#128 - Navigating The 2026 Economy: Your Wealth Preservation Strategy | Scott Kuru

Speaker A: Before, you could work, not own anything, own one property and retire and you'd be looked after. Today, if you don't have a strong asset base, you're going to be screwed in retirement.

Speaker B: How much money do you need to break through the system?

Speaker A: I would say you need three to five million.

Speaker B: Three to five million.

Speaker A: That's right. Freedom Property Investors chief executive and co founder Scott Guru. If you've got 3 to 5 million, you've got a passive income between 200,000 and 500,000 a year. That's going to give you some options.

Speaker B: Now, if you were to put a category on what a household income should be for middle class, what do you think that should be in Australia?

Speaker A: Oh, man, I'm going to get shut down for this. I think the first thing is you've got to try and get your income stable, strong. And if you're an entrepreneur and you're a business person, I don't think that you should do what Elon's doing. M the chances of failure are 99.999999%. You're going to lose all your capital. The next thing that you do is you've got to look after your cash flow.

Speaker B: Is like, how much money can people save? Uh, subscriptions, like entertainment platforms, Disney, Netflix,

Speaker A: Fox towels, wipe it all. You don't need it.

Speaker B: Buying nice clothes, nice things, jewelry, handbags, glasses, things like that.

Speaker A: Like, it'll make very little difference to your happiness or anything like that.

Speaker B: Like health insurance. Insurance.

Speaker A: Insurance is an important one. Rent, that is a real, real tough one. You'll be shocked. You'll be able to find 50, 60, $70,000 a year. The next thing that you've got to do is you got to have an investment plan is you need a guaranteed pathway to your 3 to 5 mil.

Speaker B: What's people's argument as to why they should stay away from your property? And what's your counter argument?

Speaker A: This might be very controversial. A lot of people probably won't like this.

Speaker B: But this episode is brought to you by Wick Studio. Here at the Agency podcast, we're building a community and we would love for you guys to be a part of it. So we would love to hear from you. What are you enjoying the most? What would you like to see more of and what do you think might be missing? Drop a comment. Make sure you subscribe. Subscribe. And now, on with the show. As for today's episode, I thought it'd be really fun to talk about. Where are we really at in the world when it comes to the Middle class. And for those that are looking to get outside the rat race and to build a life for themselves, you know, where are the lies and the red flags and red tape? And where are the opportunities? And how do we best prepare for, uh, what's to come? What should they start to think about?

Speaker A: Yeah, thanks. Thanks for that. Yeah. I think, like, where the economy is now is we're in this really strange place where all the traditional ways of living so not just, like, the economy and money, but life, like, it's changing and it's sort of breaking down. And I think a lot of people are confused about how to live life, how to spend their money, what they need to do, what does their career mean? Should I start a business, not start a business? Do I invest or not invest? Do I buy a house or not? Like, I think all of those old scripts now, um, have collapsed and they've disappeared. And I think a lot of people are just confused about what they do. I mean, you got the baby boomers. They're already set. They're there. You got Generation X, which is my generation. Um, and this generation probably has been shafted the most because right now they're looking after grand, you know, their parents, grandparents, they're looking after their children, adult children, teenagers, uh, and they're getting squeezed a lot. And then you got the millennials, and you got, you know, the younger generations, and they're just all trying to figure it out. But because the world has changed so much from 20, 30, 40 years ago, I just think there's a lot of confusion now about how do I live my life, how do I manage my money, and what do I do? What do I do with my money, what do I do with my career, what do I do with my business? That's where I sort of really think the world is at.

Speaker B: Can we start off with the different generations? Cause I. I hear a lot of conversation around the boomers. Are this, the Gen X, is this millennials of that? How would you tend to classify what was, I guess, different between those generations? Um, even perhaps before the baby boomer generation through to that generation into now? How would you distinctively separate the challenges that each generation has had?

Speaker A: This might be very controversial. A lot of people probably won't like this, but I just feel like the younger generation are way more entitled, you might say entitled, or their expectations now are a lot higher in terms of their quality of life, um, the amount of money that they have, where they live, how they live and what they do. And I think a lot of that's generated because of social media. There's a lot of examples out there in the world, um, of young people being very successful, flying around, doing different things, experiencing all these different things. And so people's expectations have gone way through the roof. So you know, I remember when I was 15, 16, 17 in high school, back in sort of, you know, 1990, 1991, we didn't have social media. You know, my dream was to have a job that paid 40 to 50 grand, be able to own my own home and be able to own one day, hopefully own a brand new car. And like those were my expectations. But I feel like the younger generation now have a lot higher expectations. You know, I was looking at one of my posts on social media the other day and we're talking about housing and different things. And um, I made this comment on one particular post and what it was, it was a wonderful young nurse, hardworking and she was sort of lamenting, um, or complaining that in the eastern suburbs she couldn't afford like an apartment in the eastern suburbs to be close to her hospital. And I thought to myself, you know what, um, you're single, uh, you're on one salary. And I think that expectations a little bit misaligned with reality. And I thought back, hey, when I was 21, 22, 23, uh, I used to walk to the bus station, 15 minutes. This is like I never thought I'd be in this position like talking down to the younger generation, right? But I'm 50 now. But it's like so back in my day, right, so it's like um, you know, I would walk to the bus station, wait for the bus in the rain, get on the bus, 35 minute trip into Liverpool station, you know, out, out from, out from Miller. Then I would catch um, a one hour train into the city. Then I would walk up to the city, then I would work all day. And if you sort of went home before 6:00pm, you know, your management would be all over you. And then I would train home, get off the train, wait at the bus stop, get the bus. I said I'll do that because I could only afford to live in that particular area. So I hear that a lot from um, boomers. I hear that a lot from you know, generation X, 40 to 50, they probably feel, they probably use the word entitled for the younger generation. But I would just sort of say that their expectations have actually um, grown a lot. And so I feel like that is probably the main difference between all the generations. It's around, it's around expectations.

Speaker B: What's your thoughts when it comes down to, I guess how much noise there is when it comes to making the right decisions. If you think about how much tribalism is happening.

Speaker A: Yeah.

Speaker B: And how many people, I'll give you an example, might say, hey, go invest in property. That's the best way to make money. Someone else might say, you know, go and do um, an AI SaaS tech startup and go in this direction. It seems like there's always these different tribes that people are pushed into for the best ways to get out of the middle class and generating wealth. What's your advice to someone right now who's trying to figure out how they themselves would like to get out of the middle class and into, you know, out of the rat race if you will, uh, and into making money?

Speaker A: I'll probably share a story with you that I've shared with very, very few people. So I went through this problem because, you know, I was in my corporate career. Um, at this stage. I was divorced, I was a single parent. I had actually custody of my kids. I was living in a two bedroom unit in North Strathfield. I had my three sons in one bedroom. I had my daughter in one. I was sleeping in the couch in the, in the living room. And that was my situation. I was fortunate that I had a job at NRMA at the time, a corporate job paying very, very good money at that time, very, very good money. Um, this is probably back 2010, 2011. I had a five minute uh, walk to work and so I did have some time to start the side hustle. So at that time, and the Internet was very early, YouTube wasn't really a thing to 2015, 16, 17. So there wasn't really a great amount of content on YouTube that was still the time of like going to a conference, going to a boot camp, um, buying, buying, buying a book. There wasn't really a lot of free or you did a paid course on, on the Internet. And so at that time I had the question, how do I break free? Because I was depressed, uh, I couldn't see a way out. I thought I'm just going to keep working for the next 20 years. So your question to me, I believe that's the genesis of someone moving on to something bigger. Uh, breaking free of the system, getting free of the system. Like it all starts there. I uh, went out on a search. So I started um, going crazy on reading books. I started going, I uh, set aside a monthly budget for doing these boot camps and doing all these courses, which most of them were a waste of time. Some were good. Um, even the ones which were a waste of time, I learned from, because I learned well, that's a waste. So I could start eliminating things. And so I remember at that time, I think I set aside a budget of like 5 or 600 bucks a month to spend on self development. This is when I got into Tony Robbins. And different things I did these different courses, I did, um, you know, share trading courses, all these different things, um, writing blogs on the end. All these different courses I did. And then I actually became, I got this point of massive confusion and frustration. I felt so helpless to make the decision on my own. I was thinking, is there some force out there in the universe that can help me make this decision? Like what is my path? You know, I'd finished catching up with my friends and then immediately after catching, uh, up with them, my mind just went back to the main problem that I had in my life. And the main question I was carrying around and that question was, the words were something like, how do I break free? How do I get out? How do I rescue my family? How do I give a better life to my kids? How do I get out of the system? Because the system of just working every day, collecting the check, it just wasn't getting anywhere. I wasn't saving any money, I wasn't investing. I'd run the numbers like where is this? Where is this head? It's headed nowhere. So how do I break free? And so as soon as I'd finished catching up with my friends and that was a great time that was needed, the minute I left that situation, I went back to that main problem. It was my dominant, dominant thought all of the time. So that's probably what triggered it. So I just remember having like a, like a, like a vision, right? A vision or an image in my mind. And I could see a golden house and I could see a big lake and I could see like this wharf and I could see all these kids jumping off a wharf. But then I, I wasn't sure what that image meant. But I kept thinking about it and thinking about it and thinking about it. And I took it to mean the interpretation I gave it was focus on real estate. So at that point I was able to eliminate a lot of other options. I focused on real estate. And the first thing that I did was I never thought at that stage about a business in real estate. I didn't think about that. I just thought focus on real estate in terms of being an investor myself. So keep my corporate job, invest and build my wealth that way. And so that was really the genesis for me of starting to break free, break free of the, the system, so to speak.

Speaker B: And can you paint a picture? At the time I understand what it's like to be a father. I've got three children. Yeah. Having had to be a single father, raising four children and working a full time job. What was that like for your psychology? Because I can only imagine how difficult it was to juggle all of that at once.

Speaker A: You know, I don't think you can really know this until you have kids, but once you have children, suddenly your world is a lot bigger than you. And so for me, my life meant very little. My happiness, my joy, what I had in my life, my success, my significance meant very little. It was actually all about my, my children. I mean, these are my little, my little angels. So they come to you, they're little, these little packages and evolution creates them in such a way you just, you just love these little buggers. And I was so fortunate and blessed to have, have four of them. And you know, at this time, you know, how old are they now? I think My youngest was 8 or 9. Then I had, you know, a cute little 10 year old, 11 year old. I think my daughter was like around 12, 13 at the time. So that's, they're at this beautiful, beautiful, beautiful age. They're little people. And then you look at them and you think, wow, you know, these are little people. There's a whole world out there. I'm actually in charge of them. Their life path is going to be dependent upon the decisions I make, how hard I work, whether I make the right call or the wrong call. And so I felt that weight of responsibility and I felt a lot of fear and I felt a lot of fear of failure. However, my determination to provide for them was greater than that fear. And that's what allowed me to push forward. So I'm not sure that if I didn't have my children, if I hadn't have gone through, um, a really, a really, really hurtful, uh, divorce, if I hadn't had my life upended like that, and if I didn't have those children, whether or not I would have had the tenacity, the grit, or even because I believe this was work. I believe that the 18 months of trying to figure out what to do, that was a lot of work. Like it was mental work. I wasn't out there digging a hole, but it was, um, extremely tiring having that question, how do I break free? How do I break free? And going in search of that, that was a work in itself, an emotional work. So um, I look at that period of my life and to be very honest with you, there's like a void of happiness of about six or seven years. I can't remember feeling happy. I can't remember experiencing a lot of joy. It was just like a lot of, a lot of weight. And wanting my children not to live like that or feel that was the main driving force that got me to sort of, you know, start out on that path which first of all was learning about property, learning how to invest, becoming an investor, uh, meeting some key people and eventually that's turned into the business that it is today.

Speaker B: If you want to grow your agency you need more than just a uh, website builder. You need Brick Studio. The all in one platform that's built to help you scale. Designed smarter in a hyper flexible responsive editor. Cherry picking whatever clients need from pre built UI elements and templates. Deliver robust backends with built in e commerce solutions for every industry. Letting self maintaining infrastructure just run itself. Stop reinventing the wheel with every project and instead create a shareable design system with reusable assets, apps and components. Clients growing too fast. No sweat. WIX Studio AI powered CMS lets you turn a single layout into hundreds of additional dynamic pages. It's true, more clients no longer has to mean more chaos. WIX Studio gives you one centralized view of um, every project and makes real time collaborations seamless. Do your agency's best work at scale. Build your next projects on um, WIX Studio. If you think about how, let's talk about Australia, how Australians feel right out about our government here. Um, because I think you know many of our viewers who are living abroad might be aware of some of the things that are happening but for those that aren't, um, we're living in a quite a unique time where uh, it feels like the tax regulations in this country in particular are getting a little too heavy handed.

Speaker A: I think there's three things going on. The first thing is the whole tax thing. So after that May budget, that really was a punch in the guts to small business and you've got millions and millions of small business owners so none of them are happy with the May budget. The biggest thing is that most small businesses will need to restructure all of their tax affairs and that is going to be a headache and a nightmare and extremely costly to get the same outcome that they've got today. So that seems absolutely ridiculous and it is ridiculous. Uh, but it's not only that change, it's Also the sentiment or the message coming from our leaders of taking away that ambition and not recognizing the hard work and what's provided by small business to the community and to the economy. It's a slap in the face because rather than being in a culture, uh, where we idolize business people, we put business people on a pedestal. We see business people as people that contributes to, we see business people as people that contribute to society. What our leaders are telling small business today is your tax cheats. You take from society and we need something back. That's a hurtful message, uh, to millions and millions of Australians. So there's the herd of that message, but then there's also the very real tax implications as well. But I would go as far to say it's more the pain and the hurt of that message and how they're being labeled in society with that label. Takers, cheats. It's more, um, a backlash to that than it is actually the tax, the tax issue.

Speaker B: One publication I saw recently was, um, there was a call for Elon Musk, who recently IPOed with SpaceX. And there was a debate happening where m people were saying, this is great proof of what can be accomplished in business and industry when you put your mind to something. And then the other side of that was a debate which is like, well, he could save world poverty if he just gave all that money back. The challenge with that is it's not like he's got the trillions in a bank account somewhere loaded up in cash. It's, uh, valuation in a company. When you think about this, how should people adjust their thinking if they're not quite adept at what's really happening at the top of the ultra wealthy.

Speaker A: I love the point you make, right? Because look, 70% of the population will not understand that. They'll just think, well, Elon has a trillion hand, a trillion out solve world hunger. But it's not real money. So for example, if you went to every single Australian billionaire and you said, all right, we're going to take all of your wealth today. So I don't know, Gina Rinehart, all these, the mining magnets, um, Harry Triggerboff, you know, property, uh, mogul. Let's say we take all their billions. I don't even know what the number is. Let's say it's, um, I don't know, let's say it's a hundred billion, two hundred billion, three, whatever. Let's say it's a trillion dollars. All of that combined wealth, which I don't think it is, but let's say it's a trillion dollars. Say we extract all that wealth. Okay, let's try to turn all that wealth into cash. Where are you going to get the cash from? Because as you said that's a share valuation, it's a made up number, it's not a real number. So let's turn all of that wealth into cash. All right, let's find the cash for it. Let's say we did find the cash for it. We've got a trillion dollars. Okay, let's divide that trillion dollars by every single Australian right now and give them an equal share. Let's say it's 200 grand each, 400 grand each, 500 grand each. So let's just say this coming Monday, every Aussie gets 400 grand from the, from the billionaires. Well what's that going to do? All property prices will jump 400 grand, 500 grand or more.

Speaker B: Or more.

Speaker A: Um, your grocery prices are going to shoot up, your cars are going to double and triple in price because everyone's got all this money. So it's just going to create all this inflation. So you know, we don't really understand economics. The majority of people and even the people that understand it don't understand it. But there's just a lot of misinformation, uh, there's a lot of lack, uh, of knowledge. There's a lot of ignorance out there right now. And actually that's what makes me afraid Dane, because if you get enough people, enough ignorant people calling for and voting for what seems right, which is actually not even going to be right for them, but calling for and asking for it out of ignorance. Because you've got a politician that wants a particular, uh, because you've got a politician that wants um, a spot in the parliament or Prime Minister and they want that either because they've got an ideology or because for their own personal gain, then what you're essentially going to end up is with a uh, broken, a broken society. And then when you have a broken society you have a society in collapse. Now we're talking Mad Max type scenario where I'm afraid of that. I want the ability to be able to insulate and protect my family from that event potentially, potentially happening.

Speaker B: What advice would you give to young Australian families and for that matter young families around the world?

Speaker A: It is essential more than ever that families get a game plan together to break free of the system.

Speaker B: And when you say the system you're talking about all of these collective systems.

Speaker A: All of these collective systems. And the only way to Break free. I mean you gotta mentally break free, but you gotta have the money to break free.

Speaker B: How much money do you need to break free of the system?

Speaker A: I would say you need three to five million.

Speaker B: Three to five million. Three to 5 million to escape being under control.

Speaker A: That's right, yeah. Three to 5 million. Because if you've got three to 5 million, you've got a passive income between 200,000 and 500,000 a year. That's, that's going to give you some options. And then if you've got 3 to 5 million, you've also got a chunk of money where you can get up and you can relocate your family or you can move your family, uh, and you can do different things and you've got different options.

Speaker B: So we've seen a lot of that happen. Right now I've got a lot of friends in business that are, uh, one friends moving to Dubai, another one's moving to Italy and other ones moving to the States, all in the last six months.

Speaker A: Yeah, this is a, this is a real sentiment that people have.

Speaker B: Like I'm talking about some of the wealthiest people I know in this country. Um, you know, maybe they're just shy of 100, 200 million.

Speaker A: They're leaving and they're very well insulated and they've got a lot of fears and worries and a lot of people think, well, they're just leaving so that they can pay less tax. But I can tell you right now, a lot of wealthy people, that type of money, they don't mind paying some tax or, you know, a fair amount of tax. But it's not just the, uh, tax, but it's also that whole sentiment and how they're being labeled. So in Australia, you know, we don't generally, I mean, there's a community of entrepreneurs and investors that do put, put highly successful people up on a pedestal. But generally we don't, we drag them down. They're the enemies. They're the enemies of society. You know, they're hoarding, they're grabbing, they're taking. And I think that's a part of the reason why people want to move as well. Because they want to be in a community where for their achievements, they're, they're applauded.

Speaker B: Now something else I'd like to talk about is, uh, what's happening with AI you have an interesting take around that. You look at AI and you don't just see an LLM algorithmic system, you see a, ah, living entity that is consuming energy.

Speaker A: Yeah, well, it is. And I, I don't think Australians understand the amount of investment that's coming into Australia right now. Because a lot of overseas companies are kind of saying, well, Australia has a stable political environment. Um, you've got energy, you've got water, ah, you've got all of these things, and you don't have much resistance to the building of all of these data centers. So the big problem right now, I see another big problem coming, like we had with gas. So we're talking about we should tax gas. Now, look, the gas industry does pay tax. I'm not going to get into that whole thing right now, but it does. But why don't we have like, a significant royalty on it? It goes back to the deal we struck when the gas companies first came in. So there's a lot of gas all around the world. And, you know, companies can invest in different countries and there's a different amount of money they need to invest and they, they want to get a return on their capital. So the government at the time did the deal that they thought was good to get the capital here and the overseas companies here to extract the gas. So we did a deal and it turns out Australians don't like the deal, a lot of people don't like the deal. So we look back at it, we wish we had done a different deal.

Speaker B: What is the deal you think, like, if you could create a synopsis of what it might look like.

Speaker A: Uh, I don't want to go into all the details of the deal, but basically, you know, there's this call in Australia for a, uh, 25% tax on the, uh, gross revenue of the gas companies. Now, we had an opportunity to cut that deal 10 years ago, 15 years ago, 20 years ago, but now we've, now we've done that deal. Can we renege on that deal? We can. Will we get any future investment from overseas companies to then extract, uh, materials into the future? No, we will not. And I don't think a lot of Australians understand we don't have the money and we don't have the capital to do a lot of things in this country. So we need money and capital and expertise. Do we have all the engineers to extract gas or the technicians to extract gas? No, we don't. We need overseas companies to come in for their capital, their money, their knowledge and their know how to actually get the job done. So that's why we've got the gas deal that we've got now, which now nobody likes. However, we are now entering this AI era. No one is talking about this. This is not in the news headlines. No politicians are talking about it. But AI, you can consider it almost like a natural resource because it requires land, it requires water, and it requires vast amounts of electricity and energy. Massive, massive. And so we are now, currently, I think we've got about 150 or 160 data centers in Australia. No one, no one really knows that. We've got approvals, I think, on about another hundred more. Right. Or it could even be more than that. And these things are going to soak up so much electricity and so much water and they're going to be positioned in different, um, suburban areas around Australia. That's kind of like a natural, natural resource. And so what is Australians, everyday Australian households going to get for all this data center investment? Same question with the gas. Okay, we're going to, we're going to extract the gas. Government benefits, they collect a bit of tax. But how does the everyday Aussie benefit from that? So how is the everyday Aussie now going to benefit from, from this AI investment flooding into the country? We don't have a proper framework around that right now. I believe it should be taxed. Anyone that wants to open a data center here, it should be a little bit like the gas companies, we should, we should have a tax because literally it's taking our natural resources from Australians. Electricity, water, uh, and suburban suburban land space, it's going to be, it's going to be soaking up. So we need it, we need a deal and we need a framework around that. No one's really, really talking about that.

Speaker B: You know, when I think about the average Australian, why, what's that going to do to the average Australian? What can we expect from that? What's your presumption?

Speaker A: So these data centers, they're like biological masses. They're like communities of people moving into your community because they take electricity, they take water, they take land space. So if you've got living humans that require those things and you go to these data centers that require these things, we're now going to be competing against these data centers for those limited natural resources, which actually have quite a big cost on them. So the cost of energy is already blown out. We don't have a really clear, uh, path forward for, for energy over the next 10 to 15, 15 years. The snowy River Hydro system is already blown out by 10 or 20 times. Uh, you know, the whole, uh, net zero is a conversation, but that hasn't really lived up to what it was going to be. Albert said at the last election, electricity bills would come down on average by $275. In fact, they've go double and triple that in many cases. So what's happening with these data centers is they're going to compete for those natural resources and they're actually going to increase the cost of living for Australians. So that's just another example, I feel like, of mismanagement.

Speaker B: Therefore, if you're looking at these two systems, um, creating more control and taking more tax off people and, um, expanding these natural resources and not taxing them effectively, what is this all pointing towards? If you were to look at this collection of events and you were to look at a forecast of the future of this country, what do you predict for the middle class?

Speaker A: While the middle class are going to get squeezed more and more and more, who are the ones making all the money? It's the middle class. You can't tax those on welfare. And the amount of people on welfare is growing and growing and growing. And when I say welfare, it's a little bit unfair to say people on ndis. I don't want to just say they're on welfare, because I'm very proud of our NDIS program. I think that the intent behind it is absolutely amazing and we should have something there, but we know that that's been routed. So we've got ndis blowing up. Then we've got, um, Medicare, which is a form of welfare for all Australians. They say that it's universal healthcare. Uh, however, why are people still having to pay 20 grand, 40 grand, 80 grand for different surgeries? Why can they not get it on Medicare? So is that truly universal? How well is that being. Then you've got all the other welfare that we've got all, all throughout the country, and then you've also got all the misspending in all the public servants. So I don't want to label public servants, and I'd never label nurses and frontline workers, our police, uh, paramedics and so forth. But if you look at all the bureaucrats that we've got, is that a form of welfare? You know, um, one particular office, I think, and I just can't recall the name of the office. Uh, you know, maybe we can add it in the comments later, but There was like 500 people in this particular office. I think it was the energy office. And now there's like 5,000 staff there. Uh, what are they all doing? Is that a form of. Is that a form of welfare? So you look at all that government spending, you look at all the mismanagement of the economy, and there's all these different things happening, the energy, the AI. I think ultimately we can analyze that, we can talk about this, we can worry about this, we can become activists, we can protest, we can get involved in political movements. And maybe many of those things are good things. But I think everyone's main mission should be get that three to five million dollars for your family so that your family can break free. And then if you can help some other people, some other families, help society, then, then do it. But your number one goal should be get that break free money for you and your family first.

Speaker B: If we're thinking about perhaps a juxtaposition here, one which is I've got to do what I need to do to get my family into a position where we can secure ourselves. Yeah, I respect that. I have kids that totally aligned with that thinking.

Speaker A: Yeah.

Speaker B: Simultaneously, is that also exacerbating the issue? Because should we also be simultaneously thinking about, well, how do we improve our society, how do we improve our communities, how do we, rather than fight for ourselves, how do we fight for each other and change the way this system is operating?

Speaker A: Yeah, well, I think, number one, um, fight for yourself doesn't necessarily mean you fight against the community. So I think, number one, I believe that you build whatever it is that you want to build with integrity. You follow the rules, you do all the right things. And this even means, as a property investor, you've got tenants in some of your properties. Well, you extend some charity to them. You're not just jacking up the rents every time you can. Um, people need extensions or different things. You try and be a good person. Right. So, so you definitely, you definitely do that. However, what I will say is that when you start this journey out, so when you set a deadline, set a target, set a number, put you and your family on that mission to create that 3 to 5 million, the energy and the excitement that will be in your home, it'll be very electric. Right. And then the people within your circle as well will be influenced by that. And I think the biggest way to influence someone is to lead. And to me, leadership is, is doing, not necessarily talking. So, um, you know, there was a, there was a big competitor, um, in the whole property space who recently, uh, went under, sadly went under, uh, you know, and they're in insolvency now. And I think they've got, uh, the creditors are owed something like 20 or 30, maybe, maybe even 40, $40 million. But this is a company which was founded by founders who didn't have any investment properties. So to me, that's an example of someone trying to lead to do something that hadn't actually done what they were leading to do. And then where did it end up going? It ended up going with failure. So I think that the best way for people to lead is through them getting on that mission themselves and then that will then filter out to their family and to their communities. Uh, however, let's just be, let's just be very, very brutal here. No one's going to come and save you. I'm helping you, I'm helping this person. To me, that's extremely selfish. So if I've got children and I'm spending all my time helping the neighbor, helping you. M. I'm not saying don't help them, absolutely help them, but I'm saying then your main focus has got to be to your people that you're responsible for. So my main and primary responsibility was always to the people that were dependent upon me. Like I feel obligated and duty bound to serve them and provide for them first. And I think, you know, the friendships that you've got and cousins and aunties and uncles, they're important, but you've got your primary people that you're responsible, responsible for. And by the way, Dane, I actually see and I have seen throughout my life, a lot of people use that as an excuse for not doing their own homework. Like actually saying, oh, well, I've been busy doing this and busy doing that, and those are all worthy things. But I'm like, well, is that really just an excuse for you not doing what you should be doing and doing your own homework in your own backyard? Um, or are you really this good natured person that wants to help everyone or are you simply hiding from the hard work that you have to do?

Speaker B: Well said. I can agree with that. What do you think that people misunderstand about someone like Elon Musk?

Speaker A: I'll ask one really strange question about Elon Musk. Why is Elon still working today?

Speaker B: You know, I would say he's obsessed.

Speaker A: And I think that's what people don't understand. Because if you talk to the average punter and I said, hey, forget 1 trillion. Forget 1 billion. If I just give you 10 mil, what will you do tomorrow? They will not be at work. So you gotta ask yourself your question. That's the point. Yeah, why is Elon still working? What's driving him? And again, it comes back to that, uh, what I was saying, those sort of, the two politicians, you know, you've got some people just out to get as much money as Much personal significance as possible. And then you got some people with an ideology. So for me, I believe not just from imagining it, but sort of looking at the actions because I think actions really tell you about someone. I sort of sense from Elon that he's got an ideology and I feel that his ideology is to actually best serve the planet.

Speaker B: Do you genuinely believe that?

Speaker A: I do genuinely believe that. Now whether or not what he's doing is serving the planet or not, we can debate that.

Speaker B: You would say that he believes he

Speaker A: is, but I would say that he, that he believes that he is. And I see him being quite a caring, a caring guy and a family guy. You know, he's traveling all around the world and I don't see him with four or five models on his arms, although he has had some pretty prominent relationships. Right. But I see him with his little four or five year old kid everywhere that he goes. So that tells me a lot about, about the man. Now whether or not what he's doing is right or wrong. And you know, we've got social media and different things that he said and do we agree with every single comment? No. No. Human is perfect, right? Um, yeah. But I think the key question to ask is, well, why, why is this person still working? Is it personal significance? Probably there's some of that. Is it to make more money? Doesn't need any more money. Why would he want more money? And he says this, I want more money so I can, I can do more. Uh, that's, that's my take on Elon.

Speaker B: If you look at the collection of his companies, they all do seem to be human centric or human focused. Yeah, SpaceX is to become an interplanetary species so we can survive outside of this planet. Um, then you have his boring company, so he's trying to make traffic more bearable and complex cities that have no space to put roads in. Um, if you look at um, his energy company, he's trying to put solar panels on roofs to improve people's uh, quality of life. And it does seem like that is a sentiment across his businesses. One question I have is when you think about someone that's operating at that level, like what is something that we can learn from that? As an entrepreneur who's not trying to go to Mars, but as someone who's trying to put food on the table for a couple kids or buy a house or set their family up, what is some, um, energy, um, we can draw from that?

Speaker A: Well, I think the first thing is don't do what Elon has Done. Because these are the worst decisions in humankind. Like, who takes all this money that he made from PayPal and put it into this electric car venture? That's ridiculous. Like, the chances of failure, uh, are 99.999999%. You're gonna lose all your. The takings from that and the winnings from that and puts it into a rocket company to commercialize space. That's absolutely insanity. You're not going to. Warren Buffett would never do that. Like, you'd, you'd be crazy to do that. And it would be, you know, the chances of failure of that, uh, is 99.9999. The boring, the whole, you know, like, the things that he's done are so ridiculously fraught with danger, risk. And, um, the downside of losing that no one should, should follow what Elon has done. Okay, so let me just, let me just sort of encapsulate that. If you're 40, 45, 50 now, you're probably at your peak earning years. You're probably going to earn right now as much as you're ever going to earn. You might get 10, 20, 30% more maybe, and you might have that for five years, but you're not suddenly going to triple or quadruple your money. So probably your best bet is not do anything that Elon's done. Find some safe investments, look at a safe way to optimize your tax, get really good cash flow management. Look after every single dollar that's coming through, Invest it and own something. And I think that's probably the big difference with today's economy. In today's world and maybe 20, 30 years, 50 years ago, uh, before you could work, not own anything, own one property and retire, and you'd be looked after today, if you don't have a strong asset base, you're going to be screwed in retirement. So, like, I would say do that then. If you're there and if you're an entrepreneur and you're a business person, I don't think that you should do what Elon. Elon's doing. I think that you should, um, look for a market that, um, has a lot of activity in it, a lot of, a lot of money in it. There's, um, hundreds and hundreds of examples of people succeeding in that space. Go into that space. Like, your chances of, um, succeeding are going to be way higher. But if you're going to do something like absolutely crazy with the chances of losing all your money, break a new market, break a new technology, that's madness. Like you'll, you'll never catch me doing that. And that's why I applaud Elon. Um, and that's why we need the Elon's now by the way, would a government do that? No. Um, would a collective of a million people, um, in some sort of collective communist type thing, all vote and agree, let's do that? Probably not. It takes a wild crazy man who has an ideology, is not that worried about the financial return, willing to take massive amounts of risk, and has the capital to bring us SpaceX, Tesla and all these other technologies. So the planet, whether you like it or not, the planet needs people like Elon Musk with the money and with the capital. You don't have the billionaires and the trillionaires, you don't get these breakthroughs. We're in an absolute circus around interest rates. So the end of last year we have three interest rate cuts, which was really good reprieve for all of the Aussies. And then all of a sudden, beginning of this year, um, they've started to jack the rates back up again. So, you know, we're up, we're down, we're up, we're down, we're all over the place. And the reason we're all over the place and we've got no level, uh, of certainty and stability in the economy with interest rates, with the housing market is we're up, down, we're up, down. Why are we up, down, up, down is because the RBA and the federal government are not aligned. So that, that's what I see is a really, is a really big problem. And where is this problem emanating from? I believe that the problem is emanating because we are becoming more tribal, we are becoming more niched. And to be able to win an election now, you've got to play to those different tribes and their different needs. But we're not sitting down as a whole community and having a open, honest discussion about where the country needs to go and what we should do. Uh, I don't believe that the everyday man and woman can really, truly impact the system. It's too big. It's too big. I think that your first goal has to be get that 3 to 5 million for you and your family, find any way to do it. And I mean that's why I was attracted to property. Because when I ran the numbers I'm like, okay, I can leverage my way there. I can, you know, get some tax optimizations. I don't have to suddenly become an entrepreneur, launch a business. I don't have to earn millions and millions of dollars. I can make some good money if I, if I take care of my career, take, you know, have, have, have good, solid career, keep myself valuable in the economy, if I have good cash flow management and control my money. And then if I've got some good guidance to be able, uh, to buy the right assets and not get ripped off and taken for a ride there. And then if I can hold them for 10 or 15 years, I can get my 3 to 5 million. So I would, I would say that's probably the base case for most Australians to do something like that. And then you've got some people that are gonna go, well, I wanna start a business, I want to do other things. I think you can do that as well. But I also, I see a lot of business owners and this might be the worst advice for a business owner. They put too much attention on their business. And I see a lot of businesses, uh, business owners that have been in their business for 10, 15 years and they've been making a lot of profit. They've paid their staff a lot of money, they've paid their contractors and all this, a lot of money. Mark Zuckerberg got a lot of money from them. But after 10 years of toiling in their business and they've scaled and they've done certain things, but they don't, they don't actually have any wealth. Their business, a lot of the times can't be sold, so it sort of has no value. It might have a book value, but it sort of has no value because it takes them to run it and so they can't sell it and they don't have any assets. So I think that, um, the, the game in today's economy, whether you're a business owner, um, you know, you're a pay, you're earning an income, you're a tradesperson, whatever it is, you've got to come up with a game plan to put enough, to put together enough assets to get that three to five million. I think, I think that's step one.

Speaker B: Now, uh, could you walk me through it? Uh, what skills do I need to learn? Where can I learn those skills? What is the first thing I should be aiming to do as a goal and so forth?

Speaker A: Yeah, look, it's, it's extremely boring and it's extremely easy, but it's very, very hard to implement. So I think the first thing is you've got to try and get your income stable, strong. So it means you being valuable. And that's why I Think, you know, watching different podcasts, getting inspired by different people you follow, doing different courses, being in good communities, um, upgrading your skills. So be incredibly valuable in the economy, earn a good income, try to maximize your income as much as you can, but also to make sure that it's stable, that you're growing your skills. So no matter whatever happens over the next two, three, four, five years, you're gonna have that income. So, yeah, get that income. The next thing that you do is you've gotta look after your cashflow. So like right now, basically, most people, their cash flow is an absolute, utter mess. You know, it looks like they wouldn't know. What did you spend last month? What did you earn last month? Exactly. And what did you spend last month and what did you spend it on and where is it? What accounts is it in? How much is in Super. How much is in that account? How much is in the offset account? How much is in the business bank? People don't know what, what those numbers are. And right. They're so busy. Right. But you've got to take time and attention, uh, for the cash flow management, which is boring and also can be very painful. And you don't want to look at it because then you realize where your money's going. It can generate anger, um, you know, anxiety, fear. But you've got to, you've got to look into that. So you've got to have really strong cash flow management. After the cash flow management, um, the next thing that you've, that you've got to do is you got to have an investment plan. I don't care what it is, it might be property, it might be commercial property. You might buy and renovate and do all these things. You might do what my clients do, buy brand new property. Right. Whatever it is. Like, you got to figure that out for yourself. So, but you've got to have an investment plan. It might be shares, it might be your business, whatever it is. So you got to have an investment plan. Then the next thing you need is typically if you're investing, you have a business, it's correlated with how much debt you take on. So if you can take on safe debt, you can amplify your returns. And so after your investment plan, you've got to have a debt reduction plan because there'll be a period where you take on some debt and then there'll be a period where you want to eliminate all of that debt. And then lastly then you need your exit plan. So how do I, how do I exit the system? And so that's a number actually. That's a, that's a time, it's a date in the future, it's a deadline that you set yourself for the future. But it's also a money amount. And I think for most Australians it's going to be 3, 3 to 5 million. With my clients it's mainly between 3 to 5 million. For some people it's 10 million or 15 million because they've got a certain lifestyle or a certain thing that they want to do. For some, like I had one client that his goal was basically to retire in Bali. So his um, exit number was 1.5 million. He just needed 1.5 million. Took him one investment property in about eight years to do it. But for other people it's going to be a different number. So then you have your exit plan. All right, I've created that lump sum. Now what do I do? And for some people it's yeah, move overseas, move to a country town, um, fly back to New Zealand, live there. M, move down to Tasmania, live there, do this, stay in Sydney, whatever it is. So you have your exit plan. So I just say it'd be those five pillars. So whether you're a business owner or whatever it is, you should, you should have that plan.

Speaker B: All right, now can we walk through each of these pillars in a bit more detail, starting with the first one. Let's say a stable job.

Speaker A: Yeah.

Speaker B: What would you classify right now as a stable job? Because it does seem like uh, a lot of different industries are getting tortured by AI and they're changing. Um, how does someone make sure that they're creating themselves either a stable income from their business or a stable job for themselves? What's the number? What should someone be aiming for?

Speaker A: Yeah, I think you just got to try and choose the right industry, try and choose the right size of business to be in. Uh, like any advice I'd give to someone young, uh, and starting out, I would say try to avoid the big corporates because you just, you're just going to be a number there. You're going to be lost in the system. You're going to have a team leader or a manager that's five levels removed away. Then you've got big shareholders and boards and all of this. You can't progress. And also you're going to be sort of trapped in terms of what you can learn and who you associate with. So I think if you can get into a small or a medium or a mid sized company, you're going to have a little bit more exposure to the top people, the real movers and shakers in that company.

Speaker B: Why is it important that you get exposure to the top people?

Speaker A: Well, you know, I believe all success is all about modeling, correct, uh, behaviors. And it's not just modeling knowledge, but it's also modeling energy, body language, how people act, how people talk. So you know what's more valuable, what could be really valuable to someone is imagine you can get in the boardroom with the founder of a company and just listen to them for 15 minutes. You will learn something from that. Imagine you're seated, um, in an office and you know, 20, 25 meters away. The founder, the co founder, uh, or maybe the second, um, or third person that joined the company who's in a really senior role now, maybe the CEO, whatever the company is right there and you're getting some exposure to them, even if it's just seeing them and hearing them. Um, and then also in that um, mid sized smaller company, you're going to be, have ability to learn from the other departments a lot more. You know, finance might just be there and you can associate with their marketing, marketing guys just over there. Sales and operations just over there. So I think that you, you, you want to learn, you want to learn as much as possible when you're young now, when you get a little bit older, you might be um, a bit pigeonholed already where it is. So I believe that you should just double down and capitalize on what it is that you're already, you're already good at. I think sometimes making a career change can be, can be very, very hard. So it's about trying to maximize where you are and that could be changing companies, it could be adding, adding additional new skills but ultimately just being the most valuable person that you can be at what you know. So depending on, depending on where you are and then you know, you can maximize, uh, maximize your income and also secure your income. So for me that's the first pillar

Speaker B: now to maximize your income. Some would say that, you know, they've been in a job for a couple years and they would just wait for their pay raise to come around.

Speaker A: Yeah.

Speaker B: What's some ways that people could make themselves more valuable in the workplace to, to maximize their income.

Speaker A: Yeah. So I think the big mistake people make with going for a pay rise is either they don't ask for one or they ask for one in the wrong way. So they'll say to a manager or a business owner, they'll say, hey, recruiters have been banging on my door. Um, I got offered this package like, what can you do? Like, you probably get fired on the spot or maybe not fired on the spot, but you're not going to be trusted, you're not going to be loyal. So loyalty and commitment to a company and to a team has a huge premium on it.

Speaker B: Why is loyalty so valuable to a business owner?

Speaker A: Well, business owners and uh, you know, managers, team leaders, they're looking for consistency and they're looking for stability, uh, over having really high performing hired guns. Because a really high performing hired gun will come in, maybe they perform three months, six months, even one year, but they're in and out. And when they come in and out, they're not team players. They create a really bad, can create a really bad culture and then they leave and they go to some other company and then they tell everyone else that they were working with, hey, follow me to this next place. So business owners don't want that. They want stability. And a lot of cases they're happy to take. You know, to exchange a 10 out of 10 performer for a 7 out of 10 performer that's committed, loyal, good for the culture and you know, and committed to the company. Like Dan, I don't know if you feel that in, in your own.

Speaker B: I agree with you.

Speaker A: Yeah, I don't know. I don't know that wouldn't agree with that. So I think that if.

Speaker B: I totally agree.

Speaker A: If you can demonstrate loyalty, um, and commitment and provide all the right cultures, show up on time, dress well, say the right stuff, bring the right vibe, bring the right energy, um, work really hard at your craft and you don't even have to be the top provider. You will set yourself up for a really great career and you'll be surprised, you'll be identified and you'll be fast tracked for promotions, side moves, up moves, increases in income, well and truly above the high performers. So that's, that's probably, um, one tip. And if you are going to ask for a pay rise, I think the way that you, that you can do it is you got to ask in a respectful way which maintains your loyalty. And it probably goes something like this. But I believe this should come from the heart. Don't, don't just run this script. You should be saying something like, I absolutely love living. I actually love working here. I am committed to this place. I bring my best energy, my best self here all the time. I would never consider leaving, but I've got these goals for my family. I really need to upgrade my family home. I really need to live a little bit closer to work. I really want to. You know, um, my daughter will be starting school soon. I really want to get into a good school. What could I do or how could I add more value to help me to achieve those goals? So if you can position something like that.

Speaker B: Um, I think for anyone listening to this, you made a very key distinction there. It's not just, this is happening in my life, therefore, give me more money.

Speaker A: Yeah.

Speaker B: This is happening in my life, therefore I'm hungry.

Speaker A: Yeah.

Speaker B: What's the gap that I can fill that you have a problem with? The same way you talk to a client.

Speaker A: Yeah.

Speaker B: Mr. Customer. Mrs. Customer. What can I do for you? Oh, I have this problem. If I can solve that, would you pay me more money?

Speaker A: Yeah.

Speaker B: The answer is probably going to be yes.

Speaker A: Yeah. Look, I hope none of my staff are hearing this because I, like, my heart melts M. When I hear those stories.

Speaker B: Yeah.

Speaker A: And I'm like, how do I get this person more money?

Speaker B: Yeah.

Speaker A: But, you know, you've gotta be the shrewd, um, you know, business person as well. There's gotta be a commercial return because the business is serving not just that individual. But so anyway, um, I agree with

Speaker B: the sentiment that rather than just being like, I've been here for a long time, give me more money, you're saying, contribute more value.

Speaker A: Yeah. How do I do it? Where are my gaps? What can I do? How do I get better at my current job? Is there something else I can do? But you can leave that problem with your, um, manager. Now, if you've been a committed individual in that team, your manager will like you, your manager will be committed to you, and your manager will want to do something for you or the business owner. They will a hundred percent go away and have a think about how to come back to you. And it might just be get better at your current job. And there might be some things, some feedback that they've wanted to give you that they haven't. Because as a leader, you're always worried about how feedback will land. So you're always looking for permission to give feedback. You know what I mean? So when someone puts their hand up and says, I'm willing to take feedback, I'm willing to grow, I'm willing to do a little bit extra, then there might be a little nugget or something that your leader, uh, your business owner's been holding back from you that they're. Now they feel like they got permission or it's safe for them to give the feedback because typically when you give feedback, it can land very bad. So Look, I know that's for me anyway, it's a weakness of mine. So, um, I think if you can do those things and then there's absolutely no reason why you shouldn't be able to grow your income between 7 and 15% year on year, every single year.

Speaker B: I can't say 15%. Yes, I think it has to be working your job.

Speaker A: I think, I think it has to be a minimum of 7 to 15% year on year. You have to be getting 7% because inflation's going to be 2, 3%. And then you need something above inflation. So your real pay rise is what's above inflation. So if inflation is 2, 3%, you at least want 4 or 5% of a real, real growth. So you've got to be going for a minimum of 7%. If you're not getting 7%, you're probably in the wrong company, the wrong industry or in the wrong position. So I think that if there's absolutely no opportunity for you to get 7 to 15%, then you've got to start thinking about your next move to, to another company or another industry.

Speaker B: Now, if you were to put a category on what a household income should be for middle class, what do you think that should be in Australia?

Speaker A: Oh, man, I'm gonna get shut down for this. Look, look, um, I'm not sure that I, I'm not sure that I know the number. Most of my clients have a household income between about 180,000. Combined income, that's more on the lower end, up to around 250 to 350,000, uh, combined income.

Speaker B: So these people are setting themselves up for three to five miles?

Speaker A: Yeah, the setting is up for three to five mil. Now, if you're at the lower end and you're starting off a low base, it might be a 12 to 16 year investment window. And if you're at the upper end, it might be a seven to ten year investment window. Right. Just depending on your circumstances.

Speaker B: So you're saying about 180,000 as a collective household income, you can do something

Speaker A: with that, depending on how many dependents and expenses and different things that you have. But if you're a single on 180, you're in a pretty good position, especially if your expenses are low, you know, you're sharing accommodation or you're still at home with mum and dad, you can, you can do a lot with that. You might even have your own place. So you, you can, you can do a lot with that.

Speaker B: How much of that do you think they should be trying to Having, uh, as a healthy goal to save.

Speaker A: Well, I, I would, I would say, and I know it's really hard because of social media and all the ads and there's so much stuff out there that we want to buy, but you should be living like an absolute monk. Like a monk. And I mean on your food. Um, you know, and I've actually, I've actually challenged myself on this as well with, um, what I spend on eating out. I actually set myself a challenge, like to eat at home. So you got to go back and ask yourself, well, do I want, do I, do I want to break free the system? How important is it to me? How fast do I want to make it happen? If you really write that down, that'll give you the motivation to live like a monk. And then you've got a mission. So you're not doing it to hurt yourself, punish yourself to suffer. You're making all those sacrifices because you feel like you're on this mission to break free.

Speaker B: Now, what would be your advice to people that simultaneously have debt while they're trying to do this?

Speaker A: Well, most, most of my clients do have debt.

Speaker B: How much debt do they typically have?

Speaker A: Well, they'll have anywhere from 1 to 2 million dollars of debt.

Speaker B: 1 to 2 million of debt.

Speaker A: Yeah. Because they're going to have their main home.

Speaker B: Right.

Speaker A: You know, typically they've got a mortgage of 700 grand up to about 1.5 million, sometimes more. Then they've got probably some credit card debt of 20 to 30 grand. They might have, um, a car loan as well. 30, 40, 50 grand or more. So you gotta sit down with a professional, look at how you work out that debt. But, you know, you can consolidate your debt, refinance your debt, work out, uh, your debt. That's actually the first mess that most people have in terms of cash flow management. Yeah. And the debt consolidation and figuring it out all of your debt and cleaning up all of your debt, that's actually the first big move that you have to do. Yeah. Wipe away the credit cards, annihilate them. Car loan. And I think we spend way too much money on cars as well. Most people don't actually need a car.

Speaker B: Yeah.

Speaker A: If they really, really think about it. So. Or you can get, like, a much cheaper car. Why go for the European car and all of this? So maybe one of, one of my, one of my team, uh, members might watch this, but one of my team members got a really good pay rise recently. And then I just heard yesterday he went out and bought a Toyota Supra And I'm like, dude, you did not need that Toyota. I mean, those are some of the decisions that can set you back, uh, 10 years, you know, because that money on that car could have went to another investment property. And then if you fast forward eight to 10 years, what that investment property would have done for your life versus that Toyota Supra, it's going to be a much, a much different outcome. But we're emotional, we want things.

Speaker B: Let's talk about cash flow. So when I started my business, the debt I'd accumulated was north of $200,000.

Speaker A: And I remember what, when you're starting out.

Speaker B: Yep. And I remember getting a whiteboard and uh, I felt very clever. I got the little tape and I created this massive index. And my ambition was to wipe out my debt. Now the interesting thing I'd learned, um, was that rather than doing the smaller ones and then working your way up to the big ones, I flipped it and I wrote the biggest, scariest debts at the top and I attacked them first and worked my way down. Um, and I found that it was quite liberating to actually try to take out Goliath first. And I remember my first debt was about $36,000. Uh, and um, I negotiated the big ones down and I was saving anywhere between four to six thousand dollars in the total amount of these debts by negotiating down by making massive lump sum payments.

Speaker A: Oh, wow.

Speaker B: When you're thinking about cash flow and, and taking out the debt first, like what, what's your playbook from removing debt through to maximizing cash flow?

Speaker A: Yeah, I think the first thing, yeah, you should try and remove your debt, especially if you've got debt, you know, that's high on the interest rate. So what a lot of people don't realize is that you know a lot of your debts, if you make the minimum repayment, if you don't check it carefully, it may take 40, 50 years to pay it off. The minimum repayment. And then you can get caught where you're distracted by life and you get the bill, the credit card bill or you know, the, the um, purchasing card bill, whatever it is, or you got a supplier and then you're just paying the minimum. But you don't realize you're paying 15, 16 interest, 9, 10, 12% interest and you're barely paying off the principal or you might not even be paying off the principal at all. So that's just an ongoing. So it's really, really important to get all your paperwork to cash flow management is painful, it's not fun. Cause you get to confront a lot of your bad decisions. You got to confront and kind of go, geez, for the last two years I've been wasting money here. But you've got to confront it. And then, um, I like what you did. You know, you get a board, a whiteboard or Excel sheet, you write down all your debts, you write down the minimum repayment, you write down the interest rate that you're on and how flexible it is, and then I think come up with a game plan anyway that's going to motivate you to attack it. So I like your way that motivated you. Go ahead, do that. Uh, but what I would recommend for a lot of people is attack the debts with the highest interest rate first that are costing you the most. So try and eliminate them. If you can consolidate the debt and get on a lower interest rate, that's a good thing as well. You can do that. But the trap there is a lot of people will refinance the debt, get it on a lower interest rate, get a lower minimum repayment, and then just pay that minimum repayment. And then if you work out over the time they're going to repay that debt, they end up, um, repaying back more over a longer period of time. So I think the trap around debt is the minimum repayment trap. You don't want to get caught in that minimum repayment trap. Have a plan like you and actually knock it off with the lump sums.

Speaker B: I remember. Um, so I took this idea from Tim Ferriss, and he was. He called it the snowball effect.

Speaker A: Yeah.

Speaker B: And he said, uh, if you can go get a lawyer as well. So I had, um, all these companies with these debts send me all their contracts. And I went to a lawyer and I had the lawyers read the contracts. And they're like, say this, say that, Squeeze them here, squeeze in there. They were giving me advice, and even though I was paying the lawyer to give me some consultation around the contracts, I was getting out of all these weird clauses by using all of this language against them in their contracts.

Speaker A: Yeah, great tip. And people have AI now to help them as well.

Speaker B: I didn't always without AI. So you're saying, yeah, violently get out of debt. How. How aggressive should people try to be to get out of debt before they try to start investing?

Speaker A: Well, I'm hardcore. Like, for me, you know, just go hardcore. But again, I think you can get hardcore disciplined monk, like about the whole money thing when you've got that escape plan.

Speaker B: Yeah.

Speaker A: So when you've got that. Okay, it's gonna Be this date, all right? It's gonna be 3 mil. It's gonna be 5 mil. It's gonna be whatever the number is. 15 mil, it's gonna be on this date. And then you can write down, well, that's my freedom day. Whatever. Whatever day you're gonna call it. And you think, well, what am I gonna do on that day? Um, who's gonna be there? Who am I gonna celebrate with? Um, how will I feel? Who's gonna benefit from this? So you can write that down. Then you write out your mission, and then you write out, um, your game plan to get there. Then you put your budget together, and then all of a sudden, um, you're gonna have more. More energy. And then I just believe you'll be surprised how hardcore you get, because it becomes infectious. So if you put it on the board and then you go, all right, first that 36K, and then you go, okay, it's 36. It's 32, it's 28. Like, that momentum builds. Um, you know, you become obsessed about it, and you become more hardcore by starting the process.

Speaker B: Yeah, I did as well, because every time I saw the numbers coming down, the total number, I would. I'd be like, well, what else can we do? Yeah, yeah, we cut our shoppery. Shopping grocery.

Speaker A: Can we not eat for a month? So, yeah, you become hardcore through the. Through the process.

Speaker B: Helps helps get into the dopamine.

Speaker A: Hey, why are you eating? Why are you eating? We agree we weren't going to eat for a month.

Speaker B: Yeah, we had another agreement. So Ellie and I, she's like, oh, every time you knock a debt out, you can buy beer. And I was like, awesome.

Speaker A: Awesome. Yeah.

Speaker B: So I couldn't have beer until I knocked a dead out. And as soon as I knock one out, we'd wipe it off the board, we'd share a beer, and we'd celebrate.

Speaker A: Yeah, but that. That's a success principle. And I feel like, you know, there's little rewards. You build them in. It sounds like a gimmick, but it becomes fun, and it becomes like, that's now become a great story that you and your partner share.

Speaker B: Yeah.

Speaker A: You know, so those are the. Those are the beautiful stories, um, of your life, you know, Like, I think that if you can set up these mini missions in your life with these mini rewards and these mini milestones, I think as m. As much of that as you can do and have these rewards, it becomes part of your personal story, the story of your relationship and the story with you and your children. Missions These little mini missions and they become fun.

Speaker B: Let's imagine you are a, you know, 27, 27 year old version of yourself. Like, how hardcore would you encourage someone to get if they were like, I want to do this in like under six, seven years? How crazy should someone get with the cash flow? What are the things you would encourage them to do if they wanted to be absolutely hardcore?

Speaker A: Well, you mentioned Grant Cardone earlier. Yeah, he's a huge influence in my life.

Speaker B: Yeah, same.

Speaker A: A big turning point for me was attending one of his boot camps in 2017. Changed my life.

Speaker B: That's the one I couldn't afford.

Speaker A: That was. He was in Sydney that time, right?

Speaker B: Yeah. So I remember I was at the event the day he was shooting, um, money, uh, out of a, A gun.

Speaker A: Oh, yeah, Yeah.

Speaker B: I ran to the side of the room like, G'd up, uh, like in front of 5,000 people. It's where I was like, man, so I could have met you had I found a way to afford it at that time. That's, that's, that's a cool story that you went.

Speaker A: Yeah, 20, 2017.

Speaker B: Yeah.

Speaker A: So his book, um, Be Obsessed or Be Average.

Speaker B: Oh, I love that book.

Speaker A: That book, it changed my life. Um, yeah, I think that if you can get that level of obsession as early as possible. And, you know, when we're young, we're thinking about, you know, boyfriends, girlfriends, partners. We're thinking about how do we look, we're thinking about clothes, what are we thinking about? All of this stuff. And then, you know, I just turned 50, I'm a grandfather now, and I look back and I go, so much of this stuff that I thought about was a waste of time. I was in a little bit of a different situation. I mean, at 25, I had four kids. So, um, maybe I was in a little bit of a different. Little bit of a different situation. But when you get older, you're going to look back and realize that you're wasting time on thinking and spending. You know, like, I look at a lot of, a lot of young people now. Now, you know, they're out dating and mucking around with all different, you know, just find one partner. Uh, settle down.

Speaker B: Hey, let me run you through some different categories and let's talk about if you wanted to maximize cash flow, what would you do?

Speaker A: Yeah, sure.

Speaker B: All right, number one, utility, uh, bills, phone, Internet, electricity, things like that.

Speaker A: Yeah, I think right now you got AI. So you run that, you run that through AI and you work out the plan that you're on and you Just try and maximize it. I mean, a lot of people, right, upgrading their phone too often, they've got too many different plans. So I think just, you know, take, take some time out, run all that through AI and just work out, work out the best plan to get on

Speaker B: the phones and try to get the cheapest, best deals you possibly can.

Speaker A: Yeah, 100%. So like, I know, I know it sounds like people are going to go, oh yeah, I'm going to save 50 bucks or whatever, but you should, you should do that because it's about that mindset.

Speaker B: It's like a, like go to war mindset.

Speaker A: Yeah, go to war mindset.

Speaker B: We're just going to cruise. We're going to all out war. Every 50 bucks we can get, we're going to keep.

Speaker A: You have to, you have to be that way.

Speaker B: How much do you think that people could save if they really like went through all their utilities and their Internet and everything and were like not going to get a new phone plan? I'm not going to go on a 36 month payment schedule for the new iPhone or whatever it is. Like, how much money can people save?

Speaker A: I do this with my clients, like in a lot of detail. So we've done this thousands and thousands and thousands of times to get a lot of data. You'd be shocked. You'll be able to find 50, 60, $70,000 a year.

Speaker B: 50, 60,000 a year?

Speaker A: Yes.

Speaker B: In utilities.

Speaker A: Yes. I'm not talking about someone making a million dollars a year. I'm talking about a household, uh, that's on like 220, 280 household income. Yeah, right. Uh, which is, which is good money, don't get me wrong there. But, but you can, you can find over $50,000. Not just on the utilities. I'm talking about the overall, overall.

Speaker B: Okay, the overall utilities, all out war. Try and find what you can where you can.

Speaker A: Yep.

Speaker B: All right, what about like, um, subscriptions, like entertainment platforms, Disney, Netflix, Foxtel, what all.

Speaker A: You don't need it. Like, what do you, what do you need? Depends on how, how desperate you are, you know. But what, what do you, what do you really need? Change your habits. Like, you know, grab, grab, grab, grab some of your books. Read those instead of, you know, sitting in front of Netflix. What are you getting out of Netflix?

Speaker B: Nothing.

Speaker A: Absolutely nothing. Just dopamine, wipe it and that might be, that might be 2, 3, 400 bucks a week on all these subscriptions you don't need.

Speaker B: Okay.

Speaker A: Uh, rent, rent, uh, is a tough one. That, that is a, that is a real Real tough one. Uh, but again, depending on your situation, you might have to look at, uh, you know, moving to a completely different location. Like picking up and moving. I don't know. That's a tough one. But if you're in, you know, the capital cities, you're getting smashed right now.

Speaker B: Yeah. So you would say it's better to commute in, uh, and live cheap somewhere on the outskirts of the city where possible.

Speaker A: Yeah. Just, just, just depends. Just depends. Um, yeah, I think I feel like you've got to weigh that up with getting to and from work. But again, like, I'm very hardcore about my career, taking care of my family, advancing in my career. So I'm not going to be making a rental decision around lifestyle.

Speaker B: Yeah.

Speaker A: Like, how close am I to the beach? Who cares? Um, I'm going to be, it's all, for me, it's going to be all down to the economics.

Speaker B: Get it as cheap as possible.

Speaker A: Get it as cheap as possible. Yeah.

Speaker B: Okay.

Speaker A: Yeah. And then I got to weigh that up with my energy in terms of what I show up in the office and depending on whether I'm working from home. But, you know, if I can negotiate working from home a little bit extra. But the other thing is time away from the office. I know for me, and I think this is true for most human beings, when I'm alone, I'm very, I'm very unproductive. But when I'm in the office, my productivity goes up 3, 4, 500%. So I know for me, I need to get into the office.

Speaker B: Yeah, I'm similar to you in that way. Okay, what about, um, buying nice clothes, nice things, jewelry, handbags, glasses, things like that?

Speaker A: Complete waste of time. I mean, you know, look, I've done some of that, so probably in the last 24 months, I started spending money on myself for the, for the, for the very, very first time. Like, uh, it'll make very little difference to your happiness or anything like that. You'll get over it very, very quick. So I think all these luxury items, it might be one of the biggest scams out there. All the brand names, the Louis Vuitton or all of this, you, you don't need it. It's cool and it's fun to get it one time, maybe two, maybe three. Um, but, uh, at the end of the day, it's going to be your relationships. And to me, it's going to be being free of the system and then the quality of the relationships that you have, that's going to really make you happy.

Speaker B: Uh, social Gatherings, going out for dinner, going out for lunch, ordering in.

Speaker A: That, that's a hard one. I'll tell you right now. It's a hard one because, you know, you want to connect with people, but then we sort of feel like, well, we've got to go out to brunch, we've got to do this, we've got to. You want to be left out and all this type of thing, but you can be absolutely hardcore about that.

Speaker B: What would you say?

Speaker A: You have a barbecue at home, you have a sandwich at home, you invite, invite, invite, you know, invite a friend, go, go, you know, with your friend at the gym and then invite them home, have a protein shake at home. There's so many other things you can do than blowing money out of the restaurants.

Speaker B: Okay. Other things like health insurance, insurance, things like that.

Speaker A: Yeah, I mean, there's certain things that you need. Like, I think health insurance is an important one like, to have. So, um, yeah, but for me, just, I think people know innately where they're blowing their money. You know, uber eats, eating out, social, um, events, rewards. There's a difference between, you know, a beer and a brand new handbag, you know, luxury handbag. There's a very, very big difference.

Speaker B: Uh, are there any other things that you think that people should look at to, you know, reduce costs and increase cash flow?

Speaker A: Uh, no, I think that, I think those are the main, those are the main areas.

Speaker B: Have you seen so many, uh, interesting things that people have done for side hustles to make extra cash?

Speaker A: Um, we recently had a client that was doing some music lessons on the side that provided them with actually quite, quite a large chunk of income on top of their main, main source of income. That's probably all I can think.

Speaker B: I used to go to the, um, Salvation army and I would crawl, uh, around to try and find wood, things made out of wood, and I would send them down in my garage and lacquer them and sell them.

Speaker A: That's, that's.

Speaker B: I was making like 6, 700 bucks a week.

Speaker A: Man, that is, that is good. That, that's a, that's a big chunk of money.

Speaker B: Yeah. It would take me like a whole Saturday. Yeah, but it was like 700 bucks for a Saturday. It was pretty good.

Speaker A: Yep. But, you know, you know, I used to go down to the Salvation army with my mom to be able clothes for my kids.

Speaker B: Oh, I love that.

Speaker A: You know, we, you know, I've got four kids and to deck out one kid for like one year, you're talking thousands of dollars. If you're buying brand new school uniform, sports uniforms, shoe, all this type of thing. So, you know, we'd be down at the Salvation army and you know, 20, $30, we just have a full, full suite of clothes.

Speaker B: I love that. I love that. All right, so moving into investments and uh, having a good investment plan. What, what should someone do to set themselves up to do that?

Speaker A: Yeah, look, you gotta, you gotta have an investment plan. So I think, you know, try and get as much advice as you can, try and get as much information as you can, read as many books as you can, and then you gotta figure out an investment plan. So is it gonna be property shares, business crypto, different things like that? You just gotta, you just gotta work that out. Now, of course, I'm a bit biased there. Um, you know, my clients and my businesses all around investing into, into brand new property. And so like, that's, that's what I do. But you know, like, I've, I've looked at a lot of different things over my time and I think that what you need is, in terms of your investment plan is you need a guaranteed pathway to your 3 to 5 mil. So you set that up first. And it should be boring, it should be safe. There should be almost no risk or very, very little risk. It should be very, very predictable. There should be no way on that plan where maybe you get hit with a huge amount of money that could really set you back or really sink you. Yeah. And there should be no, no torpedoes in that plan that, that would sink you and send you to the bottom of the harbor. And that plan typically is going to be a 10 to 15 year plan, very boring plan, very slow plan, very predictable plan. Once you've set that up and that's accommodated for, then you can start doing some, some other things. Like maybe you'll take some different risks and different things and do different things. But I think you need the 100% guaranteed plan that if you wake up in 7 years, 10 years, 12 years, 15 years, you'll have your exit number, your freedom number, you'll have your 3 to 5 mil.

Speaker B: What do you think that does for someone's psychology when they've gone from not having a plan like this to, let's say they're waiting 10 years, but they know that it's going to happen. What tends to happen to someone's psychology?

Speaker A: I have found, you know, I've got 350 staff now, so I've been very, very blessed to be able to work very, very closely with a lot of different people and Understand what's motivating them. Now, some people react extremely well to having that certainty in that backup plan. It makes them feel at ease. It frees up their mind, their creativity and their energy to go off and do other things. Other people will then use that as an excuse not to try hard and to relax and be comfortable and go, well, I've got that. So now I'll bludge and I won't realize my, my full potential. So I think you should reflect upon, like, what sort of person I am. And, uh, another thing that I like about property is it's actually not, it's not liquid. So, you know, if I'm investing in shares or something over here, uh, if I'm tempted to do something with my money, an opportunity pops up. Someone asked me to invest in this. Um, all my friends are going overseas on a European trip. Um, Grant Cardone has a new, a new, a new conference and he's charging 40 grand for it. Oh, I want to go to that. I can't access the funds. So I like that about property, that it's sort of locked away and so you can't be tempted to access it. So I think in terms of your investment plan, um, setting it up, how you're going to react to it, in terms of your mindset, yeah, you just got to really know who you are and then just consider the pros and the consistent.

Speaker B: Now, with your, um, conversation around debt, you said you want to maximize safe debt.

Speaker A: Yeah.

Speaker B: Can you explain what you mean by safe debt and why you would want to maximize it?

Speaker A: Typically, where can you get a better return on anything more than 5, 6, 7, 8 or 9%, whether it's, that's safe shares, share market, business returns, bonds, property, you're not getting 20, 25% returns. If something's going to give you 20, 25% returns, it probably comes with a lot of work, a lot of risk, a lot of expertise. So for your safe plan, for your 3 to 5 million exit plan, um, you typically only going to be looking at returns between those numbers. Now, a 5% return on 100 grand is only 5 grand. So if I'm investing 100 grand, 150 grand, I'm getting 5, 6, 7%. I won't hit my 3 to 5 million for 30, 40, 50, 60 years. I'm dead and gone. But a 5% return on a million dollars is 50 grand. So now, now we're getting somewhere. It's 50 grand. That's, that's, that's pretty good. Um, 5% on 2 million, it's a hundred grand. So. But I don't have the million dollars. I've only got 50 grand or a hundred grand. I don't have a million dollars. Well, the great thing about property is you can leverage. So I can go to the bank and say I've got a hundred grand, you give me 900 grand. And the bank, if you ask, go into a bank and say give me 900 grand. They're gonna send you packing. I want it for my business. Get out of here. I want it to invest in the shares. Get outta here. I want it to do this, do that. I wanna buy a franchise. Get outta here. But if you say to a bank I want 900 grand to put into the property market, the bank's gonna say what property? How much are they asking? And if the bank agrees with the valuation on that property, they'll give you the 900 grand. So it's the easiest way to get debt. Now that 900 grand now is a debt to you. Um, it's in the property market. Now. The, the only last place you can do negative gearing and the only last place you get the capital gains discount is brand new property. I'm, um, biased that way cause that's all I invest in. But let's say it's in brand new property, you can negative gear it. You're gonna get 15, 20, $25,000 tax return in year one. You got the rental income plus the tax man paying off the debt on that property. Maybe you contribute 50, 100, $150 a week to holding that asset. But now you've got an asset of uh, 1 million, 2 million, 3 million. Growing at 5, 6, 7%. That's the only way you'll get 3 to 5 million in 7, 10 or even 15 years for the majority of people. So it just simply comes down to what are your options to get that amount of money. There are very few options for an individual or a family making between 100 grand and 300 grand. There's very few options for people to get that exit money in 10 years, 3 to 5 mil any other way except for taking on debt. And the only place you can safely get debt from the bank is in property. So it all, it all comes back to that.

Speaker B: What else should people think about when they think about co investing with a bank?

Speaker A: I mean, look, there's a lot of rules around the finance. You know, there's cross collateralization, there's all these different rules. So you've got to be dealing with professionals, um, really good um, uh, property lawyer. And you should have a really good, um, finance team as well to make sure that you're signing all the correct contracts in the correct way and the loan is structured up the right way. So the banks have made a lot of mistakes. Banks have really, really bad contracts. Um, sellers have really bad contracts. Builders and developers have really bad contracts. You've got to have a really good team around you to make sure you're entering the right loan, right terms and conditions, um, the right fees. Like I'll give you a quick example. You've got comparison, um, rates versus advertised interest rates. So a lot of people know what that is. So you just gotta be very, very careful about what it is that you're signing, but then also the structure of how you're entering the agreement. Are you buying through a trust? Are you buying through a company? Are you buying in your personal name? A lot of people get that wrong because you're dealing with big business and big business always want to come out winners. So, yeah, the banks are helping me to invest, but you've. I also look at the banks as well. You're helping me, you're facilitating me, but you're also the enemy. Because if you have any opportunity to extract more profits and money out of me, you will. Same with the seller. If you can. If you can rip me off, you will. So I'm going to do everything possible. I'm going to assume you want to rip me off. And so I approach all my interactions like that, like highly skeptical. You're a bad person, you want to rip me off, you want to take from me, you want to take the food out of my children's mouths and you wouldn't care and you're heartless. So I take that approach to all the different, um, parts in the system.

Speaker B: Why that's a skill or potentially a benefit to think of people like that. Like, I'm going to go on the market, the bank's going to try and screw me, the seller's going to try and screw me. I need to come out and make sure I'm providing for my family. Why does that mentality help someone like yourself who's an investor?

Speaker A: The issue is with doing a lot in business, in investing, there's a lot of contracts. Contracts have a lot of detail and a lot of hidden meaning, and it's not a language that the everyday Aussie understands or knows. And they're a lot smarter in the transaction. They've been in the game decades and decades and decades. And they know also, even if it did go to court, what will win, what won't. So they know how to position themselves on the strong side, on the upside, and give themselves all the options and all the room to move and give you none. And so knowing that, um, and knowing that what they care about most is their bottom line. So then I've got to, I've got to predict mine. So I think having that, um, knowledge, and that's why I spend, even to this day, I spend so much money on advice. Um, you know, I'm part, you know, not partnered up, but I'm a client of one of the big, uh, big four accounting firms. The amount of money I spend with those guys is ridiculous. You, you wouldn't understand how much money I spend with them. But what, what I get from that, um, advice, it helps me, helps my clients.

Speaker B: The last two here are amplify your returns and then eliminate the debt.

Speaker A: Yeah. So you got your investment plan, you want to amplify those results. Look, this all comes down to data. So whether it's going to be shares, it's going to come down to data, um, and knowledge of the data and understanding of the data and the assumptions that are going in, um, crypto, whatever it is, even business, it all comes down to the, to the data, the feasibility studies, the marketing plans, those different types of things, the sales team, whatever it's going to be with property investing, it's no different. So because we live in property, we've got an image of property, we look out into the market, we might drive through a suburb, we might see a property. And so it's very easy to see property as property and not see property, uh, as a vehicle to get that 3 to 5 million. So essentially, uh, you'd be very, very surprised, but most of the property analysis I do on individual properties, I don't even have an image of the property, it's just a spreadsheet. So I've got details of the property and yeah, I do have the images and I can look at them, they're all there. But typically it's a spreadsheet and then I've got all the research behind it. So when I founded, uh, Freedom Property Investors, I'm a co founder. My co founder's Liana Pan. Now she's a data scientist, uh, she's an actuary. Um, I'm no newbie to numbers. If you look at my career, I'm very good with numbers. I'm a bit of a expert with numbers actually, in terms of forecasting and doing different things. But Liana being An actuary is at a whole other level. So to amplify your returns, you've got to have run all of the numbers and you've got to understand cause and effect as to what is going to give you the highest rate of return. So there's a few things you've got to consider with your exit plan. 3 to 5 mil, or whatever the number is for you. You've got to say, well, how much funds am I going to invest for how long will I invest them? And what is my rate of return? And so it's those three numbers, you times all those numbers, that will give you your outcome. So if I invest 1 million for one year at a rate of return of 10%, I don't get very far. But if I invest 5 million for 20 years and get a rate of return of 7%, that's a huge amount invested, a lot of number of years, and a very good growth rate, I'll have a massive amount of money. So the key one there is the rate of return. So the bank's gonna help you with what you can invest and also your income, your borrowing capacity and all of that. How much can I invest? Then you've got, um, the length of time that you're gonna hold the assets. Well, you can determine that. And then you've got the rate of return. Rate of return or amplifying your returns is gonna come down to your knowledge of the property market, your knowledge of where to invest, when to invest, the type of property, what to pay for the property, and then all the data surrounding that particular area. So it's actually a huge amount of work. So Liana, pretty much that's what she does full time. She's running numbers. Over 15,000 suburbs. She's currently trapped. She was just in Queensland. She's down. So what she'll do, she'll run all the numbers. She's actually got 20 data scientists, um, based all around the world that help her compile all of the data. Our clients actually get really thorough, um, analysis, all the different locations that they could potentially invest in. But Liana is ultimately making the decision we should be in this area, this location, at this time, at this price, in this type of property. That's what she's doing. I typically do the negotiations on the deal. So she'll equip me with all of that. Her and I will go out, we'll sit down with a seller or property, a landowner, land developer, ah, um, a builder, and then we'll negotiate with them the prices that our members or our Clients will purchase those properties for. And so if you've got that data driven approach, you can amplify, you can amplify your returns.

Speaker B: Now one thing you mentioned earlier was that you do a lot of new property.

Speaker A: Yes.

Speaker B: What's people's argument as to why they should stay away from new property and what's your counter argument?

Speaker A: Yeah, well first of all I'll just say old property, new property, I don't care because like why even divide property by old and new? Your question shouldn't be is it old, is it new? Your question should be is the demand for this property? Am ah, I buying this property at the right price? What's the maintenance on this property gonna be? What rent can I get on this property? Yeah. What is my forecasted growth rate on this suburb and this particular property? So those are all way more important questions as to whether it's new or old. Who cares if it's new or old? So I wanna ask those questions. Now when you, if you can get a yes on all of those questions and other questions. We've got about 300 uh, points that we check for a property and a location. But if you can get yes to those questions, then potentially that property is worth invest questions. Now the next question is going to be um, what is the cash flow on the property going to be? This is highly important because you got funds invested, you've got debt, you've got to repay that debt back to the bank, which means you got a weekly and a monthly holding cost on the property. Now fortunately or unfortunately, the truth is that the average holding cost on the average investment property in Australia under the new rules as announced by the Labor Party is gonna be somewhere between three and six hundred dollars a week to hold an existing property or an old property because of the removal of negative gearing. Whereas on a brand new property it's gonna be somewhere between 50 to about $150 a week for the same sort of property, same sort of size, one being old, one one being new because of the tax changes.

Speaker B: You think they're trying to incentivize the new properties then because of that?

Speaker A: Yeah. So the theory is, although I don't agree with their theory, their theory doesn't work and I don't believe it's the reason that they've done it.

Speaker B: What do you think their theory is and why is it um, wrong?

Speaker A: So their theory is that if they make it more attractive for investors to go to brand new, then more investors will go brand new. Number one, most Aussies are very Afraid at investing in a brand new property. They are because, you know, I've been in this, I've uh, been helping clients, uh, invest in the brand new property for 14, 15, 15 years now. And nine out of 10 Aussies do not want to invest in the brand new property because they've been conditioned so long to think that the traditional home, big, big bit of land, um, you know, closed line in the back four bit, that's the ideal property, which is actually not statistically true. But anyway, um, Aussies don't want to do it. That's number one. Second thing is banks control um, the valuations on the brand new property. So there's an argument out there. Well, you know, thousands of investors are going to flood brand new, brand new prices are going to become, we're going to have a two tiered market. We're going to have um, old property and new property and new property somehow will be overvalued. That can't happen because the system doesn't allow it, the financing doesn't allow it. So that will never happen. The third thing is, even if Elon Musk donated a trillion dollars to the Australian government to build hundreds of thousands of homes, we couldn't do it. We actually don't have the land to do it now. We have the land. But I'm saying build ready land, build ready land. It uh, costs billions and billions of dollars to get land ready to build on. You need roads, you need electricity, you need um, sewage, you need all of these uh, things to go in and then you need infrastructure, you need highways. So we don't, we don't have any of that. So even if you've got all this demand for brand new, which we won't have it. But even if you've got all of this demand for brand new, how are we going to build it? We cannot, it's impossible for us to, to build it. We don't have the uh, labor, we don't have the tradespeople. We don't have um, the financing. In fact, post the May budget, this is a very good example. Post the May budget, one of the biggest builders and developers, uh, here in Sydney and nationally said we will now no longer build any new homes or any new apartments in Sydney because of the tax settings and the government regulation, we're out. So, um, I will guarantee you, and I will stake my reputation that over the next 10 years we will not one time hit the government's target of building 240,000 homes in a year. That cannot happen. It cannot physically happen. Um, and the market forces and dynamics won't allow it to happen. Now, what do I think's really going on here? Have a think about this. The building construction industry of residential property is somewhere between 3 to 6% of our GDP. The building and construction of, um, residential property, that is a huge chunk. What is the biggest interest group besides developers and builders? What is the biggest interest group for that? It's the unions. Who are the unions closest to Labor Party? Who funds, basically funds, owns and operates the Labor Party. A big chunk of that is the unions. So you can imagine the Labor Party sitting down and putting these tack packages in front of the unions and saying, well, we're going to scrap. Um, we're going to harm the building construction industry. Uh, that wouldn't go down well. So probably they haven't really done this because they believe it will create new supply. Because here's the thing, Dane, in the treasury papers for budget night, they admit the government, the treasury admits these tax changes will result in less supply. The treasury papers say that. It's not me saying it, it's not a commentator saying it. It's Treasury. It's the government admitting the tax changes will create less supply. Let that sink in. So why did they do it? Well, they're just trying to protect that industry for the interest groups. Now, that helps. That actually helps my business a lot. Like, my inquiries have gone through the roof since budget night because the only really last legal tax loophole left in Australia for massively reducing your taxes, investing into brand new property. That's the last loophole that's left. They're even closing it up. Um, different loopholes, like with business and trust and all those types of things, there's nothing there anymore. So my inquiries have gone up. Business for us is really thriving. But despite that, I don't agree with the May budget and the changes they've made, all the reasons why they've done it.

Speaker B: What was the first thought that you had when you saw the new budget?

Speaker A: Yeah, I laughed. I laughed because it was so ridiculous. Uh, I think it's so bad for the country. It wasn't a shock or a surprise for me because we knew what was coming. Now, because I'm inside the industry, I probably knew a lot more earlier than what was coming through the news. So we probably knew nine months before what they were planning. But also, if you just look back and you know, Liana and I are sitting down because we're always trying to forecast for our clients, our members, and for our own investments, we're sitting Back, we're thinking elections coming up. And a lot of people ask me, for example, on my YouTube channel, why do I talk so much about politics? Stay out of politics, crew. Talk about property, talk about money. Well, government policy is probably half of the impact on what's going to happen with the economy and with you. For example, the May 12 budget has totally changed the way people will invest. That's a big movement. So Liana and I, we're looking at, uh, we say, hey, the budget's coming up. What's going to happen now? We knew for the last two elections, the Labor Party tried to bring the exact same changes, actually almost the same changes as what they announced on May 12. So we know that for probably about a decade they've wanted to make these changes. So that's why they've gone down the path that they have. Because what we didn't hear at the budget was, we're going to eliminate debt, we're going to pay down debt, we're going to cut spending. We didn't hear any of that. We just heard we're going to raise taxes across the board.

Speaker B: Let's say that someone's doing the best to look after themselves. What advice would you give them to help people around them accomplish the same thing?

Speaker A: Yeah, I think just, uh, you know, be. Be that example. Be. Be that example. Uh, share strategically with those around you, with, uh, what you're doing, especially your family, your immediate family, uh, and. And your friends. But just be careful who you share your plans with as well, because many people will try and shoot it down. So, I mean, you've got to make that decision for yourself.

Speaker B: Last question.

Speaker A: Yeah.

Speaker B: This whole show started off with me being a guy who created an agency, um, but I find myself obsessed with taking agency. When you think about taking agency, taking massive action towards a goal, what does that mean to you?

Speaker A: Yeah, agency is a really key word in my life. I won't give you the whole boring story about it. Yeah. But agency is about. We've got the ability to choose, and the ability to choose has a lot of responsibility. Uh, so, um, and also, agency is very, very important to me. I mean, if you look at the name of my company, Freedom Property Investors, Freedom's about freed, and agency and freedom go hand in hand. So it's a very important concept, um, and word in my mind. Yeah, I would say that, uh, getting out of the system means you're not in the river, you're not in the tide, you're not being driven by the tide, but you're actually Able to get out of the river, get out of the tide, and not just go with the trends, not just go with, you know, the tribe or the society or the community or the family that you're in. And you're not stuck in the old ways, but you can actually take, uh, that perspective where you come out, you zoom out, you look down at everything that's going on and start to see everything for what it truly is. And then when you can do that, you can start making conscious decisions, all right, what do I need to do differently so that I can have a different outcome to where the majority of people are going? So when, when you say the word agency, that's what I, that's what I imagined in my mind. And, and actually that's, that's been my personal mission, and that's, that's the mission of what I do today. The YouTube channel, the Social media, the clients, the membership, the community that we've got. Um, like, I feel like I'm on. I feel like I've set myself this mission to help people achieve that agency or that freedom.

Speaker B: Scott, it's absolutely been a, um, pleasure unpacking all of this together. There's so many more questions I had, but, um, with understanding how busy you are and how much you're out there doing, I just want to say thank you for being a voice out there in the market. Thank you for giving us Australians that are in the middle of, uh, the middle class, an opportunity to better understand the economy, better understand how to navigate, to support ourselves. And, um, yeah, just a huge advocate for what you're doing. And I think anyone who's listening right now should check out your YouTube, should check out your social media channels, Channels, uh, so they can get savvy with what's happening in the market. But I just want to say thank you so much for coming on, and I appreciate you being here.