Nine costly financial mistakes you can correct before it’s too late

Successful investors learn as much from their mistakes as they do from their successes, whereas the average Australian seems to make the same financial errors over and over again, and wonders why things don’t change.

To help place you in that successful group, let’s have a look at nine of the most common financial mistakes people make so you can avoid them.

1. Getting Caught in the Income Trap

Most Australians are caught in a rat race, believing the way to become rich is by increasing their working income.

Working, they manage to survive on a basic wage, but each time they get a raise they use the extra money to buy “stuff” – their first car, then a bigger car, a TV.  You know what I mean. calculator coin money save debt

Because they spend all their income they end up working harder and advance into a higher paying position and then they buy more “stuff”.

And on it goes – the more they earn the more they spend and now even their substantial salary wouldn’t cover their increasingly expensive lifestyle.

You see…when you focus on income you fall into the trap of spending all you earn.

More income, without the right financial understanding, habits and skills, is as dangerous to your financial success as too little income.

The solution is to earn passive income; money you make when you don’t work.

2. Saving like middle income earners

The average Australian has been taught to invest in superannuation or set aside 10% of their income to build a retirement nest egg.

This is fine if your goal is to be a middle-income earner – but it will never make you wealthy.

The trouble is the concept of building a “nest egg” is inherently flawed.

Your goal shouldn’t be to accumulate a lump sum to slowly spend during retirement, hoping you don’t outlive your money.

Rather you should build an asset base that generates ongoing passive income; a self-perpetuating money machine – like a portfolio of well-located income producing residential properties.

3. Never learning to invest

Most of us have never been taught how to save, let alone invest. idea save coin l

Younger generations are living differently to their parents; they’re marrying later, spending more on “lifestyle” and many fearlessly take on credit card debt.

As a result, they have significant earning capacity, but few assets.

I must admit that when I was young, I couldn’t spend money fast enough!

But inevitably a time comes when you need to manage your finances better.

To be financially independent you need to build an asset base that generates passive residual income, like a sound property portfolio.

4. Falling prey to easy credit

Fact is …consumer debt is too easy to get today.

Large retailers offer the latest gadgets interest free with no deposit and while this sounds great, for people with poor money habits it’s a massive trap. economy property market grow wealth house dream first home

Anything you purchase with “free” credit goes on your account and you don’t even own the product you walk out with.

When the bill inevitably arrives what do most people do?

They only make the minimum repayment.

Now the credit card companies have you right where they want you!

At the end of the finance term you’ve paid much more in interest, or at the end of the interest free term you haven’t paid off the item and you start paying up to 30% interest on the balance owing.

5. Getting advice from the wrong people 

Many people don’t realise they’re repeating the same financial patterns their parents demonstrated. 8590259 L

They continue to consult their uncle who’s broke or friends who are struggling to make ends meet.

Why would you ask advice from someone who is not achieving the results you want?

Instead surround yourself with the best and you’ll be at your best.

Use others’ successes as templates to close the gap between where you are and where you want to be.

6. Trying to do it on their own

Because the property market is booming, some investors think they can buy almost any property and it will be a great investment.

Unfortunately this is far from the truth. In my opinion less than 5% of the properties on the market are investment grade properties and just like in the last cycle, many investors will lose

Don’t be afraid to ask for help, but make sure it’s from an advisor who has your best interest at heart and is paid by you; and not a salesman who’s loyalties lie with his client – the vendor or developer.

Buying property is a complex process – if you’re the smartest person in your team you’re in trouble.

Of course I think a property investment strategist should be at the centre of your wealth creation team coordinating the others – but then some would say I’m biased.

However I know that’s my team at Metropole Property Strategists have helped thousands of ordinary Australians create significant wealth through property.

7. Thinking investing is too difficult

Many people feel they can’t invest or are too busy, so they take the path of least resistance and don’t do anything.

Others start climbing the investment ladder, but give up along the way because they’re stuck in the rat race and can’t see themselves getting anywhere. mind set rich money lesson think motivational learn teach money

However wealthy people plan, take action, learn from their mistakes, consult experts and take charge of their own financial affairs.

Sadly, most people aren’t prepared to pay for good financial advice.

The truth is we all pay a learning fee as we move up the ladder of property or investment success.

Some are prepared to pay mentors and advisors, while others end up paying the market and this tends to be a very expensive way to learn.

8. Making emotionally based financial decisions

We all tend to make most of our decisions based on emotions and it’s important to recognise that we do so.

Your subconscious financial blue print – your beliefs and emotional associations regarding money – colours your financial decisions.

While you can’t change this fact, you can change your thoughts and feelings about money so they have a positive influence and make you less fearful of climbing the investment ladder.

9.  Letting fear get in the way 

True wealth is on the other side of fear. Ostrich Denial Change Motivation Head In The Sand Business Man Hide Fear Challenge 300x292

Over the years I’ve learned that fear prevents many of us from getting what we want or where we want to be, especially in relation to wealth.

Think about the times when fear stopped you from taking action, costing you a potentially large financial opportunity.

The key is to harness our fears in a positive way, because fear can hold us back or drive us forward.

If you learn to think like a wealthy person, you’ve got a much better chance of becoming one. Remember anyone can do it, but not everyone will.

My question is, will you?

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on


A perfect storm is brewing for our property markets in 2021-22, and you can trust the team at Metropole to provide you with directionguidance, and results.

In challenging times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that’s what you exactly what you get from the multi award-winning team at Metropole.

If you’re looking at buying your next home or investment property here’s 4 ways we can help you:

  1. Strategic property advice. – Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer’s agency – As Australia’s most trusted buyers’ agents we’ve been involved in over $3Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective – that’s something money just can’t buy. We’ll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory – We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management – Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.

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Michael Yardney


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 one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit

'Nine costly financial mistakes you can correct before it’s too late' have 2 comments


    December 22, 2020 Derek Wang

    Hi Michael,

    I have $500K cash in the bank available to purchase investment properties. Should I purchase one property outright worth of $500K and collect rental income, then use this property as security to purchase two more investment properties ($250K deposit each from security), can I do it this way so that I can have 3 properties in total? Or I should just split the $500K cash to buy two investment properties? Thanks!


      Michael Yardney

      December 22, 2020 Michael Yardney

      Great question Derek -there is no simple answer to this and that’s why at Metropole we spreadsheet out the various options for our clients because everyone is different depending upon their cash flow surplus, serviceability, timeframes, risk profile plus a lot more. More important than how many properties is buying the right property/s ones that outperform the averages. Why not get my team to work on this for you – please leave your details here


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