Is Property Investing The Best Way To Achieve Financial Freedom? (Ep312)
Property investing is a great way to achieve financial freedom but is it the best way? It has it’s advantages but there are other ways to achieve financial freedom faster.
Is property investing the best way to achieve financial freedom? You may be surprised to hear this, but I believe for a lot of people, property investing isn’t the best way to achieve financial freedom and there are other ways that are better. However, property does have some advantages to help you achieve financial freedom. So I’m going to cover those as well.
Hey, I’m Ryan from onproperty.com.au, helping you find positive cash flow property. For a lot of people, I believe, the best way to achieve financial freedom is through creating a business. Why do I say this? Businesses are obviously quite risky, they’ve got that statistic that 9 out of 10 business fail within the first 5 or 10 years or whatever it is. However, with business, it’s not so much that you need to succeed 10% of the time, you only need to succeed once in business. If you can build one successful business, then you can basically take that business and create financial freedom from that business in a lot of circumstances.
Now, this isn’t going to be for everyone, but I just want to go through some of the reasons why businesses are such a great way to achieve financial freedom and why I’ve chosen that, I guess, as my path towards financial freedom. And then, we’ll talk about property and some of the advantages property has over businesses in order to generate that financial freedom.
The thing that I love about businesses is that you can start them from scratch or you can start them with very little money. I run an online business, I have a whole bunch of websites; I’ve got onproperty.com.au, I’ve got outspoken.co, which is a public speaking site; I’ve got podcastfast.com, which is a site about podcasting. And I’ve got a couple of little sites scattered through there as well. But you can start a business from scratch, you can work on it in your spare time.
And businesses, you can grow very quickly. Properties are quite passive, you could do a renovation to them but then you rent them out and they just kind of tick along. And then, you’re waiting for that market to increase. But with businesses, you can be very active in the growth of that business and you can create growth quite rapidly.
For example, every single video I put out gets turned into an audio podcast, also gets transcribed into a blog post. Meaning, I’m getting people’s attention on Youtube, on iTunes and also through Google; drawing people to my site and generating business that way. The more effort I put in, the more videos I create, the faster my business can grow.
I also have the opportunity to do paid advertising to grow my business faster, and there’s a lot of different avenues that you can go down to quickly grow your business. When you are investing in property, it’s limited how much you can grow that property. How much renovation can you do? How much will the market grow? How much rent can you charge? It’s a lot more passive, business can be fast growth if you know what to do and you know how to run a business.
Businesses can also build up an asset for you. For online businesses, websites and things like that; they tend to sell for somewhere around 20 times the monthly income of a website. So, if I’m making $10,000 net income from my website, so $120,000 per year, I could then sell that as an asset for somewhere around the $200,000 mark. So, by creating a business and by creating income and fast growth for yourself, you can also have an asset that you could sell down the line.
Eventually, you could potentially get to the point where you’re making $50,000 a month, net income – which will be absolutely awesome! I would love to be in that position. And then, your business will be worth $1,000,000, which you could sell and then live off the proceeds for the rest of your life. So, businesses do build up an asset class as well. They build up value that you could then sell if you design your business properly.
Businesses can also become passive through management. Something that I love about my online businesses is I create content like this for you guys, it goes out there and this video exists whether I’m sitting at my computer or not. So you’re watching this and I could be working, I could be sleeping, I could be out with the family. It doesn’t matter because I created this and its got some passivity to it.
Businesses can also be turned into a passive stream if I was to hire a manager and to get a manager to come in and to run my business for me. Then I could step back from that and just do some day-to-day management or just some overview management of the business and become a passive income stream for me. So you can actually achieve financial freedom without having to sell your business – by getting management to come in, manage the business for you and you then just live off the proceeds of the business.
As I said before, with business, you only need to get it right once. Whereas, if you want to become financially free through property, then you need to buy quite a few properties in order to achieve that. And so, businesses has some major advantages if you want to get into it.
Now, business, there are a lot of things that you need to learn, there’s a lot of stuff to go through, a lot of finances that you have to do, a lot of management, a lot of creating stuff out of thin air. And so, business is hard. It’s definitely not for everyone and property definitely has some major advantages over businesses in order to generate a passive income and achieve financial freedom for yourself.
One of the benefits of property investing is that you can keep your job. If you’re going to run a business, if you want to be really successful, most of the time you’re going to have to go all in. Which means leaving your employment, leaving your steady income in order to work in the business. However, if you’re investing in property, you can keep your steady income, you can keep your job, and you can still invest in property on the side.
Another benefit of property – we’ve talked about 9 out of 10 businesses fail or disappear within the first 5 to 10 years. Well, 9 out of 10 properties don’t disappear in the first 5 to 10 years. So, there’s probably going to be less risk when investing in property, as long as you do your research very carefully and you really understand what you’re getting in to. I think if you’re just getting someone else to tell you – some company to say, buy this house and land package, that’s the best investment for you – it’s probably riskier.
But if you’re doing your own suburb research, if you’re doing your own property research, then it’s probably less risky than creating a business and investing in a business. You can just work your way through that. Because you’ve got less risk, you can built it up over time.
Another benefit of property is that it’s mostly passive. We’ve talked about the fast growth in business, but part of that fast growth is being actively involved in the business and spending your time and your effort and your energy on growing that business. However, with property, once you’ve purchased it, you can rent it out and it can passively grow in value.
Rents can passively go up over time. The property can passively go up in value because the market’s going up in value and you don’t have to do a lot. This allows you to spend most of your time in your job and enjoying your life. And then you can build your portfolio on the side and it kind of grows passively for you. That’s a major benefit of property.
Another benefit of property is that it can achieve big growth. Because we’re talking such large dollar figures here – $300,000, $400,000, $500,000 to invest in property. If a $500,000 property goes up 10% in a year, that’s $50,000 growth that you’ve achieved in a year. If you have 10 properties worth $500,000 each and they all go up 10%, well then you’re looking at $500,000 of growth within a year. This is obviously a hypothetical situation, but because we’re talking such big dollars in terms of property, as you get growth and you build your portfolio and it becomes very sizeable, then you can get really good growth, in terms of capital growth.
Also, if you’ve got multiple properties – let’s say you’ve got 10 properties and they all go up $20 per week, that’s $200 per week. And what is that per year? That’s like $10,000 per year that it goes up. I hope my math is correct on that one.
So you can get great growth with property. So there’s benefits to both; there’s benefits to business, there’s benefits to property. If you want to become financially free really, really quickly and you’re willing to work hard in order to get there, then business would definitely be a viable option for you.
If you’re pretty happy in your life, you’re happy in your job, the way your career is progressing, spending with time with your family or friends outside of that. And you want something that’s lower risk, and that’s more defined in the fact that there’s more definite path to lead to financial freedom, then property may be the best strategy for you to achieve financial freedom.
You really need to assess who you are, what your goals are, what you’re willing to put into it. And then, you can decide whether business is best for you or property is best for you.
You’ve also got other investment options. Like the stock market and things like that, but I don’t know a lot about the stock market, I don’t invest in the stock market. Because I’m uneducated in that, I won’t go ahead and talk about that. But you can obviously consider other options as well.
I hope that this has been helpful. Is property investing the best way to achieve financial freedom? I think the answer is no. I think businesses are the best way to achieve financial freedom. But I think for a lot of people, absolutely, yes. Property is the best way to achieve financial freedom.
For a lot of people, even if you invest in a business and create a business, you will then use surplus cash flow and growth from that business in order to purchase property, anyway. So, for a lot of people, they grow and they get passive income from their business, so they build their asset class, they build their asset value in their business. And then shift it across to the lower risk property to generate passive income and be financially free.
That’s it for me today, guys. Until next time, stay positive.
Oh, and by the way, if you do decide that you want to invest in property and that’s your strategy and you love property because it’s a more definitive path and it’s lower risk, and you just want to learn more about how to find positive cash flow properties so that you can generate a passive income from your portfolio, then I do have a course on how to find positive cash flow properties. Where I share, step-by-step, the exact techniques I use to find positive cash flow properties all over Australia.
I’ve got a membership called On Property Listings where I share high rental yield positive cash flow properties every single day with my customers. And so, I’m out there every single day finding properties. I know how to find them and I want to share those techniques with you.
So if that’s something you’re interested in, go to onproperty.com.au/find. In order to see the course on how to find positive cash flow properties. This course is awesome. It’s going to give you the tools and the skills to find positive cash flow properties. And you’re going to take those skills with you through your life. So you’ll basically always be able to find positive cash flow properties. Whether you’re ready to invest now or whether you want to invest in the future. So, I definitely recommend it. Head over to onproperty.com.au/find to get access to that course.