Today, I'm in complete control of my personal finances. I sleep like a baby and I'm optimistic about the future. By sharing my experiences and the knowledge and skills I've gained along the way I hope I can help you learn how to find and keep financial control too.
I'm not a theorist. I'm in my early thirties and my wife and I own our own home as well as five investment properties, putting us in the top fraction of a percentage of all Australians. However, I started with nothing — in fact, less than nothing. I don't come from money; you'll read that my parents have been broke three times. Perhaps more importantly, 10 years ago my personal finances were out of control. I had to learn how to build my wealth and, before that, get my finances under control. All the while discovering a way to do it when I'm naturally conservative and cautious, and saw ‘debt’ and ‘risk’ as four-letter words.
Where there's a money shortage, there's very often anxiety. Most of us have experienced it — for some it's fleeting, passing in the space of a few hours; for others it's more persistent, if not permanent. Perhaps you can't get to sleep or back to sleep. Or it arrives courtesy of a school or university exam, a meeting at work, an unexpected bill or an awkward social encounter. Very few of us are immune to those anxious feelings, which can be overwhelming, all-consuming and above all else exhausting!
Personal finance is cited as the single biggest cause of stress for one in two Australians. In 2018, the CBA released a study that revealed one in three Australians spent more than they earned each month, one in two had insufficient savings to handle a temporary loss of income and one in three would not be able to find $500 for an emergency.
MLC (owned by Australia's fourth biggest bank, National Australia Bank) also produced data in 2016 suggesting half of all working Australians live payday to payday. These numbers are cause for concern and, no doubt, have been exacerbated by the global pandemic that sent Australia, the lucky country, into recession.
Additionally, the 2017–18 ABS Australian National Health Survey concluded that one in five (20 per cent of) Australians — approximately 4.8 million people — experience some form of mental illness in their lifetime. That number has increased from 17.5 per cent in 2014–15. Research by the same group in 2009 found 45 per cent of Australians would experience a mental illness at some point in their lifetime. It cited anxiety as our biggest mental health challenge, with 13 per cent of Australians experiencing an anxiety-related condition, up from 11 per cent in 2014–15.
In 2014 the Australian Institute of Health and Welfare reported that 54 per cent of people who experience a mental health challenge do not seek help. A 2013 study by the University of Southampton in the UK, cited in the journal Clinical Psychology Review, found that individuals with depression and anxiety were three times more likely to be in debt. Other research has made a clear link between debt and suicide.
Our online lives don't help matters. Of the 54 per cent of Australians experiencing anxiety, a significant number also have some form of gambling habit, a trend accentuated by smart-phone applications and the easy access to online gambling. Other people turn to alcohol, or prescription or illicit drugs, in a bid to self-medicate and ease the pain of their financial ailments.
That's why now, more than ever, we need to have awkward but honest conversations about money. Lives depend on it.
My own father, my best mate, endured a 30-plus-year battle with anxiety, fuelled by the oft parlous state of his personal finances. I've witnessed first-hand the vicious cycle — the coping mechanism cocktail — that is gambling, drugs and alcohol and experienced the tragic, senseless consequences. Dad's financial angst was exacerbated by the fact that his sense of self-worth was heavily linked to (if not driven by) his financial success.
This is in stark contrast to my professional mentor — who just happens to be my dad's brother — who has, since his early days in business, strived to establish and maintain financial control. I don't believe you inherit a Midas touch. My dad and my Uncle John grew up in the same loving household with the same level of opportunity and support, and the same trials and tribulations. It seems to me that, in the hand we're dealt in the game of life, the wild cards in the deck are how we derive our self-worth, how we deal with stress and anxiety, and how we measure personal success.
New York Times bestselling author Maria Konnikova, in her book The Biggest Bluff, tells of her amazing 12-month transformation from psychologist to professional poker player. Something she wrote really resonated with me: ‘Show people the data or risk charts all you want but it won't change their behaviour, decisions or perception of risk. What will, is going through an event themselves or knowing someone who has.'
I realised early on that if you want to avoid the perils of anxiety associated with money, you need to explore the habits of those who have their finances under control.
For more than a decade I've had the great fortune of being mentored by my uncle, John L. Fitzgerald. As mentors go, I'm incredibly fortunate. Significantly, John attributes a large part of his success to the exceptional mentors who guided him through his career and life journey. He talks about these mentors in his book, 7 Steps to Wealth, now in its eighth reprint and considered Australia's number one book on real estate investment.
What you learn from successful people is the importance of mindset and habits and how to apply this framework to your own circumstances. I say, with humility, that I haven't worried about money for more than 10 years. I don't expect to have to worry about it for the rest of my life because my property portfolio will earn me $125 000 to $250 000 per year over time. No doubt there will be challenges, but money won't be among them.
By reading this book and heeding the advice in it, you're putting yourself in a position to follow suit. You don't need to be driven by wealth; everybody has their own priorities. What I'm endorsing very strongly is the mental freedom that comes with being financially secure.
Regardless of your motivation, what you'll achieve is control. However, that's only half the story. The real foundation of success comes from keeping control. Stories abound of people who receive a mindboggling lotto windfall or a multimillion-dollar inheritance, only to squander it in a matter of years. To grow and retain wealth you need the knowledge, skills and habits I'm about to share with you.
Maintaining mental health and emotional wellbeing is fast becoming one of the new millennium's most urgent challenges. It was already a pressing issue before COVID-19 but the global pandemic has intensified the malaise, rattling the emotional, mental and financial wellbeing of people from all walks of life.
Money and personal finances should not be among the reasons someone might experience anxiety. As reluctant as many may be to admit it, money is 100 per cent within our control. With the right tools and knowledge, I believe gaining and keeping financial control is something anyone can achieve.
As we enter this new and challenging post-COVID-19 phase, my ‘why’ — that is, my purpose and mission — has become crystal clear. I want to use what I know to help remove personal finances from the growing list of worries that keep Australians awake at night and anxious.
Not everyone is so fortunate as to have an Uncle John. Which is why I'm motivated to share what I've learned.
Importantly, although my financial freedom has come in the form of property investments, the information in this book can be applied to any asset class. My aim is to provide a solution for investing in general, not just investing in property.
I've divided the book into two parts. Part I focuses on my life up to now and in particular my financial journey. Through my story, you'll get a taste of the mental freedom that comes with feeling financially secure. I'll tell you how I dealt with pain points such as spending more than you earn, as well
