Is it time to make your money work harder for you? We want to work to live, not the other way around. Despite the current media attention around falling house prices, property investment will continue to be the best wealth creation tool if you play the long game.
In the new book, Get Invested, award-winning property investment specialist and podcast host, Bushy Martin, draws decades of experience helping over 1700 Australians amass over $600m in property, to provide a guide on understanding your why, when and what when it comes to investing for long term financial security.
Get Invested gives you the inspiration to start investing with the confidence so you can focus on your life and career whilst your income is replaced through safe and affordable investment. After reading the book you will:
Realise that relying on your Super and just paying off your home loan will keep you poor
Understand the need to invest now in a way that won't limit your lifestyle
Know why, when and what to invest in to achieve your goals
Think about your future and what you want it to look like. Get Invested is your first step to getting there.
Bushy Martin is a renowned keynote speaker, author and award-winning property investment specialist, named by Australian Property Investor magazine as one of the country's top ten property specialists. He is the founder of KNOW:HOW Property Finance Strategy, one of Australia's leading groups of property investment strategists and has personally built an international portfolio of 12 properties. His expertise has helped over 1,700 time-poor professionals secure more than $600 million in property to improve their lifestyle and replace their income.
Michael Hanrahan Publishing
Author: Bushy Martin
Question: What can we expect from your upcoming book, Get Invested?
Bushy Martin: Get Invested is a massive wake up along with a call to action for all hard working time poor Aussies who still mistakenly believe that working hard, paying off your home loan and relying on super will secure your lifestyle long term. The cold hard reality is that this outdated model will take you from riches to rags when and if you are able to stop work. Over 70% of retirees over the age of 65 currently survive on an average of just $15,300 a year according to ABS figures. That is just a meagre $295 a week!
So Get Invested answers all of your 'Big Why's - why the Australian dream no longer works, why invest, why is now the best time and why invest in property and shares so that you can start living more, working less and securing your future. Get Invested informs and inspires you to invest with confidence and is the prequel to my first book 'The Freedom Formula' that gives you the step by step guide on how to make it all happen.
Question: What are the safest investment options, in this current market?
Bushy Martin: The safest options in the current market continue to be the time proven investments of new build rental homes and share index funds.
Most hard-working Aussies need to grow their investment nest egg beyond their home and super if they are going to sustain a comfortable lifestyle long term. The safest affordable high growth investment options that will allow you to continue to focus on building your career and income while your wealth by stealth needs are growing by remote control continue to be share index funds and new build rental homes.
In my humble experience, if you don't have sufficient savings or lazy equity available initially, start investing in low risk share index funds until you have enough for a deposit for a new build property.
Why? Shares and property have historically been the highest growth investments over the last 90 years and economic conditions along with supply and demand drivers indicate they will continue to be so. In fact, post federal election conditions have never been better for investment in terms of certainty, growing credit flow and resulting consumer confidence.
Share index funds give you low cost access to the performance of the entire stock market with built in diversification to reduce risk.
New build rental homes allow you to safely leverage to secure a much higher asset base to double your nest egg growth and can be cleverly structured to be cash flow neutral or positive so that they don't restrict lifestyle while they grow your wealth.
Note that these suggestions are just from my personal experience as I am not licenced to provide financial advice on equities. Everyone's situation, risk tolerance and goals are unique so make sure you see an accountant and/or financial planner before proceeding.
Question: Which is your favourite property market myth to bust?
Bushy Martin: Buying an existing investment property is better than building.
The multitude of so called professionals peddling this myth are really misleading the masses. Yes, for an uneducated DIY purchaser, buying an existing property is quick, easy and perceived as lower risk. And no, building a new home way out in the boon docks is not the way to go. But if you engage a specialist team of independent professionals to protect your interests, then building a property in a scarce supply high demand area is lower cost, higher yield, much more affordable to hold and can manufacture instant equity. Significant stamp duty savings, depreciation benefits, tax incentives, building below market cost and new appeal mean that carefully orchestrated new build properties out perform similar existing properties by a country mile. As an example, and varying with your financial position, a correctly structured new build investment property can be several hundreds of dollars a week cheaper to hold than a similar priced existing property and can often be cash flow neutral or positive so that they don't impact on lifestyle while they increase in value long term.
Question: How can we cheaply boost the value of our homes?
Bushy Martin: Whether you're a home owner or a property investor, increasing the value of your property is key to your prosperity. So if you have no time or much money to pour into your property, the best way to crank up the value of your property affordably and fast is to employ the proven P.R.I.C.E. principles - five cheap ways that will maximise your property value through Positioning, Refreshing, Improving, Cosmetics and Effects:
Timing is everything in property, so make sure you get the property valued or sell it during the highest demand time of the year. As a general rule, selling or revaluing in springtime is generally a good idea – with green grass, blue skies and positive potential buyers. Selling at auction can also concentrate buyer interest, increase competition and allow emotional FOMO (Fear Of Missing Out) to drive up your property value. This can easily add $10k to $50k to the value of your property.
Remove, Refresh and Renew
This is all about the garden and landscaping to create instant appeal on arrival. Remove old and high maintenance flower gardens etc and replace them with bright green splashes of low maintenance feature 'architectural' plants set amongst rich mulch. A weekend's work that only needs to cost approx. $600.
Poor lighting can significantly reduce appeal, so replace old and outdated light fittings, remove dark, heavy drapes and replace them with light and white curtains. Also consider updating tap fittings and door handles. Just $1,000 spent at the local hardware store can work wonders to improve value.
Consider repainting the walls and ceilings a light bright neutral colour, installing new carpet or timber flooring and painting cupboard doors. This can completely transform a property, make it feel fresh and inviting and only cost up to $4,000.
If you are looking to sell a property, remove all existing furniture, artwork and memorabilia and work with a professional to 'stage' the home with a modern, minimalist style – this can produce stunning results. Just $2,500 can make an old property almost unrecognisable.
To really get bang for your buck, get a professional photoshoot and drone flyover video to capture as much interest as possible. And finally, make sure to get the best (not just the cheapest) local real estate agent with the strongest, quickest and highest price sales record to present and negotiate your sale.
We employed all of these P.R.I.C.E. principles on the sale of my deceased mother's home a couple of years ago and only spent $10k to lift the value of a property by $80,000.
Question: Can you share your best piece of financial advice with us?
Bushy Martin: Investing is a game of finance and an elite team sport so engage your team of proven independent professionals and start now by automating your money management using the 50/30/20 rule.
The gap between our good financial intentions and implementing them day to day is a factor of our time. As we are all extremely time poor I suggest you use leading edge online banking and phone apps with automated set and forget direct debit and credit functions to set up your auto money management and saver system now, so that you efficiently manage your finances and build your wealth by remote control.
All you need to do is to set up and link 3 key accounts on your mobile phone:
I. Freedom Offset: Savings Account – all of your income is channelled into this central account, with regular automated direct debits making your weekly home loan and investment loan repayments along with allocated transfers to the following:
II. Essentials Account: A high rewards point credit card that pays all of your normal bills (approx. 50% of funds) with a monthly automatic full balance 'swipe' from your Freedom Offset to completely to pay it off and never incur a cent of interest. Once card payments are set up the card is locked away out of reach and never finds its way into your wallet.
III. Living Account: Approx 30% of available funds goes into a debit card to cover your discretionary spend items on the basis that once the money in the account is spent you have to wait until next pay for any over and above 'nice to have' luxury items.
This automatic saver system instils a budgeting mindset and ensures you don't touch the remaining 20% of your monies that accumulates in your Freedom Offset (which in turn shaves thousands of your home loan interest and years of your loan term).
Interview by Brooke Hunter
Michael Hanrahan Publishing
Author: Bushy Martin