The Rulebook is Broken: Why Hard Work is a Losing Game | Scott Kuru

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Before you could work, not own anything, own one property, and retire, and you'd be looked after. Today, if you don't have a strong asset base, you're going to be screwed in retirement. >> How much money do you need to break free of the system? >> I would say you need 3 to 5 million. >> 3 to 5 million. >> That's right. >> Freedom Property Investors chief executive and co-founder Scott [music] Kuru. >> Cuz if you've got 3 to 5 million, you've

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got a passive income between 200,000 and 500,000 a year, that's that's going to give you some options. [music] >> Now, if you were to put a category on what a household income should be for middle class, [music] what do you think that should be in Australia? >> Oh man, I'm going to get shot down for this. I think the first thing is you've got to try [music] and get your income stable, strong. And if you're an entrepreneur and you're a business person, I don't think that you should do

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what Elon's doing. The chances of failure are 99.999999% you're going to lose all your capital. And the next thing that you do is you've got to look after your cash flow. >> It's like how much money can people save? Subscriptions like entertainment platforms, Disney, Netflix, Foxtel. Wipe it all. >> You don't need it. >> Buying nice clothes, nice things, jewelry, handbags, glasses, things like that. >> Like it won't It'll make very little difference to your happiness or anything

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like that. >> Like health insurance, insurance. >> Insurance is an important one. >> Rent. >> That is a real real tough one. But you'd be shocked. You'll be able to find 50, 60, 70,000 [music] dollars a year. The next thing that you've got to do is you've got to have an investment plan. Is you need a guaranteed pathway to your [music] 3 to 5 mil. >> What's people's argument as to why they should stay away from new property, and what's your counter argument?

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>> This might be very controversial. A lot of people probably won't like this, but >> This episode is brought to you by Wix Studio. >> [music] >> Here at The Agency Podcast, we're building a community, and we would love you guys to be part of it. So, we would love to hear from you. What are you enjoying the most? What would you like to see more of? And what do you think might be missing? Drop a comment. Make sure you subscribe. And now, on with the show. As for today's episode, I thought

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it'd be really fun to talk about where are we really at in the worlds when it comes to the middle class and for those that are looking to get outside the rat race and to build a life for themselves, you know, where are the lies and the red flags and red tape and where are the opportunities and how do we best prepare for what's to come? What should they start to think about? >> Yeah, thank thank thanks for that. Yeah, I think like where the economy is now is we're in this really strange place where

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all the traditional ways of living, so not just like the economy and money, but life like it's changing and it's sort of breaking down and I think a lot of people are confused about how to live life, how to spend their money, what they need to do, what is their career mean, should I start a business, not start a business, do I invest, do I not invest, do I buy a house, do I not like I think all of those old scripts now have collapsed and they've disappeared and I think a lot of people are just

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confused about what they do. I mean you got the baby boomers, they're already set, they're there. You've got generation X, which is my generation and this generation probably has been shafted the most because right now they're looking after grand you know, their parents, grandparents, they're looking after their children, adult children, teenagers and they're getting squeezed a lot and then you got the millennials and you got the you know, the younger generations and they're just all trying to figure it

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out. But because the world has changed so much from 20, 30, 40 years ago, I just think there's a lot of confusion now about how do I live my life, how do I manage my money and what do I do what do I do with my money, what do I do with my career, what do I do with my business? That's where I sort of really think the world is at. >> Can we start off with the different generations cuz I I hear a lot of conversation around the boomers are this, the Gen Xers this, millennials are that. How would you tend to classify

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what was I guess different between those generations even perhaps before the baby boomer generation through to that generation into now? How would you distinctively separate the challenges that each generation has had? >> This might be very controversial, a lot of people probably won't like this, but I just feel like the younger generation are a way more entitled. You might say entitled or their expectations now are a lot higher in terms of their quality of life, um the amount of money that they

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have, where they live, how they live, and what they do. I think a lot of that's generated because of social media. There's a lot of examples out there in the world um of young people being very successful, flying around, doing different things, experiencing all these different things. And so, people's expectations have gone way through the roof. So, you know, I remember when I was 15, 16, 17 in high school back in sort of, you know, 1990, 1991, we didn't have social media. You know, my dream

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was to have a job that paid 40 to 50 grand, be able to own my own home, and be able to own one day, hopefully, own a brand new car. And like that those were my expectations, but I feel like the younger generation now have a lot higher expectations. You know, I was looking at one of my posts on social media the other day, and we're talking about housing and different things, and um I I made this comment on one particular post, and what it was, it was a wonderful young nurse, hard-working, and she was sort of lamenting um or

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complaining that in the eastern suburbs, she couldn't afford like an apartment in the eastern suburbs to be close to to her hospital. And I thought to myself, you know what? Um you're single, uh you're on one salary, and I think that expectation's a little bit misaligned with reality. And I thought back, hey, when I was 21, 22, 23, uh I used to walk to the bus station, 15 minutes. This is like I never thought I'd be in this position like talking down to the younger generation, right? But I'm 50

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now, but it's like so back in my day, right? So, it's like um you know, I would walk to the bus station, wait for the bus in the rain, get on the bus, 35-minute trip into Liverpool station, you know, out out out from out from Miller. The then I would um catch a 1-hour train into the city, then I would walk up to the city, then I would work all day. Uh and and if you sort of went home before 6:00 p.m., you know, your management would would be all over you. And then I would train home, get off the train, wait at the bus stop,

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get the bus. I said I'll do that because I could only afford to live in that particular area. So, I hear that a lot from boomers. I hear that a lot from, you know, generation X, 40 to 50. They probably feel They probably use the word entitled for the younger generation, but I would just sort of say that their expectations have actually um grown a lot. And so, I I feel like that is probably the main difference between all the generations. It's around It's around expectations. >> What what's your thoughts when it comes

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down to, I guess, how much noise there is when it comes to making the right decisions? If you think about how much tribalism's happening and how many people, I'll give you an example, might say, "Hey, go invest in property. That's the best way to make money." Someone else might say, "You know, go and do an AI SaaS tech startup and go in this direction." It seems like there's always these different tribes that people are pushed into for the best ways to get out

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of the middle class and into generating wealth. What's your advice to someone right now who's trying to figure out how they themselves would like to get out of the middle class and into, you know, out of the rat race, if you will, and into making money? >> I'll probably share a story with you that I've shared with very, very few people. So, I went through this problem because, you know, I was in my corporate career. At this stage, I was divorced. I was a single parent. I had actually custody of

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my kids. I was living in a two-bedroom unit in North Strathfield. I had my three sons in one bedroom. I had my daughter in one. I was sleeping in the couch in the in the living room. And that was my situation. I was fortunate that I had a job at NRMA at the time, a corporate job paying very, very good money at that time, very, very good money. Um this is probably back 2010, 2011. I had a 5-minute walk to work. And so, I did have some time to start the side hustle. So at that time, and the internet was very early, YouTube

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wasn't really a thing till 2015, '16, '17. So there wasn't really a great amount of content on YouTube. That was still the time of like going to a conference, going to a boot camp, um buying buying a buying a book. There wasn't really a lot of free or or you did a paid course on on the internet. And so at that time, I had the question, "How do I break free?" Because I was depressed. Uh I couldn't see a way out. I thought, "I'm just going to keep working for the next 20 years."

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So your question to me, I believe, that's the genesis of someone moving on to something bigger, breaking free of the system, getting free of the system. Like it all starts there. I uh went out on a search. So I started um going crazy on reading books. I started going uh I set aside a monthly budget for doing these boot camps and doing all these courses, which most of them were a waste of time. Some were good. Um even the ones which were a waste of time, I learned from, because I learned, "Well, that's a waste." So I

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could start eliminating things. And so I remember at that time, I think I set aside a budget of like five or six hundred bucks a month to spend on self-development. This is when I got into Tony Robbins and different things. I did these different courses. I did um you know, share trading courses, all these different things, um writing blogs on the all these different courses I did. And then I actually became I got to this point of massive confusion and frustration. I felt so helpless to make the decision on my own. I was thinking,

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"Is there some force out there in the universe that can help me make this decision? What is my path?" You know, I'd finish catching up with my friends, and then immediately after catching up with them, my mind just went back to the main problem that I had in my life and the main question I was carrying around. And that question was it it the words were something like, "How do I break free? How do I get out? How do I rescue my family? How do I give a better life to my kids? How do I get

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out of the system? Because the system of just working every day, collecting the check, it just wasn't getting anywhere. I wasn't saving any money. I wasn't investing. I'd run the numbers like, where is this Where is this headed? It's headed nowhere. So, how do I break free? And so, as soon as I'd finish catching up with my friends, and that was a great time, that was needed, the minute I left that situation, I went back to that main problem. It was my dominant dominant thought all

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of the time. So, that's probably what triggered it. So, I just remember having like a like a like a vision, right? A vision. Or an image in my mind. And I could see a golden house. And I could see a big lake, and I could see like this wharf, and I could see all these kids jumping off a wharf. But then I I wasn't sure what that image meant, but I kept thinking about it and thinking about it and thinking about it. And I took it to mean, the interpretation I gave it was, focus on real estate.

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So, at that point I was able to eliminate a lot of other options. I focused on real estate, and the first thing that I did was I never thought at that stage about a business in real estate. I didn't think about that. I just thought focus on real estate in terms of being an investor myself. So, keep my corporate job, invest, and build my wealth that way. And so, that was really the genesis for me of starting to break free, break free of the the system, so to speak. >> And can you paint a picture at the time?

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I understand what it's like to be a father. I've got three children. Having had to be a single father raising four children and working a full-time job. What What was that like for your psychology? Cuz I can only imagine how difficult it was to juggle all of that at once. >> You know, I don't think you you can really know this until you have kids. But once you have children, suddenly your world is a lot bigger than you. And so, for me, my life meant very little. My happiness, my joy, what I had in my

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life, my success, my significance meant very little. It was actually all about my my children. I mean, these are my little my little angels. So, they come to you, they're little these little packages, and evolution creates them in such a way, you just love you just love these little buggers. Uh and I was so fortunate and blessed to have have four of them. And you know, at this time, you know, how old are they now? I think my youngest was eight or nine, then I had, you know, a cute little 10-year-old,

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11-year-old. I think my daughter was like around 12, 13 at the time. So, they're just they're at this beautiful beautiful beautiful age. They're little people. And then you look at them and you think, "Wow, you know, these are little people. There's a whole world out there. I'm actually in charge of them. Their life path is going to be dependent upon the decisions I make, how hard I work, whether I make the right call or the wrong call. And so, I felt that weight of responsibility,

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and I felt a lot of fear. And I felt a lot of fear of failure. However, my determination to provide for them was greater than that fear, and that's what allowed me to push forward. So, I'm not sure that if I didn't have my children, if I hadn't have gone through um a really a really a really hurtful uh divorce, if I hadn't had my life upended like that, and if I didn't have those children, whether or not I would have had the tenacity, the grit, or or even because I believe this was work I

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believe that the 18 months of trying to figure out what to do, that was a lot of work. Like it was mental work. I wasn't out there digging a hole, but it was um extremely tiring having that question, "How do I break free? How do I break free?" and going in search of that. That was a work in itself, an emotional work. So, um I look at that period of my life, and to be very honest with you, there's like a void of happiness of about six or seven years. I can't remember feeling happy. I can't remember

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experiencing a lot of joy. It was just like a lot of a lot of weight. And wanting my children not to live like that or feel that was the main driving force that got me to sort of you know, start out on that path, which first of all, was learning about property, learning how to invest, becoming an investor, meeting some key people, and eventually that's turned in into the business that it is today. >> If you want to grow your agency, you need more than just a website builder. You need Wix Studio,

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the all-in-one platform that's built to help you scale. Design smarter in a hyper-flexible, responsive editor, cherry-picking whatever clients need from pre-built UI elements and templates. Deliver robust backends with built-in e-commerce solutions for every industry, letting self-maintaining infrastructure just run itself. Stop reinventing the wheel with every project and instead create a shareable design system with reusable assets, apps, and components. Clients growing too fast? No sweat. Wix Studio AI-powered CMS lets

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you turn a single layout into hundreds of additional dynamic pages. It's true, more clients no longer has to mean more chaos. Wix Studio gives you one centralized view of every project and makes real-time collaborations seamless. Do your agency's best work at scale. Build your next projects on Wix Studio. >> If you think about how Let's talk about Australia, how Australians feel right now about our government here um cuz I think, you know, many of our viewers who are living abroad might be aware of some

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of the things that are happening, but for those that aren't, um we're we're living in a quite a unique time where uh it feels like the tax regulations in in this country in particular are getting a little too heavy-handed. >> I think there's three things going on. The first thing is the whole tax thing. So, after that May budget, that really was a punch in the guts to small business. And you've got millions and millions of small business owners. So, none of them are happy

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with the May budget. The biggest thing is that most small businesses will need to restructure all of their tax affairs. And that is going to be a headache and a nightmare and extremely costly to get the same outcome that they've got today. So, that seems absolutely ridiculous and it is ridiculous. Uh but it's not only that change, it's also the sentiment or the message coming from our leaders of taking away that ambition and not recognizing the hard work and what's provided by small

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business to the community and to the economy. It's a slap in the face because rather than being in a culture where we idolize business people, we put business people on a pedestal, we see business people as people that contributes to we see business people as people that contribute to society, what our leaders are telling small business today is, you're tax cheats, you take from society and we need something back. That's a hurtful message uh to millions and millions of Australians. So, there's the hurt of

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that message, but then there's also the very real tax implications as well. But I would go as far to say it's more the pain and the hurt of that message and how they're being labeled in society with that label, takers, cheats. It's more um a backlash to that than it is actually the tax the tax issue. >> I think what one uh publication I saw recently was um there was a call for Elon Musk who recently IPO'd with SpaceX uh and there was a debate happening where um you know, people were saying, this is

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great, proof of what can be accomplished in business and industry when you put your mind to something. And then the other side of that was a debate which is like, well, you know, he could save world poverty if he just gave all that money back. The challenge with that is it's not like he's got the trillions in a bank account somewhere loaded up in cash. It's valuation in a company. When you when you think about this, how should people adjust their thinking if they're not quite adept at what's really happening

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at the top of the the ultra wealthy? >> I love the point you make, right? Because [clears throat] look, 70% of the population will not understand that. They'll just think well, Elon has a trillion, hand a trillion out, solve world hunger, but it's not real money. So, for example, if you went to every single Australian billionaire and you said, all right, we're going to take all of your wealth today. So, I don't know, Gina Rinehart, all these the mining magnates, Harry Triguboff, you know, property mogul.

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Let's say we take all their billions. I don't even know what the number is. Let's say it's I don't know. Let's say it's a 100 billion, 200 billion, three whatever. Let's say it's a trillion dollars. All of that combined wealth, which I don't think it is, but let's say let's say it's a trillion dollars. Let's say we extract all that wealth. Okay, let's try to turn all that wealth into cash. Where you going to get the cash from? Because as you as you said,

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that's a share valuation. It's a made up number. It's not a real number. So, let's turn all of that wealth into cash. All right, let's find the cash for it. Let's say we did find the cash for it. We've got a trillion dollars. Okay, let's divide that trillion dollars by every single Australian right now and give them an equal share. Let's say it's 200 grand each, 400 grand each, 500 grand each. So, let's just say this coming Monday every Aussie gets 400 grand

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from the from the billionaires. Well, what's that going to do? All property prices will jump 400 grand, 500 grand or more. >> or more Um your grocery prices are going to shoot up. Your cars are going to double and triple in price because everyone's got all this money. So, it's just going to create all this inflation. So, you know, we don't really understand economics, the the majority of people, and even the people that understand it don't understand it. But there's just a lot of uh

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misinformation, there's a lot of uh lack of knowledge, there's a lot of ignorance out there right now. And actually, that's what makes me afraid, Dane, because if you get enough people, enough ignorant people calling for and voting for what seems right, which is actually not even going to be right for them, but calling for it and asking for it out of ignorance because you've got a politician that wants a particular uh cuz you've got a politician that wants um a spot in the parliament or

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prime minister, and they want that either because they've got an ideology or because for their own personal gain, then what you're essentially going to end up is with a a a broken a broken society. And then when you have a broken society, you have a society in collapse. Now we're talking Mad Max type scenario, where I'm afraid of that. I want the ability to be able to insulate and protect my family from that event potentially potentially happen happening. >> What advice would you give to young

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Australian families, and for that matter, young families around the world? >> It is essential more than ever that families get a game plan together to break free of the system. >> And when you say the system, you're talking about all of these collective systems. >> All of these collective systems, and the only way to break free, I mean, you got to mentally break free, but you got to have the money to break free. >> How much money do you need to break free of the system?

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>> I would say you need 3 to 5 million. >> 3 to 5 million? >> 3 to 5 million. >> To escape being in under control? >> That's right. Yeah, 3 to 5 million because if you've got 3 to 5 million, you've got a passive income between 200,000 and 500,000 a year. That's that's going to give you some options. And then if you got 3 to 5 million, you've also got a chunk of money where you can get up and you can relocate your family or you can move your family.

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Uh and you can do different things and you've got different options. So >> We're seeing a lot of that happen right now. I got a lot of friends in business that are Uh one friend's moving to Dubai, another one's moving to Italy, another one's moving to the States, all in the last 6 months. >> Yeah, this is a This is a real sentiment that people have. >> Like I'm talking about some of the wealthiest people I know in this country. Um you know, maybe they're just shy of 100, 200

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million. They're leaving. >> And they're very well insulated. And they they they they've got a lot of fears and worries and ta And a lot of people think, "Well, they're just leaving so that they can pay less tax." But I can tell you right now, a lot of wealthy people with that type of money, they don't mind paying some tax or, you know, a fair amount of tax, but it's not just the uh tax, but it's also that whole sentiment and how they're being labeled.

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So, in Australia, you know, we don't generally, I mean, there's a community of entrepreneurs and investors that do put put highly successful people up on a pedestal, but generally, we don't. We drag them down. They're the enemies. They're the enemies of society. You know, they're hoarding, they're grabbing, they're taking. And I think that's a part of the reason why people want to move as well because they want to be in a community where for their achievements, they're they're

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applauded. >> Now, something else I'd like to talk about is uh what's happening with AI. You have an interesting take around that. You look at AI and you don't just see an LLM algorithmic system, you see a living entity that is consuming energy. >> Yeah, well, it is and I I don't think Australians understand the amount of investment that's coming into Australia right now cuz a lot of overseas companies are kind of saying, "Well, Australia has a stable political

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environment. You've got energy, you've got water, you've got all of these things and you don't have much resistance to the building of all of these data centers. So, the big problem right now, I see another big problem coming like we had with gas. So, we're talking about we should tax gas. Now, look, the gas industry does pay tax. I'm not going to get into that whole thing right now, but it does. But, why don't we have like a significant royalty on it? It goes back to the deal

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we struck when the gas companies first came in. So, there's a lot of gas all around the world and you know, companies can invest in different countries and there's a different amount of money they need to invest and they want to get a return on their capital. So, the government at the time did the deal that they thought was good to get the capital here and the overseas companies here to extract the gas. So, we did a deal. And it turns out Australians don't like the deal. A lot of people don't like the

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deal. So, we look back at it. We wish we had have done a different deal. >> What is the deal exactly? Give us a synopsis of what it might look like. >> I can't I don't want to go into all the details of the deal, but basically, you know, there's this call in Australia for a 25% tax on the gross revenue of the gas companies. Now, we had an opportunity to cut that deal 10 years ago, 15 years ago, 20 years ago. But, now we've now we've done that deal. Can we renege on that deal? We

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can. Will we get any future investment from overseas companies to then extract materials into the future? No, we will not. And I don't think a lot of Australians understand we don't have the money and we don't have the capital to do a lot of things in this country. So, we need money and capital and expertise. Do we have all the engineers to extract gas? All the technicians to extract gas? No, we don't. We need overseas companies to come in for their capital, their money, their knowledge and and their

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know-how to actually get the job done. So, that's why we've got the gas deal that we've got now, which now nobody likes. However, we are now entering this AI era. No one is talking about this. This is not in the news headlines. No politicians are talking about it. But AI, you can consider it almost like a natural resource because it requires land, it requires water, and it requires vast amounts of electricity and energy. Huge massive massive. And so, we are now currently I think we've got about 150 or

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160 data centers in Australia. No one No one really knows that. We've got approvals I think on about another 100 more, right? Or it could even be more than that. And these things are going to soak up so much electricity and so much water, and they're going to be positioned in different um suburban areas around Australia. That's kind of like a natural natural resource. And so, what is Australians, everyday Australian households going to get for all this data center investment? Same question with the gas. Okay? We We're

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going to We're going to extract the gas. Government benefits, they collect a bit of tax, but how does the everyday Aussie benefit from that? So, how is the everyday Aussie now going to benefit from this AI investment flooding into the country? We don't have a proper framework around that right now. I I believe it should be taxed. Anyone that wants to open a data center here, it should be a little bit like the gas companies. We should We should have a tax because literally it's taking our

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natural resources from Australians. Electricity, water, and suburban suburban land space. It's going to be It's going to be soaking up. So, we need a We need a deal and we need a framework around that. No one's No one's really really talking about that. >> You know, when I think about the average Australian what Why What's that going to do to the average Australian? What What can we expect from that? What's your >> Well >> perception? >> So, these data centers that they're like

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biological masses. They're like communities of people moving into your community because they take electricity, they take water, they take land space. So, if you've got living humans that require those things and you've got these data centers that require these things, we're now going to be competing against these data centers for those limited natural resources, which actually have quite a big cost on them. So, the cost of energy is already blown out. We don't have a really

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clear path forward for for energy over the next 10 to 15 15 years. The Snowy River hydro system is already blown out by 10 or 20 times. Uh you know, the whole net zero is a conversation, but that hasn't really lived up to what it was going to be. Albo said at the last election electricity bills would come down on average by $275. In fact, they've gone up by double and triple that in many cases. So, what's happening with these data centers is they're going to compete for those natural resources

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and they're actually going to increase the cost of living for for Australians. So, that's just another example, I feel like of mismanagement. >> Therefore, therefore, if you're looking at these two systems um creating more control and and you know, taking more tax off people and um expanding these natural resources and not taxing them effectively, like what is this all pointing towards if if you were to look at this collection of events and you were to look at a forecast of the future of this country,

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what do you predict for the middle class? >> Well, the middle class are going to get squeezed more and more and more. Who are the ones making all the money? It's the middle class. You can't tax those on welfare. And the amount of people on welfare is growing and growing and growing. And when I say welfare, it's a little bit unfair to say people on NDIS, I don't want to just say they're on welfare because I'm very proud of our NDIS program. I think that the intent behind it is absolutely amazing and we

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should and we should have something there, but we know that that's been rotted. So we've got NDIS blowing up. Then we've got um Medicare, which is a former welfare for all Australians. They say that it's universal uh health care. However, why are people still having to pay 20 grand, 40 grand, 80 grand for different surgeries? Why can they not get it on Medicare? So is that truly universal? How well is that being Then you've got all the other welfare that we've got all all all throughout the

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country. And then you've also got all the misspending and all the public servants. So I don't want to label public servants and I'd never label nurses and frontline workers, our police, uh paramedics and so forth. But if you look at all the bureaucrats that we've got, is that a form of welfare? You know, um one particular office, I think and I I I just can't recall the name of the office. I you know, maybe we can add it in the comments later, but there was like 500 people in this

00:29:37 - 00:30:32

particular office. I think it was the energy office. And now there's like 5,000 staff there. Uh what are they What are they What are they all doing? Is that a form of Is that a form of welfare? So you look at all that government spending, you look at all the mismanagement of the economy, and there's all these different things happening, the energy, the AI. I think ultimately we can analyze that, we can talk about this, we can worry about this, we can become activists, we can protest, we can

00:30:04 - 00:30:58

get involved in political movements and maybe many of those things are good things, but I think everyone's main mission should be get that $3 to $5 million for your family so that your family can break free. And then if you can help some other people, some other families, help society, then then do it. But your number one goal should be get that break free money for you and your family first. >> If if we're thinking about perhaps a juxtaposition here, one which is I've got to do what I need to do to

00:30:31 - 00:31:29

get my family into a position where we can secure ourselves. >> Yeah. >> I respect that. I have kids. I totally align with that thinking. >> Yeah. >> Simultaneously, is that also exacerbating the issue because should we also be simultaneously thinking about well how do we improve our society? How do we improve our communities? How do we rather than fight for ourselves, how do we fight for each other and and change the way the system is operating? >> Yeah, well I think number one

00:31:01 - 00:31:44

fight for yourself doesn't necessarily mean you fight against the community. So I think number one I believe that you build whatever it is that you want to build with integrity. You follow the rules. You do all the right things. And this even means as a property investor you've got tenants in some of your properties. Well, you extend some charity to them. You're you're not just jacking up the rents every time you can. People need extensions or different things. You try and be a good person,

00:31:22 - 00:32:20

right? So so you definitely you definitely do that. However, what I will say is that when you start this journey out. So when you set a deadline, set a target, set a number, put you and your family on that mission to create that three to five million, the energy and the excitement that will be in your home, it'll be very electric, right? And then the people within your circle as well will be influenced by that. And I think the biggest way to influence someone is to lead and to me leadership

00:31:50 - 00:32:54

is is doing, not necessarily talking. So you know, there was a there was a big competitor in the whole property space who recently went under, sadly went under. You know, and they're in insolvency now and I think they've got the creditors owed something like 20 or 30, maybe maybe even 40 40 million dollars. But this is a company which was founded by founders who didn't have any investment properties. So to me that's an example of someone trying to lead to do something that hadn't actually done what they were

00:32:23 - 00:33:18

leading to do. And then where did it end up going? It ended up going with with failure. So I think that the best way for people to lead is through them getting on that mission themselves and then that will then filter out to their family and to their communities. Uh however, let's just be let's just be very very brutal here. No one's going to come and save you. I'm helping you. I'm helping this person. To me, that's extremely selfish. So, if I've got children and I'm

00:32:51 - 00:33:41

spending all my time helping the neighbor, helping here. I'm not saying don't help them. Absolutely help them. But, I'm saying then you might your main focus has got to be to to your people that you're responsible for. So, my main and primary responsibility was always to the people that were dependent upon me. Like, I feel obligated and duty-bound to serve them and provide for them first. And I think, you know, the friendships that you've got and cousins and aunties and uncles, they're important. But,

00:33:16 - 00:34:04

you've got your primary people that you're respons- responsible for. And And by the way, Dane, I actually see and I have seen throughout my life a lot of people use that as an excuse for not doing their own homework. Like, actually saying, "Oh, well, I've been busy doing this and busy doing that." And they're all those are all worthy things. But, I'm like, "Well, is that really just an excuse for you not doing what you should be doing and doing your own homework in your own

00:33:40 - 00:34:40

backyard? Um you know, or are you really this good-natured person that wants to help everyone? Or are you simply hiding from the hard work that you have to do?" >> Well said. I can agree with that. What do you think that people misunderstand about someone like Elon Musk? >> I'll ask one really strange question about Elon Musk. Why is Elon still working today? You know, >> I would I would say he's obsessed. >> And And And I think that's what people don't understand. Cuz if you talk to the

00:34:10 - 00:35:12

average punter, >> Mhm. >> and I said, "Hey, forget $1 trillion. Forget $1 billion. If I just give you 10 mil, what will you do tomorrow?" They will not be at work. So, you got to ask yourself the question, "Why >> Yeah. >> Why is Elon still working? What's driving him?" And again, it comes back to that what I was saying, those sort of the two politicians. You know, you've got some people just out to get as much money, as much personal significance as possible.

00:34:41 - 00:35:43

And then you've got some people with an ideology. So, for me, I believe, not just from imagining it, but sort of looking at the actions, cuz I think actions really tell you about someone, I sort of sense from Elon that he's got an ideology. And I feel that his ideology is to actually best serve the planet. >> Do you genuinely believe that? >> I do genuinely believe that. Now, whether or not what he's doing is serving the planet or not, we can we can debate that. >> that he believes he is.

00:35:12 - 00:36:06

>> But I would say that he but that he believes that he is. And I see him being quite a caring a caring guy and a and a family guy. You know, he's traveling all around the world, and I don't see him with four or five models on his arms, although he has had some pretty prominent relationships, right? But I see him with his little four five-year-old kid everywhere that he goes. So, that tells me a lot about about the man. Now, whether or not what he's doing is right or wrong, and you know, we've got social media and

00:35:39 - 00:36:28

different things that he's said. Do we agree with every single comment? No No human is perfect, right? Uh yeah, but I think the key question to ask is, well, why why is this person still working? Is it personal significance? Probably there's some of that. Is it to make more money? Doesn't need any more money. Why would he want more money? And he says this, I want more money so I can I can do more. Uh that's that's my take on Elon. >> If you look at the collection of his

00:36:03 - 00:36:57

companies, they all do seem to be human-centric or human-focused. >> Yeah. >> SpaceX is to become an interplanetary species so we can survive outside of this planet. Um then you have his boring company, so he's trying to make traffic more bearable in complex cities that have no space to put roads in. Uh if you look at um his energy company, he's trying to put solar panels on the roofs to improve people's uh quality of life. and it does seem like that is a sentiment across his

00:36:31 - 00:37:32

businesses. One question I have is when you think about someone that's operating at that level, like what is something that we can learn from that as an entrepreneur who's not trying to go to Mars, but as someone who's trying to put food on the table for a couple kids or buy a house or set their family up. What what what is some um energy we can we can draw from that? >> Well, I think the first thing is don't do what Elon has done. Because these these are the worst decisions in in in humankind. Like who

00:37:01 - 00:37:56

who takes all this money that he made from PayPal and put it into this electric car venture? That's ridiculous. Like the chances of failure are 99.999999% you're going to lose all your capital. Who then takes the the takings from that and the winnings from that and puts it into a rocket company to commercialize space? That's absolutely insanity. You're not going to Warren Buffett would never do that. Like you'd you'd be crazy to do that. And it would be, you know, the chances of

00:37:28 - 00:38:38

failure of that is 99.9999. The board the whole board, you know, like the things that he's done are so ridiculously fraught with danger, risk, and the downside of losing that no one should should follow what Elon has done. Okay, so let me just let me just sort of encapsulate that. If you're 40, 45, 50 now, you probably get your peak earning years. You're probably going to earn right now as much as you're ever going to earn. You might get 10, 20, 30% more, maybe, and you might have that

00:38:04 - 00:39:01

for 5 years, but you're not suddenly going to triple or quadruple your money. So probably your best bet is not do anything that Elon's done, find some safe investments, look at a safe way to optimize your tax, get really good cash flow management, look after every single dollar that's coming through, invest it and own something. And and I think that's probably the big difference with today's economy and today's world and maybe 20, 30 years, 50 years ago. Before you could work, not own anything,

00:38:32 - 00:39:23

own one property, and retire, and you'd be looked after. Today, if you don't have a strong asset base, you're going to be screwed in retirement. So, like I would say do that. Then if you're Then if you're an entrepreneur and you're a business person, I don't think that you should do what Elon Elon's doing. I think that you should um look for a market that um has a lot of activity in it, a lot of a lot of money in it. There's um hundreds and hundreds of examples of people succeeding in that

00:38:57 - 00:40:06

space. Go into that space. Like your chances of um succeeding are going to be way higher. But if you're going to do something like absolutely crazy where the chances of losing all your money, break a new market, break a new technology, that's madness. Like you'll you'll never catch me doing that. And that's why I applaud Elon. Um and that's why we need the Elons. Now, by the way, would a government do that? No. Um would a collective of a million people um in some sort of collective communist

00:39:32 - 00:40:34

type thing all vote and agree, let's do that? Probably not. It takes a wild crazy man who has an ideology, is not that worried about the financial return, willing to take massive amounts of risk, and has the capital to bring us SpaceX, Tesla, and all these other technologies. So, the planet, whether you like it or not, the planet needs people like Elon Musk with the money and with the capital. You don't have the billionaires and the trillionaires, you don't get these breakthroughs. We're in an absolute circus around

00:40:03 - 00:40:57

interest rates. So, the end of last year, we have three interest rate cuts, which was really good reprieve for all of the Aussies. And then all of a sudden, beginning of this year, um they started to jack the rates back up again. So, you know, we're up, we're down, we're up, we're down. We're all over the place and the reason we're all over the place and we've got no level of certainty and stability in the economy with interest rates, with the housing market is we're up, down, we're

00:40:30 - 00:41:36

up, down. Why are we up, down, up, down? It's because the RBA and the federal government are not aligned. So, that that's what I see is a is a really is a really big problem and where is this problem emanating from? I believe that the problem is emanating because we are becoming more tribal. We are becoming more niched and to be able to win an election now, you've got to play to those different tribes and their different needs. But we're not sitting down as a whole community and having a open, honest

00:41:03 - 00:41:59

discussion about where the country need needs to go and what we should do. I I don't believe that the everyday man and woman can really, truly impact the system. It's too big. It's too big. I think that your first goal has to be get that 3 to 5 million for you and your family. Find any way to do it and I mean that's why that's why I was attracted to property because when I ran the numbers, I'm like, okay, I can leverage my way there. I can, you know, get some tax optimizations. I don't have to suddenly

00:41:31 - 00:42:19

become an entrepreneur, launch a business. I don't have to earn millions and millions of dollars. I can make some good money if I if I take care of my career, take, you know, have have have good, solid career, keep myself valuable in the economy. If I have good cash flow management and control my money and then if I've got some good guidance to be able to buy the right assets, I'm not get ripped off and taken for a ride there and then if I can hold them for 10 or 15 years, I can get my 3 to 5

00:41:55 - 00:42:51

million. So, I would I would say that's probably the base case for most Australians to do something like that. And then you got some people that are going to go, well, I want to start a business. I want to do other things. I think you can do that as well. But I also I see a lot of business owners and this might be the worst advice for a business owner. They put too much attention on their business. And I see a lot of businesses uh business owners that have been in their business for 10, 15 years and

00:42:23 - 00:43:04

they've been making a lot of profit. They've paid their staff a lot of money. They've paid their contractors and all this a lot of money. Mark Zuckerberg got a lot of money from them. But, after 10 years of toiling in their business and they've scaled and they've done certain things, but they don't they don't actually have any wealth. Their business a lot of the times can't be sold. So, it sort of has no value. It might have a book value, but it sort of has no value

00:42:43 - 00:43:40

because it takes them to run it. And so, they can't sell it and they don't have any assets. So, I think that uh the the game in today's economy, whether you're a business owner y- you know, you're a PAYG, you're earning an income, you're a tradesperson, whatever it is, you've you've got to come up with a game plan to put enough to put together enough assets to get that 3 to 5 million. I think I think that's step one. >> Okay. Now, could you walk me through it?

00:43:12 - 00:44:09

What skills do I need to learn? Where can I learn those skills? What is the first thing I should be aiming to do as a goal and so forth? >> Yeah. Look, it's it's extremely boring and it's extremely easy, but it's very, very hard to implement. So, I think the first thing is you've got to try and get your income stable, strong. So, it means you being valuable and that's why I think, you know, watching different podcasts, getting inspired by different people you follow, doing different

00:43:40 - 00:44:34

courses, being in good communities, um upgrading your skills. So, be incredibly valuable in the economy, um earn a good income, try to maximize your income as much as you can, but also to make sure that it's stable, that you're growing your skills, so no matter whatever happens over the next two, three, four, five years, you're going to have that income. So, yeah, get that income. I think the next thing that you do is you've got to look after your cash flow. So, like right now basically most people their cash flow is

00:44:07 - 00:45:00

an absolute utter mess. You know, like they wouldn't know what did you spend last month? What did you earn last month exactly? And what did you spend last month? And what did you spend it on? And where is it? What accounts is it in? How much is it in super? How much is in that account? How much is in the offset account? How much is in the business bank? People don't know what what those numbers are. And right they're so busy, right? But you've got to take time and attention for the cash flow management, which is

00:44:33 - 00:45:23

boring and also can be very painful. And you don't want to look at it cuz then you realize where your money's going. It can generate anger. Um you know, anxiety, fear. But you've got to you've got to look into that. So you you've got to have really strong cash flow management. After the cash flow management, um the next thing that you've that you've got to do is you've got to have an investment plan. I don't care what it is. It might be property. It might be commercial

00:44:59 - 00:45:46

property. You might buy and renovate and do all these things. You might do what my clients do, buy a brand new property, right? Whatever it is. But you've got to figure that out for yourself. So but you've got to have an investment plan. It might be shares. It might be your business. It might Whatever it is. So you've got to have an investment plan. Then the next thing you need is typically, if you're investing, you have a business, it's correlated with how much that you take on.

00:45:22 - 00:46:15

So if you can take on safe debt, you can amplify your returns. And so after your investment plan, you've got to have a debt reduction plan. Cuz there'll be a period where you take on some debt. And then there'll be a period where you want to eliminate all of that debt. And then lastly, then you need your exit plan. So how do I how do I exit the system? And so that that's a number actually. That's a that's a time. It's a date in the future. It's a deadline that you set yourself

00:45:49 - 00:46:38

for the future, but it's also a money amount. And I think for most Australians, it's going to be three three to five million. With my clients, it's mainly between three to five million. For some people, it's 10 million or 15 million cuz they've got a certain lifestyle or a certain thing that they want to do. For some like I had one client that his goal was basically to retire in Bali. So he his um exit number was 1.5 million. He just needed 1.5 million. Took him one investment property in about eight years

00:46:14 - 00:47:03

to do it. But but for other people it's going to be a different number. So then you have your exit plan. All right. I've created I've created that lump sum. Now what do I do? And for some people it's yeah, move overseas, move to a country town. Um fly back to New Zealand, live there. Move down to Tasmania, live there. Do this stay in Whatever it is. So you have your exit plan. So I just say that it'll be those five five pillars. So whether you're a business owner or whatever it

00:46:38 - 00:47:30

is, you should you should have that plan. >> All right. Now, can we walk through each of these pillars in a bit more detail? But starting with the first one, let's say a stable job. Yeah, what would you classify right now as a stable job because it does seem like uh a lot of different industries are getting tortured by AI and they're they're changing. Um how does someone make sure that they're creating themselves either a stable income from their business or a a stable job for themselves? What what's the

00:47:04 - 00:47:53

number what what should someone be aiming for? >> Yeah, I think you just got to try and choose the you know, the right industry. Try and choose the right size of business to be in. Uh like any advice I'd give to someone uh young and starting out, I would say try to avoid the big corporates because you just you're just going to be a a number there. You're going to be lost in the system. You're going to have a team leader or a manager that's five levels removed away. Then you got big

00:47:28 - 00:48:19

shareholders and boards and all of this. You can't progress and also you're going to be sort of trapped in terms of what you can learn and who you associate with. So I think if you can get into a small or a medium or a mid-size company, you're going to have a little bit more exposure to the top people, the real movers and shakers in that company. >> Why why is it important that you get exposure to the top people? >> Well, you know, I believe all success is all about modeling uh correct behaviors.

00:47:54 - 00:48:55

And it's not just modeling knowledge, but it's also a modeling energy, body language, how people act, how people talk. So, you know, what's more valuable What could be really valuable to someone is Imagine you can get in the boardroom with the founder of a company and just listen to them for 15 minutes. You will learn something from that. Uh imagine you're seated um in an office and, you know, 20 25 m away the founder, the co-founder, or maybe the um second or third person that joined the

00:48:25 - 00:49:14

company who's in a really senior role now, maybe the CEO or whatever the company is right there and you're getting some exposure to them, even if it's just seeing them and hearing them. Uh and then also in that um mid-size smaller company you're going to be have ability to learn from the other departments a lot more. You know, finance might just be there and you can associate with them. Marketing marketing guys is just over there. Sales and operations is just over there. So, I think that

00:48:49 - 00:49:43

you you you want to learn You want to learn as much as possible when you're young. Now, when you get a little bit older you might be um a bit pigeonholed already. Where it is, so I believe that you should just double down and capitalize on what it is that you're already you're already good at. I think sometimes making a career change can be can be very very hard, so it's about trying to maximize where you are. And that could be changing companies. It could be adding adding additional new skills.

00:49:16 - 00:50:11

But ultimately just being the most valuable person that you can be at what you know. So, depending on depending on where you are. And then, you know, you can maximize uh maximize your income and also secure your income. So, for me that's the first pillar. >> Now, to maximize your income, some would say that, you know, they've been in a job for a couple years and they would just wait for their pay raise to come around. What's some ways that people could make themselves more valuable in the workplace to to maximize

00:49:44 - 00:50:37

their income? >> Yeah. So, I think the big mistake people make with going for a pay rise is either they don't ask for one or they ask for one in the wrong way. So, they'll say to a manager or a business owner, they'll say, "Hey, recruiters have been banging on my door. Um I got offered this package. Like, what can you do?" Like, you'll probably get fired on the spot. Or maybe not fired on the spot, but you're not going to be trusted. You're not going to be loyal. So,

00:50:09 - 00:51:09

loyalty and commitment to a company and to a team has a huge premium on it. >> What ways loyalty so valuable to a business owner? >> Well, business owners and uh you know, managers, team leaders, they're looking for consistency and they're looking for stability over having really high-performing hired guns. Because a really high-performing hired gun will come in. Maybe they perform 3 months, 6 months, even 1 year, but they're in and out. And when they come in and out, they're not team players,

00:50:40 - 00:51:34

they create a really bad can create a really bad culture, and then they leave and they go to some other company, and then they tell everyone else that they were working with, "Hey, follow me to this next place." So, business owners don't want that. They want stability. In a lot of cases, they're happy to take, you know, to exchange a 10 out of 10 performer for a 7 out of 10 performer that's committed, loyal, good for the culture, and you know, and committed to the company.

00:51:07 - 00:51:56

Like, they I don't know if you feel that in in in your own >> I I agree with you, yeah. >> I I don't know I don't know a business owner that wouldn't agree with that. So, I think that if >> I totally agree. >> If you can demonstrate loyalty um and commitment and provide all the right cultures, show up on time, dress well, say the right stuff, bring the right vibe, bring the right energy, um work really hard at your craft, and you don't even have to be the top provider,

00:51:31 - 00:52:28

you you will set yourself up for a really great career, and you'll be surprised you'll be identified and you'll be fast-tracked for promotions, side moves, up moves, increases in income well and truly above the the high performers. So, that's that's probably um one tip. And if you are going to ask for a pay rise, I think the way that you that you can do it is you got to ask in a respectful way which maintains your loyalty. And you it probably goes something like this, but I believe this should come from the heart.

00:51:59 - 00:52:53

Don't don't just run the script. You should be saying something like, I absolutely love living I absolutely love working here. I am committed to this place. I bring my best energy, my best self here all the time. I would never consider leaving. But I've got these goals for my family. I really need to upgrade my family home. I really need to live a little bit closer to work. I really want to, you know, my my daughter will be starting school soon. I really want to get into a good school. What could I do or how can I add

00:52:27 - 00:53:18

more value to help me to achieve those goals? So, if you can position something like that, um I I think >> for anyone listening to this, you made a very key distinction there. It's not just this is happening in my life, therefore give me more money. >> Yeah. >> This is happening in my life, therefore I'm hungry. >> Yeah. >> What's the gap that I can fill that you have a problem with? The same way you talk to a client. >> Yeah. >> Mr. Customer, Mrs. Customer, what can I

00:52:52 - 00:53:28

do for you? Oh, I have this problem. If I can solve that, would you pay me more money? >> Yeah. >> The answer's probably going to be yes. >> Yeah. Look, I hope none of my staff are hearing this cuz I Like, my heart melts when I hear those stories. >> Yeah. >> And I'm like, how do I get this person more money? >> Yeah. >> But, you know, you've got to be the shrew the shrewd you know, business person as well. There's got to be a commercial return

00:53:11 - 00:53:58

because the business is serving not just that individual, but So, anyway, um >> But, I agree with the sentiment that rather than just being like, I've been here for a long time, give me more money, you're saying contribute more value. >> Yeah, how do I how do I how do I do it? Where are my gaps? What can I do? Is is is how do I get better at my current job? Is there something else I can do? But, you can leave that problem with your manager. Now, if you've been a committed

00:53:34 - 00:54:28

individual in that team, your manager will like you. Your manager will be committed to you. And your manager will want to do something for you or the business owner, they will 100% go away and have a think about how to come back to you. And it might just be get better at your current job. And there might be some things, some feedback that they wanted to give you that they haven't because as a leader, you're always worried about how feedback will land. So you're always looking for permission to give feedback.

00:54:01 - 00:54:47

You You know what I mean? So when someone puts their hand up and says, "I'm willing to take feedback. I'm willing to grow. I'm willing to do a little bit extra." Then there there might be a little nugget or something that your leader, your business owner has been holding back from you that they now they they feel like they got permission or it's safe for them to give the feedback. Cuz typically when you give feedback, it land it can land very bad. So look, I know that's for me anyway.

00:54:24 - 00:55:17

It's a weakness of mine. So um I think I think if you can do those things and then there's absolutely no reason why you shouldn't be able to grow your income between 7% and 15% year-on-year every single year. I can't I can't I can't >> 15%? >> Yes, I think I think it has to be >> working your job? >> I think I think it has to be a minimum of 7% to 15% year-on-year. You have to be getting 7% because inflation's going to be 2% 3% and then you need something above inflation. So

00:54:51 - 00:55:44

your real pay rise is what's above inflation. So if inflation's 2% 3%, you at least want 4% 5% of a real real growth. So you've got to be going for a minimum of 7%. If you're not getting 7%, you're probably in the wrong company, the wrong industry, or in the wrong position. So I I think that if there's absolutely no opportunity for you to get 7% to 15%, then you've got to start thinking about your next move to to another company or another industry. >> Now, if you were to put a category on

00:55:17 - 00:56:23

what a household income should be for middle class, what do you think that should be in Australia? >> Oh man, I'm going to get shot down for this. Look look, um ah I'm not sure that I I'm not sure that I know the number. Most of my clients have a household income between about 180,000 combined income. That's more on the lower end, up to around 250 to 350,000 uh combined income. So >> are setting themselves up for 3 to 5 mil? >> Yeah, they're setting this up for 3 to 5

00:55:50 - 00:56:41

mil. Now, if you're at the lower end and you're starting off off a low base, it might be a 12- to 16-year investment window. And if you're at the upper end, it might be a 7- to 10-year investment window, right? Just depending on your circumstances. >> about 180,000 as a collective household income? >> You can do You can do something with that, depending on how many, you know, dependents and expenses and different things that you have. But if you're a single on 180, you're in a pretty good

00:56:16 - 00:56:59

position, especially if your expenses are low. You know, you're sharing accommodation or you're still at home with mom and dad, you can you can do a lot with that. You might even have your own place, so you you can you can do a lot with that 180. >> of that do you think they should be trying to having as a healthy goal to save? >> Well, I would I would say, and I know it's really hard because of social media and all the ads and there's so much stuff out there that we want to buy, but

00:56:37 - 00:57:34

you should be living like an absolute monk. Like a monk. And and I and I mean on your food, uh you know, and I've actually I've actually challenged myself on this as well with um what I spend on eating out. I actually set myself a challenge, like to eat at home. So you got to go back and ask yourself, well, do I want Do I Do I want to break free of the system? How important is it to me? How fast do I want to make it happen? If you really write that down, that'll give you the motivation to live like a monk. And then

00:57:05 - 00:57:53

you've got a mission, so you're not doing it to hurt yourself, punish yourself, to suffer. You're making all those sacrifices because you feel like you're on this mission to break free. >> Now, what would be your advice to people that simultaneously have debt while they're trying to do this? >> Well, most most of my clients do have debt. >> How much debt do they typically have? >> Well, they'll have anywhere from 1 to 2 million dollars of debt. >> 1 to 2 million of

00:57:30 - 00:58:17

>> One One Yeah, because they're going to have their main home. >> Right. >> You know, typically they've got a mortgage of 700 grand up to about 1.5 million, sometimes more. Then they've got probably some credit card debt of 20 to 30 grand. They might have um a car loan as well, 30, 40, 50 grand or more. So, you got to sit down with a professional look at how you work out that debt, but you know, you can you can consolidate your debt, refinance your debt, work out your debt. That's

00:57:53 - 00:58:42

actually the first myth that most people have in terms of cash flow management. Yeah, and the debt consolidation and figuring it out all of your debt and cleaning up all of your debt, that's actually the first big move that you have to do. Yeah, wipe away the credit cards, annihilate them, car loan. And I And I think we spend way too much money on cars as well. Most people don't actually need a car >> Yeah. >> if they really, really think about it. So, or you can get like a much cheaper

00:58:17 - 00:59:10

car. Why Why go for the European car and all of this? So, maybe one of my one of my one of my uh team members might might watch this, but uh one of my team members got a a really good pay rise recently. And then I just heard yesterday he went out and bought a Toyota Supra. >> [laughter] >> And I'm like, "Dude, you did not need that Toyota." I mean, those are some of the decisions that can set you back uh 10 years, you know, because that money on that car could have went to another investment

00:58:43 - 00:59:40

property. And then if you fast forward 8 to 10 years, what that investment property would have done for your life versus that Toyota Supra, it's going to be a much a much different outcome. But we're emotional. We want things. >> Let's talk about cash flow. So, when I started my business, the the debt I'd accumulated was north of $200,000. And I remember >> when you're starting out. >> Yeah. And I remember getting a whiteboard and uh I I felt very clever. I got the little tape and I created this

00:59:12 - 01:00:13

massive index and and my ambition was to wipe out my debt. Now, the interesting thing I'd learned um was that rather than doing the smaller ones and then working your way up to the big ones, I flipped it and I wrote the biggest, scariest debts at the top and I attacked them first and worked my way down. Um, >> and I found that it was quite liberating to to actually try to take out Goliath first. And I remember my first debt was was about $36,000. Uh, and um, I'd negotiated the big ones

00:59:43 - 01:00:27

down and I was saving anywhere between four to $6,000 in the total amount of these debts by negotiating down, by making massive lump sum payments. >> Oh, wow. >> When you're thinking about cash flow and and and taking out the debt first, like what what's your playbook from removing debt through to maximizing cash flow? >> Yeah, I think the first thing, yeah, you should try and remove your debt, especially if you've got debt, you know, that's high on the interest

01:00:05 - 01:00:56

rate. So, what a lot of people don't realize is that, you know, a lot of your debts, if you make the minimum repayment, if you don't check it carefully, it may take 40, 50 years to pay it off. Uh, cuz of the minimum repayment. And then you can get caught where you're distracted by life and you get the bill, the credit card bill or, you know, the the um, purchasing card bill, whatever it is, or you got a supplier. And then you're you're just paying the minimum, but you don't realize you're paying 15,

01:00:29 - 01:01:11

16% interest, 9, 10, 12% interest, and you're barely paying off the principal or you might not even be paying off the principal at all. So, that's just an ongoing. So, it's really, really important to get all your paperwork to get cash flow management is painful. It's not fun cuz you got to confront a lot of your bad decisions. You got to confront and and kind of go, "Geez, for the last few years I've been wasting money here." But you you've got to confront it. And

01:00:51 - 01:01:38

then um, I like what you did, you know, you get a board, a whiteboard or Excel sheet. You write down all your debts, you write down the minimum repayment, you write down the interest rate that that you're on and how flexible it is. And then I think come up with a game plan anyway that's going to motivate you to attack it. So, I like your way that motivated you. Go ahead, do that. Uh, but what I would recommend for a lot of people is attack the debts with the highest interest rate first that are costing you

01:01:15 - 01:02:14

the most. So, try and eliminate them. If you can consolidate the debt and get it on a lower interest rate, that's a good thing as well. You can do that. But it'll the trap there is a lot of people will refinance the debt, get it on a lower interest rate, get a lower minimum repayment, and then just pay that minimum repayment. And then if you work out over the time they're going to repay that debt, they end up um repaying back more over a longer period of time. So, I think the trap around that is the

01:01:44 - 01:02:26

minimum repayment trap. You don't want to get caught in that minimum repayment trap. Have a plan like you and actually knock it off with the lump sums. >> Remember um so I I took this idea from Tim Ferriss. And he was he called it the snowball effect. >> Yeah. >> And he said uh if you can, go get a lawyer as well. So, I had um all these companies with these debts sent me all their contracts, and I went to a lawyer, and I had the lawyers read the contracts, and they're like, "Say this.

01:02:05 - 01:02:50

Say that. Squeeze them here. Squeeze them there." They were giving me advice, and even though I was paying the lawyer to give me some consultation around the contracts, I was getting out of all these weird clauses by using all of this language against them in their own contracts. >> Yeah. >> Great tip. And people have AI now to help to help as well. [laughter] >> I didn't I didn't all of this without AI, so you're saying yeah, a great violently get out of debt. How how how

01:02:28 - 01:03:13

aggressive should people try to be to get out of debt before they try to start investing? >> Well, I'm hardcore. Like for me, you know, just go hardcore. But But again, I think you can get hardcore disciplined monk-like about the whole money thing when you've got that escape plan. >> Yeah. >> So, when you've got that, okay, it's going to be this date. All right, it's going to be 3 mil. It's going to be 5 mil. It's going to be whatever the number is, 15 mil. It's going to be on

01:02:50 - 01:03:36

this date. And then you can write down, well, that's my freedom day. Whatever whatever day you're going to call it, and you think, well, what am I going to do on that day? Um who's going to be there? Who am I going to celebrate with? Um how will I feel? Who's going to benefit from this? So, you write that down. Then you write out your mission, and then you write out um your game plan to get there. Then you put your budget together. And then all of a sudden um you're going to have more more energy, and then I

01:03:13 - 01:04:09

just believe you'll be surprised how hardcore you get because it becomes infectious. So, if you put it on the board and then you go, "All right, first step 36K." And then you go, "Okay, it's 36, it's 32, it's 28." Like, that momentum builds. Um you know, you become obsessed about it and you become more hardcore by starting the process. >> Yeah, I did as well cuz every time I saw the numbers coming down the total number, I I would I'd be like, "Well, what else

01:03:42 - 01:04:18

can we do?" >> Yeah, yeah. Update that is >> Can we cut out shopping uh shopping groceries? >> we not eat for a month? >> [laughter] >> So, yeah, you become hardcore through the through the process. >> helps you getting the dopamine. >> Hey, why are you eating? Why are you eating? We agreed we weren't going to eat for a month. >> Yeah, we had another agreement. So, Ellie and I, she's like, "Oh, every time you knock a dead out, you can buy beer."

01:03:59 - 01:04:36

And I was like, "Awesome." Awesome. Yeah. So, I couldn't have beer until I'd knocked a dead out. And as soon as I'd knock one out, we'd wipe it off the board, we'd share a beer, and we'd celebrate. >> Yeah, but that that's a success principle. And and I feel like, you know, there's little rewards you build them in. It sounds like a gimmick, but it becomes fun. It becomes like That's now become a great story that you and your partner share. >> Yeah.

01:04:18 - 01:05:13

>> You know? So, that those are the those are the beautiful stories um of your life, you know? Like, I think that if you can set up these mini missions in your life with these mini rewards and these mini milestones, I think as as much of that as you can do and have these rewards, it becomes part of your personal story, the story of your relationship, and the story with you and your children. Missions. These little mini missions. And they become fun. >> Let's imagine you are a you know,

01:04:45 - 01:05:32

27 27-year-old version of yourself. Like, how hardcore would you encourage someone to get if they're like, "I want to do this in like under 6 7 years?" How crazy should someone get with the cash flow? What are the things you would encourage them to do if they wanted to be absolutely hardcore? >> Well, you mentioned Grant Cardone earlier. He's a huge influence in my life. >> Yeah, same. >> A big turning point for me was attending one of his boot camps in 2017. Changed

01:05:10 - 01:05:50

my life. >> That's the one I couldn't afford. >> Oh, [laughter] that that was He was in Sydney that time, right? >> Yeah. So, I remember I was at the event the day he was shooting um money out of a a gun. >> Oh, yeah. Yeah. >> ran to the side of the room like G'd up like in front of 5,000 people. It's where I was like, "Damn." So, I could have met you had I found a way to afford it at that time. >> That's that's that's a cool story.

01:05:30 - 01:06:16

>> the same time >> that you went to the event. >> Yeah, 20 2017. >> Yeah. >> So, his book um be obsessed or be average. >> Oh, I love that book. >> The book it changed my life. Uh you I think that if you can get that level of obsession as early as possible and you know, when we're young we're thinking about, you know, boyfriends, girlfriends, partners, we're thinking about how do we look, we're thinking about clothes, what do we we're

01:05:52 - 01:06:38

thinking about all of this stuff. Then, you know, I just turned 50. I'm a grandfather now and I look back and I go so much of this stuff that I thought about was a waste of time. I was in a little bit of a different situation. I mean, at 25 I had four kids. So, um maybe I was in a little bit of a different little bit of a different situation. But, when you get older you're going to look back and realize that you're wasting time you on thinking and spending, you know, like I look at a

01:06:16 - 01:06:58

lot of a lot of young people now now, you know, they're they're out dating and mucking around with all all different, you know, just find one partner, settle down. >> Hey, let me run you through some different categories and let's talk about if you wanted to maximize cash flow, what would you do? >> Yeah, sure. >> All right, number one, uh utility bills. Phone, internet, electricity, things like that. >> Yeah, I think right now you got AI, so you you run that you run that through AI

01:06:37 - 01:07:23

and you work out the plan the plan that you're on and you just try and maximize it. I mean, a lot of people right now are upgrading their phone too often, they've got too many different plans. So, I think just, you know, take take some time out, run all that through AI and just work out work out the best plan. >> So, get on the phones and try to get the cheapest best deals you possibly can. >> Yeah, a 100%. So, like I I know I know it sounds like people are going to go, "Oh, yeah, I'm going to save 50 bucks or

01:06:59 - 01:07:39

whatever." But, you should you should do that because it's about that mindset. >> It's like a like go to war mindset. >> Yeah, go to war mindset. >> Let's >> get a cruise. We're going to all out war. Every 50 bucks we can get, we're going to keep. >> You you have to you have to be that way. >> How much do you think that people could save if they really like went through all their utilities and their internet and everything and were like, "I'm not

01:07:20 - 01:08:04

going to get a new phone plan. I'm not going to go on a 36-month payment schedule for the new iPhone or whatever it is." Like how much money can people save? >> I do this with my clients like in a lot of detail. So, we've done this thousands and thousands and thousands of times. So, got a lot of data. But you'll be shocked. You'll be able to find 50, 60, 70 thousand dollars a year. >> 50, 60 thousand a year? >> Yes. >> Yes. I'm not talking about someone

01:07:42 - 01:08:25

making a million dollars a year. I'm talking about a uh a household that's on like 220, 280 household income. >> Yeah. >> Right? Uh which is which is good money. Don't get me wrong there. But but you can you can find over 50 thousand dollars not just on the utilities. I'm talking about the overall >> Overall, okay. >> the overall spending. >> all out war, try and find what you can where you can. >> Yep. >> All right. What about like uh subscriptions like entertainment

01:08:03 - 01:08:48

platforms, Disney, Netflix, Foxtel? >> Wipe it all. Wipe it all. You don't need it. Like what do you what do you need? Depends on how how desperate you are. You know, but what what do you what do you really need? Change your habits. Like you know, grab grab grab grab some of your books. Read those instead of you know, sitting in front of Netflix. What are you getting out of Netflix? >> Nothing. >> Absolutely nothing. Just wipe it. Wipe it. And that might be that might be two, three, four hundred bucks a week on

01:08:26 - 01:09:15

all these subscriptions you don't need. >> Okay. Uh rent? >> Uh rent is a tough one. That that is a that is a real real tough one. Uh but again, depending on your situation, you might have to look at uh you know, moving to a completely different location. Like picking up and moving. I don't know. That's a tough one. But if you're in you know, the capital cities, you're getting smashed right now. >> Yeah. So, you would say it's better to commute in uh and live cheap somewhere

01:08:51 - 01:09:33

on the outskirts of the city where possible. >> Yeah, just just just depends. Just depends. Um yeah, I think I feel like you got to weigh that up with getting to and from work. But again, like I'm very hardcore about my career, taking care of my family, advancing in my career. So, I'm not going to be making a rental decision around lifestyle. >> Yeah. >> How close am I to the beach? Who cares? I'm going to be it's all for me it's going to be all down to the economics.

01:09:12 - 01:09:57

>> Get it as cheap as possible. >> Get it as cheap as possible, yeah. Yeah. And then I got to weigh that up with with my energy in terms of what I show up in the office and depending on whether I'm working from home. But, you know, if I can negotiate working from home a little bit extra. But, the other thing is time away from the office, I know for me and I think this is true for most human beings. When I'm alone, I'm very I'm very unproductive. But, when I'm in the office, my

01:09:33 - 01:10:25

productivity goes up 3, 4, 500%. So, I know for me I need to get into the office. >> Yeah, I'm I'm similar to you in that way. Okay, what about um buying nice clothes, nice things, jewelry, handbags, glasses, things like that? >> Complete waste of time. I mean, you know, look, I've done some of that. So, probably in the last 24 months, I started spending money on myself. For the for the for the very very first time. Like it it will it will make very little difference to your happiness or

01:10:00 - 01:10:47

anything like that. You'll get over it very very quick. So, I think all these luxury items it it might be one of the biggest scams out there. All the brand names, the Louis Vuitton, or all of this. You you don't need it. It's cool and it's fun to get it one time, maybe two, maybe three. Um but uh at the at the end of the day, it's going to be your relationships uh and to me it's going to be being free of the system. And then the quality of the relationships that you have that's going

01:10:24 - 01:11:01

to really make you happy. >> Uh social gatherings, going out for dinner, going out for lunch, ordering in. >> That that's a hard one. I'll tell you right now it's a hard one because, you know, you want to connect with people, but then we sort of feel like, well, we've got to go out to brunch, we've got to do this, we've got to You don't want to be left out and all this type of thing. But, you can be absolutely hardcore about that. >> What would you say? What is the hard

01:10:42 - 01:11:20

>> at home, you have a sandwich at home, you invite invite invite, you know, invite a friend go go, you know, with your friend at the gym and then invite them home, have a protein shake at home. There's so many other things you can do than blowing money out of the restaurants. >> Okay. Other things like health insurance, insurance, things like that. >> Yeah, I mean, there's certain things that you need. like I think health insurance is an important one like to have. So

01:11:01 - 01:11:58

um yeah, but for me just I think people know innately where they're blowing their money. You know, Uber Eats, eating out, um social events, rewards. There's a difference between, you know, a beer and a brand new handbag, you know, luxury handbag. There's a very very big difference. >> [laughter] >> Uh are there any other things that you think that people should look at to, you know, reduce costs and increase cash flow? >> Uh no, I think that I think those are the main Those are the main areas, yeah.

01:11:29 - 01:12:18

>> Have you seen some interesting things that people have done for side hustles to make extra cash? >> Um we recently had a client that was doing some music lessons on the side. That provided them with actually quite quite a large chunk of income on top of their main main source of income. That's probably all I can think of. >> to go to the um Salvation Army. >> Yep. >> And I would crawl around to try and find woods, like things made out of wood, and I would sand them down in my garage and

01:11:54 - 01:12:31

lacquer them and sell them. >> That's That's >> I was making like six, seven hundred bucks a week. >> Man, that is that is good. That That's a That's a big chunk of money. >> Yeah, it would take me like a whole Saturday. >> Yeah. >> But I was It was like seven hundred bucks for a Saturday. It was pretty good. >> Yep. But you know, you know, I used to go down to the Salvation Army with my mom to be able to get clothes for my kids. >> Oh, I love that.

01:12:12 - 01:12:59

>> You know, we we You know, I got four kids and to deck out one kid for like one year, you're talking thousands of dollars if you're buying brand new school uniform, sports uniform, shoe all this type of thing. So, you know, we'd be down at the Salvation Army and, you know, 20, 30 dollars we just have a full full suite of clothes. >> I love that. I love that. All right, so moving into investments and having a good investment plan, what what should someone do to set themselves up to do

01:12:36 - 01:13:30

that? >> Yeah, look, you got to you got to have an investment plan. So, I think, you know, try and get as much advice as you can, try and get as much information as you can, read as many books as as you can, and then you got to figure out an investment plan. So, is it going to be property, shares, business, crypto, different things like that. You just got to You just got to work that out. Now, of course, I'm a bit biased there. Um you know, my clients and my business is all around investing into into brand

01:13:02 - 01:14:03

new property. And so, like that's that's what I do. But, you know, like I've I've looked at a lot of different things over my time, and I think that what you need is in terms of your investment plan is you need a guaranteed pathway to your 3 to 5 mil. So, you set that up first. And it should be boring. It should be safe. There should be almost no risk or very, very little risk. It should be very, very predictable. There should be no way on that plan where maybe you get hit with a

01:13:33 - 01:14:24

huge amount of money that could really set you back or really sink you. Yeah, there should be no no torpedoes in that plan that that would sink you and send you to the bottom of the harbor. And that plan typically is going to be a 10 to 15-year plan. Very boring plan, very slow plan, very predictable plan. Once you've set that up and that's accommodated for, then you can start doing some some other things. Like maybe you'll take some different risks in different things and do different

01:13:58 - 01:14:55

things. But, I think you [snorts] need the 100% guaranteed plan that if you wake up in 7 years, 10 years, 12 years, 15 years, you'll have your exit number, your freedom number. You'll have your 3 to 5 mil. >> What do you think that does for someone's psychology when they've gone from not having a plan like this to, let's say, they're waiting 10 years but they know that it's going to happen. What tends to happen to someone's psychology? >> I have found, you know, I've got 3 350

01:14:27 - 01:15:24

staff now, so I've been very, very blessed to be able to work very, very closely with a lot of different people and understand what's motivating them. Now, some people react extremely well to having that certainty and that backup plan. It makes them feel at ease. It frees up their mind, their creativity, and their energy to go off and do other things. Other people will then use that as an excuse not to try hard and to relax and be comfortable and go, "Well, I've got that. So, now I'll bludge and I won't realize

01:14:55 - 01:15:57

my my full potential." So, I think you should reflect upon like what sort of person I am. And another thing that I like about property is it's actually not that it's not liquid. So, you know, if I'm investing in shares or something over here, if I'm tempted to do something with my money, an opportunity pops up, someone asked me to invest in this, um all my friends are going overseas on a European trip, um Grant Cardone has a new a new a new conference and he's charging 40 grand for it. Oh, I want to

01:15:27 - 01:16:27

go to that. I can't access the funds. So, I like that about property that it's sort of locked away and so you you can't be tempted to to access it. So, I think in terms of your your investment plan, um setting it up, how you're going to react to it in terms of your mindset. >> Yeah, you just got to really know know who you are and then just consider the pro the pros and the cons. >> Now, with your um conversation around debt, you said you want to maximize safe debt. >> Yeah.

01:15:56 - 01:17:14

>> Can you explain what you mean by safe debt and why you would want to maximize it? >> Typically, where can you get a better return on anything more than 5, 6, 7, 8, or 9%? Whether it's that's safe. Shares, share market business returns, bonds, property, you're not getting 20, 25% returns. If something's going to give you 20, 25% returns, it probably comes with a lot of work, a lot of risk, a lot of expertise. So, for your safe plan, for your 3 to 5 million exit plan,

01:16:35 - 01:17:54

uh you're typically only going to be looking at returns between those numbers. Now, a 5% return on 100 grand is only 5 grand. So, if I'm investing 100 grand, 150 grand, I'm getting 5, 6, 7% I won't hit my 3 to 5 million in 30, 40, 50, 60 years. I'm I'm I'm dead and gone. But, a 5% return on a million dollars is 50 grand. So, now now we're getting somewhere. It's 50 grand. That's That's That's pretty good. Um 5% on 2 million It's 100 grand. So, but I don't have the million

01:17:14 - 01:17:58

dollars. I've I've only got 50 grand or 100 grand. I don't have a million dollars. Well, the great thing about property is you can leverage. So, I can go to the bank and say, "I've got 100 grand. You give me 900 grand." And the bank If you ask going to a bank and say, "Give me 900 grand." They're going to send you packing. "I want it for my business." "Get out of here." "I want it to invest in the shares." "Get out of here." "I

01:17:37 - 01:18:32

want it to do this, do that. I want to buy a franchise." "Get out of here." But, if you say to a bank, "I want 900 grand to put into the property market." The bank's going to say, "What property? How much are they asking?" And if the bank agrees with the valuation on that property, they'll give you the 900 grand. So, it's the easiest way to get debt. Now, that 900 grand now is a debt to you. Um it's in the property market. Now, the the only last place you can do

01:18:04 - 01:19:01

negative gearing and the only last place you get the capital gains discount is brand new property. I'm biased that way cuz that's all I invest in. But, let's say it's in brand new property. You can negative gear it. You're going to get 15, 20, 25,000 dollar tax return in year one. You got the rental income plus the taxman paying off the debt on that property. Maybe you contribute 50, 100, 150 dollars a week to holding that asset. But, now you've got an asset of 1 million, 2 million, 3 million

01:18:32 - 01:19:51

growing at 5, 6, 7%. That's the only way you'll get 3 to 5 million in 7, 10, or even 15 years for the majority of people. So, it just simply comes down to what are your options to get that amount of money? There are very few options for an individual or a family making between 100 grand and 300 grand. There's very few options for people to get that exit money in 10 years, 3 to 5 mil, any other way except for taking on debt. And the only place you can safely get debt from the bank is in in

01:19:12 - 01:20:03

property. So, it all it all it all comes back to that. What else should people think about when they think about co-investing with a bank? I mean, look, there's a lot of rules around the finance, you know, there's cross collateralization, there's all these different rules. So, you've you've got to be dealing with um professionals, really good um uh property lawyer. And you should have a really good um finance team as well to make sure that you're signing all the correct contracts in the correct way and

01:19:37 - 01:20:26

the loan is structured up the right way. So, the banks have made a lot of mistakes, banks have really, really bad contracts. Um sellers have really bad contracts. Builders and developers have really bad contracts. You've got to have a really good team around you to make sure you're entering the right loan, right terms and conditions, um the right fees. Like, I'll give you a quick example, you've got um comparison rates versus advertised interest rates. So, a lot of people know what that is.

01:20:02 - 01:20:49

So, you just got to be very, very careful about what it is that you're signing. But, then also the structure of how you're entering the agreement. Are you buying through a trust? Are you buying through a company? Are you buying in your personal name? L- m- a lot of people get that wrong. Because you're dealing with big business and big business always want to come out winners. So, yeah, the banks are helping me to invest, but you've I also look at the banks as well, you're helping me, you're

01:20:25 - 01:21:19

facilitating me, but you're also the enemy. Cuz if you have any opportunity to extract more profits and money out of me, you will. Same with the seller. If you can If you can rip me off, you will. So, I'm going to do everything possible. I'm going to assume you want to rip me off. And so, I approach all my interactions like that, like highly skeptical. You're a bad person. You want to rip me off. You want to take from me. You You want to take the food out of my children's mouths, and you wouldn't

01:20:52 - 01:21:47

care, and you're heartless. So, I I take that approach to all the different um parts in the system. >> Why that's a skill or potentially a benefit to think of people like that, like I'm going to go in the market. The bank's going to try and screw me. The seller's going to try and screw me. I need to come out and make sure I'm providing for my family. Why does that mentality help someone like yourself who's an investor? >> The issue is with with with doing a lot

01:21:19 - 01:22:19

in business, in investing, there's a lot of contracts. Contracts have a lot of detail and a lot of hidden meaning, and it's not a language that the everyday Aussie understands or knows. So, and they're a lot smarter in the transac- They've been in the game decades and decades and decades, and they know also, even if it did go to court, what will win, what won't. So, they know how to position themselves on the strong side, on the upside, and give themself all the options and all

01:21:49 - 01:22:42

the room to move, and give you none. And so, knowing that, um and knowing that what they care about most is their bottom line, so then I've got to I've got to predict mine. So, I think having that um knowledge And that's why I spend, even to this day, I spend so much money on advice. Uh you know, I'm part you know, not partnered up, but I'm a client of one of the big uh big four accounting firms. The amount of money I spend with those guys is ridiculous. You You wouldn't

01:22:17 - 01:23:18

understand how much money I spend with them. But, what what I get from that um advice, it helps me, it helps my clients. >> The last two here are amplify your returns and then eliminate the debt. >> Yeah, so you got your investment plan, you want to amplify those results. Look, this all comes down to data. So, whether it's going to be shares, it's going to come down to data. Um and knowledge of the data and understanding of the data and the assumptions that are going in. Um crypto, whatever it is, even

01:22:47 - 01:23:41

business, it all comes down to the to the data, the feasibility studies, the marketing plans, those different types of things, the the the sales team, whatever it's going to be. With property investing, it's no different. So, because we live in property, we've got an image of property, we look out into the market, we might drive through a suburb, we might see a property, and so it's very easy to see property as property and and not see property uh as a vehicle to get that 3 to 5

01:23:14 - 01:24:08

million. So, essentially, uh you'd be very very surprised, but most of the property analysis I do on individual properties, I don't even have an image of the property. It's a spreadsheet. So, I've got details of the property, and yeah, I do have the images and I can look at them, they're all there. But typically, it's a spreadsheet, and then I've got all the research behind it. So, when I founded uh Freedom Property Investors, I'm a co-founder, my co-founder's Lianna Pan. Now, she's a

01:23:41 - 01:24:44

data scientist, uh she's an actuary. Um I'm no newbie to numbers. If you look at my career, I'm very good with numbers. I'm a bit of a expert with numbers, actually, in terms of forecasting and doing different things. But Lianna being an actuary is on a whole 'nother level. So, to amplify your returns, you've got to have run all of the numbers, and you've got to understand cause and effect as to what is going to give you the highest rate of return. So, there's a few things you've got to

01:24:12 - 01:25:15

consider with your exit plan, 3 to 5 mil or whatever the number is for you. You've got to say, "Well, how much funds am I going to invest? For how long will I invest them, and what is my rate of return? And so, it's those three numbers, you you times all those numbers, that will give you your outcome. So, if I invest 1 million for 1 year at a rate of return of 10%, I don't get very far. But, if I invest 5 million for 20 years and get a rate of return of 7%, that's a huge amount invested, a lot of

01:24:44 - 01:25:34

number of years, and a very good growth rate, we'll have a massive amount of money. So, the key one there is the rate of return. So, the bank's going to help you with what you can invest, and also your income, your borrowing capacity, and all of that. How much can I invest? Then you've got um the length of time that you're going to hold the assets, well, you can determine that. And then you've got the rate of return. Rate of return, or amplifying your returns, is going to come down to your

01:25:09 - 01:25:58

knowledge of the property market, your knowledge of where to invest, when to invest, the type of property, what to pay for the property, and then all the data surrounding that particular area. So, it's actually a huge amount of work. So, Liana pretty much, that's what she does full time. She's running numbers over 15,000 suburbs. She's currently track She was just in Queensland, she's down at So, what she'll do, she'll run all the numbers. She's actually got 20 data

01:25:33 - 01:26:24

scientists um based all around the world that help her compile all of the data. Our clients actually get really thorough um analysis on all the different locations that they could potentially invest in. But, Liana's ultimately making the decision, we should be in this area, this location, at this time, at this price, in this type of property. That's what she's doing. I typically do the negotiations on the deal. So, she'll equip me with all of that. Her and I will go out, we'll sit down with a

01:25:59 - 01:26:53

seller or property, a land owner, land developer, um a builder, and then we'll negotiate with them the prices that our members or our clients will purchase those properties for. And so, if you've got that data-driven approach, you can amplify you you amplify your returns. >> Now, one thing you mentioned earlier was that you do a lot of new property. >> Yes. >> What's people's argument as to why they should stay away from new property and what's your counter argument?

01:26:26 - 01:27:21

>> Yeah, well, first of all, I'll just say old property, new property, I don't care. Who cares? Like, why even divide property by old and new? Your question shouldn't be is it old, is it new? Your question should be is there demand for this property? Am I buying this property at the right price? What's the maintenance on this property going to be? What rent can I get on this property? Yeah, what is my forecasted growth rate on this suburb and and this and and this particular property? So, those are all

01:26:53 - 01:27:48

way more important questions as to whether it's new or old. Who cares if it's new or old? So, I want to ask those questions. Now, when you if if you can get a yes on all of those questions and other questions, we've got about 300 uh points that we check for a property and a location. But, if you can get yes to those questions, then potentially that property is worth invest questions. Now, the next question is going to be um what is the cash flow on the property going to be? This is highly important

01:27:20 - 01:28:30

because you've got funds invested, you've got debt, you've got to repay that debt back to the bank, which means you've got a weekly and a monthly holding cost on the property. Now, fortunately or unfortunately, the truth is that the average holding cost on the average investment property in Australia under the new rules as announced by the Labor Party is going to be somewhere between three and $600 a week to hold an existing property or an old property because of the removal of negative gearing.

01:27:55 - 01:28:50

Whereas on a brand new property, it's going to be somewhere between 50 to about $150 a week for the same sort of property, same sort of size, one being old, one one being new because of the tax changes. >> Do you think they're trying to incentivize the new properties then because of that? >> Yeah, so the theory is, although I don't agree with their theory. Their theory doesn't work and I don't believe it's the reason that they've done it. >> What do you think their theory is and

01:28:23 - 01:29:25

why is it wrong? >> So, their theory is that if they make it more attractive for investors to go to brand new, then more more investors will go brand new. Number one, most Aussies are very afraid at investing in a brand new property. They are. Because you know, I've been I've been I've been in this uh I've been helping uh clients invest in the brand new property for 14 15 15 years now and nine out of 10 Aussies do not want to invest in the brand new property because they've been conditioned so long to

01:28:53 - 01:29:49

think that the traditional home, big big bit of land, um you know, clothesline in the back four bit, that's the ideal property, which is actually not statistically true. But anyway, um Aussies don't want to do it. That's number one. Second thing is banks control um the valuations on the brand new property. So, there's an argument out there, well, you know, thousands of investors are going to flood brand new, brand new prices are going to get become We're going to have a two-tiered market. We're going to have

01:29:22 - 01:30:20

um old property and new property and new property somehow will be overvalued. That can't happen cuz the system doesn't allow it, the financing doesn't allow it. So, that will never happen. The third thing is even if Elon Musk donated a trillion dollars to the Australian government to build hundreds of thousands of homes, we couldn't do it. We actually don't have the land to do it. Now, we have the land, but I'm saying build-ready land. Build-ready land uh it costs billions and billions of

01:29:51 - 01:30:56

dollars to get land ready to build on. You need roads, you need electricity, you need um sewage, you need all of these uh things to go in and then you need infrastructure. You need highways. So, we don't we don't have any of that. So, even if you've got all this demand for brand new, which we won't have it, but even if you've got all of this demand uh for brand new, how we going to build it? We cannot. It's impossible for us to to build it. We don't have the uh labor. We

01:30:23 - 01:31:32

don't have the tradespeople. We don't have um the financing. In fact, post the May budget, this is a very good example, post the May budget, one of the biggest builders and developers in uh here in Sydney and nationally said, "We will now no longer build any new homes or any new apartments in Sydney because of the tax settings and the government regulation. We're out." So, um I will guarantee you and I will stake my reputation that over the next 10 years, we will not one time hit the

01:30:57 - 01:32:03

government's target of building 240,000 homes in a year. That that that's it cannot happen. It cannot physically happen. Um and the market forces and dynamics won't won't allow it to happen. Now, what do I think is really going on here? Have a think about this. The building construction industry of residential property is somewhere between 3 to 6% of our GDP. The building and construction of um residential property, that is a huge chunk. What is the biggest interest group besides developers and builders? What is

01:31:31 - 01:32:29

the biggest interest group for that? It's the unions. Who are the unions closest to? Labor Party. Who funds basically funds, owns, and operates the Labor Party? A big chunk of that is the unions. So, you can imagine the Labor Party sitting down and putting these tax packages in front of the unions and saying, "Well, we're going to scrap uh we're going to harm the building construction industry." Uh that wouldn't go down well. So, probably they haven't really done this

01:32:00 - 01:33:01

because they believe it will create new supply. because here's the thing, Dane, in the Treasury papers for budget night they admit the government the Treasury admits these tax changes will result in less supply. The Treasury papers say that. It's not me saying it, it's not a commentator saying it, it's Treasury, it's the government admitting the tax changes will create less supply. Let Let that Let Let that sink in. So, why did they do it? Well, they're just trying to protect that industry for the

01:32:30 - 01:33:27

interest groups. Now, that helps That actually helps my business a lot. Like, my inquiries have gone through the roof since budget night. Because the only really last legal tax loophole left in Australia for massively reducing your taxes investing into brand new property. That's the last loophole that's left. They're even closing it up um different loopholes like with business and trust and all those types of things. There's There's nothing there anymore. So, my inquiries are going up. Business

01:32:58 - 01:33:58

for us is really thriving. But, despite that, I don't agree with the May budget and the changes they've made or the reasons why they've done it. >> What was the first thought that you had when you saw the new budget? >> Yeah, I I I I I laughed. I laughed because it was so ridiculous. Uh I think it's so bad for the country. It wasn't a shock or a surprise for me because we knew what was coming now. Because I'm inside the industry I probably knew a lot more earlier than

01:33:28 - 01:34:14

what was coming through the news. So, we probably knew 9 months before what they were planning. But, also, if you just look back and you know, Leanne and I are sitting down because we're always trying to forecast for our clients on Amazon for our own investments. We're sitting back, we're thinking elections coming up. And a lot of people ask me, for example, on my YouTube channel, "Why do I talk so much about politics? Stay out of politics, guru. Talk about property. Talk about

01:33:50 - 01:34:48

money." Well, government policy is probably half of the impact on what's going to happen with the economy and with your For example, the the May 12 budget has totally changed the way people will invest. That's a big movement. So, Leanne and I were we're looking at we're saying, "Hey, the budget's coming up. What's going to happen?" Now, we knew for the last two elections the Labor Party tried to bring the exact same changes actually almost the same changes as what they announced on May

01:34:20 - 01:35:05

12. So, we know that for probably about a decade they've wanted to make these changes. So, that's why they've gone down the path that they have because what we didn't hear at the budget was we're going to eliminate debt, we're going to pay down debt, we're going to cut spending. We didn't hear any of that. We just heard we're going to raise taxes across the board. >> Let's say that someone's doing the best to look after themselves. What advice would you give them to help people

01:34:43 - 01:35:38

around them accomplish the same thing? >> Yeah, I I think just you know, be be that example. Be be that example. Uh share strategically with those around you with uh what you're doing, especially your family your immediate family, uh and and your friends, but just be careful who you share your plans with as well cuz many people will try and shoot it down. So, I mean, you've got to make that decision for yourself. >> Last question. >> Yeah. >> This whole show started off with me

01:35:10 - 01:36:11

being a guy who created an agency, uh but I find myself obsessed with taking agency. When you think about taking agency, taking massive action towards a goal, what does that mean to you? >> Yeah, agency's a really key word in my life. I won't give you the whole boring story about it. Yeah, but agency is about we've got the ability to choose. And the ability to choose has a lot of uh responsibility. So, um and also agency is very very important to me. I mean, so if you look at the name of my company, Freedom

01:35:41 - 01:36:50

Property Investors, Freedom's about freedom and agency and freedom go hand in hand. So, it's a very important concept um and and word in my mind. Yeah, I would say that uh getting out of the system means you're not in the river, you're not in the tide, you're not being driven by the tide, but you're actually able to get out of the river, get out of the tide and not just go with the trends, not just go with, you know, the tribe or the society or the community or the family that you're in

01:36:16 - 01:37:18

and you're not stuck in the old ways, but you can actually take that perspective where you come out, you zoom out, you look down at everything that's going on and start to see everything for what it truly is. And then when you can do that, you can start making conscious decisions, all right, what do I need to do differently so that I can have a different outcome to where the majority of people are going? So when when you say the word agency, that's what I that's what I imagine in

01:36:47 - 01:37:38

my mind. And and actually that's that's been my personal mission. And that's the that's the mission of what I do today. The YouTube channel, the social media, the clients that the the membership, the community that we've got. Um like I feel like I'm on a I feel like I've set myself this mission to help people achieve that agency or that freedom. >> Scott, it's absolutely been a pleasure unpacking all of this together. There's there's so many more questions I had,

01:37:12 - 01:37:58

but um or with understanding how busy you are and how much you're out there doing, I just want to say thank you for, you know, being a voice out there in the market. Thank you for giving us Australians that are in the middle of the middle class an opportunity to better understand the economy, better understand how to navigate to to support ourselves. And yeah, just a huge advocate for what you're doing and I think anyone who's listening right now should check out your YouTube, should check out your

01:37:35 - 01:37:56

social media channels so they can get savvy with what's happening in the market, but I just want to say thank you so much for coming on and I appreciate you being here. >> [music] >> Woo!

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