Episode Details

We are experiencing extraordinary times with a booming economy and surging property market yet if history repeats itself, most investors won't become rich.

So, in today's podcast, I want to share three lessons with you to help even the odds in your favour. Firstly, I'm going to explain six reasons many property investors don't become rich, and they're probably not ones that you would've thought of.

I would then like to discuss a controversial topic with you - that debt can actually be an asset, not a liability. Of course, not everyone agrees with me, but I hope once you've heard my point of view you will understand why the rich are getting richer because they know how to use it wisely, especially in today's low-interest-rate environment.

And then I'm going to share 5 things that you can do differently to make your future better.

The reasons why property investors don't become rich

Reason 1 – Most people wait too long to start

Many investors are waiting for everything to be "perfect" before they get going.

Which means they never get going.

The longer you wait to get started with your investing, the longer it will be before you get the money, success, and freedom you want.

Reason 2 – Fear stops them

Fear keeps many of us from getting what we want, especially in matters of money.

Some fear taking on more debt, others fear failure and some even have a fear of success.

Successful investors have learned to harness their fears and rather than focus on the negatives, they use fear to force them into positive action.

Reason 3 – Waiting until they know enough

The fear of not knowing enough prevents other investors from getting started.

However, the irony here is that the more you learn, the more you learn that you don't know!

The way out is to recognize that while you don't know it all, and you never will, you do know enough to get started with your investing and you will learn more along the way as you apply your knowledge in the real world, surviving any mistakes and challenges along the way.

Reason 4 – Focusing on linear income instead of passive income

Some income streams are linear, and some are passive.

Linear income is what you get from a job.

Passive income is when you work once but continue to get paid over and over again from work you're no longer doing.

The way to become wealthy is having passive income coming in whether you go to work or not.

Reason 5 – Not using systems for making money

A system for making money is something that takes the emotion out of your investment decisions and makes the results more reproducible.

My preferred system is investing in high-growth property.

Once you create a proven system for making money, there is no limit to the money you can make.

Reason 6 – Not being patient

Warren Buffet once said: "wealth is the transfer of money from the impatient to the patient."

To become a successful property investor requires patience and persistence.

You must not only get started, but you must continue on and follow through.

How debt can be an asset

You were probably taught by your parents to get a good education, a good job, buy a home, work really hard, and pay off your debt.

But, in my mind, that's not a productive use of the equity in your home.

Instead, you should recycle the equity in your home and convert it into productive debt to buy income-producing assets.

The three types of debt

1. Bad debt: This is debt against assets that depreciate in value. Bad debt generally refers to things like credit cards or other consumer debt that does little to improve your financial outcome.
2. Necessary debt: This is the non-tax-deductible debt against your home, but it's something essential that can't really be avoided.
3. Good debt: This is a tax-deducti