Episode Details

This podcast is about more success in your life, whether it's success in property investment, money, or any other area of your life.

We can learn from other people's success, but we can also learn from their failures, and today we're going to learn about some famous last words. Ahmad Imam and I are going to chat about what people were thinking about when they made those blunders, and you'll learn about what not to do so that you can be more successful.

I'm also going to chat with property researcher John Lindeman and talk about some property "pumping and dumping" schemes you should watch out for.

Some famous last words all property investors need to know

"My financial planner called, and he said he has a special opportunity." – The main reason they have a special opportunity is that they stand to make a commission on it.

"I thought I was getting guaranteed high returns." – Project marketers don't need to be licensed, so there's no regulation or restriction on what these marketers can promise, and not much you can do if they don't come through.

"I want to get in now before I miss more of the upside." – You shouldn't allow emotion to drive you, because that creates booms, downturns, and busts.

"We've come up with a new way to mitigate risks." – The biggest risk lies with the investor, and you can only mitigate that with time, knowledge, and a good team.

"Well, it looked like easy money" – There's no real easy money. If it feels easy now, it's probably going to be harder in the end.

"There's very little downside risk." – owning the sort of properties that don't fluctuate much in value is the best way to minimize risk.

"Analysts are predicting high growth for years to come." – The problem with this is that most property forecasts are wrong.

"How can you argue with a booming area that's been growing for 10 years?" – all markets move in cycles. An area that's been booming for 10 years is an area that's 10 years closer to the end of its boom.

"There's too much uncertainty in the world to be investing right now." – If you wait for everything to be perfect, you'll be waiting forever, and in the meantime, you'll miss out on opportunities.

"I'm going to wait on the sidelines until there's more clarity." – This is a good way to miss the best opportunities.

"My brother-in-law has made a killing in this suburb. It's time I jump in." – Taking risks that you don't understand based on the advice of well-meaning but poor advice can go very wrong. Be careful who you listen to.

"It's different this time." -- Risk will never be eliminated, growth will never be limitless, and markets are never fully efficient. When it comes to big, basic principles of investing, it's never different this time.

Watch out for property pumping and dumping schemes

Faced with the prospect of little price growth on the horizon, property investors are starting to see innovative get rich quick schemes being promoted which offer huge returns.

It has always been true that if the property market can't generate a return for investors from market driven growth, then investors can make some growth themselves.

We have traditionally done this by improving the value of our investments through cosmetic or structural renovation or even developments.

But some new investment alternatives have recently emerged, bringing us glitzy promises of high returns from property investment without the need to outlay any significant cash up front.

The risk seems low, the opportunity to participate is high and many of us are sucked in, usually at free so called "investment" seminars.

One clever land banking scheme offers you an easy way to get into the property market with one low upfront cost and the promise of eventual riches. The promoter sells you an option to buy land which is slated for future development, showing you th