5 Tips For Young Property Investors
As a young investor getting into the property market can be difficult when you don’t have many other people around you on the same journey. Here are some tips for young investors looking at getting into the market.
0:00 – Introduction
0:57 – It can be difficult when you’re by yourself as a young person interested in investing
2:13 – What’s Simon’s plan for financial freedom?
3:04 – #1: Have Clear Goals and Known Your Why
6:44 – #2: Identify Your Investment Strategy
14:00 – #3: Get Good At Budgeting and Saving
21:26 – #4: Educate Yourself on Investing
26:48 – #5: Learn How To Overcome Challenges That Might Hold You Back
as a young investor looking at getting into the property market it can be very difficult when not many other people your own age are kind of on this journey no one’s thinking about this no one’s thinking about the future at all let’s let’s be frank beep –all drinking people are doing what they do and it’s very difficult as a young investor to get into the market but today I have with me Simon Everingham who is a buyer’s agent over at pumped on property who is a young investor himself at only 26 has bought his first investment property now and so today we’re going to be talking about some tips that we have for young investors looking to get into the market so hey Simon thanks for coming on today yeah really excited for this one it’s one that a few people that I’ve talked to over the last two months have said that they’d love to hear a little bit more about a bit of a more basic introduction to investing so it should be fun yeah and I think myself when I was younger I’m 31 now so I don’t consider myself old but I guess I guess young people do consider me old but I do remember they a spring chicken and I do remember that there was not many people around me in my life that were on the same journey as me not many people were passionate about financial freedom that I had you know maybe one friend who I could talk to about property and about financial freedom and we both had the goal of being financially free or being millionaires by 30 at the time so it can be a really difficult journey where you’re when you’re by yourself I just yeah I remember going on road trips with my dad when I was 16 making it take me out to look at properties and you know it’s not very common for young people I don’t think no not at 16 but I think it’s it’s a massive thing and it’s a really good thing to do and I myself achieved a level of financial freedom at 28 through my businesses and are now looking at long-term financial freedom through investing in business as well as property portfolio and you’ve obviously made the huge step of buying your first property at 26 and you’re now on the journey to buy your second one and set yourself up for financial freedom when’s your goal like when when do you want to be set up for financial freedom by um ideally I’d love to have my my three foundational properties by the end of 2022 so I want to have the three properties at that point in time and then I’ll spend probably another two years converting all of those properties into dual income but yeah my goal is three properties in three years so yep so before you’re 30 ideally owning three properties and then by the time you’re you know my age 31 having those three properties with three granny flats on them so that they’re positive cash flow and paying themselves up and you basically got your retirement set up for you by the age of 31 without having to worry about that anymore so I think one of the first things that young investors need to have in their life is their goals and we talked about this in the last video I thought you were – really well which is knowing your why knowing why you do things because we don’t have that support network around you of people pushing for the same thing you really need to be very centered and know your wife so do you want to talk a bit about that Simon I just think having a good and a real wire is gonna be a stronger motivator than almost anything else so if you understand why you’re doing what you’re doing it’s very easy to make a decision think about you know eating well or going to the gym like if you want to get healthy if you want to get fit you weight good food and you can you train you know why you’re doing that and it’s to feel better to feel healthy to feel fit so like that’s it I guess a small example now when it comes to investing my wire is to achieve financial freedom it’s to secure an insurance policy and not have to rely on my superannuation fund or my savings or anybody else around me now I’m taking control of my own fate I’m taking control of my own destiny and like that’s for me is a big enough wire to keep me focused and keep me moving towards my goals and that was the same for me my goal was to achieve financial freedom and that really drove me forward at a young age when everyone else was getting jobs and following their career path I remember I think I was either 24 25 I quit a six-figure role which was six figures with a free car as well so quite a high paying role for a 25 year old to go full-time into business and because I saw a path where I could build up the passive income from my business and so I went from six figures per year to about 500 to $1,000 per month and made that decision when I had a wife and two children as well so it was a very big decision to make at a very young age but because I had that Y of financial freedom and I could see a path to get there as well which we’re going to talk about next which is strategy it made making that decision a lot easier even though everyone in my life thought I was crazy and you know maybe I was a little crazy hey the best of us are ya know I think like another another thing on that why it’s like aside from financial freedom why would I choose to work until 75 when I can just work hard for a smaller period of time and enjoy those later years if that does that sort of makes sense yeah and I think one of the things that I liked is I had the goal of financial freedom and that really drove me but I didn’t have a reason for being financially free obviously the reason would be to spend more time with my family but in terms of like purpose in life I I wanted to be financially free I wanted time to spend with my family and that was it so when I achieve financial freedom I was like oh this isn’t quite enough I need to work out how I I can be motivated and happy and still be a productive member of society I can’t just spend every day and so you know having a why like financial freedom is definitely good but even going beyond that and being like well why do you want to be financially free is good as well they’re doing some building work there so I’m really sorry next let’s talk about strategy because I know strategy was so important for you to help you stay disciplined to help you buy the right property so you want to talk about why strategy was so important for you yes I think that’s pretty much the next step after identifying your goals and identifying your strategies is so important to just block out all of the noise that’s associated with making a massive decision like this there’s so many different ways to achieve financial freedom through property there’s so many different strategies there’s so many different people who have successfully done many different types of property investing so identifying a strategy that that’s right for you and it’s going to allow you to achieve your goals with the path of least resistance I think is important so understanding your why and then go into K well how can I actually achieve that what do I need to do to achieve my longer-term goals now for me it’s not necessarily about being rich like I don’t care about being rich I just want to be I just want to have choices I just want to go on a holiday when I want to go on a holiday I want to spend time with my kids when I want to spend time with my kids like how much you don’t know about probably not joking nope Tyler’s not listening today yeah so but what I do which is definitely something that’s going to happen I I want to be able to make make decisions to spend time with them whenever I want so having a strategy that’s going to allow you to achieve that so mine is more of an income goal as opposed to a net worth goal because I can’t live off a net worth but I can live off an income so for me it’s not necessarily about how much all of my properties about you that you know that’s going to be cool as well at that point in time but if I can replace my income or replace you know mine and my partner’s combined income through property investing and work towards that over a number of years I guess that’s that sort of a strategy to start off with if you’re kind of not sure where you want to start is maybe replacing your income start there because most people haven’t have a decent amount of income to live an enjoyable life and when you think long-term down the future like when you’re going to retire you know it’ll be nice when you don’t have kids in school you don’t have a mortgage to pay your expenses are going to be a lot lower so a lot of people like I want to have you know ten million dollars worth of property and I want $300,000 worth of passive income and it’s like why do you need that like I think it’s really important to be realistic about exactly what you want because it’s going to be so easy to execute on that when you’re realistic with yourself yeah I think that comes back to when we’re talking about goal setting is to have that goal that is realistic that’s going to give you a life that frankly most people don’t get to live which is financial freedom and to have the choices that you want and that you could achieve that quite early you know we’re talking you know in your 30s in your 40s even 20 or 30 years ahead of everyone else that you could achieve that financial freedom and have those choices and to know that that’s not the end that once you have that free time you can then go and you can decide to build your wealth even more and so setting your goal setting a realistic goal that’s going to give you a good life and give you those choices you might decide to then go and travel and you want to live your life and you want to travel and you don’t need excessive amounts of wealth because as a young person you know someone in their late teens or someone in their 20s you’ve got to realize you you do have a lot of maturing to do as a person and you do change as a person as time goes on so who you are now and what your desires are in your early 20s is going to be very different to what your desires are in your early 30s 40s early 50s and stuff like that so having a goal that’s going to give you choices that as you change as a person you can adapt your future goals and your wealth goals after that I think is really good and then having a strategy to move towards that because there’s so many ways to achieve the same thing there’s so many ways to achieve financial freedom having a strategy that suits you that suits what you’re passionate about so if you’re passionate about property then property is great but if you hate property but you’re passionate about shares and you absolutely love the share market well then maybe that’s going to be a better option for you because if you’re not passionate about something you’re not going to put in the time the energy the effort the creativity to find a way through the obstacles that you have but if you are passionate about it you will and so and as well having a clear strategy and okay how am I going to get from point A to point B and then not trying not to get greedy in that time so for me the goal was financial freedom my strategy was through online passive income using a very particular strategy for creating and building passive income websites and there’s a lot of different options out there where you can make money faster or you know you can flip website there’s just so many ways to make money but I just knew that I had a goal I had a strategy that lined up with my talents and what I enjoyed working on and then I just worked that and I kind of put blinkers on you know how horses they put like the blinkers on them so they can’t see the side and get distracted I kind of did that so I kept my greed in check in terms of trying to achieve that goal a lot faster and I just pulled my blinkers on and I knew that if i delay gently applied my strategy then I would go ahead and achieve that so having that good realistic goal having that good realistic strategy that you can just implement with those blinkers on with those blinders on so you don’t get distracted is going to move you forward more because it’s actually implementing the strategy that’s going to change things and if you’re just flipping from one strategy to the other chances are that you’re not going to move anywhere fast so getting your goals and strategy right is absolutely key and if you’re sitting there thinking okay I know I want to do this I know I need a strategy so that I can achieve financial freedom in my life but you’re having trouble trying to work out what is that strategy going to be then Simon and the team over pumped on property do offer free strategy sessions to listeners so if you go to onproperty.com.au/session to your web browser onproperty.com.au/reno more about that there it’s a complimentary session over the phone with Simon or one of the team where you can just look through okay what’s your situation what’s your end goal and what’s a property investment strategy that you can implement in your life and then you get the next steps of what you need to do in order to move forward so go to onproperty.com.au/plus strategy session over there the next thing Simon I think we need to talk about is budgeting and saving so that’s something that I think I did poorly in I was very fortunate and that I was able to achieve financial freedom through my websites without budgeting and saving and I’m now learning the hard way how badly I need to do that and in working to improve that in my life but you can’t you can’t already there and a lot better at that than I am so I’ll let you talk about some tips around budgeting and saving as a young person yeah I’ve always been a pretty good saver not by choice but I was kind of forced to studying going to university you’re going to TAFE all these different things I had no choice but to be a good budget or if I wanted to go to university full-time and work part-time but still go on holidays going overseas trips every single year do things with my friends and family that I wanted to I never I knew that I needed to be good saver and I think it’s something that like my parents probably instilled in me from quite a young age like the importance of saving for certain things they didn’t really tell me why or what I should say for but they just said it’s a good habit to get into to not always have to on your entire income and I know a lot of my friends that started working in a truck in a trade industry like they might have left school a little bit earlier or started as soon as they finish high school and they never knew how to save and they always spent their whole entire income and live week to week and like at that point in time where 17 18 19 years old and I’m living off $200 a week $250 a week and these friends are earning six hundred seven hundred dollars a week as an apprentice and blowing everything and I’m still managing to save like fifty bucks a week and I’m just like it’s so like it was just so foreign to me that they could even spend that much money I’m just like how what are you buying like we’re doing the same things but it was really hard for a lot of them now that they’re a bit older and they’re like okay well I want to purchase a home I want to purchase an investment property I want to do something with my income and now they’re not earning seven hundred dollars a week they’re owning two thousand dollars a week and as their wage increase their spending kept increasing so putting in a habit at a young age of budgeting and saving is going to be so beneficial but if you haven’t I think a really cool place to start is maybe the barefoot investor that books awesome he kind of breaks it down ways that you can just save your money a little bit easier for people that are struggling to do that otherwise really honing in on what your what your nest necessary expenses are like living car phone you know a bit of fun money and figuring out how many insurances whatever and then go on a cable I should have this plus income now every single week when I get paid I’m paying myself first I’m going to put that percentage into a saving a high-interest savings account every single week and I know that I’ve got enough money here to support my expenses and still have a little bit of because like I’m not going to sacrifice too much lifestyle in order to achieve those goals like we only live once that we know of so why not enjoy that entire journey and you know I love going out for brekkie with friends I love going out to dinner with friends I love going on weekend trips away I love going overseas at least once a year and all of those things are important because they provide me with happiness but because I’ve got so good at budgeting because I’ve got so good at saving I know how I can do all of those things so it’s not just about the end goal you want to enjoy the process so that’s why I think a really good budget a really good savings plan is just so crucial and I think for someone who has been working on this for the last six months of my life and getting better at it and someone who has tried and failed to budget in the past barefoot ambassador was really the turning point for me so I will link up to that book down below or get it on property condo you forward slash barefoot and that will redirect you to go ahead and purchase that book but basically the premise of that budgeting plan was that you automate everything that you can so when you get paid money automatically moves aside to pay for the bills in your life so things like your phone bill if you’ve got internet if you’ve got rent that sort of stuff all just gets done automatically as well as automatically money gets put aside either to pay off debt or to save and invest and then once that’s done then you have money left over which I call my weekly discretionary budget so I have a set amount each week that I get to decide what I do is so there’s flexibility in my life that it’s like I have this amount of money each week how much do I want to spend on petrol this week how much I want to spend on breakfast how much am I going to spend on groceries or going out or the movies or whatever it may be but you’re already saving you’re already putting money aside for your bills and then you had that set money to work with so you don’t need to think about that stuff anymore your budgeting and the focus that you have just comes around that weekly discretionary budget so I’ll tell you what I absolutely love about it as well setting up those automatic payments into select selective accounts like it’s so nice to just have that out of your mind pay like that’s just a few decisions that you don’t have to make it’s like I am like my finances are on lock like they are just taking care of themselves you can always just have you know your discretionary card or take cash out for your discretionary and you’re like everything else is done I don’t need to worry about it like I know that I’m putting X amount to savings I know that I’m putting X amount of holidays I know that all of my expenses are paid for and it’s just like every week you’re like oh sweet you know it’s all good yeah and for lack of a better word it’s like a delicious feeling to know that tasty that that money is put aside and so when things so for me I got like I had private health cover for a family and so it’s like that’s not necessarily extremely cheap it’s the same way like Reggio you know when those big bills come in my private health cover was every six months but it would come through and I’d be like okay I know that I have enough money to pay for this because it’s just automatically been put aside or when Reggio came in the mail I remember being younger and just being like oh my god I’m gonna come up with the money for this read Joe but then now being like oh yeah read Joe easy peasy I’ll just pay that and when it’s due and so yeah budgeting and automating that is absolutely key so now you know we know our goals we’ve talked about that we know our strategy and we know that you need to get your budget together I think the next best thing and it needs to happen throughout the entire process is education so it’s so important as a first-time investor to understand the way that the Australian property market works if that’s what you’ve chosen is your investment now when you get a new job you spend so much time educating yourself on being good at that job right like you want to secure that job you want to earn a good income you want to be a lynchpin like you spend the time doing that and because you’re getting paid from it now you need to focus on investing like it says another business like it’s a side hustle like it’s another job because you need to put the time and effort into educating yourself understanding everything that you need to know about it so you can successfully invest in property because it can make you more money than your wage does like I know like for example my mom made over six hundred thousand dollars in three years from property like there’s not too many jobs that are going to pay you an income like that so there’s a lot of saying that that happens every single time but there are examples of that and she treated that like a business so she knew what she needed to do she purchased and unrenovated home she came in she cleaned it all up we lived in it for a small period of time and then she timed the market very well and sold it for a huge profit so she knew the value in purchasing and unrenovated property at a good price at a good time she knew she had the skills from doing previous renovations that she could manufacture value through a renovation so she had the education that she needed to successfully do this now that wasn’t necessarily even a full plan it just kind of happened but she used her knowledge she used her expertise to our advantage so going out there getting the education that you need starting from the bare basics and I’m just like understanding your why understanding the Australian market understand what historically work the best because history has a funny way of repeating itself when it comes to investments so understanding what’s worked best in the past and you know just slowly but surely getting smarter and getting better investing so that when you are ready to purchase you’ve got your strategy you’ve got the education you know exactly what you need to be purchasing and then that helps to block the noise as well that we were talking about before yeah and it’s so much easier to get educated now than it used to be when I was 18 19 20 even 16 looking and investing in property podcasts didn’t exist back then YouTube didn’t exist back then it was really only books and really only the monthly magazines which arguably didn’t have much practical advice for a young investor so it’s so much easier now with things like podcasts things like YouTube channels like this one like Ben’s and your channel as well Simon there’s so many opportunities out there to just passively and quite easily get educated in the market so something that I have done for over a decade now is that when I’m driving especially when I’m driving by myself is that I’ll put on a podcast or I’ll put on YouTube in the background listening to some educational content and you just never know when something in that content is going to jump out at you like sometimes there’s just little snippets of things that we say or things that other people say that you’re like oh my gosh that’s a genius idea even something like how Ben talks about how Metro markets have outperformed regional markets how houses tend to outperform units over a long period of time and just little snippets like that can dramatically affect the way you invest and the success that you have I was even driving today had to drop my kids off at school then had to run a bunch of errands before we film today and I was listening to educational content around my business and there was this one throwaway line that this person did that I think may increase my income in my business quite dramatically and gives me an extra opportunity to make more passive income that I wouldn’t have had if I didn’t listen to it and this was a video that went for about an hour and a half but I just chucked it on to time speed as I was driving that will listen to music and so I think getting educated is easier now than it used to be it’s a lot more fun than it used to be as well like I we really hope that videos like this and the back-and-forth is interesting to you and a bit of banter and things like that and yeah so there’s not really any excuses anymore that you get educated and I’ll but you need to listen to stuff while you’re driving while you’re commuting while you’re at the gym even while you’re brushing your teeth put your headphones in and listen to stuff you can get educated so easily now so once you’re educated you’re going to come up against challenges right the challenges that are going to hold you back from interesting challenges that you need to push through in order to invest how do you feel about overcoming challenges I think the best way to overcome a challenge is to actually accept that it is a challenge so looking at you know the things that that make you fearful the things that make you scared the things that are holding you back absolutely important because they’re subconsciously there and if you can be consciously aware of those challenges you can overcome them but if you just think that that’s that the that’s the way the world is that’s a way that things are you’re never going to be able to overcome them and you’re never going to be able to take that next step so you know lots of people have a fear of failure lots of people have a lack of confidence a lot of people don’t have the right mentor or support network around them a lot of people have heaps of challenges there’s so many different ones they might not have the budget there they might not have the service ability they might not have the income and understanding all of these are barriers for you for your financial freedom once you accept them once you understand this is a challenge that I need to personally work on that’s the only time that you’re going to be able to overcome them yeah and that’s what I think as well is that you need to accept responsibility for those challenges because obviously sometimes things happen too in life sometimes there’s bad luck sometimes you’re mistreated sometimes you get a bad lot in life there’s so many things that happen that are out of your control or maybe lending with the bank’s change so you can no longer get lending that sort of stuffs out of your control but I think when challenges come up you need to find the part of that challenge that you’re responsible for and that you have control over if lending limits change and you can no longer get a loan you need to take responsibility for okay now that it’s changed what do I need to do in order to be able to borrow money so what level of income do I need to be out of what type of income do I need to be out in able to do that and then taking that responsibility on yourself rather than just blaming someone else that’s what I found in my life overcoming challenges it’s like when I accept full responsibility for the challenge even if it’s not my fault even if something has happened to me I still accept responsibility for overcoming that challenge that’s when I really feel empowered to go ahead and do something yeah so that’s that’s crucial and I think like taking responsibility is really important but delegating some of the challenges that you can’t overcome to other people which is the next thing that we kind of wanted to talk about is you know building that team building that support network around you that’s going to allow you to execute on your strategy it’s so so important like we aren’t alone in this world like don’t think that you are alone and nobody can help you like these videos can help certain people but when it comes to investing in property you need a good team around you you need a good mentor you need a good support network you need like case studies you need experience to help you understand and help you overcome those challenges you know you can get other people to take care of the stuff that might be too hard like getting a mortgage broker to look after the loan like I don’t want to walk into a bank I can perhaps not I’m sleepy and Kutta trying to pull me into some home loan like I want somebody else to take care of that for me so I find a great mortgage broker and that’s the thing getting those people in your life who can help you a mortgage broker is a great example of that someone who can look at all of the banks and can tell you what your lending position is but then also someone that you can ask okay if I can’t borrow money what can I do and what where do I need to be at in order to move forward and then they can say okay well you need to have this level of income or you need to lower your expenses or you need to do whatever that’s going to give you the next action step so it’s important to have people in your life to support you and then if you don’t have people then you’ve got us on video to support you and to educate you and to stay passionate about it but yet to have those people who can both support you and give you your next steps as well so there you have a bunch of different tips for young investors if you feel like okay I don’t have people in my life and I want someone to help and support me again we mentioned it previously but Simon and the team over it pumped on property do offer free strategy sessions so you can get on the phone with them you can talk about your situation where you’re at and what you want to do and they can help you create a property investment strategy that you can go ahead and implement and again that’ll help you set up what are your next steps and then obviously if you want to go ahead and work with them as a buyer’s agency team you can or you can go ahead and take those steps and implement to yourself and move towards financial freedom so we wish all the young investors out there or young and old investors out there the best of luck in their property journey are there any anything you wanted to add before we sign off Simon no I just you know I hope if there’s some people out there that are feeling as though they don’t have the people around them that can help them along this journey like we’d love to talk with you we’ve expected nothing from that cause I want to do is help you connect the dots and make the right decisions yeah and you know if you are a young person who is passionate about investing passionate about financial freedom and other people around you aren’t then we are weird with you okay we support you in that we think that is an amazing thing both me and Simon have been very passionate about finance very passionate about investing from a young age and looking at back in my life now being 31 looking back in my 20s and the decisions that I made to achieve financial freedom and move towards financial freedom I don’t regret any of that so if you’re on this path if you’re passionate about it we absolutely commend you go ahead and check out the video that me and Simon talking about how he bought his first property so you can see his story there and how he saved and what he bought and get inspired by that I’ll link that up in the description down below and until next time stay positive
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