Podcast Episode 19: How soon can I give up my day job as a property investor?

How soon can you give up your day job if you invest in property?

The answer may not be what you really want to hear.  productivity-work-busy-office-tech-job-employment

In today’s show I discuss this as well as explaining the three P’s of property price growth.

Plus I highlight some interesting findings (at least I think they are) from the Census.

And in my mindset moment, I am going to talk about the importance of a growth mindset.

The 3P’s of Property Price Growth People, Price and Place

  1. People: Demographics and how many people there are and how they want to live. In fact household formation is the biggest factor
  2. Price : Affordability of property which is related to wages, interest rates and property prices
  3. Place: – supply and demand property market
  4. Every five years the census helps us understand the changing demographics.
  5. As a property investor, you need to understand what properties will be in strong demand in the future – and the Census gives us clues.
  6. The latest census revealed that we add about 1,037 people to Australia every day.
  7. Australia has a sparse population density, and people congregate in the capital cities.
  8. Our median age is 38. We are slowly getting older.
  9. We are a diverse nation – Australians were born in over 200 countries.
  10. Almost half of the population were either born in another country or had a parent born in another country.
  11. Most of our immigrants come from China and India.
  12. The census gives details to where people’s wages have grown.
  13. We pinpoint our research to find areas that will have growth.

Mindset Message: Why a growth mindset matters.

  1. A fixed mindset believes you can’t change your capabilities
  2. A growth mindset means you can move towards improving yourself.
  3. It all starts with your inner self. With your thoughts and feelings leading to your actions and results.
  4. In what areas of your life do you need to move from a fixed mindset to a growth mindset and what are you going to do about it?

How soon can I give up my day job as a property investor?

  1. It’s not easy to do this. Real estate investment is a slow game that takes 10 to 15 years of growth.
  2. You first have to build your asset base – and can do this by investing smartly in high growth properties. older, old, man, work
  3. Then, slowly lower your loan-to-value ratios. But in the meantime you need to have a real job.
  4. Then use your asset base as a cash machine
  5. Residential real estate in Australia is a high growth, low yield investment.
  6. It doesn’t matter how many properties you own. The question is how big is your asset base and how hard is your money going to work for you?
  7. To retire you’ll need a 3 -4  million dollars in assets and your own home.
  8. Cash flow will keep you in the game, but it won’t get you out of the rat race.
  9. House flipping doesn’t work in Australia because of stamp duty and tax rules.
  10. It can take 30 years to build a substantial property portfolio, because most investors get it wrong in the first 10 years. Then it takes two or three property cycles to build their asset base.

Links and resources:

Our favourite quotes from the show:

“Believing change is possible is one of the biggest tenets of personal development.” Michael Yardney  Light Bulb With Drawing Graph 1232 2775 300x200

“A growth mindset makes change possible, but you still have to take action to achieve your goals and success.” Michael Yardney

“Your thoughts lead to your feelings. Your feelings lead to your actions. Your actions lead to your results.” Michael Yardney

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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 Metropole.com.au

'Podcast Episode 19: How soon can I give up my day job as a property investor?' have 2 comments

    Avatar for Michael Yardney

    December 14, 2017 Nicole

    After reading numerous books (including free books published by authors of financial advisory companies) I repeatedly hear that an investor has to be in either of the two property investment camps: i.e. yield vs capital growth. It is even strongly worded in one book that you have to choose a strategy and stick to the one strategy for your whole investment journey. I understand the differences and pros/cons for each side. However, I have also heard of pigeon pairing. I can see how this tactic on a select few negatively geared properties may be advantageous to cash flow. What are your thoughts on pigeon pairing please? Thanks


      December 14, 2017 Michael Yardney

      Nicole, that’s great question and clearly.

      If two different camps exist there must be a reason why they have survived.

      All theSuccessful property investors I’ve come across over the many years I’ve been working in this field, have become financially independent by using capital growth to build themselves a large asset base and then they’ve lowered their LVR’s and lived off their cash machine – in my mind you need to do it int he right order – asset growth first then cash flow next.

      If you can only 3 or 4 four properties, and remember that most investors never get past their first or second property, you shoudl own the best proeprties you can afford – if you can’t buy a high growth proeprties don’t buy a secondary one.

      I would suggest you only own capital growth properties in the early stage of your investment career, because when you eventually retire and get out of the rat race, most of your asset base will be capital growth, not rental income or money you’ve saved.

      So why do the cash flow crew exist – because some people can’t afford to buy what I call investment-grade properties – those with high growth.

      I can understand it’s an issue for many investors, but in my mind buying secondary properties is why most investors fail
      This is such a great question I’ll cover it in much more detail in upcoming podcast


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