Good financial habits are the basis to creating wealth. Building financial freedom is not something you learn overnight, it takes time and a foundation of solid habits that you perform day in and day out.

There is no such thing as ‘getting rich quick.’ Yes, you can win lotto, but most people blow their winnings because they don’t have the knowledge behind them on how to properly manage their newfound wealth.

When you’re trying to build up good financial habits, keeping it simple is the way to go. You want to set yourself up with the best possible chance for success by starting with habits that you can actually achieve and most importantly, maintain. This in turn builds your self-confidence and increases your motivation towards the journey of financial abundance.

HOW TO CREATE NEW HABITS?

By definition, a habit is an acquired behaviour that is regularly followed until it becomes almost second-nature. It’s a bit like driving a car, when you first learn, it’s a process that requires hours of practice. However once you’ve mastered the skill, you’ll find yourself arriving at home without remembering much of the drive, and that’s because you were on auto-pilot.

The key skills you’ll need to develop to form and keep your new habits are willpower and discipline. When a particular action becomes a habit, a neural pathway is formed to reinforce this behaviour. When you nurture those actions that lead to wealth creation, they’ll soon become second nature, leading you to automatically (habitually) do those things that can help you achieve financial success.

Now we’re all creatures of habit, just take a look at your daily routine – you probably brush your teeth, have your morning coffee and take the same route to work every day. So why is it so hard to form new healthy habits?

It can take anywhere from 18 to 254 days for a person to form a new habit and an average of 66 days for a new behaviour to become automatic. There is no one-size-fits-all approach when it comes to creating new habits. It generally requires trial and error until you find what works for you.

As previously mentioned, keeping it simple will give you the strongest possibility of maintaining your new habits. The reason why most people give up so easily is because they skip a day or two and think there is no point in continuing.

If you forget now and again this does not impact your ability to form a new habit – what is important is that you stick with it and remain disciplined.

Start small

Most people struggle to create good habits because they make bold goals that are unsustainable. If you’ve never been to the gym and you expect yourself to go five times a week without fail, then you’re in for a shock.

For example, if you’re wanting to save for a house deposit then begin with putting away a small percentage of your income, and once you become familiar with that you can re-evaluate your budget to identify where you can cut back spending in order to save more. The satisfaction you’ll get from actually saving what you say you will is unmatched.

Do it every day

Like real estate is a long-term investment, so is creating new habits. As mentioned, on average it takes 66 days for an action to become habitual. Building good financial habits isn’t as glamorous as most people think, it requires small steps each and everyday that over time will build up to a massive shift.

Make it easy

It’s all about working smarter, not harder! You are more likely to form a new habit if you clear the obstacles that might stand in your way. Humans are especially sensitive to small friction in our environment, so by reducing any distractions you’ll be more likely to form a new habit.

For example, if you’re wanting to learn more about wealth creation through property investment, then perhaps an e-newsletter about real estate might be the solution for you. Positive real estate has a weekly email that’ll give you the education you need to build your property portfolio.

Reward yourself

In our fast-paced world, most people jump onto the next thing without properly acknowledging and celebrating their wins. Rewards are an important part of habit formation.

Rewards teach us which actions are worth remembering in the future. Your brain is a reward detector. As you go about your life, your nervous system is continuously monitoring which actions satisfy your desires and deliver pleasure. Feelings of pleasure and disappointment are part of the feedback mechanism that helps your brain distinguish useful actions from useless ones. Rewards close the feedback loop and complete the habit cycle.

GOOD FINANCIAL HABITS EXAMPLES

Building a financial plan is a great place to start when it comes to beginning your journey of creating good financial habits. It can help you with everyday money decisions, and provide you with guidance when you get to the stage of deciding what types of vehicles you’re going to invest in to create wealth.

Your plan should include the following attributes:

• Specific goals that define what you want to achieve and which are aligned with your values and your personal situation.
• Clear, actionable steps that lead you towards your goals.

Identifying why you want to create good financial habits

As with anything in life, in order for it to stick you need to have a really strong reason why. You should have solid reasons that will encourage you to keep going when things get tough. Understanding your why will also help guide you in certain areas down the track.

For example, if you choose to invest in real estate to build your wealth, you will likely have to make decisions about buying, selling or renovating. Having clarity around why you are aiming for financial success will aid you in this decision making.

Most people want to create wealth so that they can retire and live life on their terms. With the cost of living rapidly rising, retiring stress free is becoming out of reach for many Australians. This is because most go about their lives thinking their Super and pension payments will be enough for them to thrive in their golden years.

Unfortunately, the harsh reality is that is simply not going to be enough. The Australian pension payment is $36,000 per couple or $24,000 if you’re single. Wanting more than to merely survive in retirement is a pretty solid reason why.

Set specific and actionable goals

This was vaguely mentioned above but it’s worth reiterating as it’s a deal breaker when it comes to achieving the outcomes you desire.

Once you are clear on your “why” you’ll be able to design goals that are specific and actionable. Creating goals that are relevant to financial success and not impossible to achieve are much more powerful than wishy-washy goals such as “pay off debt soon” or “make more money”.

As with anything in life, there is risk, especially when it comes to investments. If your chosen wealth creation vehicle is real estate, then in order to better inform what kind of specific and actionable goals you should be setting it helps to understand your risk profile.

When we talk about risk in real estate, we’re essentially gauging how willing you are to expose yourself to loss and how you adapt when things go wrong.

Create a liveable budget

Forming a budget is a good financial habit to make because you should always know how much money is coming in and going out of your accounts each month. Without knowing this vital financial information, you may be spending more than you make – leading to a life of debt and poor credit.

A simple way to gain a clear view of your financial situation is to track your spending for at least two weeks – if you can do one to three months, even better. It can be as simple as writing it down on a piece of paper.

Once you know where your money is going, you’ll be able to spot patterns. Where are you wasting money? What areas can you cut back on to increase your savings? This will help you to create an action plan that you can live by each day.

Pay off debt

Debt is not always a bad thing, especially when you are leveraging it to invest in yourself or your financial future (student loan or recycling equity). However, over the course of your life, you might be amazed by how easy it is to get into debt, and how difficult it can be to reduce it.

Bad debt refers to borrowing money in order to fund your lifestyle, usually on items that have no value or that will depreciate over time. Think credit cards, car loans, hire purchases and laybys.

Making a plan to pay off all of your bad debt is a good financial habit that will (hopefully) encourage you to avoid accumulating debt in the future.

When making a plan to pay off debt, consider the below:

• List how much you owe and the type of debt (credit card, Afterpay etc).
• Prioritise your debts from highest to lowest by interest rate. Pay off debts with higher interest and fees first.
• Make a repayment plan.
• Work out if you can afford (based on your budget) to pay more than the minimum repayments.

Find a way to create passive income

You have probably guessed by now that property investment is our go-to when it comes to building wealth. Through capital growth and rental yields, real estate can offer the ability to increase your net worth and also provide you with a stable passive income.

Passive income is essentially money you make residually through endeavours with minimal routine upkeep. Basically, the idea is for your money to work for you, not you working for money.

Real estate can generate income through rental yield. When building an investment portfolio you want to be looking for positive cash flow properties. This is where your rental income and tax deductions cover the majority of your running costs, and then some to generate a profit.

Historically house prices have increased over the years in Australia. We have seen a 23.7% increase in residential property prices in the last 12 months, one of the strongest annual growth records. To take advantage of these capital gains, you have to be committed to property investment for the long-haul. Most real estate investors adopt a buy-and-hold strategy so they can be a part of the gains of a normal real estate cycle.

HOW TO REINFORCE YOUR GOOD FINANCIAL HABITS

You are the average of the five closest people you spend time with. This is something you want to be aware of when you’re embarking on this journey of creating good financial habits.

For example, if you’re wanting to retire by 40-years-old with an extensive property portfolio then you’re going to need to start connecting with like-minded people who want to do the same (or have already done it).

When you first start planning for your financial future, it can be very overwhelming. The best thing you can do is get support. If you’re thinking that real estate could be the wealth creation vehicle for you then come along to one of our FREE property investing masterclasses.

This jam-packed two hour event will give you all the information you need to start out in property investment, and you will be able to ask questions to our expert team.

Register now for the free property investor webinar

Real estate has the potential to become your main vehicle for creating wealth, but only if you take the time to learn some crucial property investment basics to set you up for success as an investor.

All too often, wanna-be investors try to jump into the game without fully understanding what they’re getting themselves into. Before you even put in your first offer, you need to determine what your “dream” financial goal is, and then from there you can develop a custom-built plan that not only suits your current lifestyle but also challenges you to make decisions for your desired future.

These are the four property investment basics that every investor needs to know before buying an investment property.

1. BRAINSTORM YOUR FINANCIAL FUTURE

In order to set yourself up for success, you need to consider what you desire from property investing. This is the first step in property investment basics, so be bold and dream big – your future is in your hands!

Having a clear understanding of the end-goal will greatly assist you when it comes to planning how to get there. Perhaps you’re wanting to work less hours, travel more or retire at 40? Sit down, grab a pen and paper and start mapping out your dream life.

Setting up your plan of attack

Now that you have a clear understanding of what you want, it’s time to establish a timeframe for achieving your goals. The key to building a sustainable plan is to break it down into micro-steps that you can work towards each week.

1. Establish a six month, one year and five year time frame.
2. Under each time frame, create a list of the five most important steps that you need to do to get closer to your target.
3. Schedule a time, either quarterly or bi-annual to review your goals.

By reviewing your goals regularly, it will give you the opportunity to adjust your plans as your personal situation changes.

2. GET YOUR FINANCES SORTED

The foundation of your property portfolio is finances. So the next step in property investment basics is getting a handle on your money.

Pay off consumer debt

Before you even think about purchasing a home, you want to eradicate all of your consumer debt. Having consumer debt is a massive financial liability that will make it incredibly difficult to secure lending from the banks.

The less consumer debt you have, the better your ability to both purchase and service your investment properties.

Create and stick to a budget

Be honest with yourself. If you’re not disciplined with your finances, your success will be limited at best.

A budget can be done on a rough piece of paper, or if you’re after something a bit more sophisticated, then there are a multitude of budget templates online to help you track your income and expenses. Once you know where your money is going, you’ll be able to spot patterns.

The essence of budgeting is to track what’s coming in and what’s going out. Your financial situation cannot be improved if you don’t know what’s happening in your bank accounts.

Being able to create and stick to a budget is a vital skill that will assist you greatly as you expand your property portfolio and accumulate wealth so the earlier you can get a grasp on it, the better.

3. LEARNING THE KEY CONCEPTS

When you’re first starting out in property investing, it can often feel like there are a million things you need to know before you can even purchase your first home. For many people, this can be a put off and is usually when they tend to throw in the towel. However, if you put some time aside to become informed, the rewards for your efforts will pay off – literally!

While there are several key concepts that you should have a basic understanding of, you certainly do not need to become an expert in everything real estate to build a successful property portfolio.

Here’s a few simple things to be across.

Drivers of the real estate market

In order to secure a great property to add to your portfolio, you need to understand the drivers that influence the market. For example, knowing that investment in infrastructure generally leads to increased population will help you identify the areas that are on a growth curve. The main market factors to be aware of are:

• Infrastructure – spending on infrastructure points to a growing economic base
• Yield variation – signals growth
• Supply and demand – indicates need in the marketplace
• Population – fuels growth in an area
• Economics – reveals clues to an area’s capacity for growth
• Demographics – influences growth – as incomes grow, so do property values

Positive versus negatively geared property

A property is negatively geared when the expenses of owning the property – including maintenance costs, depreciation and borrowing costs – exceeds the rental income, resulting in a loss.

Negative gearing deductions are most beneficial to people in high income brackets where they are in the top marginal tax rate. This is because the ‘loss’ is able to be offset against other income (e.g. salary or business income) therefore reducing the tax obligations of the owner.

Including depreciation within property expenses can increase the loss on paper without incurring a cash loss. Therefore, increasing the expenses and amount of tax deductions available.

This strategy works very well for high income individuals as the more money which is borrowed the more interest is charged which can then be deducted 100% from the owner’s taxable income.

If you’re planning to adopt a negatively geared property strategy, then you must have a good understanding of the potential costs. While negative gearing allows investors to recoup some of the costs via tax savings, it still results in losing money and therefore cash is needed to help service the property. The long-term strategy behind negative gearing is the hope that the losses will eventually be compensated in the form of capital gains in the future.

A property which is geared positively means that the income derived from owning the property exceeds the financial and maintenance costs incurred. Positive gearing is generally seen as lower risk than negative gearing because it provides more consistent income. The surplus income can cushion investors from interest rate hikes or unexpected property (or life) costs.

With a positively geared investment, investors are not able to reduce their income or get tax benefits. The ‘profit’ made on the rental income will be taxed at the appropriate rate. However, what positive gearing does provide is additional income which can be used to pay down the mortgage quicker, or used to invest elsewhere.

Both negative and positive gearing have their place in a property investor’s portfolio which is why it is important to have a clear understanding of both to determine how they may fit into your real estate strategy.

Positive cash flow versus positively geared property

A “positively geared” property creates more income than expenses before tax, which means your rental return and tax breaks cover your outgoings, leaving your wage or income unaffected. Whereas positive cash flow property only creates more income than expenses after tax deductions and refunds are calculated, making it a self-funding investment.

Investors that follow a positive cash flow strategy understand that living off passive income is the key to an early retirement. That isn’t to say that positive cash flow is better than a positively geared property – it all comes down to your specific financial situation.

For example, if you’re looking to purchase in a high growth area then perhaps a positive cash flow strategy will be right for you. Generally speaking, new or newly renovated (high depreciation) homes hold the greatest potential to be positive cash flow because you can claim a larger “on paper” loss.

On the other hand, properties which are older and less expensive have the potential to offer a strong rental return, creating a positively geared property.

Your strategy will come down to whether you want to lose money and recover it through taxes or earn money before taxes and offset the income received through tax deductions, essentially paying little to no tax.

The importance of safety buffers

Regardless of what strategy works for you, the concept of safety buffers is a key underlying factor to all successful real estate strategies. Every investor’s budget should include money set aside for any unforeseen expenses that may arise. This is not extra money to go on holiday or buy a new car, it should be reserved for legitimate expenses connected with your investment property(ies).

Having your safety buffer sit in an offset account gives you the ability to earn compound interest until such a time where this money may be needed.

An offset account is simply a savings account which is linked to your loan account. Let’s assume you have a mortgage of $100,000 which is linked to an offset account with a balance of $10,000.

In this scenario, you would only accrue interest on $90,000 rather than the entire $100,000. You will still pay back the principal of $100,000, however the interest will only be calculated on the $90,000. Therefore, your mortgage repayments will be more effective at reducing both the principal and interest on your loan.

4. GET HELP FROM EXPERTS

Now that you have a basic understanding of the key concepts of property investing, it is time to put them into action. Remember that knowledge is only potential power. You can research for months, but if you take no action, you’ll still be back at square one.

Beginner investors often experience information fatigue, they know what to do but don’t know where to start. This is why it is crucial to develop your six-star team that will help you climb the ladder of success. Let’s explore this further:

Find a good mentor

The best way to learn is from someone who is doing what you want to achieve. When learning something new, mentoring can help ease the learning curve because in addition to “textbook” knowledge, a student under the tutelage of an experienced property mentor can take advantage of the many years experience of their mentor without having to go through the experiences themselves.

Establish relationships with industry experts

Some of the most successful people in the world will tell you it’s ‘who you know’ not ‘what you know’ and this couldn’t be more true for the real estate industry.

Find networking events that give you the opportunity to mix with industry experts. Our free real estate investing seminar is a high-value two-hour event that will connect you with the people you need to know to build your team.

Having the right team is vital for your success, by surrounding yourself with knowledgeable property professionals, you will be putting yourself in a position to soak up all that they know. It’s all about working smarter, not harder.

PROPERTY INVESTMENT BASICS NEXT STEPS!

Now that you have a good understanding of the four top property investment basics, it is important to remember that everyone’s journey is unique and there is generally no one size fits all approach to real estate investing.

As long as you are aware of all strategies, and you work with a team to determine which is the best fit for you and your long-term goals then you’ll be on your way to creating generational wealth through property investment.

The best thing you can do is get support, so come along to one of our FREE property investing masterclasses. Our coaches and mentors have real life experience as investors and can give you the tools, resources and knowledge to help you build your property portfolio.

Register now for the free property investor webinar

It’s the Australian dream – the clock ticks 65 (or earlier) and off you sail into the sunset of retirement to live out the rest of your years stress-free. Sadly, for some, this will remain nothing more than a dream with the drastic cost of living rising and no plan to cover the shortfall – that is, unless you take onboard these retirement planning tips which could change the way you prepare for the future. Our property investment groups is a great place to keep informed about the ever changing landscape of real estate investing.

The truth is, unless you can live off $500 a week then you’ll need to start planning ahead now. That’s because a mere few hundred dollars is all you’ll get if you have $523,000 in your super by age 65 (estimating that you’ll live to 85).

This is the approximate amount that Australian Super Funds of Australia (ASFA) says you’ll need to live a comfortable retirement, based on the assumption that you’ll also receive the pension which is $36,000 per couple or $24,000 if you’re single. It doesn’t sound like a lot does it?!

Assuming you want more than to just scrape by after all those hard years of work, then these retirement planning tips are what you need to be across in order to retire stress free.

TIP 1 – CRITICALLY EVALUATE YOUR SITUATION 

What is your financial situation right now? Before we look at where you’re headed, we first need to understand where you are today. Do you live paycheck to paycheck? How much do you have in your super? What about your emergency fund? These are all extremely important questions that most Australians overlook when wading through life.

The thing about financial security is that when you have it, everything else in your life changes for the better. That’s why the sooner you start creating wealth, the safer you’ll feel and the more you can live the way you want without having overarching guilt or feeling stuck in your current position.

There are three basic principles when it comes to creating wealth. So, put aside one hour, grab a pen and paper and let’s get a better understanding of your current financial situation.

Principle 1: Money buckets

Money is an energy exchange, the better you understand it, the more you’ll attract. As we grow up, money is often a taboo subject, and because it’s not talked about, we enter adulthood knowing nothing about money.

So here’s your first lesson; money buckets. They’re basically how you grow and accumulate wealth. Most Australians only have one thing in their bucket e.g. their wages. We know this isn’t going to create wealth for a stress free retirement.

You need to diversify and put your eggs into other buckets. These come in the form of other assets or strategies that work alongside your wages to help build that wealth, whether that’s shares, side hustles, or our favourite – real estate.

Principle 2: Knowing your number

This is asking the hard question, how much money do you need to die? Most people pluck a number out of thin air with no strategy behind it. Actually no, most people never even answer this question!

To create an informed investment strategy that will allow you to retire stress free, you need to work out what you need every month to live the life you want. Whether you’re after a comfortable or lavish lifestyle, you need to do the maths. If you don’t know how, this method will take you through the process. 

Principle 3: Learning what grows your wealth vehicle

Let’s be clear, property doesn’t need to be your vehicle of choice for creating wealth for a stress free retirement. But, if you want an investment strategy that’s safe, steady and guaranteed to look after you in the future, then you need to consider it as an option.

This is because real estate has always had incredibly reliable returns, and being a physical asset, it will always be around in society. The key to creating passive income from property long-term is understanding what drives growth.

There are six market drivers that grow real estate value:

• Population growth
• Infrastructure growth
• Supply vs demand
• Economics
• Demographics
• Yield

This is explored further in tip number five!

TIP 2 – SET SPECIFIC AND ACTIONABLE GOALS 

Once you are across the money principals above, the next step on the retirement planning tips list is to set some goals! Take note of the words ‘specific’ and ‘actionable’ – we’re building an informed strategy here. There is no substance to saying “I want to have five investment properties in 10 years” with no action steps to go along with it.

With any investment comes risk, and when we talk about risk in real estate, we’re essentially gauging how willing you are to expose yourself to loss and how you adapt when things go wrong.

As property investors, risk is all part of the buying game, so understanding your risk profile is crucial to your overall success. Once you know where you sit on the risk scale, this will help better inform what kind of specific and actionable goals you should be setting for your retirement plan.

TIP 3 – SET AND FOLLOW A LIVEABLE BUDGET

Once you’ve got your goals set in stone, you need to create an action plan that you can live by each day. A budget need not be complicated, the simpler it is, the easier it will be for you to follow. A good way to start is to track every dollar you spend for at least two weeks – if you can do one to three months, even better.

You can do this on a rough piece of paper, or if you’re the king or queen of organisation then you’ll find joy in knowing there are heaps of budget templates out there to set you up. Once you know where your money is going, you’ll be able to spot patterns. Where are you wasting money? What areas can you cut back on to increase your expendable income?

Make budgeting fun! Yes, it’s important to plan for your retirement but do it in a way where you can still indulge in those things that mean most to you. The key to budgeting is identifying and cutting back on your frivolous spending that doesn’t help your financial situation at all.

TIP 4 – PAY OFF DEBT

To ensure a stress free retirement you need to eliminate all of your debt – both the good and the bad – before you put in your notice.

For example, if you have a home mortgage and/or consumer debts (aka bad debt), focus your efforts on paying these obligations off as a first priority.

Bad debt is one of the top factors that holds back real estate investors. A lot of people are living on borrowed money without creating a financial outcome from what they are borrowing.

Potentially one of the most important retirement planning tips is to eliminate bad debt. It is the cleanest way to fix your credit profile and surge ahead as a property investor. Rip up the credit card and get rid of the car loans and those pesky Afterpays.

This will free up the funds you need to supplement your super, add to your emergency cash and perhaps buy your first (or next) investment property.

TIP 5 – COMMIT TO BUYING INVESTMENT PROPERTY(IES)

As previously alluded to, property investment is the go-to investment vehicle for creating wealth when it comes to retirement planning because as we say, real estate is a marathon not a sprint. When it comes to retirement, you want a vehicle that delivers consistent results over the long term.

Residential real estate has provided quality returns over the past 20 years, matching Australian Shares and outpacing inflation. In fact, a report from the ASX and Russell Investments released in June 2018 examined the returns of long term investments.

It found from the 20 years to December 2017, residential investment property saw better gross returns than the share market.

Investing in property for the first time can be exciting and thrilling. It can also be very, VERY confusing, and not to mention scary. This is your future, there’s a lot of money at stake and understandably, you don’t want to stuff it up.

As a beginner to property investing there are some important things to remember and steps to take if we want to get off to the best start.

TIP 6 – LEARN TO IDENTIFY THE BEST MARKETS

If this is all new to you then exercise some patience and do some really great, diligent research. The right property for you to buy may not be in your street or even in your state.

Take some time to research real estate markets around the country. Remember the six market drivers we discussed in tip one that grow real estate value? Those are called macro drivers and they will help you determine what city or state to buy in. For example, cities with infrastructure developments will likely attract people to the area and lead to population growth.

Then there are also micro drivers, which tend to be seen more likely in suburbs or towns.

The micro drivers are:

• The owners established benchmark
• The new established benchmark
• Socio-economic
• Symbolic landmarks
• The ripple effect

For example, when looking at suburbs or towns, you want to be looking for the “worst” house on the best street, (owners established benchmark) this allows for an opportunity to add value to reach the market-rate of nearby properties.

Another great way to see if a micro market will grow is to determine average income versus average house price, in other words, if wages are high and house prices affordable, the property market can rise in value.

TIP 7 – BUILD A PROPERTY PORTFOLIO 

Now you know the benefits of property and what it takes to retire stress free by calculating your magic number based on your retirement living goals – great! But how do you go about building a property portfolio that reflects that?

Two things – you need the right team and the right strategy.

TIP 8 – ENROL A TEAM OF EXPERTS

The key to seeking advice is to get it from someone that is doing what you want to do. As much as you love your friends and family, unless they’re very savvy property experts who have spent years staying up to date with market behaviours and patterns then, it is likely that

their concerns and strategies will not make sense from an investor’s perspective today. Their advice may actually be the opposite of what an educated, experienced property investor would suggest.

In order to successfully use property as a wealth creation vehicle you need to assemble a six-star team to manage your portfolio. This team is comprised of:

• A property strategist expert (the captain of your team – a coach, mentor, investor and advisor who understands your big picture strategy)
• A finance expert
• An acquisitions expert
• A property management expert
• An accounting expert
• A financial planning expert

Most people end up as the statistic of 99% of investors who fail in property because they don’t ask experts for help. Our team of expert coaches and mentors can help you on your way to becoming one of the one per cent. The one percent of Aussies who are successful property investors.

SET UP YOUR RETIREMENT PLAN TODAY

Before you even buy your first investment property, you should have a plan in place that includes these retirement planning tips. You know, as the saying goes, if you fail to plan you’re planning to fail.

If you’re ready to get started in your real estate journey so that you can retire stress free, then sign up for our next free property investing masterclass. These high value events are packed full of information about where the markets sit right now, how to invest both wisely and smartly, and it’ll connect you with the TRC-Gorod team who have been dominating the property investing industry for over 20 years.

Saving for a house deposit to get onto the property investment ladder is tough. Especially with the cost of living drastically going up. After bills, rent/mortgage, groceries, petrol, insurance… there isn’t a whole lot left for saving. But that doesn’t mean it’s impossible! By adopting these 10 ways to save for a house deposit you’ll be ten steps closer to building out your portfolio and creating future wealth.

Typically, you’ll need at least a 20% deposit (an 80% loan-to-value ratio – LVR), for an investor home loan if you want to avoid paying lenders mortgage insurance (LMI). Some banks will allow you to put down a deposit smaller than 20% to buy an investment property, but you’ll need to pay LMI which adds an additional cost to your loan.

As a rule of thumb, aiming for a bigger deposit is better because it shows the lender that you’re a good saver and are able to manage your finances. There are a few banks that will allow a 5% deposit but that is usually the lowest amount they will entertain. A 5% deposit on a $500,000 loan equates to $25,000, which is far less than many prospective investors imagine their deposits will need to be.

BIGGER DEPOSIT VS SMALLER DEPOSIT 

There are also other costs you need to consider when purchasing your first investment property. These can include:

• leasing fees
• property management fees
• repairs and maintenance to ensure minimum rental standards
• body corporate fees
• tax
• loan, interest, and bank fees.

If you’re not prepared, you can easily get caught out by the costs involved in running an investment property. Where possible, a larger deposit is always preferred so that a partial amount can act as a safety buffer if needed for any hidden costs.

And now, here are the 10 ways to save for a house deposit.

1 – PAY OFF YOUR DEBT 

It sounds simple enough, but you’d be surprised at the number of people drowning in crippling amounts of debt. There are two types of debt, good debt and bad debt. 

What is good debt?

Good debt is money you borrow that is used to purchase something that will either grow in value or bring in an income. Such as your mortgage or a student loan. Your investment property will increase in value over time and provide you with rent. A student loan gives you opportunities in your career and increases your earning potential.

Paying off good debt should still be considered when saving for a house deposit, however your main priority needs to be bad debt.

What is bad debt?

Bad debt is anything that is used to fund your lifestyle, debt that is spent on things that have no value, or that go down in value over time. Things like credit cards, car loans and holiday loans won’t leave you any better off in the long run.

With social media running rampant through society, it is common these days for you to feel like you “need” to purchase the latest and greatest in order to keep up with the trends. The “buy now, pay later” phenomenon has developed rapidly in Australia with Afterpay now being a billion dollar company. In April 2021 they notched up their 10th millionth customer. Isn’t that just terrifying?!

Services like Afterpay have made it incredibly easy for customers to access something they need or want immediately. If repayments are made on time, often little to no interest is paid. However, if repayments are not made in the agreed time period the late fees or interest can incur.

Why should you pay off your debt quickly?

People often think they’re better off paying the minimum on their loans so that they can save money for a deposit, however this is actually very counterintuitive.

The average Aussie owes $3841 on their credit card according to Canstar. If you are only making the minimum payment, almost all goes to pay the interest incurred and only a tiny fraction goes to pay the purchases you charged (the proportion depends on your credit card rules).

This means that a credit card balance of $3841 would take you almost 30 years to pay off with minimum repayments. The frightening thing is, the interest you would pay would be almost $9000!

However, in this scenario if you paid $189 per month your debt would be paid off in only two years and you’d shave off over $8000 of interest charges.

Bottom line, you can’t save for a house deposit while you have bad debt. In fact, your ability to service an investment property with loads of unsecured debt is impaired as well.

2 – GET A BUDGET

You’ve probably heard this a thousand times. It is a common misconception that budgeting is reserved for the poor. However, this couldn’t be further from the truth. The richest of the rich generally all follow a strategised budget. How do you think they became rich in the first place?

You guessed it, let’s get into budgeting!

A budget is the single most effective tool for saving money. You can use an excel spreadsheet which will cost you nothing – or you can invest in accounting or budgeting software.

The essence of budgeting is to track what’s coming in and what’s going out. Your financial situation cannot be improved if you don’t know what’s happening in your bank accounts.

If you want to go all in, try and live off of 50% of your income for one month. If you can do this, you will end up in a place where you can budget for anything. You will learn to survive only with what you have, it is in our human nature to make do and this will set you up for a future of wealth.

A more conservative budgeting tip is to follow the 50/30/20 rule which is the idea that 50% of your income goes towards your needs, (mortgage, bills) 30% of your income goes towards entertainment and 20% needs to be invested into income producing assets.

While a budget is important to have while saving for a house deposit, it will become vital once you own that investment property.

3 – SAVE CONSISTENTLY 

Once all your debt is eliminated then you can begin saving. The best and easiest way to save is by adopting the “Pay yourself first” method.

Pay yourself first method

Paying yourself first means that instead of paying all your bills and saving whatever is left, the very first thing you do when your wages come in is to send a percentage of your income to your savings and investments before covering things like food, petrol, insurance etc.

It’s useful because you’re saving some of your money for your future self before it leaks somewhere you hadn’t meant it to. To make this method fool-proof it is suggested that you set up automatic withdrawals – you know…”out of sight, out of mind”, right?

 4 – ADOPT A GOAL-ORIENTED MINDSET

If you’ve never set any goals before, then it is likely you bounce through life like a pinball doing what others want instead of accomplishing what is important to you. So the magic question is – what do you want?

It is very common in Australia to reach adulthood and never be asked this question. Society is designed to trick you into thinking you know what you want but most people never stop and reflect to determine their vision and mission for life.

One fundamental attribute you’ll find among the wealthy is goal setting. They know exactly what they want and they create a plan to achieve it – a plan that they relentlessly follow until it’s completed.

Here are five powerful ways to become more goal-oriented:

1. Start with the end in mind and work backwards
2. Get specific and then break down into sub-goals
3. Get clear on your values
4. Make time for inspiration
5. Form goals around your strengths

5 – PRACTICE FINANCIAL DISCIPLINE

A basic definition of ‘discipline’ is to exhibit self-control and avoid impulsivities. So to apply this to your financial situation would be to control your money and avoid impulsive spending. Financial discipline is one of those things that is a lot easier said than done.

In a world full of marketing noise, where every brand is trying to sell you something it can be difficult not to splurge. If you want to save for a house deposit fast, then a great way to “turn off the noise” is to cancel all email subscriptions where their only purpose is to take your money.

If you do come across something you fancy, then institute a mandatory three-day waiting period for every buying decision, large or small. If you still want it three days later, go ahead and buy it. Chances are, though, that you won’t remember why the item appealed to you—or even what it was you thought you wanted.

Having financial discipline will serve you now while you’re trying to save for a house deposit and it will be absolutely indispensable when you start expanding your property portfolio.

6 – SELL OR REORGANISE 

It’s time to cut ties. Needs and wants are two very different things that social media, large corporations and trends like to blur together. If you’re wanting to save for a house deposit fast then there are some big steps you can take to bank some extra cash without doing a bucket load of overtime.

• Sell off assets (sell that second car, boat, etc.)
• Live on one salary and save the other
• Move your savings to a high interest account (if it’s not cost prohibitive)
• Start your own side hustle
• Sell off your clutter on and offline
• Move your high interest debt to a zero interest credit card and pay it off BEFORE the introductory period expires.
• Change over to a “cash and carry” mentality. Keep your credit cards at home.

7 – SLASH YOUR BILLS 

Reduce your outgoings and you’ll instantly save money. Start with the non-essentials such as subscriptions – Netflix, Disney +, Amazon Prime, Spotify etc. You do not need them all!

It is important for quality of life to still enjoy entertainment but if you want to save for a house deposit fast then you need to get creative. There are a tonne of leisure activities that are free – hikes, the beach, a walk or a bike.

Once you have eliminated those bills that you don’t need, try to find ways to reduce your essential bills. Insurance, phone and internet providers love customer loyalty and I am sure they would hate to lose you, so ring them up and see if they can do a deal for one of their longest standing customers. You never know unless you ask!

8 – GET HELP

Find one or more individuals who would be willing to buy the investment property through a joint venture. Granted you’ll split ownership, but part of something is always worth more than all of nothing!

Friends and family – even colleagues – are the obvious people you might go to if you want to form a joint venture and invest in real estate, which can come with difficulties. There are three simple rules when investing with people you know to ensure your financial (and physical!) survival. These are:

Have clear goals

Make sure everyone wants the same thing. Competing strategies will only end in disappointment and confusion, so before you decide to enter a joint venture, ensure all parties are on the same page.

Have clean documentation

Once you have agreed on a strategy, write it down, have all parties sign on and file it somewhere safe. Same goes for all of your agreements as to how much money is being invested, who owns what, who’s liable for what and what to do if something unexpected should happen. While written proof doesn’t always solve an issue, having a signed agreement never hurts.

Know your role

Be clear about what yours and everyone else’s role is and respect that position. Everyone must have an understanding of what each role entails and ensure you have the time and money to take your role on without undue stress or anxiety.

9 – CLAIM YOUR INHERITANCE EARLY

It’s not uncommon for parents to help their kids get into a property – even if it’s an investment property.

If they’re willing, your parents can gift you some of your deposit, however remember that lenders want to see that you can save money so part of the deposit needs to come from your savings which have accumulated over a period of time – typically at least three months.

10 – NURTURE A LOVE OF LEARNING 

No matter how long you invest there will always be something new to learn. Adopt an attitude of openness to learning new things and you will be amazed at what will happen.

However, don’t listen to just anyone. Find people who have achieved the success you are seeking and ask them how they made it. You are the average of your five closest peers so start surrounding yourself with people that are already property investing.

People love to share what they know, so take advantage of it and ask questions!

THE RIGHT TEAM KNOWS HOW TO SAVE FOR A HOUSE DEPOSIT 

A list of 10 ways to save for a house deposit is all well and good but we all know how hard it can be to stay motivated and disciplined.

The best way to stay committed is by having the right team to work with you. If you’re seeking a team of experts to help you get on the property ladder fast, then check out our free real estate investing seminars

Come along for this high value two-hour event, ask our property investment experts questions and get to know key people in the industry that can help you streamline your investing strategy and get into the property market quicker.

So, you want to find out how to educate yourself on property investment? Well, you have come to the right place. There are millions of free resources out there that claim to “help you get rich quick,” this is not one of them. In this blog you’ll find out exactly how to learn property investment, as well as the best ways to actually get started.

Real estate is a fantastic wealth creation vehicle if you’re wanting to create lasting long-term wealth. To become a part of the 1% that succeed in this industry you have to exhibit patience and persistence. If it was easy, everyone would be doing it.

With a commitment to learn property investment and all its ins and outs you’ll be able to grow a booming property portfolio, enjoy passive income streams and eventually create financial security for retirement.

Here’s a list of how you can get started:

GO TO OPEN HOMES

Creating wealth through property investment is 100% a numbers game. We all know this in theory but it rarely gets put into practice when people start investing in property.

Here’s a challenge – go to an open home and see how many people will be buying real estate based on an emotional decision. You’ll hear weird comments like, “It’s got a lovely kitchen,” or, “This master will get great afternoon sun”.

These comments are purely emotional and often people end up over spending due to buying with their heart not their head!

You need to ensure you’re making decisions based on the numbers, and the economic returns of the property. Once you’ve eavesdropped on the conversations of emotional buyers, you’ll have a better understanding of how NOT to approach real estate.

UNDERSTAND HOW THE NUMBERS WORK

Buying real estate based on the numbers, or a strategy, is a far better way of looking at the market. There are four strategies behind buying a winning property.

It takes endurance and commitment to create a deal that “stacks up”. Most real estate is sold to illiterate buyers who are impatient and consider themselves too time-poor to show persistence and conduct proper due diligence. These four simple strategies are a great place to start learning about property investment.

1: Return on deposit 

Cash on cash is a term all investors should acquaint themselves with when they analyse a deal. The return on deposit percentage gives you the most accurate indicator of how fast you can do this. Here, your goal is to ensure your capital is in and out of the market within two years at the latest.

For example, if you were to put $30,000 in the market, accumulate the asset and achieve growth over 12 months to gain a further $30,000, this is considered to be a 100 percent cash on cash return.

2: Property finance 

Understanding what the typical finance requirements are in an area is critical. Mortgage insurers and banks have classifications for various areas in the property market regarding how risky they believe it to be. If a particular market is very flat or does not look desirable the bank may ask you to put more skin in the game to protect themselves.

Properties can often look wonderful until you consider how much capital is required as a deposit. You need to run feasibility on lending when you are buying.

3: Market value 

To determine the sale-price range of properties in a particular area, it’s best to organise them by price.

This will identify the lowest priced property compared to others in the suburb which establishes a guide for how much discount to seek or when to walk away. If a property is priced well below others in the area, asking for a discount is not necessary. The best thing to do is snap it up! Money will be made “on the way in” due to good research and knowledge of the market.

4: The returns 

Running the numbers before purchasing a property is of huge importance. A property could look great on the surface, but until you measure the rental return, the outgoings and associated costs, you won’t know how much the true cost is per week.

As a rule of thumb, no more than 30% of the property income should be lost to expenses and rent should be no lower than four percent return.

LISTEN TO PODCASTS 

Podcasts aren’t only good entertainment, but also great education. They are a fantastic way to integrate productivity into mindless tasks such as cleaning or exercising.

Nowadays podcasts are very accessible. They are a way for the common person to communicate their expertise to the masses without the use of mainstream media. What this means for you is that you have access to experts from millions of industries, usually for free.

There are thousands of podcasts that will help you to educate yourself on property investment. Ideally, as an investor in Australia you want to seek Aussie-based shows. Here are two of our faves:

The Wealth Faculty Podcast 

TRC-Gorod Founder and Chief Education Officer, Jason Whitton hosts a ground-breaking and inspiring podcast series about the true meaning of wealth. Jason interviews world-renowned leaders who have achieved extraordinary levels of abundance. Some of whom are the very experts and advisors that have impacted and contributed to Jason’s success as a property investor and coach.

The Urban Property Investor Podcast

Sam Saggers – TRC-Gorod CEO, hosts the UPI podcast where he brings together the latest news, strategies and ideas to help grow your personal wealth from investing in real estate. With a major premise to help you join the 1% of people who achieve financial independence, Sam advocates ways to replace your income, invest in property and retire rich using trends that form part of the urban landscape. The podcast uncovers the answers to the critical “what” “why” “where” and “how” of investment using behavioural economic insights into how everyone can prosper in the cities of tomorrow as investors of today.

READ BOOKS 

It can be tough cutting through the clutter to find the property investment strategies and tips that are right for you. Books are a great source of education when it comes to learning more about property investment. The problem is, some books are good, some are outdated and many give advice that doesn’t work for real estate investors in Australia.

Well you’re in luck because Sam has authored three books on property investment that will get you set up for investing in the real estate industry in Australia.

Property success in 7 lessons – the safe way to fast track big $

This is the book for first-time investors. The most important first step for novice investors is to change your mindset, so in Property Success in 7 Lessons Sam begins by dispelling some of the property myths that often hold people back. He then focuses on the basics, such as setting challenging yet realistic goals, saving more and spending less, and understanding the market.

Developing the right mindset is only the first step; to fast track your wealth, you also need a plan and the right tools, which is why part II of this book is about putting everything into practice.

The future of property investing in Australia

A timely read, first published in 2017, this book sets out to explore the rapidly changing Australian property market and explains how property investors can capitalise on emerging trends. Whether you’re just starting out or buying your fiftieth property, this book will change the way you look at real estate. With a sensible and easy-to-follow approach, Sam gives you a proven path for your property investment journey. This is your ultimate guide to cracking the code for what type of property makes a great investment and what properties you should avoid. There are no excuses with this one, because it’s FREE.

The money magnets of property investing

The latest addition to Sam’s writing repertoire; in this book he advocates ways to replace your income, invest in real estate and retire rich. This book is about investing beyond 2020 and tackles ways to bulletproof your investment plan.

TAKE ACTION 

It is very common for investors starting out to experience ‘analysis paralysis’ which is when you over analyse and overthink all the information you’ve consumed to the point where you cannot take action. Listening to podcasts and reading books is all well and good but the best teacher is experience.

Once you’ve got a basic understanding on property investment it’s time to bite the bullet and get into the market. Learning through your own personal journey will be the quickest and easiest way for you to understand what works for you.

This is because everyone’s journey is different and therefore your strategy needs to be customised to suit your needs. Here are four powerful lessons to help you take action today:

1. Stop waiting until the time is right

If you are waiting for the ‘right’ time you will be waiting forever. There will always be something that is not right or could be better. The best thing you can do is take action now and make adjustments as you move along.

2. Stop, get up, and do it

Turn yourself into a doer. A doer is someone who has an idea and moves forward with it immediately. When you pause and wait, you lose the will to move forward and allow doubt to creep into your mind.

3. Take continuous action

Once you get started, continue to take continuous action. It is often mistaken that motivation is a prerequisite for action taking, however motivation actually comes from taking action. The more you do it, the more your confidence will build to keep going.

4. Focus on the present

There is an old Chinese Proverb that says, “The best time to plant a tree was 20 years ago. The second best time is now.” Yes, if we had planted those seeds 20 years ago we would have a lush and vibrant forest to provide us with shade. But if we do not plant that tree now, 20 years in the future we will still be standing in the sun. Focus on what you can do in the present.

ASK THE EXPERTS AND ATTEND INVESTMENT WORKSHOPS 

Good property investors are nimble and adapt fast. They stay informed and enrol a team of experts to help them excel. The TRC-Gorod 6 star team is who you need to create wealth through real estate. The 6 star team includes;

1. Mentor, coach, investor or advisor
2. Lending specialist
3. Property deals team
4. Property management
5. Accountant
6. Financial planner

You’re the average of your five closest peers so it’s about time you start mixing and mingling with the elite of the real estate industry if you want to learn about property investment. The 6 star team at TRC-Gorod are real world investors and qualified experts who stay up to date with the news and market changes, and implement real-life strategies for long term investment and financial sustainability.

With all the support you need to retire rich under one roof, a great place to start educating yourself is with our free masterclass. This is a high value two hour event that will show you how to reach the next level in any type of market conditions.

KNOWING WHERE TO LEARN PROPERTY INVESTMENT IS THE FIRST STEP 

Now that you have a wealth of resources at your fingertips it’s time to start learning about property investment. But remember, knowledge is only potential power. It’s now up to you to take all these learnings and put them into practice.

Starting your real estate journey can be overwhelming and stressful and the key factor that successful investors do is they get support and they stay relevant. Without a good team behind you to guide the way, it can be incredibly overwhelming to own property!

If you resonate with that at all, come along to one of our FREE property investing masterclasses. Our coaches and mentors have real life experience as investors and give you the tools, resources and knowledge to help move you through each phase of the investing cycle.

Register now for the free property investor webinar

Real estate is the perfect asset structure for wealth building, but it has to be done right – and that means having solid money management skills to back you as you make these major financial decisions. 

Some of these skills may seem obvious – like having a budget – but you’d be surprised how many young investors didn’t get to build this foundation of knowledge through their school or home life. 

You see the idea of having wealth is still very much stigmatised in Australian society, especially in the middle class. And yet who can truly say that life wouldn’t be easier if you knew you and your family were set up nicely to live the lifestyle you truly desire?

HOW TO BUILD YOUR WEALTH

Outside of having terrific money management skills, there are three basic principles to building wealth: Understanding money buckets, learning what grows your wealth vehicle, and knowing your number.

Understanding money buckets 

Money buckets are basically the means of how you grow and accumulate wealth. 

The issue we have in Australia is that a lot of people only have one money bucket, and in there they only put one thing – their wages.

Now we know that wages alone can’t create great wealth. Even if you earn a huge salary, it’s pretty rare that someone has ever ‘saved themselves wealthy’. That’s why we need to have other buckets filled with strategies or assets that accumulate wealth too. 

This could include:

Superannuation: Money we set aside that accumulates money with very little effort from us. The more contributions we make, the more money we make.

Tax: Most Australians pay too much tax and don’t apply for the deductions they’re eligible for. Good money management skills will ensure you get the most out of tax to top up your bucket.

Side hustles: Creating a second income, or side-hustle, is another potential income that will help you accumulate extra wealth. 

Shares: With good financial advice you can buy shares and get a nice dividend at the end of the year. 

BUT what will be your biggest bucket of all? Cmon, it’s real estate!

Learning what grows your wealth vehicle 

Let’s be clear, the vehicle you use to create wealth doesn’t have to be property. It could be shares, businesses – whatever you feel you have the money management skills to do well at.

If you’re here it’s likely you’re either already in the property game or looking to invest, in which case you need to understand what drives it to grow. Once you know that, you will know where and when to invest.

With property, there are six market drivers that grow its value:

• Population growth
• Infrastructure growth
• Supply vs demand
• Economics
• Demographics
• Yield

Basically if you can see population growth in an area where infrastructure is improving and expanding, where you know that people are going to want to live, then that’s a good place to invest.

Get to know what influences and grows your wealth vehicle. By doing this you will make investment decisions based on education and knowledge, not emotions and impulses.

Knowing your number

While most Aussies agree they want to retire comfortably, very few actually work out how much money they’ll need each month to reach that. 

The biggest mistake you can make is believing your super and pension will be enough to live the lifestyle you want. The pension number for a couple today is $36,000 per annum, while the average super balance at retirement is $128,000 if you’re male and $73,000 if you’re female. 

It doesn’t even take an expert to tell us that no-one is living the high life off those numbers.

Nail down how much income you need every month to live the life you want. Once you find that figure you can then start working towards achieving it.

Of course, in order to get there, you’re also going to need the best money management skills to keep you on the right path. 

10 WEALTH MANAGEMENT SKILLS YOU MUST HAVE

1. Say goodbye to instant gratification

Building more wealth is a long term game. Whether you’re buying an investment property or investing in shares it takes real time to grow assets.

A typical real estate cycle lasts anywhere from 10 to 15 years, and yet 99% of people fail in real estate in the first six years – less than a full market cycle! Why?

Well one of the reasons is they expect instant capital growth and strong rental returns, and when they don’t get that gratification they simply give up.

2. Know the difference between a need and want

Do you really need to buy a brand new $50,000 car – or do you want it? 

If you want to know how to build your wealth you should start with a little self reflection. The lifestyle you’re working towards through property investing is within reach as long as you’re not trying to live it too early on an income that can’t afford it. 

Don’t rob your own future by buying everything you want now. Focus on your wealth building plan and honing those money management skills.

3. Learn to automate your savings and investing

Having the right structure for your finances is crucial. One thing that can help keep you on top of your savings and investing is having automated systems in place so you don’t have to worry about moving your money around manually every week, fortnight or month. 

Money sitting in the bank these days is wasted. When putting together your finance plan ensure you’re directing the savings portion of your income in areas where that money will work harder for you like your buffer or offset account.

4. Understand the cost of debt and ownership

When it comes to real estate you have to consider more than just whether or not you can afford a monthly payment. Good money management skills means ensuring you figure out the entire cost of ownership before making a decision.

For instance, if you’re buying an investment property that is geared negatively, are the tax savings you’ll receive more beneficial to your financial situation and your goals than a neutral or positively geared property?

Remember there are a lot of costs you might not have thought about with property ownership such as legal fees, council rates and insurance. Here is a comprehensive guide on the financial commitments to investing in real estate.

5. Set goals

Every decision you make in your property investing journey will fall in line with your strategy. And your strategy? Well that’s based on your goals. So if you haven’t clarified what you want yet, how will you know when you’ve achieved it?

One popular goal setting strategy we use with our clients is the S.M.A.R.T. method, which is designed to help them narrow down what they want and what it will take to achieve their desires.

For example: “I will buy a second investment property by December 31, 2022, and I will negotiate the purchase price to be at least 10% below the fair market value.”

6. Learn to live within your means

One of the best and oldest money management skills is knowing how to budget. In fact, it’s not just knowing how to budget, but having the willpower to stick to it.

When creating a spending plan don’t set yourself up for failure. Consider your financial capacity, what your other life commitments are, and what you still want to enjoy on a regular basis. 

However, don’t forget the basic key of budgeting is to spend less than you earn, so if you need to cut out unnecessary spending in order to build your wealth – do it. 

Here’s another great blog on the five budgeting mistakes you might be making.

7. Be willing to make short-term sacrifices

Often life is about trade-offs. You have to be willing to give up something you want now – like that annual holiday overseas – for something better in the future.

An easy principle to work off? If you want an easy life later, work hard in the beginning. If you want a hard life later, take it easy in the beginning.

8. Seek out the experts

Even with the best money management skills you can’t build wealth alone. A lot of the time you’ll need the help of experts who can guide you through certain decisions and processes. 

In fact, you’ll need help from at least six experts – your six star team – if you want to make it through this long real estate investing journey. Learn more about that here!

Don’t forget, there’s no shame in asking for help when you need it.

9. Remove the bias

Don’t make assumptions about real estate before you look into it further.

Should you buy the new investment property or the older one? Well, ask a seasoned property investor and they’ll tell you that it depends on a lot of factors – your financial situation, your goals, the suburb’s postcode…

There are a lot of things to consider when managing your money and building your wealth and each of them will impact the success of your investing. Just don’t let bias around certain properties or locations push you to make poor money decisions.

10. Take advantage of opportunities

PAYG variations, negative gearing, renting out your principal residence – there are a number of tools and strategies you can use to grow your wealth.

Once you get your money management skills down pat, you’ll open yourself up to a lot more opportunities to get you one step closer to your ultimate goal. 

HONING YOUR MONEY MANAGEMENT SKILLS IS JUST THE FIRST STEP

Now that you know the money management skills you need to succeed as a property investor the real education can begin! 

Having the know-how around finances is just one piece of a much bigger puzzle. Building wealth through real estate takes a lot of planning and a core understanding of how markets work. Without a good team behind you to guide the way, it can be incredibly overwhelming to own property!

If you resonate with that at all, come along to one of our FREE property investing masterclasses. Our coaches and mentors have real life experience as investors and give you the tools, resources and knowledge to help move you through each phase of the investing cycle. 

Register now to join the next masterclass near you.

Many of us did not get the privilege of learning how to become financially abundant during our schooling years – in fact, the education curriculum didn’t even cover taxes let alone how to structure a basic budget. It’s no wonder then that so many people don’t realise how close they are to being able to create a multi-million dollar property portfolio that has the potential to set them up for life!

Let’s explore this further. 

Using real estate to become a successful property investor is underpinned by one very important philosophy – profits are better than wages.

Fundamentally, we get into the game to make money from steady and increasing income which creates a profit from the properties we own. On the other hand, wages are money exchanged for time, skills and labour. You don’t put in the hard yakka – you don’t get paid. 

For some this may be ok, but for others there comes a time in life when they’re ready to work less hours for someone else, to concentrate on other things they love while still getting paid. 

The answer to this equation is real estate. 

THE GOAL OF AN INVESTOR

The goal of property investors in the market is to target optimistic returns. 

If you fully accept that profits are better than wages, it will serve you well for a lifetime. I wish somebody had taught it to me at school, but I went for 12 years without hearing it once. It wasn’t even mentioned at the real estate college I attended. 

Understand that companies, banks and institutions are all hunting profits and that they’re all hunting in the same safari park as you – the Australian property market. 

Yes, learning how to create your own profits comes with time and experience but the payoff is worth it. 

WHY DON’T MORE PEOPLE INVEST IN PROPERTY? 

However, this does beg the question – if property investing is such a smart and lucrative profit making machine then why don’t more people do it? As a professional who’s worked in the industry all my life, it still surprises me that more people aren’t scrambling to have a cluster of properties all working for them to generate passive income. The reality is that for most, owning multiple properties simply feels out of reach. 

On top of this, many don’t know where to begin when it comes to creating long-term sustainable wealth for themselves. 

WE MUST SEEK THE KNOWLEDGE WE NEVER GOT

You would think that in the privileged country of Australia, wealth creation would be passed down from one generation to the next; a parent would coach their child and so on. 

These invaluable lessons and strategies would find themselves into the education system and we, as a nation, would empower our citizens with the sensible means of becoming prosperous! 

However, very few people obtain the necessary education to make sound financial decisions. For many of us – our upbringing did not embrace the art of wealth creation. For the majority of Australians, the success that is ‘making money’ is entirely misunderstood and seems unattainable. 

I mean, one can go to school and be educated for 12 years in Australia and still graduate with no economic understanding whatsoever. 

So, we actually have to seek the knowledge as we grow. 

REAL ESTATE CAN CHANGE YOUR LIFE

When I realised that I could create riches by using controlled debt, and leverage it into real estate to make millions, naturally my world changed forever. 

Yours can too! 

The only caveat is that you need to have an open mind. I want you to recognise that no matter what your background; there are major opportunities available to you through real estate, but you have to be willing to grab them with both hands. 

BUILD YOUR PORTFOLIO TODAY

A person with drive and initiative is no more than three to seven years away from a multi-million dollar and self-sustaining property portfolio. It just takes support from the right people to get you started. 

Join our team of real estate experts at one of our free investing seminars. These special events are run by real-world property gurus who know how to get you into a position where you’re creating real profits from increasing levels of passive income. 

Spots are limited so book now!

Sam Saggers

Real estate is a game of winning or losing, and as a professional property strategist, in order to get to where I am today, I can honestly say I’ve experienced the full spectrum. 

But to understand how I’ve managed to turn any loss I’ve had into a gain and support others to do the same, it helps to know where it all began. 

From the moment I stumbled across it as a wealth creation vehicle, I’ve always loved property. Reminiscing about our youth can give us definition as to why we are drawn to certain things. 

PASSION FROM A YOUNG AGE

After toy soldiers my favourite game as a child was, without question, MonopolyTM. I would play this wonderful game for hours on end, not knowing I was establishing the framework for my later life. 

The game I now take part in is very similar, except that I’m playing on behalf of more than 4000 clients – including companies and even the occasional investment bank – and the dollars are very real. 

After all this time, I still love it. It’s not just the economic reward that keeps me playing, though of course that is nice. What I enjoy most about the game is what I call “the art of the deal”. 

WHY I LOVE REAL ESTATE

I am fixated by deal-making and profit creation, both for myself and for other people. Every day I get to take part in the grown-up version of that same game I loved as a child, which is called The Australian and New Zealand Property Markets. 

Just about everybody has played MonopolyTM and I still love it! The simple reality is that even though it’s meant to be an entertaining board game, its foundations are very firmly set in reality. 

Look beyond the dice and fake money and you will see it’s about the accumulation of assets and the monopolising of growth areas. It’s adding value to real estate by accruing houses and hotels; it’s mortgages, banks and real estate brokers; it’s pitfalls and negotiation; it’s a little bit of luck and a lot of good personal management. 

Simply put, it’s everything you see in the real market.

Since my childhood I’ve graduated from trading in Mayfair and Park Lane but the principles are still exactly the same. I help people buy assets that magnify their profits and put money into their pockets. Real money, that is. There’s no fake paper cash in the real world. 

STARTING AT THE BOTTOM

I’ve worked in the real estate industry for nearly 30 years.

I started young and at the very bottom. I knew as soon as I finished high school that I wanted a career in real estate. My first job was handing out pamphlets and letterbox-dropping homes for a sales agent friend of mine, which allowed me to tell people I was in marketing at a real estate agency. 

Meanwhile, I studied real estate at college each night and eventually found my passion – property investment. 

I was young and naive when I bought my first property. I was so happy in the honest belief that all I had to do was buy property and watch its value increase. 

I had seen numerous friends make money through the process and I’d noticed the pride it gave them to know their asset was a winner. I knew I could do the same, so I raised the funds I needed to invest. 

NAIVETY + REAL ESTATE = DISASTER

I had found a property I thought was ideal and was encouraged to buy it by my workmates, my licensee and my franchise. 

With their emotional support, I purchased it with great gusto. It was in the area I worked and that gave me confidence I was onto a winner. At the time of acquisition, I was known as the “Unit Market Area Expert”. Well, that’s what it said on my business card anyway.

I chose the property because it looked over a park and was the most I could get for my money at the time in the area where I lived and worked. I thought it was the right place to buy, but of course, I was totally wrong.

I BOUGHT WRONG AND PAID THE PRICE

We all pay for education in one way or another. The lesson that I had bought the wrong property in the wrong market cost me $30,000 in hard savings. 

Looking back, it was my naivety which resulted in me buying a dud. 

I obtained the property well after the growth cycle had hit its ceiling and I failed to negotiate well. My own emotions caught me up – I simply fell in love with the property and just had to have it. 

I didn’t look at the true income and expenses at the time of buying the property, I didn’t conduct research and I had no idea about the cash flow or growth potential. 

The decision to hand over my life savings of $30,000 as a deposit was entirely emotional. I soon discovered I was out of my depth and that I certainly wasn’t the “unit area expert”. 

The property didn’t go up in value and it began to take cash from my back pocket as it was negatively geared in a heavy way. I could no longer save money because all my available funds were being diverted into the property. 

KNOW WHEN TO CUT YOUR LOSSES

Effectively, my deposit was stuck, and my money was not compounding. With no signs of growth, my only options were to cut and run from the investment or wait for the market cycle to start again. 

I assessed the situation and soon understood it would be years before the market regained strength. I decided to sell the property and ended up giving the market my life savings. The property was sold at a loss, leaving me sadly both disgruntled and devastated. 

Anyone who has lost opportunity or money, begins to ask, “How does this happen and why me?” I began soul-searching and looking at my peers within the real estate sector. 

FAIL FAST THEN GET BACK UP

I soon realised a fundamental problem – real estate agents, my trusted peers and mentors, don’t necessarily own real estate. 

Most of the agents I was associated with had no idea about investing. They didn’t own property and, if they did, it was usually the family home rather than an investment. 

They were not knowledgeable about property investments, deals or opportunities. 

Most of the salespersons were in the door one week and out the next, yet they were offering suggestions on what and where to buy. I was completely flabbergasted by a statistic I still find alarming – eight out of 10 agents in any office around the country don’t own investment real estate but will happily sell or manage it.

I decided that’s where I had gone wrong, so I asked the universe to deliver some people who knew the art of making money. That’s when I met some business associates who had the idea of starting one of Australia’s first investment specialty real estate firms. They had experience in owning real estate and building profit as well as funds. I had time on my hands and the willingness to learn and create. 

BECOME OBSESSED WITH LEARNING YOUR CRAFT

Buying an investment property is a business decision, so it’s important you treat real estate with respect. To maximise your profits, it’s wise to understand the fundamentals that will help you reach your goal. 

At some stage, every buyer is likely to suffer what is known as buyer’s remorse. Questions pop into every investor’s head when they ponder a property purchase. Have I bought well? Did I choose the best location? Will the property perform? 

Psychologists would call this “uncertainty,” but I think of it as a form of “illiteracy”. 

If more people took the time to understand the answers to these questions and actually schooled themselves in the art of buying property, wealth creation wouldn’t just be for a small percentile of Australians. It would be there for all to participate in sharing the profits it can produce. 

WHAT 30 YEARS CAN TEACH YOU

There’s no doubt that I’ve come a long way since my first ‘dud’ buy. The great thing is, you don’t have to make the same mistakes that I did to learn the craft of making millions from real estate – instead the knowledge is already here and waiting for you to implement. 

Personally, I’ve helped my clientele make over $785,000,000. Combine that with the work of my colleagues at TRC-Gorod and we’re confident to say that we’re in a position to support you to get started. 

The best part is, getting started doesn’t have to cost anything. 

We offer free property investing webinars designed to keep you up-to-date with the best strategies to succeeding in the market. Our knowledgeable coaches live and breathe real estate, so they’ll be able to answer any questions you may have around the economy and its impact on building a solid property portfolio.

While these events are held frequently, we keep numbers per session limited to offer a more intimate experience. 

Register now for the free property investor webinar

By Sam Saggers

To succeed as a property investor, there is one fundamental component you need – a plan. You need a plan that leaves no bases uncovered that would potentially cause issues in the future.

I often meet people who have done just about every real estate education seminar that’s been offered in Australia or New Zealand. They will explain that they have continuously researched many groups and philosophies yet when questioned on what action they have taken following the event; the answer is a resounding ‘NOTHING’!

This type of behaviour is called analysis paralysis.

IF YOU DON’T PLAN, YOU PLAN TO FAIL

Acquiring knowledge is one thing but if you can’t implement it, it becomes almost useless.

You see, most people will just create a default future and sadly for many Australians and Kiwis, the result is that they end up on the pension. The statistics are, from every 100 people born, 75 will end up in retirement using the pension system to survive.

Alarming!

If you don’t like how things are, change them with the understanding that improving yourself is not a one-time thing, but rather a constant challenge!

I will not let a week go by without some sort of self-improvement. I usually allocate a whole day to work on my goals, ideas and dreams.

It doesn’t matter what our structure looks like or how we go about shaping it, but it’s important we have clear direction around what it is that we’re trying to achieve. Otherwise, we just stay stagnant. We just sort of plod along.

PLAN OR PLOD?

Of course, that’s ok if you are choosing to plod! Some people make a life out of plodding.

The other day, I drove past a surfer’s car that bore the slogan, “If you work, you obviously don’t surf”. What a great habit for those choosing to plod along!

But many of us don’t want to plod, we want to make a difference.

Unfortunately, a lot of people don’t realise that it isn’t difficult to change and start making a difference.

THE FUTURE IS WHAT YOU MAKE IT

You can choose to live any way you wish. In fact, you can make the next decade dramatically different from the previous one, but only if you choose to. You have to accept change and be open to it – even greet it with wide-open arms, because it is what will help you move forward.

We set out in our lives on a particular course, based on what we know. Yet, we cannot rely on loopholes and tight squeezes to get by in life, it is far better to rely on goal setting and good habits.

The truth is, you can map out your future. That may be, for example, retiring on $100,000 passive income per year.

If that’s what you need, you just have to set a goal and create a plan. Sitting on the fence just means you are delaying facing up to the reality that one day you need income to live off beyond your job.

In order to set goals for the future you need to develop habits.

Good habits allow you to break down an unsuccessful routine and reroute yourself to what you should be focusing on. The habits that I continually seek to improve are:

• Investing
• Spending habits
• Education
• Self-motivation
• Health and travel
• Relationships

A BASIC ROAD MAP

Don’t have a plan? Well, you can use my basic road map!

First up, let’s set a goal in real estate, that I call an “automatic acquisition plan”.

When I first started in real estate, my acquisition plan focused on acquiring one property every second year, with the aim of having five properties in 10 years.

It’s like going to the dentist – you create a reminder in your calendar to call your dentist for a check-up, but this time you do it for property. This will allow you to be consistent and consistency allows us to ensure our goals become a reality.

So, what happens when you buy one property every second year for the next 10 years? You end up with a multi-million dollar portfolio. That doesn’t sound too bad, does it?

Let’s say that portfolio is worth two million. Well, then it’s just holding on for the ride.

GET A CUSTOMISED STEP BY STEP FRAMEWORK

Generally, in Australia and New Zealand property grows faster than inflation and, in the past, property has doubled in value from seven to 18 years. Meaning you can become a property millionaire very quickly.

It sounds easy, and to be honest with the right plan it is! Understand the tried and true strategies successful property investors use to grow immense wealth.

Develop a step by step property plan that will lead to passive income at our free property investors’ seminar.

Here you’ll learn how to take advantage of the current market landscape, as well as the chance to have one of our property experts assess your exact situation and establish an actionable road map that’s right for you.

Register now for the free property investor webinar

By Sam Saggers

In property, proximity is power – meaning the people you choose to surround yourself with will have a direct impact on your ability to create wealth through real estate. 

Like anything that results in large returns, there are a lot of moving pieces and unless you’re an expert, you will need help to achieve high levels of success as an investor. 

DON’T DEFAULT ON YOUR DREAMS!

At first, getting the right advice can feel complicated, and often-times people are drawn away from real estate because they are bombarded with their day to day lives. They are unable to grow and be financially free because the hangman’s noose of ‘time poor’ is squeezing their neck. 

Worse still, they default to getting advice from well-meaning friends or family who are yet to have any real experience in achieving long-term success through real estate ownership. 

Most individuals are not influenced by people with a purpose or who lead in their industry, but rather by the people around them who aren’t always the best examples. 

True success comes when you still love those people but choose to learn and adapt the principles of those who have rolled up their sleeves and got their hands dirty to be where they are today! 

SURROUND YOURSELF WITH A MILLIONARE MINDSET

Look at the people around you and ask yourself the following questions: 

• Who do I have around me? 
• What are they doing to me? 
• What have they got me reading? 
• What have they got me saying? 
• Where do they have me going? 
• What do they have me thinking? 
• What do they have me becoming? 

Wealth is a habit; and rich people have the habit of living well. They pass that on, they teach, share, network and help each other. 

The fact remains, those you surround yourself with, do have a high impact on your ability to create and sustain wealth. 

GET A MENTOR ASAP

If you’re not able to find people who are a shining example of what you deem to be ‘successful’ – that’s ok! Surrounding yourself with the right group can take time, but by consciously and deliberately gravitating towards individuals who are smarter than you and have achieved more than you, will naturally lead to growth in your personal circle. 

In the meantime, this is where a professional mentor comes in. Someone who has the skills and demonstrated experience, to help take you from where you are now to where you want to be. 

In Australia and New Zealand today, there is a huge class gap. The rich are getting richer and the poor poorer. The power comes in knowing you have the ability to change your position and that with the right help, anything is possible. 

REAL ESTATE IS A TEAM SPORT

Experts are experts for a reason. They bring experience and knowledge that will help immensely when it comes to making the big financial decisions that are involved in property investment. 

Of course, you should always do your own due diligence. You should know your numbers, your lending, your insurance, your market knowledge, and how it all fits in with your overall investment strategy. 

However, building the right team around you – with professionals who have investment experience themselves – will ensure you are buying smarter, not harder. 

Who are the right people to talk to? A super star property coach will guide you in every area of property investment, as well as help you find the right accountant, financial planner, buyer’s agents, a conveyancer or solicitor, mortgage broker and property manager to ensure everyone works together to get the best possible outcome for you.

Plus, there’s the added bonus that you’re not in this alone and you have support to stay focused on achieving your financial goals. 

BUILD YOUR TEAM AND GET STARTED TODAY

Remember, the first step to success is surrounding yourself with the right people. 

Our free property investment seminars will help get you started on your investment journey by sharing the best tips and resources to make well-informed, smart decisions. 

Meet with the experts you can trust. Limited spots available so book now.

Register now for the free property investor webinar