Are you looking for financial freedom or more choices in life? You're in the right place. Each week Michael Yardney shares smart property investment strategies as well as the success and personal finance secrets of the rich, in 20 minutes or less.
While Michael is best known as a property expert, he is also Australia's leading experts in the psychology of success and wealth creation and a #1 best selling author of 8 books. He frequently challenges traditional finance advice with innovative ideas on real estate investing, personal finance and wealth creation.
His wisdom stems from his personal experience and from mentoring over 2,000 business people, investors and entrepreneurs over the last decade.
Michael's message will be priceless regardless of the size of your investment portfolio - whether you're just starting out or an experienced investor wanting to move to the next level, he will provide you a roadmap for real estate investing and financial success.
Property prices can’t keep rising at the same rate they used to; with Stuart Wemyss
Property values can’t keep rising!
It’s all a Ponzi scheme and is going to come crashing down around us!
The only reason our property markets have survived COVID-19 is because of bank and government support.
That’s some of the commentary you’ll find in the media and over the Internet at present and on the other hand you’ll find many experienced property commentators saying we’re at the beginning of a new property cycle, one where property values will rise considerably.
Who is right?
Can property values keep rising, and can they rise as much as they have over the last three or four decades?
That’s the question Stuart Wemyss and I discuss today as we explain the various factors that created the significant property price growth over the last couple of decades.
However, looking forward many of those growth drivers won’t be the same. So what’s ahead for property values?
That’s what we going to discuss so welcome to today’s show.
Will property values continue to rise?
As we enter the beginning of a new property cycle some people are asking can property prices continue to rise at the same rate at which they have over the last three or four decades?
In fact, some people asking can property values keep going up at all considering how expensive they are today?
I know that’s a question that has been asked of Stuart Wemyss, an independent financial adviser and author because he’s written recently written a blog outlining his thoughts, so I look forward to hearing how he would answer these questions.
Some of the topics Stuart and I discuss
In Stuart’s blog he had a graphic showing what happened to house prices over the last five decades from 1970 to 2020.
Now I know I bought my first investment property in the early 1970s, paying $18,000 and I got $12 a week rent and I was excited.
$18,000 was a lot of money in those days when the family car was a Holden Kingswood and cost $2000; so I guess one of the first things we have to do when looking at house prices is see how they performed after inflation.
Property has always been expensive. It seemed like a lot of money in the 70s because it was a lot of money in the 70s. You need to take a longer-term view to understand how property prices have occurred. But no, property prices can’t keep growing at the same level. Over the last 40 years, there has been population growth along with the rise of 2-income households. Some properties won’t increase in value, but others will and some will perform better than others. It’s important to look at real price growth, ignoring inflation. The bigger impact population growth has with investment-grade property is overall economic activity. Established money areas are liable to do better over the next 2 years or so. Borrowing capacity not likely to increase, interest rates not likely to decrease because they’re already low. You want a property that will appeal to someone whose income is rising faster than the general population People from the work from home movement will want to live where things are, not out in areas where there’s nothing around. Links and Resources:
Stuart Wemyss’ blog mentioned in this show – Property prices cannot keep rising at the same rate
Get the team at Metropole to help build your personal Strategic Property Plan – click here and have a chat with us
Stuart Wemyss – Prosolution Private Clients
Stuart’s Book – Rules of the Lending Game
Shownotes plus more here: Property prices can’t keep rising at the same rate they used to; with Stuart Wemyss
Some of our favorite quotes from the show:
“It’s real, after inflation, growth that’s important.” – Michael Yardney
“There are more of us (Australians’s), but we’re also wealthier. We’re earning more.” – Michael Yardney
“As always, demographics is going to be very important
Learn These Rich Habits of Successful People | Rich Habits, Poor Habits Podcast, Part 1 with Tom Corley
Have you ever wondered how certain people become so rich and successful?
Well, if you’ve been listening to my podcast or reading my blogs and my books, you’d know that rich people don’t become rich by luck or by accident. Becoming rich requires hard work, dedication, and a certain set of habits. We are what we repeatedly do.
That means excellence isn’t an act, it’s a habit.
My friend Tom Corley spent five years studying millionaires and gathering insights that become the basis of his blogs and books, including the book we co-authored: Rich Habits, Poor Habits.
He found that people who became wealthy practiced certain habits, and that’s what we’re going to discuss today. Since there are so many habits, we’re going to break this into a two-part series, and today we’re going to start with the first group of habits that the rich do that differentiate them from the average person.
Of course, not all rich people are successful, and not all successful people are rich; but remember I was much younger and more naïve then and wanted it all.
So I tried to understand why some people were rich while others kept struggling financially.
Over the years I attended many seminars, paid mentors, and read as many books as I could on the topic of success.
I modelled successful people and eventually grew successful myself.
It wasn’t easy, I’ve had my challenges in life (mostly self-inflicted) and I’ve hit rock-bottom, but I got up again, learned from my mistakes, and moved forward.
And over the years I’ve mentored more than 3,000 successful (and some not so successful) investors, business people, and entrepreneurs.
In fact, a by-product of this is our top-selling book – Rich habits Poor Habits
In it, Tom Corley and I explain…
Being rich has little to do with the money itself
Instead, it has a lot to do with how you think about money.
So if you want to become rich, one of the first steps is to know how the wealthy think about money differently than you do and to start thinking like them.
The next step is to take action and to let the action become natural by thinking the way wealthy people think.
We’ve found rich people share similar habits.
While we explain this in some detail in our book, today I’d like to briefly share…
The first of the 21 Success Habits of The Rich ….
The average person thinks about spending their money, while the rich think about how to invest their money. The average person worries about running out of money while the rich think about how to use their money to make more money. Most people believe hard work makes you rich, while the rich know that leverage creates wealth. Successful people don’t procrastinate. They don’t spend their life waiting for the ‘right time’ or waiting until they know it all or have figured everything out. The average person believes having a job gives them security. The rich know there’s no such thing as “job security.” Most people want to be rich. The rich are committed to being rich. (They are very different things.) When things go wrong, the rich find a lesson, while others only see a problem. The average Australian sets their financial expectation low, so they’re never disappointed. On the other hand, the rich set their financial expectations high so they’re always excited. Successful people take calculated risks – financial, emotional, professional, psychological. But once they’ve built their wealth, they take fewer risks. The rich consciously and methodically create their own success, while others hope success will find them. The rich look for and find opportunities where others see obstacles. The average person believes life happens to them. They are a passenger, while the Rich believe that they create their own destiny. They are the pilot of their lives.
Successful people align themselves wit
Ditch the Debt and get Rich with Effie Zahos
Navigating the world of personal finance can be overwhelming, even for an adult who has quite a bit of experience in the working world.
Yet with some smart planning, a good strategy, and an understanding of the basics you should be able to develop the money-management skills you need to get your finances under control.
And that’s what I discuss in today’s show with Australia’s leading finance columnist Effie Zahos.
While many people listen to this podcast because they’re interested in property investing, money management is a critical part of any type of investing, and especially real estate investing.
You need good money management to save your first deposit and once you own a property or two money management is even more important.
So don’t let the financial world intimidate you.
You may not have been taught much about finances, but I believe that 80% of personal finance is not financial education, but financial behaviour.
If you can modify your behaviour with your finances, you can modify your financial future.
And even if you don’t have money problems, I think you’ll enjoy my chat with Effie today as we discussed her new book and some lessons that we should be teaching our children and grandchildren.
And of course, I will be sharing my regular mindset message with you.
Ditch the Debt and Get Rich
The Covid-19 pandemic impacted just about every Australian.
Some people manage to cope well financially – others did even better financially turning lemons into lemonade, however, many Australians ran into financial difficulty with some only managing to stay afloat by raiding their super or putting a pause on their debt
It was just another example of the rich getting richer and they did so by understanding the way money and finance works.
Now you know one of the aims of my podcast and my blogs is to make more and more Australians financially fluent and help them get control of the finances.
So, I was pleased to hear that leading Australian finance commentator and author Effie Zahos has just published a new book called Ditch the Debt and Get Rich.
Effie Zahos is one of Australia’s leading personal finance commentators, with more than two decades of experience helping Aussies make the most of their money.
She’s a regular money expert on Channel 9’s Today Show and on radio around Australia and was editor of Money magazine and is now Editor-at-Large at Canstar.
Some of the subjects that Effie and I discussed
Effie’s journey and why she believes it’s so important to be the best financial version of yourself and learn the right things to teach your kids about finance. Why more Australians aren’t wealthy and how they’ve become an instant gratification society. The importance of mindset in developing wealth. Money personalities – The animal traits that correspond to how you deal with money: Peacocks, Squirrels, Sloths, Owls, Ostriches The problem of buy now, pay later, and how to be more aware of the tricks retailers use to get us to spend. How to break the cycle of living payday to payday by no longer setting yourself up for failure. And how to put yourself on a bare-bones budget to catch up. Common money mistakes. Debt repayment strategies. How to think rich in order to become rich. How children learn financial literacy from their parents. Some of the lessons Effie has learned over many years writing and speaking about finance. It’s not what you earn that counts it’s what you spend. Compound interest can make you a millionaire. The great Albert Einstein once said: "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it". Learn to say no I am my best investment I will continue to make mistakes love your superannuation fund Set your savings on autopilot Have a plan and stick to it The people who will most benefi
5 metrics you can use to assess a property’s investment potential and one you shouldn’t
How do you evaluate the investment potential of a particular property?
Well, that’s what I’m going to share with you today as we I share 5 metrics that we use at Metropole when discussing the investment potential of properties that we’re considering showing to our clients.
But I’m also going to share 1 metric that you probably think is important, but we think is very misleading.
In assessing a property’s investment potential, we have a checklist of more than 100 metrics. I’m only going to share 5 with you today. But they’re going to give you a good balance of the science and art of property investing.
If you don’t understand what that means, you’ll understand a lot better after today’s show.
Then, as always, I’m going to share today’s mindset message with you.
Here are 5 numbers you can use to assess a property's investment potential and one you shouldn’t
When it comes to the numbers (scientific) component, I see many investors get swamped by the seemingly endless numbers that can potentially paralyse them into inaction.
In reality, you don’t need to know one million things; you just need to understand a few critical metrics.
While this list is not exhaustive, here are a number of metrics the team at Metropole uses to assess the investment potential of a property.
Past sales history We look at past capital growth to give us an indication of future growth potential.
You probably know that one of the rules in Metropole’s Six Stranded Strategic Approach is buying in an area that has a long history of strong capital growth and one that will continue to outperform the averages because of the demographics in the area.
Once we’ve confirmed the quality of the location, we need to drill deeper into the property itself.
And the best way to gauge its growth potential is to back-track its past performance by getting the history of at least two previous sales (if possible.)
This is where a seasoned buyer’s agent with intimate local market knowledge can be worth their weight in gold.
Days on market Days on Market (DOM) is a measure of how long it takes to sell a typical property in a particular suburb, and more important than the actual number is the trend which provides context.
Clearly, when demand is high and there are more buyers than properties available, the days on market will decrease.
On the other hand, when the market is soft because of economic conditions, perhaps, or because of a flood of new properties becoming available, then time on market will increase, which will drive down prices.
This statistic helps investors to identify those locations that are strengthening so they can buy before the masses and therefore make the most of the price uplift as the time on market decreases.
Depth of Market What we’re looking for here is an assessment of the supply vs demand balance within a particular market.
This is a measure of how long it would take for the current inventory (number of properties on the market) to be absorbed completely (purchased) based on the current rate of monthly sales, assuming there is no more new inventory being added to the market.
A market is considered to be balanced if it has between 5 to 7 months’ worth of inventory (properties for sale.)
If hypothetically all the stock on market (inventory of properties) in less than 5 months that implies there is great market depth – lots of buyers waiting in line, with an inventory turnover of more than 8 months implies an oversupplied market with little depth of buyers.
Ratio of owner-occupiers to renters While many beginning investors have their prospective tenant top of mind, an important strand of Metropole’s Six Stranded Strategic Approach is to only buy properties with owner-occupier appeal.
Since owner-occupiers own 70% of Australian properties they “make the market” and add stability t
Here's why I'm excited about 2021 - What the next 12 months has in store with Pete Wargent
No one expects 2021 to be the same type of rollercoaster ride as 2020.
And while there’s plenty of good news for our economy and our property markets, it’s important to remember that considerable uncertainty remains and the extreme dislocation to many businesses over the past year will take time to resolve.
Now the general optimism is well-founded.
We seem to have this virus “thingy” under control, around 90% of the jobs lost during the pandemic have now been restored – and that’s a tremendous achievement and our property markets are rebounding.
Australia and the world also stand on the cusp of the biggest vaccination rollout in human history, which will only increase the rising levels of consumer and business confidence we’re experiencing.
Sure, the COVID rollercoaster may be slowing, but we still face a bumpy road to economic recovery and that’s what I’m going to discuss in today’s show with Pete Wargent as well as giving you five of my predictions for our property markets in 2021.
Then I’ll share my mindset message with you.
2021 Property Trends
It seems that everybody has been making predictions for our housing markets for 2021 and they’re all extremely positive.
While on the one hand I love to hear this, on the other hand I’m always concerned when everybody thinks the market is going to perform in a particular way as we have seen how wrong consensus opinion has been over the last few years.
So in today’s show I share 5 property trends that I think will occur in 2021 and I’m looking forward to Pete Wargent’s view on these, plus we’ll discuss some economic trends that will influence our property markets.
Property demand from home buyers is going to continue to be strong. One of the leading indicators I watch carefully is finance housing approvals, and these are at record levels suggesting that we will have strong demand from owner occupiers and investors in the first half of this year.
Despite the “recession we made ourselves have”, rising unemployment, and many small businesses facing challenges, interest in buying residential property has skyrocketed.
This has come particularly from owner occupiers who have amassed household savings at levels not seen since the mid 1970s, and this is in part because they have not been able to spend their money on vacations or even local entertainment as they normally would.
Now, with borrowing costs lower than they ever have been, the reassurance that interest rates won’t rise for at least 3 years and increasing confidence that we’ve got this virus thing under control, it is likely that buyer demand will remain strong throughout the year.
Investors will squeeze out first home buyers While currently there are many first-time buyers (FHB’s) in the market, buoyed by the many incentives being offered to them, I can see demand from first homebuyers fading as property values rise from increasing competition as investors re-enter the market.
You see…typically investors compete for similar properties to FHB’s.
Property Prices will continue to rise As always, there are multiple real estate markets around Australia, but in general property values should increase strongly throughout 2021.
However certain segments of the market will still continue to suffer, in particular in the city apartment towers and accommodation around universities. It is unlikely the segments of the market will pick up for some time and the value of these apartments is likely to continue to fall as there just won’t be buyers for secondary properties.
At the same time some rental market will remain challenged. In particular the inner-city apartment markets which are reliant on students, tourists (AirBNB) and overseas arrivals.
People will pay a premium to be in the right neighbourhood. If Coronavirus taught us anything, it was the importance of livin
The 8 Golden Rules for building wealth in this new property cycle – Part 2, With Stuart Wemyss
Would you like to know where the property hotspots are going to be as Australia enters some semblance of normality in 2021?
Or maybe you’d like to know exactly where property values are going to end up at the end of this year.
Now I know that’s what a lot of the other podcasts are currently offering you, so I’m sorry if I’m going to disappoint you, but I’m not going to make any short-term predictions.
You only have to look back 12 months to see how all those short-term forecasts worked out, or even further back to the beginning of 2019 and again see how incorrect those predictions were.
On the other hand, it’s much easier to tell you what the value of well-located investment-grade properties will be in 10 years’ time. But that’s not as sexy, is it?
The problem is many investors take a short-term approach to real estate which is really a long-term investment.
They try and make a quick profit such as buying cheaply, or looking for the next hotspot, which is a short-term approach, and then wonder what to do next; rather than taking the long-term approach of owning the best asset they can which will give them long-term compounding growth and in time produce substantial wealth.
In today’s show we are going to continue on the discussion I started last week with Stuart Wemyss and work through his 8 fundamental rules for property investment.
These will serve you much better than learning where the next hotspot is going to be because as you know, this year’s hotspot will become next year is a not-spot.
When you understand these fundamentals and use them to formulate your investment decisions, you’ll be ahead of the game and be in that small group of investors who builds a multi-million-dollar property portfolio, rather than in that large group of 1.9 million Australian investors who never gets past their first or second property.
If you haven’t heard last week’s show, please listen to that after you’ve heard this episode – the order in which you listen won’t matter - just go to The Michael Yardney Podcast on whichever player you use to listen to the podcast because the two shows are complimentary – there was just too much information to pack into one show. And while you are there, if you don’t already subscribe, please subscribe to this show so you keep up to date as we enter an interesting year ahead.
Once you’ve listened to these two episodes, I believe you’ll be in a much better position to take advantage of the changing property market in 2021 as you understand Stuart Wemyss’s eight rules of property investment.
The Golden Rules That We Discuss This Week:
Golden Rule 5: Set your asset allocation to reduce risk and maximize return
Understand that you can’t predict what’s going to happen in the short term.
Invest in a combination of assets that diversify outcomes.
Be realistic about what long-term returns are going to be.
Golden Rule 6: Invest in the share market using low-cost passive investments
Two types of approaches: active fund management and passive management.
Golden Rule 7: Only invest in ‘investment-grade’ property
Three characteristics of an investment-grade property:
Strong land/value component Have scarcity in terms of location and in terms of architectural style or building type Proven performance Golden Rule 8: Protect your investments from expected and unexpected risks
Plan for the worst and hope for the best.
Make sure that you have the right insurance, including income protection insurance.
You need to put a will together.
You need access to several year’s worth of living expenses.
A finance strategist can help you put the appropriate buffers in place.
Links and Resources:
Get the team at Metropole to help build your personal Strategic Property Plan Click here and have a chat with us
Stuart Wemyss – Prosolution
Customer ReviewsSee All
I’ve been a listener for a couple months now and I’ve been working my way through all the previous episodes. As a future first home buyer and dreams of owning multiple properties I love the knowledge I’m gaining from the seasons. Thank you for educating a future homeowner
End Goal in mind and tools available for achievements.
Glad that your podcast appeared during my Google search on investment related topics.
I am a regular listener to your podcast in recent times.
I am happy to hear your voice and the way you present information. Especially ‘hey!’, in between those information. Very cool.
Your topics enable in building strong foundation to beginning investors like me to achieve Level4 investor, as you have mentioned in one of your podcasts.
It is very motivating and inspiring to look & hear across multiple media platforms available today.
May god bless in all your endeavour and wish you good health.
A must listen every week!
Michael and team provide the perfect combination of information and inspiration in this property invesment podcast. I'm a listener of multiple investment podcasts and the content is always straight forward, effective and relevant, a testament to what is obvious a wealth of knowledge he has gained through years of experience. Highly Recommended!