This episode is where this podcast companion to the book kicks into high gear: because Chapter 6 is a big one.

As the official companion to How to Retire on $3K a Week, this podcast gives you the deeper reasoning, stories and real-world examples behind what we wrote on the page.

And in this chapter, Bryce and Ben break down one of the most important ideas in the entire book:

👉 Not all properties are created equal.

Inside, you’ll discover:
🏠 Why Asset Selection had to come straight after compounding
📍 The evolution of “investment grade” & “owner-occupier appeal”
🌏 The Location Lens vs Entry-Level Lens (brand new to this book)

This is the detailed, behind-the-scenes conversation that brings Chapter 6 to life — the stuff you’d only know if you were sitting across the table from Bryce and Ben.

P.S. Want the full framework — not just the companion conversation?
Grab your copy of How to Retire on $3K a Week now! 👉 howtoretireon3k.com.au

Timestamps

  • 0:00 – Chapter 6: Asset Selection
  • 0:32 – Why Asset Selection had to follow compounding
  • 1:10 – The “monster chapter” and why it matters
  • 1:50 – Investment grade, owner-occupier appeal & scarcity
  • 2:25 – The evolution of the location lens
  • 3:15 – Entry-level lens: helping beginners still get into the market
  • 4:03 – Bryce’s first-ever investment property: zero margin of safety
  • 4:40 – Economic activity, population growth & city strength
  • 5:20 – The fundamentals: 3 price drivers & macro-to-micro
  • 6:05 – The Buyer’s Decision Quadrant (and how L.L.L. used it daily)
  • 7:10 – New vs old: why the maths still favours established property
  • 8:10 – Why starting with property first is the #1 mistake investors make
  • 8:30 – Wrapping up: asset selection sets up the financial game to come

Transcript

Bryce
Alright folks welcome back to the how to retire on $3,000 per week podcast Ben and I here chatting about Really part two first Ben because we’ve pivoted from the foundations to now the property investment formula.

Ben
Well, Bryce, we debated about how we would set up the start of this chapter. So for those who are trying to, if you’re ever thinking about writing a book, you’ve got to have it flow correctly. So obviously, the property investment formula needed to go next off the back of the power of compound in terms of chapter five. But asset selection, there really wasn’t, we had a choice to put cash flow management and potentially borrowing power next. But we chose asset selection because it just flows more sensibly off the back of the diagrams and showing the compounding returns that we’re seeing. Like everything we were referring to was residential property in some of the charts with cotality and all of that. So asset selection just needed to be here. And that’s the backstory in terms of why it made Chapter 6.

Bryce
Now Ben, I’ve got to be honest to the listeners, this was a monster chapter. Every other one I read, I just did each chapter in one hit, not this one. But it’s important, like assets, like the whole game is making sure you buy the right asset.

Ben
It is and everyone’s got their thesis in terms of how to do that. And we’ve got a lot of fresh content in here in terms of what we hadn’t explored in the other book and obviously in the podcast. mean, obviously, you know, we’ve always been telling people about, you know, investment grade and, you know, owner-occupier appeal and that scarcity. mean, they are, you know, they’re our bread and butter foundations. And that obviously led at the very early parts of our podcast to talk about location does 80 % of the heavy lifting, which you’ll find in here. we expanded out on those in terms of prime lens and also potentially the entry level ends of the market that we were looking at.

Bryce
Yeah, we haven’t tackled that anywhere else, not on a podcast, not on a blog, not on a video. We hadn’t talked about it when we were a guest on any other podcast. That was totally fresh and new for this book. that was an evolution because if you go back to when we… There’s a bit of confusion at times when some of our listeners go, you said in the first 100 episodes, that particular part of the book is an evolution of what we observed over the last decade.

Ben
Well, it’s also about that’s what happens when property prices double. And we still needed to make sure that we were going to write a book for anyone who was a budding investor, that they could still get into the market and play. I mean, we still think that one or two good properties, obviously, if you can afford great properties, that’s fine. But if you also can get into the market, we still think that that’s a better outcome than trying to save your way to retirement. So that’s where the entry-level lens came in, the location lens. And that’s why we talked about those key characteristics. And obviously most people who have done a couple of laps with us would know what we mean when we talk about prime location lenses and the key characteristics and approach that we’re looking for there with that scarcity and that status and that human emotion appeal. But we also know that entry-level locations can get a ripple effect and a lift up because just purely on the back of supply, demand and affordability.

Bryce
Yeah. We’re recording this about 26 years after I bought my first investment, my first property. And there’s something in this chapter that I wish I knew back 26 years ago that I did not know. And that was margin of safety. Because we started this chapter with me talking about my first investment property that was in an 110 unit complex. I did not know back then what margin of safety meant in the, I didn’t know in period, but not even in the context because what we explained in this chapter is when the developer turns a piece of land into 110 apartments, there is no margin of safety left. It has been extinguished. The developer got the benefit of all of the margin of safety that was left and like a sponge just wrung it out.And here I was; and I’ve gone back from time to time and checked the performance of that first property. And 26 years ago, if you put that on the back of the compounding chapter we just came from about the third decade, this property would not have achieved anything that would, 2.77 % compounding, Ben, the last time I checked. That’s not very impressive. But as I said in that chapter, and this is what I want to say to everyone who’s listening to this, it was the best property I ever purchased interest because

Ben
Yep, I’ve heard you say this a few times.

Bryce
Yeah, got you in the go and from then on, every property after that was actually easier than that one.

Ben
Yeah, so why have we dedicated a good portion of the book? Because at the end of the day, not all properties are created equal. It’s pure and simple. So margin of safety comes in different forms as well. Like if you think about, we’ve always talked about land scarcity, you know, in terms of that, but the margin of safety also can play itself into economic activity. Like, you know, if you go and buy in a booming town, and then that town, the economic drivers or whatever that got that town booming are no longer there, then there’s a margin of safety in terms of the future economic activity of that area because if the population are leaving, well, why do you need shelter? If no one’s there to take it up because there’s no jobs there. So that’s why we also spent a fair bit of time in teaching people about the power of economic activity and economic growth of a city, and the power of the bigger citie,s because in reality, that’s the insurance policy and that reduces your margin or that increases your margin of safety, but reduces your margin of error.

Bryce
Didn’t we cover some fundamentals from the first 100 episodes here? could have three price drivers of economic activity, human behavior, the macro to micro framework, the three sort of concurrent circles that define an investment grade property. We have done a lot in this particular chapter, but the buyer’s decision quadrant, gosh. That’s 300 pages on there. Gosh, I used that every single day when I was on the set of location, location, location, Ben, every single time I was talking to those clients on that television show was essentially which one of these four quadrants are you gonna compromise?

Ben
And whih one you’re going to drop off. And then framing it up for people who are starting out around, start with the macro and then drive down into the micro. So look at the national, look at the state economics, look at the city or the region that you’re looking at, and then you can drill down into the suburb area and then off the back of that, the street and then obviously into the property itself. it’s heavy going. It’s, you know, it’s…

Bryce
Comprehensive. It’s intended to be a reference. So folks, ironically, starting with asset selection is, Ben set this up, this conversation we’re having, beautifully by saying it’s the perfect flow on from compounding, but it’s actually the number one thing we see people get wrong is when they start with the property first. Later on in the book, we’re gonna talk about property investing being a…

Ben
I didn’t do any better at the time when you bought that first investment property 23 years ago. Of course, I bought the house across the road from mum and dad in Fundura. I mean, you know, what was I thinking?

Bryce
Because you’re a tight ass, because you want to use the lawnmower.

Ben
Exactly, I’m going do more washing. So there’s all of that. But there’s also another important part there, that I want them to have some slow thinking about new versus old. think we’ve worked really hard over the last decade of educating people on the podcast as well to try and get them to understand that the math’s just impossible to beat the old because it’s all in the land value and land to asset ratio, once that lands for you, you’ll be in the winner’s seat.

Bryce
So there you go folks, we’ve just covered chapter six, asset selection. If you are playing along at home, we’d love you to do that with your copy of How to Retire on $3,000 per week, the Property Couch’s playbook for passive property investing. If you have stumbled across this podcast and you don’t have a copy, you can go to howtoretireon3k.com.au and in there, audio books where you can get your hands on it. We’d certainly love you to do that. But we hope you’re enjoying this because the next chapter we’re about to go on is arguably where the main game has been for property investing because property is a game of finance. So there you go. All right, look forward to doing that. We hope you continue to stick around with us folks.