Owning your own dream home is an important step for a lot of investors and a lot of Australians. Which of the 2 paths do you want to take to own your dream home?
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0:00 – Introduction
1:18 – Ben’s dream home renovation story
1:40 – Ryan’s rented his dream home but never owned his own dream home
1:58 – There are 2 strategies for getting to your dream home
3:33 – Negatives of buying the dream home before investing
4:25 – It’s not just about the dream home, it’s about the dream lifestyle
5:38 – A different way to get your dream home is to invest first, and buy your dream home second
8:08 – What’s more important…the dream lifestyle or the dream home?
11:11 – Instant gratification holds us back
13:44 – Financial freedom allows you to live anywhere
16:03 – Is it actually your dream home that makes you happy? Or is it your dream lifestyle
Why we are investing before buying our own homes – https://www.youtube.com/watch?v=hUivkcQiVtY
Owning your own dream home is a really important step for a lot of investors and a lot of Australians and we’re here in Ben’s pool of what will probably be your dream home. I think it’s your third dream home. This is my dream. Dream Home. Their dream. Dream Home. The real dream. I just didn’t know it was until I bought it. Yeah, so previously before this, ben bought or built a dream home on the water in another location and it turned out not to be his dream home once they moved in. Sometimes if you guys know when you move into something or you think he wants something once you’re actually there, like the goalposts change, but you didn’t know until you’re there. And so that’s something that I’ve learned about the dream home is it shifts. Yeah. And so we’re going to have a conversation today about how you guys can look at acquiring your dream home.
I’ll be upfront and say that we don’t actually know the exact steps or we haven’t figured it out, how it will work for the average investor. So we’re going to develop this over the course of the next year because we realized this is something that’s really important to a lot of you and so we’ll get better at talking about this as the years go on if you guys stick with us, but this is our starting to talk about it, starting to flesh out ideas of how you can buy your dream home, living your dream home, swim in the pool like we are today. Finished. Just finished the renovation as well in the house. That’s awesome. Yeah. I’ve been out of the house for the last four months now and it feels so freaking awesome to behind. Um, I was living with the inlaws with my three kids, my dog and my cat.
I’m in pretty much a one pager room so it’s so safe to be home. And my wife, Lacey has done an incredible job renovating the place for us. Yeah. So. And for me, I have previously rented what I would consider my dream home, but I’ve never actually owned my dream home. And I’m about to move down to Sydney and I’ll be renting, probably not in my dream home. I’ll be cheaper than I what I want so that I can save money so that I can start to invest. And so there’s really two strategies that I can see for getting to your dream home. So the first is you do the dream home first and then that makes it harder to invest. Or the other strategy is you invest first and it takes longer to buy your dream home. Yeah. So I was reading a blog from the barefoot investor a couple of weeks back and he talked about how much your life can change over five year period.
And one of the things he said that an average couple earning a combined income of $120,000 could do was to save about 40,000 out of that 120 grand a year. Now that sounds like a shitload of money if you don’t have a budget in place. So you’re just spending out the bottom. But he said that most people could live a life where they live off 50 grand. They save $40,000 a year at least for the next five years until they get to where they want to be. Now, for people with children that might not be really slick, I get it, but this is his thought. Um, so let’s say that over the next five years, a couple could save $40,000 a year in five years time, you’d have a $200,000 deposit, which in almost any market in Australia as a 10, 20 or 30 percent deposit would get most people into something that that’d be state with the living.
And I thought that was one way to do it. Like you just put all of your capital, all of your effort into that first option that you talked about. Just buying what you want upfront. But obviously tying up that much capital in something that’s not income producing obviously limits your ability to go do other stuff in the future too. And the thing is, when you do it first, when you buy the dream home first, before you invest, you can overleverage yourself and you can stretch yourself. I’ve got a friend who bought his dream home or I don’t even know if it’s his dream home, but I just bought a home in Sydney. Business was going good at the time. It made sense to buy it. They wanted to own their own house. That was one of their dreams, but then in the last 18 months, business hasn’t gone so well.
They’re not enjoying it as much. Paying the mortgage has become really a pain in the ass for them and they’re spending so much money on their mortgage that they’re not able to enjoy their life and so they’re not able to invest either to the point where it’s like, well, maybe we should sell this home because is this even adding to our happiness? Is this our actual dream or is it just they’re huge cash drain forcing us to do something. We might not want to do anything. That’s the thing. I think the dream home has multiple aspects to it. Yes, it’s the physical house itself. It’s the pool lack we’re in today and stuff like that, but it’s also the financial situation that you’re in that if you had a beautiful house, but if you’re stressed about money while you’re going to fight with your partner a hell of a lot more, you’re not necessarily going to have time for your kids because you’ll be working to pay for the mortgage.
Is that your dream? Like the dream home needs to be the dream home and the dream lifestyle in that home 100 percent, but I like my drain is certainly not to own a million dollar home with a million dollars worth of debt against it. That to me is the anti dream. Like that scares the shit out of me. That’s risky. Like that high amount of leverage and debt on an asset that you can’t depreciate, that you don’t get any tax benefits on. It doesn’t produce income and it’s questionable to me like as someone who’s lucky enough to live where I want to live. As you know, to me, my home adds huge amount of value to my life, but do I need it for my baseline happiness? And contentment. Fuck no, like this is a privilege that I’m in this position through 10 years of hard work to beat you and you invested first and then what your dream home after you invested.
Yeah, and you know that’s probably the second thing that we wanted to touch on a different way of still getting your dream home, but maybe delaying that gratification a bit is to either start a good business or invest in something. Property shares, stocks like Crypto, whatever your thing is, you find that and that’s what I did. I bought two investment properties and then I bought a really, really cheap home, which at the time was my dream for three engine, 20,000 bucks and I renovated it and then sold it and with the profit from that property, I went and bought another investment on how the two investments and then a slightly nicer what I thought was their dream home again. And then I sold that home and then I bought another couple of investments in a slightly nicer home and then I leveraged off the sale of some investments that are bought over time plus those homes that had been like slowly making chunks of cash off yet to actually, you know, by what it is that we truly want.
And so you kind of, I guess your dream home got better and better as time went on. Scene originally started in a crappy home that you had to renovate the second home you built. Right. But it wasn’t glamorous or anything like that. And slowly it’s gotten better. But you’ve invested at the same time. You haven’t just jumped up in homes and jumped up in debt at the same time you’ve been buying properties. Yeah. And we’ve been buying properties which have been increasing our income. And um, you know, we’ve also been selling properties that we bought a while ago to create chunks of debt and selling those properties that we lived in for a couple of year period of time or three year period of time to leverage into the next thing. But with more equity and more cash and so, you know, every one of those places are so happy to live in and so grateful.
I’m just so stoked with what it was and they were like dreams for me at that time in my life. And then as my financial situation over a 10 year period is slowly improved. It’s enabled us to, you know, move into something that is actually what we want to spend the next 20, 30 years in. But I never would have bought something like this earning a million dollars a year, you know, if it was all going to be financed on debt. Like I just don’t think that doing something like that for the lifestyle benefit for most people is actually what they truly want to would make them happy. As you said, it just puts a lot of pressure on people. Well that’s the thing. I think our dream home does have the potential to make people happy. But I do really like this idea that our dream home does consist of a dream home plus the dream lifestyle and that the dream lifestyle is probably easier to achieve before the dream home and by investing in property, by achieving financial freedom, you can get that dream lifestyle without the dream home and then hopefully eventually get to the point of having the dream home.
But I think like if you had the drain lifestyle but don’t have the dream home, you’re probably going to be pretty happy and you’re probably going to love your life. You know, you wish you could have had that dream home, but maybe you’ll get it in the future. Whereas if you have the dream home but you have a crappy lifestyle, I feel like that’s not worth the payoff. I talked to so many people in Sydney and Melbourne and Brisbane and Perth every year that live in these ridiculously expensive homes or a lot of our clients live from New York or London or Singapore that have these very, very high paying jobs. That also because of that, I think culturally people go, I’m earning money that should be represented in my lifestyle, so it’s like inexpensive high or an expensive car or expensive holidays or friends or whatever like people do for some reason to like show show what they’re doing or show how they’re living or show what they’re making and I just, I look at their actual position.
I’m like, if you were to lose your job or if you were, if the wind was to change or unemployment rates went to 10 percent or if interest rates went to eight, these paper would be bankrupt and these properties would be coming on as those distress cells that come up every now and then. And that’s, you know, and some of these people that are, you know, after that lifestyle at working 60, 80 hours a week. And that’s not the dream, especially when you’ve got young kids at home for me, but for other people whose value system is all around work or their identities tied to it 100 percent, then you know, it might be their dream to live that way. Yeah. I think you guys need to work out what your dream is and what’s going to be best for you. That’s the same for me.
My dream wouldn’t be that it wouldn’t be to have the dream home. Glad to be working 80 hours a week in a job that I’m not really passionate about. My dream home would be to have the dream home, but to also be doing work I’m passionate about and not having to worry about money, so it’s up to you guys whether you want to go the dream home first and then that potentially put financial stress on you and maybe delay investments or to invest first and then build towards having financial freedom and having the lifestyle and then once you’ve reached that baseline financial freedom, then you start thinking about, okay, now I have this. I know I’m going to be secure for my entire life. That I’ll have the lifestyle that I want. I may not to get get to live in my dream home exactly where I want, but I’m secure in that I won’t end up on the pension and then you go from that point.
Then you leverage off that to go into your dream home, so maybe you continue to work, but you’ve also got this, these properties that are giving you passive income that help you pay off your home. I think one of the biggest things in, you know, Western society, today’s this instant gratification thing and I think that ties a lot of young people, particularly those under 45 into overextending themselves on a drain home, which is in most cases isn’t truly the dream home way too early at the expense of there may be having to work an extra 10, 15, 20 years and I would’ve had to if they hadn’t made that decision. So I’m, I’m a as someone who grew up in a, in a beautiful home with my family and we’re so grateful to have that stability. I wanted to create that for my family and it’s super important to me.
Like every day I wake up in this space and I just feel awesome. I come through the front gate and unlike, I’m here like eater adds value to my life, but if it ever stopped, if it ever became a burden for me, like it’s not actually the home, it’s the people within it and the lifestyle that I’m lucky enough to lead here that has enabled me to do that. And I think over extending to early, like if I had just shot straight at this, it means that I wouldn’t have been able to create the business that I’ve created because I wouldn’t have been able to take the punt to leave work to someone else. A lot of invested in property. It would have completely changed my destiny because it almost like boxes in your life because you live drive this excessive amount of money that you need to pay and you’re focused on that and you’re too scared to leave your work because there’s real consequences.
If you don’t have enough, you lose your home, like the bank will take it and sell it. But you know, if you’ve got a million dollars worth of debt, um, and interest rates are at five percent plus principal Europe, you’re talking 70 grand a year after tax just to break even for a drain home. You know, that for some people is nothing for other people. That’s extraordinary. And what I’ve learned in the last few years is you can’t always rely on business as usual, like just because, you know, and a lot of people that do fly in fly out work that I’ve talked to, like they get used to a 200 k lifestyle and then they get back into the real world where their skill sets only worth $75,000 a year and all of a sudden there’s a huge adjustment. Know, um, and I just feel like the time and a place for everything you want, like you can have it all but possibly not at the same time.
And so I would host everything and the costs for most people that they’re not factoring in here is time and free choice early in their life when they’re young enough to enjoy it. Or were they when their kids really need them there? Yeah, well that’s the thing that I chose lifestyle over the dream home early on and focused on a business that generate a passive income that then allowed us to live anywhere in Australia. And so we lived in Sydney, we lived on the central coast, we lived on the Gold Coast Noosa. I’m like, we could move to Noosa for a school for our children because I could work anywhere and financial freedom. If you invest in property or achievement through business or shares or however provide you with those options and you know, now we’re moving back to Sydney, but we can do that because I can work from anywhere and we’re not tied to one particular home.
We have that freedom and I just have found that freedom so valuable. I wouldn’t trade it for a dream home, but if I had that freedom and then could have a dream home on top of it for sure, I would definitely want to do that. Yeah. So wherever you’re coming from, I suppose there’s always 10 different ways to get the same result. I’m super grateful that I had decided to delay that gratification for my family, as tough as that was like, you know, moving my children around a bit, obviously, you know, like my wife wanting what she wanted and stuff like that and balancing all of that. But now we’re here and there’s not a huge amount of pressure to, you know, make big money for the rest of our lives, just the Cape, what we’ve created. And that is kind of like a liberating feeling, you know what I mean?
And has given us other choices outside of just having a beautiful place to live in with high debt, if you know what I mean. Yeah. So I think start to think about this yourself because often we get so focused on the dream home. We just forget about investing, but really there are multiple paths to your dream home and it may make more sense for you to invest first, delay that gratification of your dream home, but achieve financial freedom, being a better financial position to get your dream home. Because let’s say you have financial freedom and then you want to buy your dream home. You can still work and now you’ve effectively got two incomes coming in, you’ve got the income from your properties and you can supplement that with an income from a job to buy a dream home. You know, you’ve got so many more options if you invest first and achieve that financial freedom first.
So I think just have a think about that rather than just go into after to my own home first. It’s not necessarily always the best path. One thing that you said is so powerful and that is, is it actually a dream home that makes you happy or is it a drain lifestyle? And if you think about that, you know, that is something that’s enabled me to invest first, then probably come back to the home second is this concept of, you know, you taught me that it was okay to not work like everyone else works. It was okay to start a business leader, cut down and work four days a week. Um, you know, like it’s okay to make choices based on what makes you happy and what it is that you really want. And like, I’m so grateful for that because I think, you know, focusing on what would make you happy day to day, like for most people would a million dollars debt sitting over their head for a roof over their head actually improved the quality of their life or would not having a million dollars over their head, being able to work four days a week in a job that I enjoyed and spending time with their family three days a week or even just like working and knowing that if you got fired you’d be okay, but you don’t have a boss like, you know, had that pressure over your head that you need this job.
And so they don’t treat you well, you can move somewhere else. Like it’s so powerful to have that now. Cool. I appreciate it. So yeah, so we hope this has been interesting and insightful to you. Go ahead and check out a video that me and Simon Ben’s brother did on why we’re buying investment hobbies before we’re buying our dream home first. So me and Simon already talked about that. So I’ll link that up over there or in the description down below. Check that out. You can also go ahead and book a free strategy session with pumped on property by going on property.com dot a u if you want to look at investing. Thanks so much for tuning in. We wish you the best and until next time, stay positive.