered for sale.

Median prices are growing strongly, but they're a bit of a lagging indicator. Auction clearance rates are a more in-time indicator of market sentiment and depth.

Home loans surge

A lot of fuss has been made of the December home loan figures which confirm the revival of our housing markets. However, they still remain well below the figures of 12 months ago, particularly for property investors.

On the other hand, ending for first home buyers went against the trend, increasing by 4.6% over 2019 compared to the previous year.

Is this the end of rate cuts, or are the RBA just holding off?

The Reserve Bank of Australia decided in the first week of February to keep interest rates on hold.

The board noted that previous outbreaks of new viruses had "significant but short-lived negative effects" on economic growth in the economies at the centre of the outbreak.

Headline Inflation rising - but still subdued

Headline inflation was up to 0.7% for the quarter, and the annual rate of inflation sits at 1.6%, which is significantly below the 2-3% target range the RBA is aiming at.

More economic headwinds – tragic bushfires and coronavirus.

The Australian economy posted its worst performance since the global financial crisis in 2019.

The big macro stories affecting our economy have come so far this year have been:

• The USA China Trade Pact
• Brexit
• The Corona Virus
• The Australian bush fires.

The coronavirus is creating a second wave of economic disruption in Australia.

The RBA minutes stated that the coronavirus will have a bigger impact on the Australian economy than SARS.

Good news for employment

Unemployment fell at the end of last year to 5.1%.

But there is still spare capacity in our labor markets with many people who are in part-time jobs being underemployed.

A slump in job advertising over the past year and slow economic growth suggest the unemployment rate could go even higher.

Consumer confidence

Three interest rate cuts and reductions to personal income taxes have failed to lift the mood of consumers, who appear more content in paying down debt and saving rather than spending the increase to household incomes.

Business confidence is also weak as business conditions struggle below average, raising the risk of slowing employment growth and continuous sluggish business investment.

Our Housing Market

Our forecasts for 2020 are that property values will be higher at the end of the year than today with well-located Sydney and Melbourne properties worth 10% more than they are today.

Links and Resources:

Michael Yardney

Metropole Property Strategists

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

Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au

Join us at my annual Property Market and Economic Update – come as my guest using the Coupon Code: PODCAST Click here for details

Show notes plus more here: What's ahead for property this year? How will the corona virus affect our economy?

Some of our favourite quotes from the show:

"Auction clearance rates are a more in time indicator of the market." – Michael Yardney

"In the context of what's happening in the world, those aren't bad economic figures if we could achieve them." – Michael Yardney

"I guess the elephant in the room is the coronavirus. It's still a developing story and even the RBA stated in its minutes that it will have a bigger impact on the Australian economy than SARS." – Michael Yardney

PLEASE LEAVE US A REVIEW

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

If you're looking for more money, better success in property investment or other areas of your life, or more wealth, this episode is for you.

I have three messages for you today. We're going to discuss one thing you're going to have to change to become a more successful investor – and it's not what you think.

I'm also going to share what is the right type of property investment for this stage of the cycle.

Then, in my mindset moment, I'm going to explain an important trait of successful people. And if you can pick up on it, there's no reason why you can't be successful as well.

The One Thing You Need to Change for Investment Success

One of the first steps in change is changing your thoughts.

How do you think about money, success, and prosperity?

For many of us, our thoughts revolve around fear, scarcity, and limitation.

If you think about fear, scarcity, and limitation – what do you achieve?

Remember:

Your thoughts lead to your feelings – your feelings lead to your actions and your actions determine your results.

So, money is a result. Wealth is a result.

These occur in your outer world but are determined by your thoughts and feelings – your "inner world."

It's not what you don't know that prevents you from succeeding; it's what you think you know that isn't correct that is your greatest obstacle.

The problem is for many Australians their thermostat is not set for wealth.

Firstly, we need to change the way we think about ourselves.

We need to see ourselves as a wealthy person, as a wealth attractor and a wealth creator.

This means we may need to change some ingrained thinking patterns.

Or overcome some negative ways of thinking that have developed as a result of past experiences.

Most successful people all share one critical characteristic – the trait of adaptability.

They embrace change.

They look for opportunities to expand and learn.

Another common characteristic of successful people is that they have a mentor and they belong to a mastermind group.

They hang around other like-minded successful people.

Results change when people change their way of thinking.

And doing things differently first requires thinking differently.

If you change your thinking, you will change your actions and if you change your actions – results.

What's the right investment for this property cycle?

We're well into a new property cycle. And with the property market on the move, it's becoming apparent that more and more investors are looking for the next hotspot.

The problem is that hot-spotting is about short term speculation, not long-term wealth creation.

Most property investors are looking to build an asset base so that one day they can replace their personal exertion income with their property income.

But the key to building a substantial property profile is to use the first property to leverage into your next property, then using those two properties to leverage into more investments, and so on and so on.

And you can only do that by investing in the type of locations that consistently provide long-term capital growth. But by definition, hotspots are not that.

They cool off as quickly as they heat up.

If you're into investing in short-term trends, being right isn't what's important; it's being right at the right time that counts.

Very few can do that, so the history of investors trying to find the next boomtown is littered with people who get the story right and the outcome wrong.

Instead, I buy in areas that have a proven long-term history of outperforming the average capital growth and that are likely to continue to outperform, because of the demographics of the people living in the area.

Hot spotting is virtually the opposite of this sensible, not-so-sexy, tried and tested system for successfully building a property portfolio.

There are some principles that can be applied whenever you consider investing in real estate, to ensure that you are as comfortable as possible and exposing yourself to the least amount of risk.

These include:

• There is no one property market. Instead, there are many submarkets around Australia. Each state can be at a different stage of its own property cycle and within each state, the markets in different areas are segmented by geography, price points, and type of property.
• Rather than trying to time the market, buy the best assets you can. Owning an investment-grade asset that grows at wealth-producing rates of return will see your portfolio outperform over the long term.
• Strategic property investors manufacture capital growth through property renovations or development.
• Our property markets are not only driven by fundamentals, but also by the often irrational and erratic behavior of other investors. While the long-term performance of property is influenced by the fundamentals, its short-term performance is much more affected by market sentiment.
• Treat your property investments like a business and stick to a proven strategy to take the emotions out of your investment decisions. Don't make 30-year investment decisions based on the last 30 minutes of news.
• Recognise that property is a long-term play. You need financial buffers to help you ride the property cycles because the cycle will keep recurring.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Michael Yardney's Mentorship Program

Register your interest to join us this year at Wealth Retreat 2020

Join us as our guest at our annual Property Market and Economic Update 1 day trainings - - use the coupon code PODCAST and come as our guest.

Show notes plus more: The right investment for this stage of the property cycle | 1 thing you'll need to change to become a successful investor

Some of our favourite quotes from the show:

"The problem is in terms of wealth creation, it's not what we know that's holding many of us back.

It's what we think we know that isn't so, that isn't right, that is holding us back." – Michael Yardney

"If you continue to do the things you have always done, you're going to continue to get the results you have always achieved." – Michael Yardney

"A side effect of doing challenging work is that you're pulled by the excitement and pushed by the confusion at the same time." -- Michael Yardney

PLEASE LEAVE US A REVIEW

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

If you're in business, and even if you're not, today's show about the common mistakes businesspeople and entrepreneurs make will be useful for you.

If you think about it, we're all in our own little businesses: the business of property investment or the business of improving ourselves.

Hopefully, this discussion will help you avoid making some of these common mistakes.

Top 7 mistakes Entrepreneurs make

1. Expecting success right away – it's harder than most people think

   1. Underestimating the amount of time it will take and the cash that will be needed

2. Providing a product or service that is their passion, without making sure there is a viable market for it.

   1. Confusing a good idea with a good opportunity

   2. Is there a big enough market?

   3. Is there a sufficient margin?

   4. Opportunity exists at the intersection of a deep customer need or problem and your ability to meet that need

3. Not understanding the importance marketing

   1. If you build it, they will come is the wrong idea. You need to invest heavily in marketing – but you also need to understand it even if you outsource it

   2. USP– they must differentiate themselves

   3. Social media

   4. Building a list

4. People problems

   1. Having the wrong business partner

   2. Hiring the wrong people

   3. Not firing the wrong people fast enough

   4. Not understanding how to manage teams

5. Letting perfection get in the way of progress:

   1. They wait for the "right " time. There rarely is such a time

   2. They wait until everything is perfect or 100% in place. This can lead to analysis paralysis.

   3. Gen Colin Powell applies a 40/70 rule

6. They let go too soon or don't want to get their hands dirty.

   1. You have to work in your genius and focus on the highest and best use of time BUT

   2. You have to know how things get done in your business,

   3. Sometimes you have to be able to dive in and make things happen….there is a difference between delegation and abdication.

7. Trying to do it alone – need a coach, mentor, mastermind group

Links and Resources:

Why not join Metropole's Business Accelerator Mastermind

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

Show notes plus more here: Here's How to Avoid the Top 7 mistakes Entrepreneurs Make | Build a Business, Not a Job Podcast

Some of our favourite quotes from the show:

"Unfortunately, life is hard. Business is difficult. Retaining clients is difficult. Making a profit isn't easy. Because if it was, the rewards on the other side wouldn't be as valuable." – Mark Creedon

"What I'm suggesting is the list needs to be yours – not on Facebook, not on Twitter, not on LinkedIn, because over time they change the algorithms and you may lose access to those people." – Michael Yardney

"One of the other aspects of managing staff as your business grows is that you may well be a good practitioner at your skill, whether it's in sales or the craft or the profession that you're in, but that doesn't actually translate to being good at human resources and managing people." – Michael Yardney

PLEASE LEAVE US A REVIEW

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

For the last few decades, Baby Boomers have been driving our economy and our property markets.

But interestingly, they're not doing what everyone thought they were going to do.

They're redefining retirement. And this is going to have significant implications for our property markets and on our economy and businesses.

So, if you're interested in property investment or if you're a business owner, this is going to be an enlightening show.

I'm speaking with Simon Kuestenmacher, a leading demographer, about how baby boomers are redefining retirement, and what that means to you and to the property market.

Demographics have always been a major driving factor of our economy and our property markets. And Baby Boomers have dictated many trends because there are so many more Baby Boomers than previous generations.

The last Baby Boomer will hit retirement age by 2029. But that doesn't mean that they'll all be retired. There's been a big shift in terms of how people are defining retirement.

More and more people are staying in the workplace longer. Some are doing so because they find the work engaging and enjoy it.

We also see more and more people who are being forced to work longer. These are usually people in low-income jobs, which makes clear the crucial importance of lifelong retirement planning.

There are a number of different ways to plan financially for retirement. Superannuation is one way. Owning your home is another. Investing in residential real estate or shares is one more way to plan for retirement.

There are four major tribes of Baby Boomers moving into retirement:

• The Lifestylists – People between 55-64 years of age who prep for retirement. They tend to slide into retirement, rather than jumping into it all at once.
• The Active Retirees – People between the ages of 65-74 who are still somewhat linked to work. They want to stay active and in the family home as long as possible. They only move when they are forced to.
• The Downsizers: They are 75-84 years of age. At this stage, they are slowly starting to prepare for old age. Physical problems force this group to slowly start to change their housing behavior.
• Old Age: They are 85 or older. Statistically speaking, they are quite likely to have lots of physical ailments. However, they still want to live as independently and as healthily as possible.

The workforce as a whole is shifting more and more toward knowledge work. At the same time more and more repetitive knowledge tasks are being taken over by computers. That leaves humans with the tasks of socializing and networking.

There are also lots more jobs in the low skilled and unskilled sectors. But no new middle-skill jobs. The workforce is being hollowed out.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Simon Kuestenmacher - Director of Research at The Demographics Group

Join us at my annual Property Market and Economic Update – come as my guest using the Coupon Code: PODCAST Click here for details

Show notes plus more here: Here's how Baby Boomers are Redefining Retirement

Some of our favourite quotes from the show:

"Middle ring suburbs are where we need more medium-density development, but it's really hard to find the land or to make the economics work." – Michael Yardney

"As always, baby boomers are going to be an important factor in our economy and in our property markets moving forward." – Michael Yardney

"I really do think everyone's doing the best they can." – 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's the million-dollar question so many investors ask: what's a better investment, the stock market shares or property?

Outside superannuation, property and shares are the two most common ways Australians build wealth.

Some find deciding which to invest in is a bit of a hard decision. If someone tells you only shares or only property, run away fast. That probably means they have a vested interest.

You'll find that in different stages of your life, or different times when you need asset growth and cash flow, different types of investments will be more suitable for you.

In today's show with our regular guest Pete Wargent, we'll tell you the pros and cons of both asset classes.

We're also going to explain when they're right for you, and when you shouldn't be investing in a particular asset class.

Property or Shares?

Property and shares are different but complementary asset classes.

While their long-term performances may be similar, they are very, very different as asset classes.

The tax system in Australia tends to favour people investing in property.

Property

• You can leverage against property.
• The extra leverage you can achieve with property magnifies your returns if you've got a long enough time horizon
• Property is an imperfect market: in property you can have an edge related to your knowledge, your information, and your contacts.
• The property market isn't controlled by investors. This gives the market more stability – housing is a fundamental human requirement. As long as you buy in the right location, the value isn't going to disappear as it can in stocks.
• The government wants us to be property investors. It actually doesn't want to provide public housing to that 30% of Australians who rent properties.
• In property, you make fewer but bigger decisions, so it's extra important to make sure those decisions are the right ones.

Share market

• The share market is much more liquid so it's easy to get your money back on short notice.
• The share market is also better for generating income (cash flow.)
• Because you can buy smaller clumps of shares, the entry cost is lower. Property is lumpier.
• The diversification of the stock market is an advantage. You can also diversify over time.
• You can leverage against shares, but not as much as you can with property.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Pete Wargent Next Level Wealth

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

Join Michael Yardney and a group of Australia's leading experts at his annual Property and Economic Market updates – in Sydney, Brisbane, and Melbourne Use the coupon code PODCAST and come as our guest.

Show notes plus more here: Property vs Shares, which is a better investment? With Pete Wargent

Some of our favourite quotes from the show:

"Because property is lumpy, you can't get it wrong. You've got to get good advice." – Michael Yardney

"The government wants us to be property investors. It actually doesn't want to provide public housing to that 30% of Australians who rent properties." – Michael Yardney

"You are not your fears. You create your fears." – 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 we enter a new year and the beginning of a new property cycle, there are still many mixed messages in the media leaving many investors and potential homebuyers confused.

Hopefully, by the end of today's show, you'll be a little less confused because I'm going to ask Dr. Andrew Wilson, Australia's leading housing economist, some of the questions you're probably thinking about.

But before that, we're going to discuss some lessons that we've learned in 2019 that will make you a better property investor in 2020.

I also have a mindset moment to share about things I would have liked to know earlier.

4 Property lessons

As we enter a new year and in fact a new property cycle it's interesting to look back at 2019 and see what lessons we can take out of 2019 to make 2020 a better year in property.

Let's take a look at 4 property takeaways from 2019:

1. Be careful whose forecasts you listen to.

What happened to all those predictions of 40% house price falls for the Australian property markets?

Lower interest rates, a miracle election result and looser lending criteria saw the property markets in our 2 biggest capital cities surge in the second half of 2019

1. Property investing is a game of finance - with some houses thrown in the middle.

This became clear as APRA tightened the lending screws on property investors from 2014 through till 2018 causing the biggest decline in our property markets in modern history.

Then when the banks' lending criteria became more relaxed and interest rates fell in 2019 our housing markets rebounded strongly.

1. There is not one "Australian property market".

While the fundamentals of strong population growth and the wealth of our nation will underpin the Australian property markets, there is not one "Australian property market."

Each state is at its own stage of its individual property cycle and within each state there are many markets segmented by geographic location, dwelling type and price point.

1. Expect the Unexpected.

Every year an unexpected X factor comes out of the blue to undo the best laid plans – some on the upside (like the miracle election result in mid-2019) and sometimes on the downside. Sometimes these are local issues and at other times they come from overseas. However, over the long term our housing markets are driven by the fundamentals so don't make 30-year property investment or home buying decisions based on the last 30 minutes of news.

Bonus Lesson: The property market is not a get rich quick scheme, however those who own well located properties will benefit from the long-term growth of their properties. As Warren Buffet wisely said: "Wealth is the transfer of money from the impatient to the patient."

An expert answers your property questions

While our property markets are entering a new property cycle, currently there are lots of mixed messages in the media – some positive and many negative.

This has led to many listeners to our podcasts leaving questions and asking for clarification.

So, in my chat with Dr. Andrew Wilson today I'm going to ask him to answer these questions which, if you're interested in property, are likely to be on your mind also.

1. Is Australia going to fall into recession in 2020?

During 2019 the RBA realised that the Australian economy wasn't as rosy as it had hoped.

The labour market deteriorated, unemployment rose, incomes growth languished, inflation failed to increase, and our GDP slowed down despite 3 interest rate cuts.

It was really only mining sector and government spending that kept our economies head above water.

But as the year finished off, the latest labour market data at the end of the year showed a slight fall in unemployment and jobs growth albeit mainly part time jobs.

But there are now signed of an improving global economy, particularly driven by the strong US economy.

All this makes an Australian recession in 2020 very unlikely.

1. What is likely to happen to interest rates in 2020?

While rates are likely to be cut again twice again in 2020, it is now more likely that the RBA will hold off cutting interest rates in February as many commentators are predicting.

Their decision will depend on the end of year economic data that will be published in February and March.

1. Will the strength in the Australian property markets continue in 2020?

The auction markets finished 2019 strongly indicating plenty of home buyer and seller confidence.

Other factors that will underpin strong property markets especially in Sydney and Melbourne include:

• The First Home Buyer Scheme that came into effect on January 1st
• The prospects of further interest rate cuts during the year
• Fear of Missing Out – as the markets rise strongly

The missing link at present is investor activity. Investors are keen to get into the market, but many are having trouble getting finance due to restrictive bank lending practices.

1. What will be the major influencers of our property markets in 2020?

Just as lack of confidence held back our property markets at the beginning of 2019, strong market confidence will be one of the main driving factors of our property markets in 2020. Particularly the Melbourne and Sydney property markets

Other factors that will lead to continued property price growth include:

• Pent up demand as property values in Melbourne and Sydney retrace their lost ground. These markets should reach new price peaks in the first half of 2020.
• Supply and demand – our population keeps increasing, but there is now very little new dwelling construction in the pipeline which will create a shortage of housing.
• Falling interest rates over the first half of the year
• A slowly improving Australian economy.

The bottom line.

The opportunity to take advantage of the beginning of a new property cycle only comes around a few times in your lifetime.

Strategic property investors and smart home buyers will take advantage of the opportunities the property markets present in 2020.

Links and Resources:

Michael Yardney

Metropole Property Strategists

Dr. Andrew Wilson, chief economist of MyHousingMarket.com.au

Join us at my annual Property Market and Economic Update – come as my guest using the Coupon Code: PODCAST Click here for details

Show notes plus more here: 4 property lessons from 2019 that will help you in 2020 + Your questions answered | PROPERTY INSIDERS with Dr. Andrew Wilson

Some of our favourite quotes from the show:

"If you listened to all the Negative Nellies and the property pessimists, you would have missed out on some great opportunities 12 months ago." – Michael Yardney

"Mistakes teach you important lessons." – Michael Yardney

"The more you know, the more control you're going to have over your 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

During his five years studying the rich and the poor Tom Corley identified 10 hard truths about the wealth gap that no politician or member of the mainstream media would dare reveal.

And as I share them with you today, you'll probably get a few surprises.

These aren't just our thoughts.

In his 5 year study, Tom asked 361 rich and poor people 144 questions each. That's 51,984 questions.

From the data he gathered, he was able to identify 344 differences between the way the rich and the poor conducted their lives.

Over one hundred million individuals have read something about my research, which has been cited, quoted, referenced, commended and criticised in 25 countries around the world.

As a result, Tom has made a lot of friends and a lot of enemies.

And he's about to make some more with this podcast.

His research opened my eyes.

One of the many benefits of having done this research is that he became privy to the inner workings of the lives of the rich and the poor.

For five years he was that fly on the wall.

And this fly has identified 10 hard truths about the wealth gap.

10 Hard Truths About the Wealth Gap

1. Bad Parents – The poor have parents who simply do not do their job. Drugs, alcohol, gambling and a host of other parent character flaws pull the rug out from underneath their kids.
2. Broken Families – The poor are raised in broken families. Divorce, incarceration, abandonment are common denominators among the poor that fracture the family unit.
3. No Work Ethic – The poor are bad employees who have a bad work ethic. As a result, they find themselves regularly unemployed.
4. Financial Negligence – The poor spend their money as quickly as it comes. They don't save. They don't invest. They are financially illiterate.
5. Poverty Ideology – The poor believe they will be poor their entire lives. They see poverty as a fact of life. They are without hope and thus, without motivation to escape their poverty.
6. Bad Health – The poor do not exercise regularly. They eat and drink too much junk food. They frequent fast-food restaurants. They take drugs and drink too much alcohol in order to numb their pain. They are overweight and out of shape.
7. Uneducated – The poor do not embrace education. It's not part of their culture. They do not self-educate themselves. They do not read. They do not engage in self-improvement.
8. Bad Habits – The poor have many bad habits and few good habits.
9. Entitlement Ideology – The poor believe they are entitled to things others have to work very hard for.
10. Victim Ideology – The poor believe others hold them back in life. They see themselves as victims. They look to the government to take the wealth of those who are producing and working hard in society and redistribute it to poor people.

I now know that rich people, particularly the self-made rich, are the good people.

They were raised by good parents, parents who cared and who mentored them to succeed.

Poor people, conversely, were raised by bad parents.

Some were raised in broken homes, some were raised with little to no work ethic, some were raised to be ignorant of finances, some were raised with a poverty mindset, some were raised to disregard their health, some were raised to shun education, some were raised with bad habits, some were raised to believe they should be given free stuff and some were raised to believe the world was aligned against them.

We don't have a wealth gap in this country.

We have a parent gap.

If, as a society, we truly want to end poverty, we have to first acknowledge the cause of poverty.

Parents.

Parents cause poverty.

Parents are to blame.

As a great man once said, "the truth shall set you free."

Links and Resources:

Michael Yardney

Tom Corley - Rich Habits

Get your own copy of our international bestseller Rich Habits Poor Habits

Show notes plus more: 10 hard truths about the Wealth Gap

Some of our favourite quotes from the show:

"We know that children develop habits from things they see, things they experience, things they hear, and their mentors as a child are really their parents." – Michael Yardney

"Bad mentoring from parents is more likely to – but not certainly – going to give you a disadvantage in life." – Michael Yardney

"It's probably worthwhile reminding our listeners that we're all walking around with some good habits, some bad habits, some rich habits, some poor habits, some habits that are empowering us, and some habits and beliefs that are disempowering us." – 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.