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301 | How to Lose Half a Million Dollars & The Secret to Lifestyle Design

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Don’t want to lose half a million bucks? Well then, make sure you don’t do this… 

In today’s episode, we’re diving deep on The Secret To Lifestyle Design – that’s means What To Do & What NOT To Do when building out your Property Portfolio Plan. 

Like we always say… “Plan to become what you plan to become.” 

So, if you’re an aspiring or existing property investor, what does it mean to plan your property portfolio? And why go to the lengths to plan out your future anyway?  

Well, with “the end in mind”, your goal is a heck of a lot clearer! 

But there’s something wildly more important than this… 

 Listen now to get the secret to creating the life you want (“lifestyle design”)… and how to reverse-engineer your dream goal to suit your current lifestyle! 

 

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Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

The Questions 

Question from Angus: 

Would love some commentary about The Barefoot Investor’s email yesterday: 

 Hi ,“Get out now.” That’s the advice the CEO of NAB has given to homeowners who are struggling to make their repayments. 

Yes, in his quarterly trading update last week, NAB’s new-ish chief, Ross McEwan, warned: 

“There will be some circumstances where people are better off selling out early and taking some equity out of their homes, or keeping some equity, before it disappears.” 

While most of the media didn’t give his words much attention, there are two good reasons that you and I should: 

First, because in all the years I’ve been doing this column I’ve never heard a bank boss speak so candidly. 

Bank bosses are basically politicians: they get parachuted into the top job, stay there for five years, and rocket out with $40 million. Their main job is to stick to the script: “keep lending”. (And we’ve all witnessed how bad things go when bank bosses go off script, like getting into wealth management.) 

So why is NAB’s CEO sticking his neck out? 

Well, that brings me to my second point: he obviously doesn’t like what he sees on the horizon. 

And know this: McEwan isn’t peering into a cloudy crystal ball. Over the years NAB has invested billions into tracking its customers’ every financial move. In fact, all the banks have incredibly detailed customer analytics that tell them what people are doing — or not doing — with their money, in real time. 

Now, according to the banking regulator, APRA, roughly 1 in 10 mortgages in Australia are paused. 

Which gets me thinking … 

On one side, how long can the banks cop 10% of their customers not paying? 

On the other, when will customers who are really struggling finally bite the bullet? 

It’s a grim situation. 

My hunch is that the banks are betting that the overwhelming majority of their customers will get through this. Yet they also know a small number of their customers won’t, and so they (well at least Ross McEwan) are turning up the heat on them. 

My advice? 

Please don’t misquote me: I am not saying you should sell your home. 

What I am saying is don’t be a frog … if you were in hot water before COVID hit, don’t just sit there bubbling away. 

We’re still early on in this crisis, and you have more options than you think. And if you want someone independent (and free!) to walk beside you and carefully lay out your options, call the National Debt Helpline on 1800 007 007 and speak to a financial counsellor (like me) immediately. 

The last word goes to McEwan: 

“We’ve seen in other crises around the world, when people try to hold on they end up walking away with nothing.” 

Don’t say you haven’t been warned 

 

Question about Vendor Finance from Simon: 

 How do you set up Vendor Finance? What is the process? Do you need the full amount in cash or can you use funding from elsewhere, like a venture capitalist maybe, or even a bank under certain circumstances? Does a third-party company look after everything for a fee or is it more of a hands-on personal approach that is needed? How do you evaluate the risk vs reward with the process? What happens when the buyer refinances down the track? I’m thinking for some people in certain industries to get approval for borrowing will be very difficult for some time, this may open up opportunities within the vendor finance area? Some people may see this as praying on others misfortune while others, like me, may see it as offering a lifeline to those who need it. 

Could fragmentation of properties and vendor finance offer an attractive way in for less money for anyone struggling to get into property? Is this also a way you could offer Vendor finance if you only had for example 50% equity?? 

 

Question about What Property To Buy from Scott: 

To buy established or a new investment property, Bryce. I am in Sydney and considering buying in Melbourne as I feel the market there is way undervalued compared to Sydney, given the expected population numbers expected to surpass Sydney’s over the next few years. Thanks mate. 

 

Question about Our Biggest Investment Mistakes from Quy: 

Love your work gents! What are your biggest investment mistakes which had delayed you from reaching your passive income goals quicker. 

 

 

Want to check out MoneySTRETCH?

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

 

279 | How To Master The Pillars in Pandemic Times

By in Podcast, Q&A

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As a property investor, you have to master the frameworks. But during a pandemic, you have to tweak specific strategies in each framework to not just survive in this climate, but thrive — now and in the future.

Make no mistake… the fundamentals DO NOT change! But in a brand new world, there’s no doubt that adaptability and proactivity in regards to our Four Pillars of Mastery — Asset Selection, Borrowing Power, Cashflow Management and Defence (ABCD) — are critical and will set you up for life… provided you work with this time of self-isolation, economy upheaval and uncertainty… NOT against it!

When this is all over, we will see that the folks who were able to act and adjust quickly will be the ones who get out on top. We have seen it throughout history and most-recently during the GFC… so, while the coronavirus is an unprecedented and uncomfortable time for all of us, there are practical and smart strategies you can adopt NOW to make certain you get through the other side… and not just “unscathed”, but potentially in a great financial position.

So, maximise your results and efforts during this time and you will be rewarded for it.

And, please folks… DON’T buy bargains… the “bargains” are that way for a reason… and we’re going to see a fair bit of this junk stock coming onto the market. So, don’t be tempted. Don’t do anything stupid. And stay focused on the objective.

In this episode:

 

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Free resources: ABCD during Pandemic

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More on The Pillars of Mastery…

 

And of course… Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

UPDATE | QLD Emergency Rental Assistance Payment

By in Podcast, Q&A

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Just a quick update folks! There’s been some changes since we released today’s episode. The Queensland government had set up a grant program that offers an emergency rental assistance payment of up to $500 a week, for up to four weeks, for Queenslanders who cannot make rent. We thought it’s critical that we let you know about this considering it’s related to today’s episode on Landlords vs Tenants.

Hope you find it helpful and here are all the links for this update:

Don’t have access to our Platform? No worries! Just fill in the form below and we’ll create a free access for you. AND send you the instruction manual, Make Money Simple Again as well! 🙂

 

 

 

 

 

 

278 | Coronavirus: Landlords vs Tenants

By in Podcast, Q&A

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“Landlords vs Tenants.” Has this become the Unspoken Virus as the current pandemic escalates and more folks lose their jobs, fall into financial distress and struggle to pay rent? 

Well, to answer this question, let’s talk about the myths and misinformation out there. 

Because we want to set the record straight in order to help BOTH landlords and tenants navigate what is a difficult time for all of us. 

Because, YES, there’s a whole lot of folks out there who are doing it really tough right now… and we by no means want to understate this. We understand the severity of the situation. And we understand that there is NO “landlord vs. tenant” argument — because, realistically, there are no winners in this. 

Equally, we also know that the majority of investors only have ONE investment property and only the minority out there are super cash-flushed. Most of us are everyday Australians simply trying to self-fund…  

Put another way… investors ie. landlords also feeling the hit with job losses and reduced income like everyone else. And we want do whatever we can to assist the community, but the fact is most of us can’t afford to bear the cost of having reduced or no rental income while still needing to cover mortgage repayments, tax commitments and repairs and maintenance. Most of us aren’t in a position to shoulder the responsibility if rent stops coming in because, as we explained in last week’s episode the “6–month holiday” on your home loan, while helpful to those under duress, is merely a temporary freeze, which you will then have to make up for further down the track. 

So, in this episode, we want to share some ideas of what we think both the Federal AND State and Territory Governments need to do in order to step up and help all of us who are affected here. 

Again, WE’RE ALL IN THIS TOGETHER… and it’s wise we take a look at both sides of the equation… for Landlords AND Tenants. 

So, let’s get into the nitty gritty, debunk the myths and offer some useful solutions that could be beneficial for everyone. 

 

Free Resources Mentioned 

 

What we Talk About in Today’s Episode: 

  • Why are Landlords and Tenants are in this together? 
  • Our ideas to help them BOTH 
  • Our Top Advice for Property Investors About Rent Reductions 
  • The Types of Landlords 
  • What’s NEW and What’s NOT New with tenancy hardship agreements? 
  • Misinformation about Landlords 
  • What monetary relief is available for tenants right now? 
  • “Job Keeper” vs. “Job Seeker” Payments 
  • What happens to an investor’s Landlord Protection Policy if you drop your rent? 
  • How long will your Landlord Protection Policy cover you for? 
  • What do you need to show to claim tenancy hardship? 
  • Rental relief package for landlords… 
  • What is Centrepay, and who is eligible for it? 
  • Ideas around tax depreciation that could help during the COVID-19 crisis 
  • How are property managers helping tenants during financial hardship? 
  • What are the ramifications for landlords? 
  • What should you do if you don’t have a tax depreciation schedule? 
  • Claiming tax refund early 
  • What would we like to see at a Federal Level? 
  • What would we like to see at a state and territory level? 
  • What is PICA doing to help Landlords during the time of COVID-19? 
  • Is there an option to switching to interest only? 
  • What’s stopping people from switching p and I to IO? 
  • Are we going to see volatility come through the property market? 
  • Realistically, will there be a DROP in median property prices? 

 

And of course… Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

And One Final Word…

If you’re worried about your finances or if you have no clarity on your cash flow position, we strongly recommend you to organise your finances now. It’s more important than ever to have a clear view, down to the exact cent, on how much you’re spending each month and how much surplus you’ve got. If you don’t know it, then log in to your Money SMARTS Platform here and update the numbers.

Don’t have an account yet? Create your free access below and we’ll also send you an e-copy of the instruction manual which is also our best-seller book, Make Money Simple Again. Just fill in the form below and we’ll email it to you right away.

 

 

 

277 | Coronavirus & Property FAQ

By in Podcast, Q&A

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There’s been a lot of questions coming in about the coronavirus and its implications to the property market, the finance sector and the economy at large — particularly in direct response to the higher levels of social distancing regulations we’re now seeing and its flow–on effect to unemployment and how we transact property. 

So, today we’re answering a whole heap of Frequently Asked Questions (FAQs) about how COVID-19 affects you as a property investor, a home owner, a first home buyer, or someone who’s in fortunate circumstances to take action on the opportunity. 

‘Cos, let’s be real folks… if you’re dining out on the news cycle, it’s a very scary place out there!! 

Again, we must repeat… our message of calm remains…. but we’re going to dig even deeper into what we’re starting to see as this pandemic unfolds. 

As well as answering a whole lot of your questions (all of them listed below), we’re ALSO going to give you some Frameworks and Tips to support you during this time so you’re prepared, have the RIGHT knowledge behind you and can navigate the “new world” we’re all now living through! 

We touch on it in today’s episode, but just in case you need a recap… folks are likely to fall into ONE of TWO categories during this time… 

  1. “Take Action” Club – This is a small percentage of folks who are ready to take action based on their individual circumstances (please seek professional advice before you do this) 
  1. “Money Management” Club – The vast majority of folks will sit here and during this moment-in-time of uncertainty, should focus on the gaps in their money management 

  

Free Resources Mentioned 

Free resources: Isolate + Chill

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And here are the Questions!

Question about “Investor & Tenant Relief” from Greg: 
Any talk from the banks/government on providing relief to Investors on investment lending so as to enable them to provide relief to tenants who find themselves in financial trouble? For many owners they would have tenants they don’t want to lose and would like to assist (if required) but may not be in a position to do that themselves… 

 

Question about “The Six-Month Freeze” from Jake 
Points to consider for the six-month freeze 🥶 on home loans?  Ie. how is the loan recalculated after six months? Will interest still be required to be paid during the freeze? And could this result in household having higher repayments on completion of the six-month freeze? Will it impacted your credit file? Cheers 🤙  

 

Question from about Property Prices Dropping from Nicole 
I just heard that Economists are predicting a 20% drop in house values. Would love your thoughts on this? If one is to take up the banks offer of 6months “off” from the mortgage — besides extending the loan time frame, how will it affect households and do you advise it in what circumstances? 

 
Question from about Waiting To Buy from James 
My partner and I are looking to buy in Queensland later this year. But are we better to wait until next year to buy?  

 
Question about “What the market will look like next year” from Jarrad 

What will the market look like next year? Would it be a good time to buy if I was planning to buy my first property? Could it be a good time to get a great priced asset? Thanks guys 

 

Question about Offset Account Protection from Matt 
Are offset accounts protected by the government up to 250k? Should I move funds above that to a different offset account, or should I use it to pay down principal on the loan? Would this then secure these funds in the hopefully unlikely event that a bank failed. Note that this is not a big 4 bank. 

 

Question About “Accessing The 10k Out of Superannuation” from Daniel 
If we have money in an offset account, can the bank access it to reduce their exposure?
Also, not sure if you can answer, what are the new rules around accessing your super? If you’re a couple can you both access the $10k per FY? Is it means or asset tested? 

 

Question about Finding a Remote Property Investment Advisor from Aaron 
Was about to redo mortgage and borrow additional funds for deposit on 1st investment property (which we are not really sure on the process, have to talk to mortgage broker),but now that everything is closing down not sure what our next steps are. Can we find a property investment advisor completely remotely? Is it a good time for a newbie investor to try and get into the market, when our only knowledge comes from the podcast and your book? 

 

Question About What To Do If Tenants Can’t Make Rent from Rebecca 
I am a single Mum with no family support … I have two investment properties but if tenants asked for ‘free rent’ don’t they realise that the landlord might be in a similar situation to them??? That this doesn’t make sense for tenants to ask for a pause on rent when mortgage payments still need to be made. I realise that some banks have waived the repayments for 3-6 months but I am actually not with the BIG banks who are doing this (WOW – it is impressive that it IS the big banks who are offering this support – makes me wants to transfer to one of them!)… any thoughts? 

 

Question from Andrew 
 it would be great for you guys to canvass the current situation around landlords insurance and what policies will and will not cover in terms of loss of rent due to coronavirus circumstances. ie ….Actually getting Coronavirus and not being able to work vs being laid off because of economic difficulties. I can see this being a bit of a snake pit in terms of insurance policies and wordings associated with ‘pandemics’. 

 

Additional Helpful Resources on COVID-19

National Update: Click here

State Update:

 

One Final Word…

And please… Just a (not so gentle) reminder. Stay at home if you don’t need to go out. Download our Isolate + Chill Pack if you want to use this self-isolation time to learn new things!

Free resources: Isolate + Chill

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