signing up at the gym and getting seriously fit?
I have a morning routine that gets me up and feeling positive, so I get everything I can out of my day. I get Riley out of bed and get his breakfast sorted. He's always happy and cheeky in the morning.
I take my Boston Terrier Frankie for a run. Then I have to have a coffee — that's non-negotiable! I also like to sit and read the paper. That relaxes me and gets my head in the right space before I get into ‘work mode’. Every evening I turn off email notifications on my phone. I have a rule that I don't check my phone after 8 pm, so I can spend uninterrupted time with my family.
These kinds of activities would make me happy whether or not I had money. It seems simple, but it's really important to find the motivation to keep doing the things in your life that create happiness. And if you have that nice lifestyle, money just adds to what you have created within yourself.
In my experience, you need a routine and to try to get everything you can from your life. Getting up early and going for a run might not work for everyone. You need to find your own routine and what you need to do to help you achieve your personal goals.
It's vital that you both believe in yourself and keep yourself accountable.
I believe it's important to have goals and to continue to set new ones, but you also need to recognise and reward yourself when you reach your current goals, to enjoy the satisfaction of your achievement and the knowledge that you're still moving forward.
Don't compare your performance with others' and try to keep up with other people. Think rather, ‘Yes, I've achieved some good goals here and I'm happy about that.’ I'm not suggesting you rest on your laurels, because I think we should always strive for something better. But equally, you shouldn't go through life thinking, I need more, I need to do better, but I'm never going to get there.
It's also very important that you believe in your dream, and in yourself, and keep working towards it while not being swayed by naysayers.
When I was still teaching, a lot of people told me, ‘Investing is too risky — you're not going to make it.’ Once I had four or five properties people said, ‘Oh, don't buy any more — you'll go bankrupt!’ But all the time I was educating myself and setting achievable goals. I knew my strategy was sound. I was confident I would be successful down the track because I knew I'd work hard until I got there. I backed myself.
One client's story — of how while on maternity leave with her second child she took the reins of the family's financial planning — stands out for me.
Jane had a successful career, having worked her way up over 10 years in the corporate sector. She and her husband had been considering buying an investment property for a while and had been saving for a deposit for at least two years. But her savings were accumulating very slowly, on a low interest rate, and didn't reflect how hard she had worked and saved.
Frustrated, she knew she needed to find a way for her money to ‘work smarter’ for her. When she took maternity leave, with a newborn and a toddler to care for, Jane began to reflect on where she wanted her family to be financially in five, 10, even 20 years' time — and that was in a place of assured financial security.
But buying an investment property can be hard. Jane did some research on where to buy and what they could afford. She soon realised that budget limitations meant she'd have to purchase in another state. She wanted to ensure she did it right first time and didn't fall for any sales tactics or traps.
With a new baby, of course it was going to be difficult to do property inspections, especially for an investment property that wasn't close to where the family lived. So Jane employed Aus Property Professionals, and we helped her throughout the process.
Jane came to us with a budget of $450 000. I did a lot of the research and due diligence to ensure she bought in an area that was primed for growth. We chose one of the outer-ring suburbs of Brisbane for Jane's purchase. This was based on the planned infrastructure, which would fuel jobs growth in the area, and the population growth forecast for the suburb.
It was difficult to find properties in such a good area of a capital city that would be affordable, given Jane's budget. I searched both on and off market for something suitable. I considered but dismissed more than 10 properties, either because they were over budget or because they weren't ‘investment-grade’ properties. (I discuss what makes an investment-grade property in chapter 10.)
I finally sourced a newly built property with an asking price of $450 000, right on budget. As it was a new property, Jane would get maximum depreciation for tax purposes. I managed to negotiate a great price — $425 000, which was $25 000 under the asking price and below Jane's budget limit. This meant her rental yield was much higher than it would have been had we bought at the asking price, so she achieved better cashflow right away.
I ensured that the contracts were signed on the most favourable terms for her, including a ‘subject to building and pest inspection’ clause and a 60-day (rather than a 35-day) settlement period.
An excellent valuation of $540 000 just 12 months later demonstrated that we'd bought this property at the right time in the cycle, when the markets were beginning a growth phase.
Jane is now on the right path to building a positively geared property portfolio that will give her the freedom to make financial choices, such as working part-time so she can spend more time with her children, sending them to private schools and taking the family on an annual holiday.
THE NUMBERS
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| Property purchase price: | $425 000 |
| Stamp duty: | $14 619 |
| Legal costs: | $1550 |
| Building and pest inspection: | $660 |
| TOTAL PURCHASE COSTS: | $441 829 |
| Rent per week: | $470 |
| Yield: | 5.75 per cent (excellent for a capital city) |
| Independent valuation results (12 months later): | $540 000 |
| EQUITY GROWTH ACHIEVED IN THE FIRST 12 MONTHS: | $98 171 |
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