Money doesn’t discriminate; it doesn’t care who you are or where you come from.
No matter what you did yesterday, today begins anew and you have the same rights and opportunities as everyone else to become wealthy. Yet the sad reality is that the majority of Australians will never achieve financial freedom.
On the other hand a small group of Australian property investors are becoming very wealthy.
This week, I begin exploring the common myths about money that hold many people back from achieving their financial goals.
Myth # 1: It takes money to make money
Despite what some people believe, it doesn’t really take a lot of money to make money.
Many Australians have untapped equity in their homes that they can use as seed capital for investments, while others will have to learn the discipline of saving to get some start up capital. Then all they need to do is invest in high growth investments such as residential real estate and use the magic of compounding, leverage and time to grow their asset base.
You don’t need a fortune to begin making your first million; you just need to commit to making a start and stick with it.
Myth # 2: I don’t make enough money.
Almost everyone makes enough money to become an investor. The truth is most people don’t have an income problem, they have a spending problem.
Look at your current wage and ask yourself; how much am I likely to earn over my lifetime?
For most of us, the answer will probably be over a couple of million dollars. The problem is most of us spend as much as we earn. You’ve got to start living within your means, paying yourself first, saving a deposit for a property and investing in order to break your current pattern.
Myth # 3: My job and superannuation will take care of my financial future.
If you accept my definition of financial freedom as having enough passive income to finance the lifestyle you desire, without having to work; you will never achieve this through your job or superannuation. Instead you will need to take control of your financial future by investing.
Even if you try to save 5 or 10% of your income as many financial planners suggest, you’ll find it won’t give you a big enough nest egg to fund your retirement.
You just can’t save your way to wealth
Myth # 4: I’m not smart enough.
In our country everybody has the ability and opportunity to become rich. Successful people come from different backgrounds and while some have university degrees, others never finished high school.
To reassure you that an education doesn’t equal a financial fortune, here are a few multi millionaires who never graduated from college: Bill Gates (Microsoft), Michael Dell (Dell Computers) and Steve Jobs (Apple). The truth is you can do whatever you want; not being smart enough is just another excuse.
Myth # 5: Investing is complicated.
Developing your own financial freedom is only as complicated as you make it. Sure gaining the knowledge to become financially independent is challenging, but many new things seem more difficult than they are until you develop an understanding of them.
Investing is no different.
It’s easier than ever before to learn the fundamentals of wealth creation, with limitless tools available in today’s high tech, info-laden world. The key is to learn from the right people – those who’ve already achieved what you want to achieve. The process is also simplified when you select an investment niche such as residential property investment and develop specialist knowledge in that area.
Myth # 6: Investing is risky.
The dictionary definition of “invest” is: “To commit (money or capital) in order to gain a financial return.” The word “risk” doesn’t even get a look in.
However many people speculate when they think they are investing – they buy a property in a secondary location or off the plan “hoping” it will increase in value. Speculation is risky.
On the other hand, finding a property with an element of scarcity so it will always be in strong demand, in an area that has always outperformed the averages and buying it below its intrinsic value, is a proven investment strategy that minimises your risk.
Myth # 7: You have to know how to time the investment markets.
It’s often said that timing is everything when investing, but that’s not really the case.
Sure timing matters – you don’t want to buy property at the peak of the boom, but successful investors find that timing isn’t really that important. Have you noticed how some investors do well in good times and do just as well in bad times, while others do poorly in good times and even worse in bad times?
The truth is, successful investors know how to create wealth at any point in the property cycle while unsuccessful investors manage to lose money at the same stages of the cycle. This suggests to me that it’s not our external world that determines whether we make money; it’s something inside us – our mindset.
Next week I’m going to share another 8 wealth myths that tend to hold back ordinary Australians from reaching financial freedom. The good news is that, as you become aware of these myths, you can do things differently. You can choose to change your beliefs and produce outrageous results and reach every goal you set by investing wisely in the right type of property.
Of course while property investing may be simple it’s not easy. And that’s not a play on words.
Fact is, around 20% of those who get involved in property investment sell up in the first year and close to half sell their property in the first 5 years.
And of those investors who stay in property, about 90% never get past their second property.
So if you want financial freedom from property investment to fund your dreams, you’re going to have to do something different to what most property investors are doing. You’re going to have to listen to different people, to whom most Australian property investors listen.
You’re going to need to set yourself some goals and follow a strategy that’s known, proven and trusted.
Then you grow your property investment businesses one property at a time.
Of course…you need to buy the right type of properties.
Ones that have a level of scarcity, meaning they will be in continuous strong demand by owner occupiers (to keep pushing up the value) and tenants (to help subsidise your mortgage); in the right location (one that has outperformed the long term averages), at the right time in the property cycle (that would be now in many states) and for the right price.
To become a successful investor you will need to surround yourself with a team of independent and unbiased professional advisors (not sales people) – a team of people who are known, proven and trusted, so it is probably appropriate to remind you that in changing times like we are experiencing, no one can help you quite like the independent property investment strategists at Metropole.
Remember the multi award winning team at Metropole have no properties to sell, so their advice is independent and unbiased.
If you want to find out a bit more about what is happening in your local market and what our research suggests is in store for us, join us at a free property briefing in Melbourne, Sydney and Brisbane or with our associates in Perth. Just click on this link to find out more and reserve your place.
Also if you are a serious investor, business person or entrepreneur, I suggest you join us at Wealth Retreat 2012 on the Gold Coast on May 26th to 30th 2nd.
Click here to find out about this special annual event, where we limit numbers to a small group of already highly successful investors, business people and entrepreneurs.
This is your chance to immerse yourself in a 5 day get together to learn from a leading faculty of experts and network with like minded people. Please register your interest now so we can send you more details – just click here.