We’re almost at the end of another year.
And what a year it’s been!
2020 started off with predictions of a fantastic year in property.
Remember we were coming off the end of 2019 when property markets were very strong.
Then the predictions changed to doom and gloom because of COVID.
And it wasn’t just the naysayers – economists were suggesting property doom as well.
Now it’s been said that the role of an economist is to explain to you tomorrow why what they predicted yesterday didn’t come true today.
This is a very apt description of the behavior of many economists and all of those other experts chasing headlines who were very noisy in the media with their attempts to exploit the pandemic for publicity.
But those of you who saw the dark side, you were wrong.
We’ve had great support from incentive programs from the government, and now it’s become clear that our property markets have turned the corner and will perform very strongly over the next couple of years.
However, life is still going to be very different going forward, and that’s part of what will discuss on today’s episode of the Michael Yardney Podcast.
I’m going to share some lessons that you can learn from what happened to airline pilots (and it’s probably not what you think.)
Then I’m going to have a chat with Brett Warren about the suggested trend toward working from home.
And finally, I’m going to share a mindset moment with you that may help you think differently about life and your situation.
What the Bad News for Airline Pilots Means for You
Qantas lost billions of dollars and has shed thousands of employees.
Virgin went broke and similarly, its employees, including pilots, are facing layoffs or job losses.
While a gate attendant might easily transition into a customer service position in another industry, what does a pilot to do?
How do their special skills translate into a new industry?
Of course, pilots aren’t the only people with high-paying, prestigious jobs based on skills that are narrowly marketable should the industry they’re in slow down.
Chefs and entertainers are suffering.
Even many surgeons were temporarily put out of business to preserve medical capacity for COVID victims.
It can happen to anyone with very little warning.
Do you have skills that are transferable?
And if so, which industries are expanding? Is there even room for you?
If you think about it, it’s really no different than when an illness, accident, disability, or any severe life event takes you out of action.
When you trade time for dollars … even for a high income…you are vulnerable.
And even if you have insurance or some money saved for a rainy day – this might not absorb the entire impact.
Of course, the key to security and resilience is to have a cash machine.
By that I mean a portfolio of investments that provides you with enough income to live on … and more … whether you work or not.
And the right time to start building that cash machine is right now.
Actually, that’s wrong!
The best time to have started building your property portfolio, your cash machine, would have been 20 years ago. The second-best time is right now.
Wherever you are now, it’s smart to use what you have to create resilient wealth to shelter yourself from tough times … whether they’re on the horizon or on your doorstep.
The good news is …. properly structured property portfolios have a strong track record of resiliency through challenging times.
The bad news is it takes money, knowledge, relationships, credit, and in particular, time to build a resilient portfolio.
I don’t know your personal circumstances; maybe all you can do at the moment is hunker down and get through the challenging times we are going through.
But for many Australians now is the time to get all your ducks in a row and look after your future.
Now is a good time to prepare to take action and set yourself up to take advantage of the next stage of the property cycle which will come sooner rather than later.
Working from home revolution with Brett Warren
We’ve heard a lot in the media about the working from home revolution that will change where and in what homes Australians want to live.
Will this trend have an impact on property markets?
Brett Warren did the research and found out some interesting things.
For one thing, about a third of Australia’s workforce works from home regardless.
For another thing, only about 36% – 37% of Australia’s jobs can actually be done from home.
This means that even if the trend of increased working from home continues, it’s going to remain a minority trend.
There’s only so much room for increased numbers of work from home workers in Australia’s workforce.
The other 63% of the workforce will continue to follow historical trends.
So why fight the big trends? We already know where 63% of the workforce will want to be. Rather than chasing minority trends, property investors should focus on known and proven historical trends, supported by facts, research, and data and not the latest headlines.
Links and Resources:
Some of our favourite quotes from the show:
“Unless you grow out to where it is, you end up going back to where you are.” – Michael Yardney
“When you throw out the blame list and start to become more of yourself, you learn more, you grow more, then all of a sudden everything is going to change around you.” – Michael Yardney
“Why chase the trend of the minority of people who may move to other locations? Why fight the big trends?” – Michael Yardney
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