a couple of property seminars, but they haven't taken the plunge yet. They may say, ‘Yeah, I want to enjoy financial freedom through property’ or ‘I just want to grow a property portfolio’. I can tell you from firsthand experience that building a property portfolio is useless unless you know what it is going to achieve for you. How many properties do you want? More importantly, why? If financial independence is your key goal, what does that even look like for you?
Scan the QR code for a spreadsheet to help you set your goals.
These days I start the conversation by asking a lot of questions about my clients' motivations to get them thinking. Do you have kids? Do you want kids? Do you need extra funds to pay for their education or to be able to afford an annual family holiday without worrying about where the money is going to come from? Do you have a home mortgage? Is owning your home mortgage-free important for you, or are you aiming for your dream home and the ability to pay that off? And I have them put it all down on paper.
Working through all those ideas, and thinking about the whys that drive your life now and those you want to drive your future, will move your understanding one step forward. If you've never asked yourself these questions, the answers will give you the clarity you need to move in the right direction. When you know what you want, you become clearer about what you don't want.
If you have a goal of, say, $100 000 a year in passive income, or paying off your home mortgage, or putting your kids through a private-school education, we can work out how to deliver that and build a roadmap around that. Then we can start formulating the strategy that will get you there.
GOAL VS STRATEGY
A goal is an objective or destination. It could be paying off a mortgage, achieving financial freedom or buying a dream home. Smaller, interim goals (sometimes called momentum goals), such as saving for a family holiday or completing a duplex development, can be seen as milestones or stepping-stones on the path to success.
A strategy is a long-term plan for how you will achieve your goals. Those goals will determine your investment strategy — for example, whether the properties in your portfolio will be high-growth, instant equity, high-yield or subdivision projects. Without a strategy in place, there's a risk that you'll purchase the wrong type of property, one that doesn't help you achieve your goals.
Achieving financial freedom is a long-term process. The only strategy almost guaranteeing a fast result is the one in which you purchase your own home, because once we set the full purchase brief for that, we can obviously start the property-buying process pretty much right away. But most of our work is with long-term, repeat clients, because we have a long-term strategy in place that is about delivering the outcomes they want through investment after investment. This usually includes purchasing their own home as part of a longer property journey.
REALISTIC AND ATTAINABLE GOALS
Many people come to me with unrealistic goals. They want to invest in property for five years and within that time frame achieve a passive income of $300 000, or to be able to buy a $5 million home even though they have yet to start investing and have only a modest income!
Your goals need to be realistically achievable, because purchasing property always comes down to realistic planning, as I'll detail over the course of this book.
SMART GOAL-SETTING
Your goals define where you are heading and what you aim to achieve. For this reason, it is important to set both short-term and long-term goals.
Use the ‘SMART’ criteria:
Specific. Ensure your goals are clear.
Measured. Ensure your goals specify actual numbers or outcomes.
Attainable. Do your research and your sums to make sure your goals are achievable.
Realistic. Ask yourself whether your expectations are realistic.
Time frame. Set a clear time frame for how long it will it take to achieve your goals.
Once you have set your goals, it's important to write them down. Equally important is to review your goals regularly to ensure you are consistently heading on the right track.
I tend to divide my goals into short-term, medium-term and long-term goals. This keeps me accountable. Achieving the ‘momentum goals’ in the short or medium term gives me a dopamine rush that allows me to move on to the next goal with greater confidence. Your long-term goals seem so much more accomplishable when you can see smaller goals being achieved in the short and medium term.
DEALING WITH UNCERTAINTY
I often emphasise the importance of enjoying the journey. You can't always be focusing on enjoying life in 10 or 15 years' time, when at last you get to buy that dream home. You need to enjoy life now, and to keep your goals fluid. For example, when the COVID-19 pandemic hit Australia in 2020, it became more difficult for some to buy the properties they wanted. With the goalposts shifting and even the banks working differently, people needed flexible plans. So set your long-term goals, but remain open to changes in external conditions. And be sure to enjoy the journey.
Another aphorism I like to share is this: if you're the smartest person in the room, you're in the wrong room. Surround yourself with people who can add more value to your practice than you alone can. It's really important to keep learning throughout life.
Don't take advice from people who haven't done what you're struggling to achieve. Instead, seek out people who have already accomplished your goals, and more. For example, don't use a buyer's agent who hasn't built up a property portfolio for themselves. That's not going to work for you.
I've made lots of mistakes along the way, and I'm happy to share this with my clients as well as in my writing and through the media. When clients approach me, I'll tell them quite openly, ‘We're not going to go out and buy a property tomorrow. First we need to look at your why, to find out what you're hoping to achieve. Then we can develop a strategy that recognises how you can get there. Buying the property comes later’.
NO SILVER SPOONS HERE
A lot of my underlying principles, like being a straight shooter, relate to my own story. My parents gave me and my brother everything we wanted that they could afford, but we were always on a budget. There was only so much to spend on groceries each week, and snacks were limited luxuries. I'm sure that was a good thing! Holidays too were on a budget.
I was fortunate to go to a private school. My grandparents had sold their orchard when they retired and put money aside for their grandkids' education. If it weren't for them, I would not have had the sort of education I did.
So, looking back, I am aware that I've set things up differently because of this early experience. Financially, providing well for my own kids has always been an important goal. That was a big ‘why’ for me when I got serious about investing.
I have two sons: Riley was born in 2019 and Caelen in 2021. So I'm a dad now, and the world has changed a lot since I was a kid. Growing up on a farm in Orange in central New South Wales, I had plenty of freedom. I used to ride
