Around this time every year, a little animal creeps out.
They’re called naysayers.
And they find all the bad things that are going on in the world, rather than seeing the good things. Rather than being grateful.
Interestingly, in the 40-something years, I’ve been investing, the naysayers always come out.
And interestingly, they’ve always been wrong.
So in today’s episode, I’m going to explain to you why these are the good times – why these are the times you should be enjoying and appreciating.
Then we’ll have a chat with my business partner Brett Warren about why he left $50,000 on the table by not doing a property deal. Some great information there.
And there will also be a lesson in my mindset moment that I think is going to help excite and stimulate and influence you to go for some great things.
Why These Are the Good Times
The steady stream of “bad news” we receive via our 24/7 news cycle is enough to get anyone down.
It’s easy to buy into the doom and gloom hype in the media these days.
So, it’s no wonder many of us are pining for the “good old days”.
But what if I told you that you’ve won the lottery and right now, we are living in the best country in the world and at the best time in human history?
- Thanks to the internet, we have a whole world of possibilities our parents and grandparents would never have dreamed possible.
- We can video chat with friends and family on the other side of the world, work from home and even gain qualifications through prestigious overseas universities, all without leaving the couch.
- We have limitless news and entertainment right at our fingertips.
- International travel has never been cheaper
- platforms such as Airbnb enable us not only to travel on a budget but also to make some cash on the side when our home is empty.
- Most of us can afford to eat at restaurants and buy takeaway on a regular basis, even if we don’t have a huge income.
- And if we can’t be bothered going out, we can have the finest cuisine brought to our home using apps like UberEats.
So what is wrong with this picture?
Human nature is such that with all these advances and improvements, we can’t help but want more, more, more.
But none of it is real.
Real happiness and real financial security can’t be found at the bottom of an award-winning bottle of wine in a fancy restaurant.
It’s gained through hard work, discipline and maintaining your priorities – spend a little here, save a little there, until you reach a point where you’re no longer dependent on your weekly wage to make ends meet.
Until that time, you’re never truly free, because you’re always at the mercy of your creditors, your employer, or the economy.
Becoming financially free isn’t about having the best of everything – you have to make sacrifices in some areas so that you’re able to splurge on the things that really matter to you.
It’s called delayed gratification.
Then follow these three simple steps to financial freedom:
- Spend less than you earn (otherwise you’ll always owe money.)
- Save and invest wisely in income-producing growth assets like residential real estate.
- Reinvest your money and use compounding and leverage to grow your asset base until you have a cash machine.
Now don’t underestimate the importance of this simple message.
Every little step you take towards that dream is progress, even if it doesn’t seem that way at the time.
Why I said no to a $50,000 profit with Brett Warren
Never make long term decisions, based on short term information.
It’s easy to focus on the short term: In this case a possible $50,000 profit as a one off hit flipping a property.
But it’s an error to assume that everything will go according to plan. In this case, to achieve the best-case scenario, you would need to hope that:
- The purchase would go to plan at the right price
- There would be no significant issues with the renovation
- It would be easy to find a tenant paying the desired rent
- The valuation would stack up at the end
You need a backup plan in case one or two (or more) of these factors don’t work out as you hoped.
This is the risk of the transaction alone, let alone the idea of holding on to the asset and renting it out for the long term.
The better plan is to focus on the longer-term and reduce risk.
Focus on areas with a higher percentage of Owner Occupiers Homeowners are in it for the longer term and will not give up their homes so easily, this leads to less market volatility.
At Metropole, we look for suburbs where the locals have a high disposable income. We look for locations where the wage growth is higher.
We also look for locations where jobs are plentiful. The people living here will generally be able to ride out the difficult times.
We also look for aspirational suburbs and gentrifying suburbs.
As a result, these locations perform significantly better with less risk.
Links and Resources:
Organise a time to speak with Brett by clicking here
Some of our favourite quotes from the show:
“We want everything and we want it yesterday, and this mentality leaves us open to the relentless pursuit of keeping up with the Joneses.” – Michael Yardney
“One day you’re going to wake up and realise you’ve made it. And it will be totally worth it.” – Michael Yardney
“You only need one thing to succeed: forget all the reasons why it won’t work, and believe in the one reason why it will.” – Michael Yardney
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