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Fifteen wealth myths that hold property investors back

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.

Why not join me and a group of property and tax experts at my upcoming Property Market and Economic Updates that I’ll be conducting in 4 states in August and September 2013

I will be presenting a heap of BRAND NEW content I haven’t discussed in public before. I guarantee there will be several things I reveal that you are not doing and you should be!

Click here now to get more details and reserve your seat.

Property & Econonomic Update

If you want to cut through all of the media hype, and all the contradictory predictions, and finally learn the truth (good and bad) about what is going to happen to the Australian property markets, this seminar is exactly for you…  Click here now to get more details and reserve your seat.



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'Fifteen wealth myths that hold property investors back' have 11 comments

  1. Avatar for Property Update

    April 27, 2012 @ 8:31 am Neil m

    Great stuff. Makes sense as I can relate to a few of these. I’m interested to read the next installment

    Reply

  2. Avatar for Property Update

    April 27, 2012 @ 9:52 am david C

    Unfortunately some of the tings you mentioned are the things I heard form my parents and, despite their best intentions, I’m sure it has held me back

    Some great insights – thanks

    Reply

  3. Avatar for Property Update

    April 27, 2012 @ 10:29 am Chayot Ing-aram

    very true. Another great blog by Michael Yardney.

    Reply

  4. Avatar for Property Update

    April 27, 2012 @ 2:06 pm vasilija wilson

    Thank you Michael It is great plesure reading your info and it is so good to shear it with my friends too.
    I love reciving your ingo so mush.
    Your work should be introduced to all shools and we all can have better life.Yes as you say it is not problem the money but the problem is your spending that gives as problems
    Regards
    Vasilija

    Reply

  5. Avatar for Property Update

    April 27, 2012 @ 4:31 pm Robert Yap

    I have recommended Michaels book to everyone after i read the last edition especially my sister as she has the save, get out of debt principle. Even one of my best mates says he earns only $70K a year so he will never retire wealthy. Humbug i say as i only earn a quarter of that as i am investing and re-investing my funds. After reading your book it all made sense and with tons of tactics in the book which gave me the courage to buy investment property number 2 at the height of the GFC and guess what ? The house rented out immediately using the principles in your book. Now, i am not just saying this to boost Michaels profile as i have read nearly every investing book around in Australia and Robert Kiyosaki in the US and truly believe this covers everything a property investor needs to know to get started with buying half a dozen properties or more. By the way i had been unemployed for 8 years and used equity to start my business as well as start property investing. A whole new mindset is now in place and instead of a world of drudgery, i look forward to continue in investing ! Thanks Michael.

    Reply

  6. Avatar for Property Update

    April 27, 2012 @ 8:02 pm Tom Sugar

    Quote: “…..high growth investments such as residential real estate……”

    Wow that is one very big lie.
    Real estate will be barely keeping up with inflation, maybe even going backwards, at least for the next 5 years. You could buy today or buy in 5 years time for virtually the same price.

    Reply

    • Avatar for Property Update

      May 2, 2012 @ 1:09 pm Dave

      If you buy in the area Michael outlines, you will not be able to buy a property at the same price 5 years ago, or the 5 years increment before that at 07 price. Check out for last 30 years if you want these areas stand the test of time. I been actively study/learning property investment for 10 years now, and compared michael to all sorts of property educators like Henry Kayne, John Fitzgerald, Steve Mcknight, Margaret Lomas, Jan Sommers, and none gave me the answers to all the questions and worries i had other then Michaels book did. Hes been around almost 40 years teaching property without integrety and honesty.

      Reply

      • Avatar for Property Update

        May 2, 2012 @ 2:00 pm Michael Yardney

        Thanks for the kind words David
        Your comments are very humbling

        Reply

  7. Avatar for Property Update

    April 28, 2012 @ 5:01 pm Reza Layeghi

    Dear Michael
    I am stationed overseas on work commission and can not attend your seminar in Oz.
    I am interested in investing in some real estate which you call scarcity type in NSW. I can communicate from here via email , phone and fax. What do you suggest?

    Kind Regards
    Reza

    Reply

    • Avatar for Property Update

      April 28, 2012 @ 7:27 pm Michael Yardney

      HI Reza
      Please ring our Sydney office on 02 9327 2266 and you can discuss your needs

      Reply


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