Do This Before Even Thinking About Investing in Property

ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode

Before you even start to think about investing in property you should really do this one thing. That’s to have your end goal in mine.

Book a free strategy session – https://onproperty.com.au/session/

0:00 – Introduction
0:50 – Do most people have an end goal in mind?
3:32 – Don’t get caught up in useless end goals
6:40 – Enjoy the journey
7:30 – Life changes and so your goals change
9:30 – You end goal will define your strategy
10:46 – Have a realistic step goal
11:36 – How do you start creating your end goal
16:55 – After you set your financial goals come back to the present moment

Transcription:

Ryan 0:00
before you even start thinking about investing in property you really should do this one thing and that’s to have your end goal in mind hi i’m ryan from onproperty helping you achieve financial freedom and i’m joined by ben everingham buyer’s agent from pumped on property to talk about this idea of having your end goal in mind having what you’re trying to achieve in mind before you even start investing so hey ben how’s it going

Ben 0:25
good hey how you doing

Ryan 0:25
yeah good thanks so this came out of a conversation that i had with a follower of ours who was very clear he invested in a bunch of properties but he was very clear that he didn’t quite know what his end goal was or what he was trying to achieve through investing in property and it just made me think about how important this is when it comes to investing in property so do you find that most people have an end goal in mind when they’re investing

Ben 0:51
i wish i could say yes but unfortunately that 90% of people that i speak to don’t have a goal let alone an end goal in mind when i speak to them about investing

Ryan 1:01
yeah and the reason it’s so important to have an end goal in mind is that that actually directs your property investment strategy and actually directs the areas that you invest in and the types of properties that you buy in the way that you manage those properties so if we don’t have a clear strategy in mind if your strategy is just to make money quote unquote then your chances of success are actually less because you’re less focused and you have a less clear idea of how you’re meant to invest in order to actually make money in order to achieve success

Ben 1:34
yeah i completely agree with you like i was speaking with a bloke yesterday and he was 50 years of age just looking to buy his first property in his lifetime and i asked him a question you know what is your end goal or where do you want to be 1015 years from now and he i loved his honesty like he said i really have no idea and i said well why don’t we look to replace a certain amount of income through property and even at that point like he he couldn’t connect the dots between you know $50,000 a year of income or $100,000 a year of income through property he couldn’t find a way to make a decision on that at that point in time and it was really sort of tricky to work through with him because people get emotionally attached to the idea of property or owning a number of properties that you and i are both attached to the end goal which is a passive income stream associated with what we buy and really people forget that property is a vehicle to achieve that and you want to do that with the least amount of risk in the least amount of debt as opposed to just you know properties of fun thing that we all do to just accumulate you know paper money that may or may not be there in the future

Ryan 2:44
yeah and this person had a good equity base in their property portfolio as they investing over a number of years decades even but they still felt tied to their job and so their property portfolio wasn’t giving them choices and even i guess the words that we use he talked about he talked about properties as being golden eggs that if he wanted to have a break for a year then he could sell the property and then live off the golden egg and then i talked about now i think properties are actually the geese that lay the golden egg and you’re actually slaying and geese and eating the gaze that lays the golden eggs for you and this comes down to really knowing what your end goal is and what you’re trying to achieve as to how you’re going to see property and how you’re going to invest in property and i think a lot of people get caught up as well into what exactly their goal should be and they get caught on certain figures that mean nothing like maybe they want to have $10 million in equity in their property portfolio or they want to as you said they want to own a certain amount of property so they want to own 10 properties and it’s like okay why like what what does 10 properties get you what does $10 million in equity get you and what it what exactly are you trying to achieve and that’s why we talk so much about well if you don’t have an end goal in mind then look at income replacement as a potential goal because when it comes to wealth creation and when it comes to the life that you may live obviously most people listening to this won’t want to retire on $40,000 per year you know that they’ll probably want more than that which is why they’re investing in property but there’s stages of the investment cycle that kind of can really change your life at certain stages and give you huge amounts of choices that you know other goals won’t so like income replacement you’re living the current life you’re living in whatever house you’re living in whatever area how many coffees you have per day whatever it is you’re living that lifestyle and chances are you’re pretty happy with that you would like a bit more money but imagine if you could have that lifestyle but you didn’t have to work so now you can live anywhere that you want you could move to a cheaper area or you could just keep living your life but you not you don’t have to work in the job that you have to work that goal all of a sudden changes your life completely and gives you a huge amount of choices moving forward so you can choose not to work you can choose to continue to work and then invest and grow your wealth further from that point you can choose to change careers and but that’s a really i think life defining achievement to replace your income and not need to work in order to survive

Ben 5:26
yeah i think the old model of property investing was as you said like to accumulate a huge amount of properties and i don’t i actually don’t know why like yeah i had no idea what the goal of that was

Ryan 5:37
yeah like even like 10 million in equity or whatever like why like what’s the goal and when’s the goal was at 65 that you don’t have to be on the pension like that’s a good goal but no one really discussed that they just said all you want to have x amount of property they want to have x amount of millions of dollars but no one’s actually stopped to say okay well well why and what impact is that going to have on your life apart from like the fake pictures of people standing next to flashy ferrari’s that they hide their day that they don’t actually own like and this like lifestyle of the rich and famous that people think they’re going to get like $10 million in equity might buy you that for a short period of time but it’s not gonna buy that long term

Ben 6:16
yeah and the thing about $10 million in equity or $5 million or $2 million or 100 mil is that when you get to that point you’ve probably build a skill set and a mindset which is just constantly not being satisfied and chasing anyway so that you know from my experience talking to a lot of these people that have got to that level they don’t stop when they get there because their end goal isn’t clearly defined and so you know ryan has helped me understand this it’s not so much about a destination it’s about understanding where you would like to be in the future just as a yardstick and then slowly reverse engineering that back end slowly you know confidently from a low risk perspective you know working towards that over a series of series of time until you achieve a portfolio that’s going to allow you to do that down the line and then just enjoying the journey all the way through as well like not hoping that 15 years time from today you’re going to be different person when you wake up with an extra couple of zeros in the bank

Ryan 7:13
yeah and that’s the thing i think having that end goal in mind and having those different stages towards that like i it gives you a step by step plan and it’s so much easier to create a property investment strategy but i really liked what you said there about it it being a journey because i did reach a level of financial freedom at 28 and financial freedom was my goal like that was my goal that was my goal but the why wasn’t clearly defined i didn’t know why i wanted to be financially free so i didn’t have to work maybe i guess but then i reached that and i realized that didn’t make me happy and along the journey you’re going to change your goals are going to change and that’s why i think setting goals in the beginning that give you choices as you change as a person as your desires change as things change is is really good

Ben 8:02
you know i had this goal when i was 24 years of age to make $50,000 a year of passive income through any way that i possibly could at that time by the time i was 30 and you know whether i achieved it or not by the time i was 30 i now had a home i had two cars i had a dog and a cat i had two children with thinking about a third like $50,000 for me doesn’t even scrape the surface of what i need at this stage in my life with kids in private school and kids in daycare and you know the cost of living being what it is and so i’ve had to reset my goal and and change that yardstick to a point where it’s gonna you know allow my family to do what we want to do but then i’ve also got to remember that another stage of life in the future at some point my kids aren’t going to want to live with me anymore which is sad um you know my wife and i it’s just going to be the two of us we’re going to be debt free on most of our assets and our home and our cars etc and all of a sudden you know i think i might need $150,000 a year now but in the future to have this exact same lifestyle i might not only need 70 grand again so you’ve got to be open to the different stages of life when you’re setting this strategy now and you obviously if you’re starting this today set it from where you are and what you can say but just remember that different stages of life you need more or less

Ryan 9:30
yeah and setting your strategy is so important because that is going to define i mean setting your end goal sorry is so important because that is going to define what your strategy is and what types of properties that you want to invest in so if your goal is x amount of dollars in equity then you might pursue a different strategy or you might pursue something like development in order to get that equity growth but not necessarily the cash flow versus if your goal is to have passive income and have those choices in your life Then your goal might be a low risk strategy where you invest in a house and build a granny flat, get good quality, cashflow and and good quality area. But your equity growth is going to be over the long term over a 10 1520 year period, rather than creating equity straightaway. And so that strategy is low risk, because you’ve got the cash flow coming in that can support your portfolio. Whereas the other strategy, you might get more equity, but then you might be negatively geared so you’re tied to your job. So is this going to really change what your strategy is, and then when you decide on your strategy, that’s going to change the areas that you look at the types of properties that you look at, etc. So it really all stems back to this one thing, which is what is your end goal when it comes to investing in property, getting clear on that, and then also having I think, a realistic step end goal as well. So sure, maybe your end goal might be a million dollars per year in passive income. But if you’re currently earning $100,000 a year, then that’s a that’s a big leap. Okay, that’s

Ben 10:59
a big,

Ryan 11:01
that’s a big jump. And, okay, that’s gonna lead to like a great life. But having a more realistic goal of replacing your income in passive income, that’s going to still give you a huge change to your life, still allow you to then go from there to pursue your ultimate goal. But then yeah, like having that realistic step that if you reach this, your life will be changed forever. You can decide to start there if you want, but you don’t necessarily have to

Ben 11:25
self You know, you’re sitting at home right now, you know, cuz again, sometimes I forget, like, how much time I’ve put into thinking about this stuff in the last 15 years. And I know you have as well, yeah. But you know, what, what does someone do that doesn’t have that angle right now? Like, how do they sit down the Savo? Or tomorrow or over the weekend? And actually think about this properly? Like, where do you actually start?

Ryan 11:47
So I think this is a really hard thing to tackle. And that’s a great question that you’ve asked there. Because it’s like, Okay, well, how do you make such a big decision as to what should your financial goal be, not knowing who you’re going to be in 510 15 years time, when this comes to completion? not really knowing, sitting there not knowing what what does it feel like to be rich, is being rich going to make me happy? Is that even a worthy goal to pursue. And so it’s a very hard thing to do. And it’s a hard thing to sit down and decide in one moment, I think being more flexible with it is good. Like you said, You used to have the goal of 50 grand a year in passive income, and then that’s now going out because of children, and might go down in the future, like being able to be flexible with it. I don’t know, I guess for me, passive income has always been the goal for me, just because it gives me choices. It gives me flexibility, it gives me stability, it just gives me the freedom to do whatever the hell I want to do, whether that be working or not working. And then I can pursue wealth after that. So I guess I’m so single minded in that I’ve always wanted passive income. I always thought that made sense. So it’s hard for me to think, okay, if someone’s in a frame of mind, where they just want the equity, and they want the big base of money, how do they set that goal? Because I don’t know. Look, I

Ben 13:12
completely agree with you. Because that to be honest with you, like I’m kind of embarrassed about the way that I thought 10 years ago when I didn’t know any better. But that’s what I knew. At that time. I just thought, you know, equity was the game, I used to measure it every year on my phone, and I’d see how much equity I’d made that year outside of my job. And that’s how I tick the boxes of success or failure that year. But now you’re me

Ryan 13:35
in terms of equity. So obviously, you’re growing your asset base and your net worth growing on paper. But that’s probably not affecting your life in the immediate term. Because no way, like you made 150 grand in capital growth that year. Like you’re not seeing any of that come in, what was the end goal for you at that point in time?

Ben 13:53
You know, underneath, you still live in a position where most people would be at that time and I had no idea. I just knew that. After reading Robert Kiyosaki Rich Dad, Poor Dad, that property was one way that I could achieve financial freedom. And I thought, honestly, at that time, whoever owned the most properties would probably win the game. Like I was so naive in my approach to this stuff. And I’m grateful that I was because it’s enabled me to become more diligent and really focus on this stuff. And I wish I could say it happened overnight. But it really did take me seven or eight years to connect the different dots for a strategy that works for me. And, you know, for someone sitting there, I think, whether you want to be wealthy, financially free, or just have choices, they’re all the same thing. You know, like Brian said, if you can replace your current annual salary, and that be your first goal and just recognize it’s probably going to take three times longer than you expect it will. And just be realistic about that. And once you’ve replaced your income, decide what’s next from there. That’s a really nice place to start because once you’ve replaced your income and you don’t have to go to work then you get 40 5060 hours of your week back to have those choices that he talked about and so i think you know one way to do that is to map out your current living expenses as well as the lifestyle that you’d like and how much that will cost and work it out that way or alternatively you’re living it right now maybe just replacing your current annual salary or yours in your partner’s salaries the easiest way to think about it

Ryan 15:24
yeah i think the problem that i had with the sitting down and mapping out okay what do you want your future lifestyle to look like and how much do you need to earn in order to achieve that is just that how do you project something like you don’t know what that lifestyle is going to be like you don’t know how much a car is going to cost or how much the insurance on a brand new lexus is because like never been in that position to buy it and you don’t know what kind of holidays you want to go on and how expensive they are and so i always had that trouble and then it creates a figure that is so unrealistic that you’re less likely to take action as well and that’s why i guess yeah i think the stepping stone approach to setting goals is ideal and that’s why i love the to property to financial freedom strategy is because you can spend a couple of years and buy the foundational properties that you need to achieve the baseline financial freedom to replace your income so that you know you’ll be financially free when they’re paid off but that might take you two to five years in order to do that but then at that point you can then reassess at that point and say okay do i now want to spend the next 10 to 15 years paying these off and then i’ll have baseline financial freedom or do i want to double this and you know improve my income from there and you’ll gain you’re gaining choices at that point in time you’re not waiting 25 years achieving financial freedom and then being like oh this isn’t enough money you get to do it earlier

Ben 16:52
yeah i really like that concept as well like you know what i try and obsess about is after i’ve identified that point in the future that i loosely like to work towards i just come right back into the present moment and i focus on my next immediate step and i know that if that’s that connects to the big picture because i’m buying quality property at the right time with great cash flow with great long term potential for growth and if i execute on this part of the strategy properly then that will help set me up for whatever steps i decided to take in the future because some people watching this will only ever buy one property and that’s completely cool other people watching this probably already own 10 or 15 you know everyone’s at a different level based on their risk profile and what one person needs is very very different you know one thing that we haven’t talked about is just i love my lifestyle now like even if i was like financially free to the level that i wanted to be i don’t think that much would actually change like and i think that’s an important part of this journey like create what you want today and then the money side of things is just sort of your insurance policy like you talk about for your future self you know on the flip side of that i remember when i really really hated my job and i just wanted to get out of work you know at 24 to about 28 i felt that way and so like for those people in that position you know set a very clear goal identify what your next step is and then begin you know safely taking quality actions because you could easily go through the next four or five six years like a lot of people do and not do anything and you’re no closer to achieving what you want to achieve you’re just another five years down the line

Ryan 18:38
yeah and so they have some ideas around setting the end goal obviously this is a very personal endeavor that you need to decide what is right for you if you are thinking okay i do want to invest in property i don’t quite know what my end goal is and i need help getting clear on that getting clear on my strategy getting clear on my next steps then ben simon and the team over at pumped on property are offering free strategy sessions so if you head over to onproperty com au forward slash session then you can learn about that over there you can book a time that suits you get on the phone with them and get clear about your end goal get clear about what you want to achieve so you can get clear about your property investment strategy get clear on your next steps so you can start implementing that and moving towards whatever it may be that your financial future holds so i wish you the best of luck setting your end goal as well as setting your strategy again go to onproperty com.au forward slash session if you want to check out those free strategy sessions over there otherwise until next time stay positive

DISCLAIMER No Legal, Financial & Taxation Advice
The Listener, Reader or Viewer acknowledges and agrees that:

  • Any information provided by us is provided as general information and for general information purposes only;
  • We have not taken the Listener, Reader or Viewers personal and financial circumstances into account when providing information;
  • We must not and have not provided legal, financial or taxation advice to the Listener, Reader or Viewer;
  • The information provided must be verified by the Listener, Reader or Viewer prior to the Listener, Reader or Viewer acting or relying on the information by an independent professional advisor including a legal, financial, taxation advisor and the Listener, Reader or Viewers accountant;
  • The information may not be suitable or applicable to the Listener, Reader or Viewer's individual circumstances;
  • We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and we are not authorised to provide financial services to the Listener, Reader or Viewer, and we have not provided financial services to the Listener, Reader or Viewer.

"This property investment strategy is so simple it actually works"

Want to achieve baseline financial freedom and security through investing in property? Want a low risk, straightforward way to do it? Join more than 20,000 investors who have transformed the way they invest in property."