So you've got some pretty shit habits here. Light bulb moment. Sounds like you've walked to the light switch. The next step you is something called delayed verification. You need to change something. I was always more scared of what life would be like if I didn't invest than investing because I knew I'd be markets there about to go off their head. Get into the market as soon as you can. Welcome back to Brick to the Future. I'm Al Lewison here with Ken McClellan. Hey mate. How are you? Good, good. Bit of a different format for us today. We often talk to people about uh sending emails into hello at opencorp.com.io with questions or queries. And today we thought we'd try it a bit differently with some live callers buzzing in with some uh questions for us to answer on the fly. So you've uh you you work in the phone system, mate? No, the team the team's my thing. All right, the team are, so they're gonna slam a few calls in. Alright, so and then what um I just take it on? We we all take it on. Alright, let's go. Hey, Jason here. 32 and renting in Melbourne. Honestly, I feel like I've missed the boat. Everyone around me seems to be buying. I've saved like eighty thousand dollars, but um I don't know if that's even enough anymore. I mean, the properties in my area are going for around 1.5 million. Do I keep saving or should I just bite the bullet and invest somewhere cheaper? Uh I'll I'll jump in first. Uh Jason, what is that? Jason, uh great effort on getting started with saving. It's pretty challenging. Uh life's a full life's expensive, so that's a great start. You're saving the money. My my answer typically is to people you get in the market as soon as you can get in the market. Um, sometimes that means looking for different property types. Uh, and the reason I say get in the market as soon as you can, because markets grow at typically 8% per year, and it's very hard to keep increasing your deposit by enough to get into the market. Probably doesn't give you the answer to start straight away, and Ken might have a different view on it. But typically my response is do what you can to get in the market as soon as you can. Yeah, it sounds like you're sitting on the fence a bit, uh Jace. J-Man. Um but look, I'll look I'll be straight to the point. You're in a similar situation that I was when I started investing. I've been in my 20s, you said you were 30-ish. Um, different figures, but similar situation. So I was living in uh you know, in middle ring suburb in the eastern suburbs of Melbourne, um similar property prices were probably double what I could afford. Uh so I moved to an outer suburb called Bayswater, and as I said before, it was bullshit, there's no bay, no water out there. So um, but I could afford the property out there, I then rented that out and moved back in and live beachside. So it's a matter of if you think about it now, so our clients' properties on average are going up just under $10,000 a month at the moment with the growth rates in the areas that they're in. Um we track all of our clients' growth rates across every one of our clients' properties. If you're thinking of that growth rate, um just to keep up with the deposit, yeah, 20%, you've got to save two grand a month just to keep up with the increase in pricing. So it's getting harder and harder, and especially with the markets they're about to go off their head at the moment with uh with price growth. And I don't I don't usually give short-term predictions, but um if you say I've got rose-colored glasses, um, yeah, they're like those big Elton John ones at the moment. So get into the market as soon as you can. Look at to an a suburb that's got growth but it's within your price range, and uh the team is happy to help you out. Just maybe think of one other thing, Cam, the magic uh letters OPM, yeah, other people's money. A great idea is to go and rent. I mean, Cam City moved further out than he wanted to, but buy and invest in property, have tenants in the property paying for your rent, have the tax man paying some of the cost for you, go and live where you want to live, and that might be another way to get in the market sooner. Hope that helps, mate. My husband and I are in good money, but he's um terrified of investing. He says buying an investment property is too risky and wants to wait for the market to crash. How do we get on the same page financially? I think divorce. Yeah, yeah, divorce. I think get it. You got a prenum? Yeah, well no, Viv. Yeah, move him on. No, this is uh very, very similar question. I think in any relationship there's a driver and passenger. I know Flisty when I went down the road of investing and was buying properties at an insane rate when we were early um together was far beyond what her comfort zone was. And remember talking her off the ledge, you know, in the middle of the night when she'd wake up and go, Look at the debt we've accumulated in our you know teens, early twenties. Um, but I was always more scared of what life would be like if I didn't invest than investing, because I knew I'd be poor. And that's a sad thing for most Australians. They earn a crazy amount of money through their lifetime and they get to the end of their life and they've got no assets that provide income for them, and they're poor. So, Vivian, explain to your husband that if all you've got is your own home and an income coming in and not much in super or not enough to get you through, then you're going to be poor, and that should be more you should be more fearful of that than investing. Um so I mean we can do it a nice way if you want to have a chat to him, but uh yeah. We had a client write us a letter, didn't we? Saying that she wanted to invest, took her a while for her husband to get on board after their first purchase, went through the process with Open Corp. Yeah, he saw how easy it was and he's driving. He got in the driver's seat and he's like, let's get three, let's get four, let's get five. Yeah, I think that was uh Sharon we did a podcast. Sharon, yeah, Sharon. Yeah. So uh a big part of it is you helping to educate him, uh you helping him get on board, and then I think he'll see the fruits of your labour, and you won't need to be divorced. Yeah, the other one is the market crash. I've been hearing that for 35 years since I've been investing. Your old man, Steve, who taught us the basics of investing, he'd been hearing it for 30 years before that. The fundamentals of the markets, supply, demand, affordability, consumer sentiment. Supply and demand has never been at more of a skew if in Australia. There's no chance of a property crash in the uh in the next 10-20 years with the the pricing difference between supply and demand. Hey, John here. I went to the bank to see if I could borrow for an investment property, and uh they basically shut me down. I walked out feeling embarrassed and defeated. How do you know if the banks know it's the end of the road? So I won't name the bank, Bank of Melbourne, but the first time I went to get a loan, I had went through a broker and they applied four different times, three times trying to get a loan through Bank of Melbourne. They kept knocking me back. I went to another bank, I just I was a dog of the bone, I wanted to get a property. Um, and my broker finally went to another bank as opposed to just submitting into the the one bank different bits of information and I got a loan across the line to get into my first investment. The issue you've got with most brokers, and we've got a um you know finance broking team, our brokers do 99% property investment finance. Home finance is a totally different beast to property investment finance. So most brokers, when they go and do a home loan, they've got all the basics and they go through, and there's um they've got normal banks that they put information through. When it comes to investment property, there's structure is probably the main thing that you need to get right because that allows you to duplicate. But the amount of home loan brokers, just so you've got a relationship with them, when they go to do an investment property, they either get the structure set up incorrectly and cross-collateralize, or they fail to get the finance across the line. So because we deal with what 40, 50 plus different lenders, all the major tier lenders, and then second, third tier if need be, we've got different options based on the individual and the investment property they're going to get. So uh don't take the first knockback as a knockback that um puts you out of the market. Seek advice or information from experienced brokers who specialise in investment property loans. The other thing I'd add to that, uh, and it's absolutely spot on, is a good broker should be able to take your information, put a little pretty bow around it, and give it to a bank in the format they need to see it and hear it, versus you piecemealing information to them, the bank manager not really understanding it or not getting the information the way the bank needs. A good broker will present it in the absolute best way for a bank to be able to approve it, uh, and often you get a much better outcome through that process. Yeah, it's important that you use an investment broker as opposed to a home loan broker because every time you apply for a loan, it's registered on your credit file. There's no credit rating like there is in America, and everyone thinks you need to get a credit rating, but there is a record of the amount of times you've applied for the loan. So it's make sure you get it right the first time, but don't say take no for an answer. Kath here. My daughter is 24. Excellent job saving hard. I want to help her get into her first investment property, but I don't know if I should give her some money or let her do it on her own. What's the right way for parents to support their kids without derailing their future independence? What a great question. I don't think it's one that is unique to you. I think lots and lots of people are going to be asking the same thing. And the challenges that come to mind from having conversations with people for the for you in your situation, wanting to gift it, is what if your daughter makes a mistake? What if she marries someone like uh the caller earlier who thought they had to leave their husband because you wouldn't invest? The question really is how to protect your money and protect your daughter, I guess. So um there are things you can do rather than just gifting it to them that protect your money. Uh you can secure it with uh unregistered second mortgages, which means that if your daughter gets married, if your daughter uh unfortunately gets divorced or something happens and she separates and she needs to sell the property, the money you gifted comes back to you as a loan. So you're protecting her and yourself rather than someone going to get their mitts on your daughter's money. I don't think it's I think it's spoiling your children. I think it's giving them a leg up and a really good head start in life that they'll open up many, many opportunities for them by getting to the market as soon as they can. Yeah, I reckon you're spot on that people need to look at it and go, well, if you die, you're gonna hand everything to your kids. Why not hand it to them while you're alive and you can control their educational process when it comes to money. So if we look at probably the there's through probably three impacts that happen with uh you can either go guarantor on it, you can um provide an equity loan, or you can um you can go in a joint venture with um your kids. Um it's important if you're going to go into a situation like this, and we found having a set agreement, so we've got agreement templates we provide to people that you have a set agreement in place which outlines what the situation is with the property. If it goes up X amount in value, we get it refinanced and I take my money back if that's scenario, or it's gifted across and you know tax needs to be paid on it. Um the other one is a financial uh binding agreement that should be outlined, which I've told my kids about. I'm happy to set them up with their property portfolio to start, not give them so much they don't have to do anything themselves, but enough to get them off the ground. But that requires them to sign a financial binding agreement, so I'll prenup with anyone they go to move in with. So that's part of the agreement that we've got in place, and that protects them. So uh Open Corp, we've got a couple of agreements if people want to go down that line. But for me, I'd rather see my kids at least get a leg into the market because it's becoming a huge gap between the haves and have nots, and it's only getting harder for kids to get into the property market. Or it's good on you if you want to get into it, but uh set some clear parameters. Yeah, protect yourself and your daughter. Absolutely. Hey, I've been researching property for two years, and um I've read everything, watch everything, follow everyone, but I still haven't bought anything. I'm scared of making a mistake. How do you know when it's the right time? Uh I asked the exact same thing 35 years ago and was told the best time to buy property is as soon as you can afford it. Uh and never look back. But you you can make mistakes. You're not going to get it right when you buy an investment property every time. But the you're not trying to pick that best in investment every time. If you're trying to, and I've we've had clients that Michael and I were talking talking earlier in an earlier podcast about a client of his who had waited 10 years to get into the property market trying to find the perfect investment. If he'd just bought an average property or even below average property, he would have been hundreds of thousands of dollars that are better off. So analysis paralysis is costing you at the moment around $250 a day with the way the market's moving. Um clients' properties are going up at about $350 a day. So it's uh analysis paralysis is a very expensive thing. So make a decision, you know, reduce your risk and get into the market. Oh, you just said it before, Cam. What's the bigger risk? Retiring below the poverty line or taking some action? And like you said, the worst performing property in Australia's probably gone up by enough that your mistake's not that bad anyway. Yeah, over 10 years. That's right. I'm happy to provide you some information on where to buy the right property to reduce that risk. There's risk in everything, but there's more risk in doing nothing. Hi, um, I'm a bit worried about our son. He's 27 and still living at home. He's saving a bit, but he's mostly enjoying the lifestyle right now. We want to nudge him towards property investing, but he doesn't really think it's urgent. So uh how do you motivate adult kids who feel like they have all the time in the world? Kick him out. Yeah, Mark, I get it. Um I've got uh teenage kids and adult kids and 18-year-old now, and they're pretty focused. I think leading by example on what's important in life and making money and investing a natural part of life and talking to them about it gets them into the the habit of thinking about money. But some kids need that nudge to so worst case is if still living at home and working, try and create a savings plan or something, take control of some money and guide them and help them or force him. But uh you might have to get the crowbar out and kick him out of his room. Time to downsize. Yeah, that's right. Put your home on the market and he's got three months. Off you go. Catch you later. Uh get your foot up his backside. I made a terrible investment in my twenties. Wrong area, wrong advice. I lost money. Now every time I think about buying again, I freeze. How do you trust the process after a bad experience? Are you still here? You're still alive? Yeah. Yeah, you're still here. Alright, I've um if you don't invest, you're no better off than you are today. You recovered from the last time, um, obviously on some poor advice, and I've seen people buy shit investments, usually from uh and I'm sat sad to say, accountants who shouldn't be providing uh advice on investments, but that there's regulations across that industry now, but it was usually you know high-rise apartments in oversupplied areas where people lost money. Um I get it, you've made a mistake, but if you don't get back in the market, you're no better off than you are now. We had a client, I'm sure, about three or four months ago, who I was told something like it took he's a little bit on the fence, like the earlier caller. Took me a while to realise that to sell the asset, bite the bullet, lose some money. Yeah. And I think he's bought four new assets through us that are dominating. So I can't remember his name. But I don't think it's a unique story that you lost some money on something out of bad investment. Yeah. It's how you get up and recover and take the next step that probably defines what's going to happen for you. But other people have done it, other people have recovered. And one bad decision, if you educate yourself, doesn't mean other decisions will be bad. Yeah, you can uh email Open Corp or hello at Open Corp or you know go to the website and click the link and have a chat to someone. It's a really simple mathematical equation to work out if you're holding a dog of an investment. Um, what the cost of so what we do is we look at what the anticipated growth of that shit investment is going to be, best case, what the cost to sell it would be, the cost to buy an investment in an area which is highly likely to go up at least at you know the the city averages, and then over a 10-year period, what the difference is. So take a motion out of it, mate. That'll stop you freezing up. Do that side-by-side comparison, and you can move forward with confidence. Hiya. Um I earn good money, but somehow I'm always broke. It's the new car, the dinners, uh, holidays. Oh, I know I need to dial it back if I want to start investing, but I don't really know where to begin. So how do you break the lifestyle habits that are stopping you from building wealth? Well, I'll assume you've got um some money stashed away. I won't go into your personal details if you don't want to ask, but what you've got to get a deposit together. To get a deposit together, you've got to set yourself some boundaries. So if you've got a deposit together and you think investing is going to reduce your lifestyle, it's not. To hold an investment property is a pittance after you have um a tenant and tax benefits back. It could be as anything as little as fifty dollars to a couple hundred bucks a week in in today's market conditions, depending on how much you put in. It could be nothing. So understand what that holding cost is and then go, can I sacrifice a hundred bucks a week out of your current lifestyle? So investing doesn't impact lifestyle the same way buying your primary place of residence, your home does, which is you've got to pay the whole thing out of your back pocket and your wages. The other thing is, this I did this with my kids. I set them a task not to use online shopping for three months, including Uber Eats. The money they saved, and not that they've kept that habit going, but the money they saved, it was a good eye-opener. So you've got some pretty shit habits there as far as your spending. I was going to go down the same path. So a couple of things happen in people's lives. Um, most people have on at some point, a light bulb moment. Sounds like you've walked to the light switch. Yeah. You haven't turned it on, you realize you need to change something, but you're not quite there. So let's say the lights fully come on and you decide, yes, okay, I need to do something different. The next step, unfortunately, if you is something called delayed gratification, you need to make a decision and say, you know what, I'll stop eating out, I'll save some money, I'll buy my lunch, I'll change what's your membership. I need to save a deposit. That can only happen if you change something you're doing. And without doing that, nothing else really matters because you probably won't get anywhere anywhere. So hard decisions to make. So you're saying get to like international roast coffee. International roast coffee. Yeah, enjoy that, Emma. With our portfolio managers, I just did a podcast recently with uh K-San, who's one of our um portfolio managers. She does regular reviews with our clients, and what they go through is all of their spending, um, what sort of you know costs they've got in their life that can impact their borrowing capacity. So, firstly, if you need to sit down with one of our team and they can go through that scenario and tell you what you are and aren't capable of doing, what you need to do to change it, to be able to get into the market, and they can probably help you out with some bit of budgeting and those sort of things. Thanks everybody for tuning in. That was a fun episode. Thanks for the callers. Hello at opencorp.com.au with questions. Thanks, Cam. Thanks, Mark.