Steve book 2017 Final Print Version PDF

THE DREAM STEALER 30 years later … - 49 -

THE DREAM STEALER What do I recommend you do? The answer is simple. You will have to get an agreement from your partner. The best way to do this is to allow them to be afraid. Don’t turn your back on their concerns or try to force them to agree. That will only put unnecessary strain on your relationship and you’ll end up fighting, with each person trying to make the other wrong. No one likes to admit that they are wrong, when they are angry. - 50 -

THE DREAM STEALER Just think of some of the silly arguments you have had with the people you love. Conflict is not the answer. Just tell your partner that you’ve received some great information about property investment. Then tell your partner that you would value their opinion because you really believe that it will benefit you both financially for the better. Try and get your partner to agree to at least attend a seminar with you. After all your partner deserves the right to know what is going on. By attending a seminar they will be able to hear and see the information for themselves and most - 51 -

THE DREAM STEALER importantly they will be able to ask all the questions that they wish to ask. Let them get the answers personally, to handle their own fears. If that does not work because they feel they do not have the time to attend a seminar, give them a simple book on property investment, such as this one and get them to read it. Make a game out of it. Let him or her get the knowledge step by step until they’ve grasped it for themselves. Then they will share your dream. - 52 -

THE DREAM STEALER Over the years I have spoken to many people who have shared their dream stealing stories with me. The following is one that I remember well and thought it relevant. A gentleman who had attended one of our seminars came up to me afterwards and told me this story. He had won some money in the Lotto in the 1970s, about $120,000. He had located a small block of units in Merrylands and they were selling for one hundred and twenty thousand dollars. He went to his accountant with his property investment proposal to seek his advice and guidance. His accountant looked over the proposal but advised him to rather go for a shares investment that would pay him a regular income every year for the rest of his life. Today, he still has his $120,000 in shares and is receiving a dividend each year, but he was extremely frustrated as that small block of units are now worth over $1.3 million dollars. By following the advice he had received from his accountant who was not an experienced property investor, he had missed out on an opportunity to buy that block of units. - 53 -

THE DREAM STEALER Today his $120,000 is not even enough for a deposit on them. In reality he had missed the boat. How many times have you heard of similar hard luck stories from one of your family or friends who had taken some bad advice? So when is it the right time to invest in property? My advice is – when you can comfortably afford to do so and it’s not going to cause you any financial stress. It is as simple as that. - 54 -

THE DREAM STEALER So your next task is very simple. Task: Take a blank piece of paper and draw a line down the centre of the page; on one side write positive friends, on the other side write negative friends. Be honest with yourself as you start on your personal journey to wealth. Never, under any circumstances, share your dreams with a Dream Stealer, only with those people who will support you. You may believe this is a minor point but believe me – it’s not. 94% of Australians retire broke and I believe the majority of them lost their dreams by sharing them with a Dream Stealer. - 55 -

THE DREAM STEALER Your dreams and goals are your most precious assets – protect them carefully from a Dream Stealer. - 56 -

THE DREAM STEALER Rule: A Dream Stealer is anyone who intentionally or unintentionally knocks you off your course from becoming wealthy or achieving your goal. “Well, what is a relationship? It’s about two people having tremendous weaknesses and vulnerabilities, like we all do, and one person being able to strengthen the other in the areas of vulnerability and vice versa. You need each other. You complete each other, passion and romance aside.” — Jane Fonda, 1937~ - 57 -

Chapter Four Why Bother Becoming Wealthy? Lets think about it, why bother becoming wealthy? You could just carry on working day after day, week after week, month after month and year after year until you reach the retirement age of 65, just paying the bills, without ever attempting to create any real wealth in your life. - 58 -

WHY BOTHER BECOMING WEALTHY? Now this wouldn’t be a problem if your pension turned out to be $1,000 or more per week. But sadly, right now, the average pension in Australia is around $380 per week. That’s right it’s only $380 per week. Now it should not take you too long to work out that that isn’t a lot of money to survive on. Let me add some more fuel to the fire. - 59 -

WHY BOTHER BECOMING WEALTHY? You now know that over 94% of all Australians will retire broke, surviving, if you can call it that, on $20,000 per year or less. Now stop and let’s really think about this for a moment, here we are in Australia, supposedly the “Lucky Country” – where most people can get a job, work hard for up to forty years and somehow then end up retiring broke! Far-fetched you might say. I thought so too but, believe it or not, the statistics do not lie and 94% of us are still going down that same path. Now let me ask you this question. Could you live on $380 per week? Now will your expenses drop or increase when you retire? Just think, at this point you’ve worked hard all your life, you’re 65 and retired with an extra forty hours a week in which to spend your money. Combine that with the fact, the average person spends over twenty years in retirement, you’re going to have a lot of extra spending hours on your hands. - 60 -

WHY BOTHER BECOMING WEALTHY? Right now you may already own your own home, but when you retire you may not own it for long, if you end up relying on the pension as your only source of retirement income. There would be nothing worse than having to sell your family home to provide those extra funds required to support you during retirement. - 61 -

WHY BOTHER BECOMING WEALTHY? Will you be in a position to really enjoy your retirement? Sunday lunch with your children and grandchildren, maybe spoiling them. Overseas holidays each year, exploring new and exotic locations. A game of golf with friends. - 62 -

WHY BOTHER BECOMING WEALTHY? A new car every few years. When the children need some financial assistance, will you be in a position to help? Can you do all of that on $380 per week? What about your everyday living expenses – food, electricity, gas, rates, petrol, gifts, car registration, entertainment, etc. Retirement should be a time to start enjoying life. A time to be able to relax, have fun and spend time with family and close friends. It is not the time to have to sell your family home and have to find another cheaper house in a new neighbourhood because of a lack of retirement funds. - 63 -

WHY BOTHER BECOMING WEALTHY? Sadly this situation is all too common. Do you want this to happen to you? Okay. Okay. You may be young and see your retirement as “far off” and you’ll probably not be worried about it just yet. I understand but I have in my property career, met many parents who had to sacrifice their holidays and quality time that they should have spent with their children, working extra hours just to be able to pay off their mortgages. - 64 -

WHY BOTHER BECOMING WEALTHY? Then, when their house was fully paid off and they had the extra time and money to spend on their children, where were the kids? They’d moved on to have their own kids and were busily paying off their own mortgages. Do you really want to live life like this? So now you have to decide. Do you want to create wealth for your family and yourself, or not? Life has many choices. The choice to be wealthy is a choice and the choice is yours alone. Now creating wealth takes more than just thinking about it. The idea has to be followed by an action to achieve your goals. This concept is not too dissimilar from someone who decides that they want to become a doctor. They follow up that desire, by attending classes and going to university for as many years as it takes. - 65 -

WHY BOTHER BECOMING WEALTHY? If you want to be wealthy, thinking about it will not bring about the wealth you seek. You need to take action – the earlier the better. It is as simple as that. If you choose to become wealthy, great! You now have to follow your choice through with a definite action plan. - 66 -

WHY BOTHER BECOMING WEALTHY? Being Broke is a Choice Most people believe they are broke because of circumstances. They blame their parents, education, lack of opportunities, partner, government, etc. The truth is they will always remain broke until they realise that creating wealth is their responsibility and that it is no one else’s responsibility to ensure they become wealthy. - 67 -

WHY BOTHER BECOMING WEALTHY? It’s your choice not to find out how to gain the knowledge on how to become wealthy; it’s your choice not to become an investor; it’s your choice not to attend that wealth seminar; it’s your choice to be afraid to take a chance. The only difference between the wealthy and the poor is the application of knowledge. The wealthy have the knowledge and apply it. You can gain the knowledge, if you wish to. You can apply the knowledge, if you wish to. So, remaining broke is a choice. It’s your choice, when you say it’s easier to sit at home and do nothing than to learn about creating wealth. “Don’t wait for a light to appear at the end of the tunnel, stride down there and light the bloody thing yourself.” — Sara Henderson, Australian writer - 68 -

Chapter Five Why property? Hopefully by now you have decided that you want to become wealthy. If you haven’t, stop now and read the first five chapters again. If, after that, you still feel that you do not want to become wealthy then that’s fine. The choice is yours. If you have decided that you want to become wealthy, the first thing you need to do is sit down and list all the possible ways that you could create wealth and review them carefully. So what choices do you have to become wealthy? - 69 -

WHY PROPERTY? The following is a list of some of the ways that I could think of, that people can use to help to create wealth in their lives. If there is a method that I have left out please do not hesitate to let me know, write to me at: I am all ears when it comes to income-earning possibilities and always willing to learn. In making this list, my intention is not to ruin anyone’s dreams - far from it. If there is currently a financial path that is working for your family and you, then do not change it. Rock or Pop Star - 70 -

WHY PROPERTY? Okay so you’ve got the voice of an angel, you can play a musical instrument like there is no tomorrow and you’ve got the charisma that is going to one day fill the Royal Albert Hall. Good luck. Then you’re on your way. But there are no guarantees as you step out into the arena of record producers and promoters that sit in the wings, waiting to control your hard earned dollars that you’ll make it. The Lotto No one knows. It could happen to you. It could happen tomorrow. It could happen next week. It might happen when you’re sixty or seventy. It might happen……. or it might not. - 71 -

WHY PROPERTY? Business Ventures Do you have a business mind? Do you have a business idea that is going to launch a thousand ships? Can you get hold of the capital that will be needed to get your venture off of the ground? All of these and many more questions need to be answered before you can set out on this path with enough certainty to know that you will succeed. But the scary thing is that the Australian Bureau of Statistics tells us that 4 in 5 businesses go broke in their first 5 years. So, if you start a business venture make sure you know what you are doing. - 72 -

WHY PROPERTY? Network Marketing Superstar I do not deny that there have been millionaires made in this field. Some pretty incredible success stories have emerged from out of the network marketing boom and many motivational speaking “gurus” have lent their support to this recent 20th century phenomenon. But if you look at the amount of people who join these businesses as compared to the amount that make it right to the top, you will see that this road can also be paved with thorns if you do not have the persistence to make it work. If you think this is your answer to financial independence, then good luck. It has worked for some. It may work for you. - 73 -

WHY PROPERTY? Movie Star Granted, there have been a few stars that have come out of Australia and boy they have made it very big! So if you’ve got that Shakespearean feel of emotion within you and you feel that you can make it, then also good luck. This is definitely one of the ways to become rich. Once again the amount of people that make it compared to the amount that venture into the jaws of Tinsel town? – I will leave you to find that out for yourselves. - 74 -

WHY PROPERTY? A Specialist in a Specialised Field Those who can deliver a needed and wanted specialised service will always do well. But if you sit down and look at the financial position of professionals, you will discover a great number spend what they earn on supporting their lifestyle. Remember, it’s not what you earn that counts, it’s what you do with your earnings. Funnily enough if you were to investigate, you would find that the prudent professionals have already invested in a property or two along the way. - 75 -

WHY PROPERTY? Stocks and Shares Once again there have been some people who have become very rich and successful from this industry. I personally do not have the knowledge to play in the share market but I have realised one thing – when someone wins at this game someone has to lose. I know if I want to send a company broke, all I have to do is to buy their shares. It seems every time I buy shares they start to nose dive the next day. Savings Nobody that I know of has become really rich from saving in the bank or in superannuation. - 76 -

WHY PROPERTY? Want proof? Just look at the statistics of the amount of people who are retiring broke in Australia – and this in one of the best economies in the world! It is virtually impossible to become rich by just saving alone. Inventor Now there is a way to make a packet of money. Invent something that fulfils a specific need. - 77 -

WHY PROPERTY? Simple? – William Kellogg, recognise the name? Well, it took him 10 years to convince his dominant brother to take up the baking mistake he had made, which created Corn Flakes, before he became successful. – Levi Strauss was sitting with an awful lot of denim tent material that he could not offload on the miners, at any price, until he had a brainwave to recut it and sell it as trousers, And the list goes on. So if you have a great idea, some new concept or an invention, fantastic! Go for it. Property Investor - 78 -

WHY PROPERTY? Did you know that 87% of the world’s millionaires come from the field of property investment? That’s staggering. Why is that? I guess you have to look at property’s history. Residential property in Australia has doubled in value every 7 to 10 years on average. That’s right. It’s doubled in value, without fail, every 7 to 10 years! And that has been going on religiously for the last 150 years. During that time in Australia we’ve had two world wars, two minor wars, stock market corrections, crashes, Labor governments, Liberal governments, high interest rates, low interest rates and through all these adversities, property has still doubled every 7 to 10 years! - 79 -

WHY PROPERTY? Property does not care whether you are a housewife, have a terrible singing voice, have few business skills or can’t predict one single Lotto number. It will still look after you and will keep on working for you. I remember a great ANZ bank TV commercial, where the guy drives to work early in the morning and arrives back from work late that same night – and the caption was – “The property earned more money that day than he did.” I thought, “How true that is”. What’s ironical is that most people reading this book who are worried about becoming property investors are already successful investors. They’ve bought their family home and over the past 5, 10 or 20 years have already earned unbelievable capital growth and they did it without even trying. The problem is that the family home provides no income and its purpose is more to put a roof over your head than to be a money maker. All that I’m suggesting that you do, is what you have already done, simply go out and buy another property. Only this time, you will be able to spend the profits. - 80 -

Chapter Six How Property can Change Your Life Did you know the average family is only 3 or 4 pay packets away from being broke? - 81 -

HOW PROPERTY CAN CHANGE YOUR LIFE What I mean is that, if they lost their jobs and there was no social security of any kind, no friends or family as backup to lend them money, within 2 to 8 weeks of becoming unemployed they would be totally out of money. Unable to pay the mortgage, school fees, car payments or even buy food. They would most probably have to start selling off any assets they owned. It’s a really sad situation and you can understand why so many families are under so much financial stress. The idea of getting into more debt to purchase an investment property is less than appealing. But if they only just opened their eyes and took a closer look they might see that taking on more debt could be their knight in shining armour. Funnily enough, it will be the taking on of more debt that will eventually resolve their current financial situation. - 82 -

HOW PROPERTY CAN CHANGE YOUR LIFE To get off the treadmill of living from week to week, you have to take a calculated risk. And property is one of the safest investments you can ever make. Provided you follow some simple principles. There is an old saying, “You don’t have to be rich to be an investor, but you have to be an investor to become rich.” Think about this, we have already established that residential property located in metropolitan areas of Australia, on average, double in value every 7 to 10 years. Now, I find it very amusing to see a bunch of accountants, financial analysts and financial planners all standing around arguing over whether the property is negatively geared1, positively geared2 or neutrally geared, what is the rate of return3, what is the yield4. In my opinion, that doesn’t really matter. All that is needed to be known – after all the rental income has been received, including any tax benefits, minus all the costs of ownership – is how much do I need to put in every week out of my pocket. 1 negatively geared: Where income is less than expenses. Giving the landlord a loss - used for tax relief. 2 positively geared: Where income is greater than expenses. Giving the landlord (property investor) a profit. 3 rate of return: Income is greater than expenses. Giving the landlord (property investor) 4 yield: A profit obtained from an investment. - 83 -

HOW PROPERTY CAN CHANGE YOUR LIFE If it’s $500 per week it’s not a good deal. If it’s only $60 per week it’s a fantastic deal – go for it. It’s as simple as that! Advisors can lose sight of the big picture and often get tied down with all the details, for that’s their job. However, none of them can disagree that the property will double in value over the next ten years. So now picture this. You invest in a property. Let’s say it costs $500,000 today and we know it will be worth roughly $1,000,000 in 10 years. If you purchased the property on an interest-only loan your profit on that investment would be around $500,000. Sure, you may now have a great boost to your super fund for retirement, but let’s be a little more creative and look at what else you could do. Is it possible, if property doubles every 10 years that in 5 years, at the half way mark, that the $500,000 will have gone up in value by 50% to $750,000? - 84 -

HOW PROPERTY CAN CHANGE YOUR LIFE Your equity being $230,000 allowing $20,000 for the initial purchase costs. Did you know the banks may let you have access to 80% of that equity through a line of credit loan? This amounts to $184,000. All of a sudden you are no longer 2 to 8 weeks from being broke or need to worry about how to pay the bills. In reality, you now have $184,000 in security. If you lose your job you can draw down on your equity to pay the bills until you find a new job. You can use the equity to pay your school fees and that outstanding mortgage, still owing on your own home, could be paid off with your equity at any time. - 85 -

HOW PROPERTY CAN CHANGE YOUR LIFE Daughter’s wedding?... No problem! Car engine blows up on you?... - 86 -

HOW PROPERTY CAN CHANGE YOUR LIFE Buy a new car! Feeling stressed?... Book a cruise! - 87 -

HOW PROPERTY CAN CHANGE YOUR LIFE Are you starting to get the picture? Just one investment property that has gone up in value over a few years can dramatically change your quality of life and help you get off the treadmill. Can you imagine how a portfolio of 3 or 4 properties could change your life? Do you now realise that property is just a financial vehicle? It really doesn’t matter if it’s a low-rise5 unit, town house6, villa7 or duplex8 in the north, south, east or west. It doesn’t matter which property you start with. Just get started. 5 low-rise units: Less than 3 floors. 6 town house: Houses built in a row and joined together. 7 villa: A detached single storey house. 8 duplex: A house divided into two separate units for living purposes. From Latin meaning two + flat. - 88 -

HOW PROPERTY CAN CHANGE YOUR LIFE But watch out for procrastination9 I was at a seminar in Sans Souci in Sydney in 1992. After the seminar I spoke to a man named George. George told me he was looking for a good investment property and had been looking for 6 months, but he felt developers were asking $5,000 to $10,000 too much. I met George again in another property seminar in 1998. I asked him how many properties he had now. To my surprise he said, “None”. 9 procrastination: delay doing something that you ought to do. - 89 -

HOW PROPERTY CAN CHANGE YOUR LIFE Amazingly, George was still looking for the perfect investment property. In his view the developers still wanted $5,000 to $10,000 more than properties were worth. In reality, he should have been on his 3rd or 4th property and should have already made a few hundred thousand in equity. I’m sure if I met George today he would still be looking for the right property. His procrastination is stealing his dreams and costing him dearly. I hope you’re starting to get the picture. Just get started – buy just one property. - 90 -

Chapter Seven Getting Started By now I hope you are saying to yourself, this all makes so much sense I’ve just got to get started. But start where? Which property? There are so many choices – land, houses, units, town houses, villas, new, old, under construction, completed, renovated, negatively geared, positively geared, high-rise10 units, low-rise units, commercial…!!! 10 high-rise units: referring to multi story, usually meaning above four floors in height - 91 -

GETTING STARTED There are many books on property investment recommending the different options above. The truth is they are probably all right. One of the greatest things about property investment is that there are many ways to make profit out of it, and all the property options mentioned here will probably double in value over the next 7 to 10 years, provided they are located in a suitable area. So what are suitable areas? In most cases, it’s close to work, a CBD11 areas, shopping, cafes, gyms, 11 CBD: Central Business District - 92 -

GETTING STARTED churches schools, - 93 -

GETTING STARTED railways buses night life, entertainment. - 94 -

GETTING STARTED Rule: Make sure your investment property is close to the facilities that tenants are looking for. Property selection Some types of property investment require a bit more skill and knowledge, such as developing or renovating. Some will cost you more money than others. My goal in this book is not to teach you advanced strategies. I’m sure you will read more books and learn them as you go. What I want to do is show you some simple, basic ways so you can just get started. Once you are off and running, you will learn new and advanced skills as you go. Skills that will help you increase your property portfolio at a faster pace. - 95 -

GETTING STARTED I recommend you start your investment portfolio with one of these: • House and Land Package • town house, • - 96 -

GETTING STARTED duplex, - 97 -

GETTING STARTED Selecting a property with either 2 or 3 bedrooms, if a Town House and 3-4 Bedrooms if a House and land package. I can already hear you ask the question, why House and Land package, town house, villa or duplex And what about a low or high-rise unit, a renovation deal or a commercial site as your first investment? Units are bad not investments. But I believe there is slightly more risk in these, compared to a House and Land package, town house, villa or duplex. Let me explain myself. High-rise Most high-rise buildings are very impressive. - 98 -