Whether you want to leave a nest egg for your children or escape the rat race and dedicate more time to doing what you love, investing in property can help secure your financial future. But in an era where everyone is time poor, how do you know who you need in your team to succeed, or what investment strategy will work best for your situation?
In the new book, The Freedom Formula, award-winning property investment specialist Bushy Martin draws decades of experience helping over 1700 Australians amass over $600m in property, and provides a practical guide to achieving your lifestyle goals. He shows how to calculate the wealth needed to replace your income, and a unique step-by-step process to replace this income through safe, affordable property investment. Readers learn how to:
Master the principles, process and people required for property to create and fund your ideal lifestyle
Build a property portfolio without impacting on your time or restricting your way of life
Calculate the net wealth required to supplement or fully replace your current income
Find the right types of investments for your circumstances
Understand property market cycles and know what to invest in, when, where and how
Take advantage of the power of TLC – Time, Leverage & Compounding
Filled with real examples, tips and tools, The Freedom Formula provides readers with the plan they need to leave a legacy, live more, work less and retire early.
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.
The Freedom Formula
Michael Hanrahan Publishing
Author: Bushy Martin
Question: What inspired your book, The Freedom Formula?
Bushy Martin: The Freedom Formula was inspired by 3 key people - my -Granny', my father and my son.
Granny's love of the English language and written word enriched my childhood with stories of love and laughter. When her book manuscript failed to get published when I was in my teens, her unfulfilled dreams lit my fire of determination to publish a book that she would have been proud of.
My father worked himself into an early grave and on his deathbed he looked me in the eye and said – -Learn from me son, don't spend your whole life working for money, invest so that your money works for you.' This started me on my -Freedom Formula' journey.
The driving purpose of the book is to capture all of my life's learnings in a way that will make it easier for my son Adrian to know me better and to help him and others better navigate his way through the financial challenges of life.
Question: What do you hope readers take from The Freedom Formula?
Bushy Martin: Working hard and relying on super will see your lifestyle reduced to penny pinching poverty when you try to stop work, so you need to start investing now to secure your future.
Learn how to stop feeling trapped on the treadmill so you can regain your time and your freedom long term by replacing your income through building wealth with property
The best way to be able to live more, work less and sustain your lifestyle long term is through safe affordable investment property.
Investing in expertly structured self funding property will not impact on your lifestyle, savings or salary but will keep thousands more of your hard earned dollars in your pocket every year and will help pay of your home loan years earlier and save ten of thousands in home loan interest
Question: How can we give ourselves a payrise by only changing one thing?
Bushy Martin: Simply by re-negotiating or refinancing your home loan will give you an effective payrise of between $7k to $24k a year. How? If you or a savvy finance broker negotiates a rate drop on your average $400k home loan along with other cost reduction features, it is not difficult to reduce costs by up to $350/m. To earn this amount in your hand with tax added back in, your gross income would go up by $26,000 a year. Boom! An instant payrise.
Question: What are the five things we need to look for when buying a house?
Bushy Martin: When buying a house with long term value growth in mind, you need to focus on one thing - future scarcity not past history. It's all about limited supply and growing demand and in this regard, the house is actually the last thing you consider – the five things you need to look for are:
Strong ongoing employment growth in the area supporting stable and growing incomes
Closeness to the city or the sea
Committed change - future Infrastructure (roads, rail, shopping, health, sport and lifestyle), rezoning change or area gentrification
Limited ongoing land availability
House designs, layouts and finishes that the majority of people want and can afford
80% of property growth is about the location not the house
Build rather than buy
Question: Why is property the best way to build wealth?
Bushy Martin: To be able to break free financially as quickly as possible so you can work less and live more, you need to invest safely, simply and affordably in the highest growth assets that require as little of your time and money as possible. So the best investment strategy is to use as little of your own money to secure as big an asset base as possible as quickly as possible that doesn't take money out of your pocket or restrict your lifestyle, and then let time and capital growth do the work.
The highest growth asset that allows you to do this in Australia is new build residential property, as you only need to use a small portion of your savings to secure a property and the tenant and the tax office can cover all of the costs if set up properly.
So while shares and property enjoy similar long term growth rates of 8-11%, well structured property is the best wealth building growth asset because you only need a small deposit to start, it wont cost anything to hold, it saves thousands in tax, it doubles in value every 10-15 years and it allows you to pay off your home loan years earlier.
Property is also the best way to build wealth because:
It is safe, secure and low risk: 70% of homes are owner occupied and half of them have no mortgage so this underpins and stabilizes property values as they don't panic and sell in tough times – property is the only investment class where value is not dominated and driven by investors
it provides superior & secure leverage eg you can borrow double the amount on property as you can shares, so using the same amount of savings you can double the size of your wealth asset base which will give you double the growth long term
Most home owners buy property based on need and emotion rather than rational reason so desire drives ongoing demand and price growth
Interview by Brooke Hunter
The Freedom Formula
Michael Hanrahan Publishing
Author: Bushy Martin