15 Sep 40 strong cash flow suburbs + Values to drop in Syd and Melb + Unlearn money beliefs
Highlights from this week:
- Does it get any easier for investors?
- The ‘holistic’ approach to property investing
- 40 cap city suburbs with strong cash flow
- Mozo tips Syd and Melb values to decline
- It is time to ‘un-learn’ what you think about money
Does it get any easier for investors? – Chris Christofi
Kevin Turner: One thing I do know about investment property is that the landscape changes all the time. Only look at what’s happening with the banks, with the lending criteria, with the value of property and sometimes people really struggle with their first property. That’s what I want to focus on in this interview, but I also want to talk about growing your portfolio and reviewing it. I’m talking now with Chris Christofi from Reventon and they are an investment and financial services company.
Kevin Turner: Chris thank you very much for your time.
Chris Christofi: Thank you very much Kevin for having me on your show.
Kevin Turner: Chris, I want to ask you about the first property. I know in a conversation you and I had off-air that you say that the first property is the most important. Why is that? Is it because it’s the learning experience?
Chris Christofi: Well look, it’s like with anything, the first property … determining you don’t get into too much debt, and making sure that you borrow the right amount of money, will enable you to get into the property market sooner thereafter. So what a lot of people traditionally do is they go the bank, the bank says, “You can borrow 600,000.” They’ll look for a property around about 600,000, and they go purchase that property. What a better way to be doing it is saying what you can afford. In a case of 600,000, you might be able to afford a $400,000 property, which means your repayments will be a lot more affordable. You can afford interest rates to go up, and if the property’s not tenanted 52 weeks of the year, which is not always the case, you can afford those things, and I can have some safety nets and buffers, which means it’s a safer investment.
Kevin Turner: Yeah, but Chris, isn’t that the job of the bank, or the broker I’m dealing with to assess my ability to pay that back?
Chris Christofi: The broker, yes, but they’re going to tell you what your maximum borrowing capacity is, they’re not going to tell you what you’re comfortable to borrow, and what it’s safe for you to borrow. That’s for you to ascertain or dealing with a good broker that’s going to work on the same path as you.
Kevin Turner: Should you, therefore, be consulting maybe with an accountant before you do it?
Chris Christofi: Well, not an accountant. A good mortgage broker can give you that information, but traditionally, people like to go to a bank. Now, a lot of people are using mortgage brokers now, but they won’t be asking the right questions when they go into a broker. “What can I borrow and how much would my repayments be? So if I was to borrow 600,000, what would my repayments be?” Now, a broker will not be able to give you the exact repayments without knowing how much rent will come in. They can give you an estimate. But without having all that information, he can’t tell you. “literally it’s going to cost you X per week to maintain this investment property.”
Kevin Turner: Okay, so that sounds quite confusing. Is there one place we can go to that can help us with all that information? Sit down and have a look at our financial situation?
Chris Christofi: 100%. Reventon, which is a company I established in 2005, and we’ve spoken to over 10,000 people and placed 3,000 Australians into investment properties. We sit down and we go through that process over four, five stages. Before we even look at property, we work out exactly what your borrowing capacity is, exactly how much it’s safe for you to borrow, and more importantly, what you’re comfortable with borrowing, because that’s even more important than actually what you’re looking at buying.
Kevin Turner: Yeah, because I can see here, Chris, that many people would think, “Oh, well I want to get an investment property.” They go out and start looking for it first, it’s almost like putting the cart before the horse. Do your homework first, so you can then go and find a property you want and you can then move on it.
Chris Christofi: I can’t tell you how many times, Kevin, I’ve seen it in the reverse order to what it should be done. Looking at property, this is how much I can borrow. Let’s work out what it’s safe for you to borrow, what you can afford before we even talk about property. And that’s the exact process that we do it in.
Kevin Turner: Let’s talk about the banks for a moment, Chris, if I could. They’ve been in a lot of hot water recently. What are the banks looking for in terms of lending to investors today? How tough is it?
Chris Christofi: Well, the LVR’s have changed, obviously, because the bank’s loan book was very heavily weighted towards investments, and now they’ve wanted to make that a little bit tougher and put it towards owner-occupied properties, which means they’re making the lending a lot tougher. As you saw, ANZ and Westpac put their interest rates up, which is something that you’re going to see a little bit more of, I do believe, just so they can slow the lending down. The reason that they’re actually making you put more deposit is because they want to control the lending and to make it safer. And to get people putting more deposit down, which means they have more skin in the game in property.
Kevin Turner: Yeah, it always amazes me how we’re so obsessed about following what the RBA does in terms of rates. What’s more important is what the banks are doing, and we’re now seeing them exercising these levers, which is going to make it more expensive for us to get mortgages, forgetting what the RBA might do.
Chris Christofi: I agree, but I’m actually quite happy about that, to be honest, because it actually eliminates the people in the market that I think shouldn’t be in the market, and that are over-leveraging. And I think that’s a very, very good sign, and it’s actually very good for buyers in general. You shouldn’t be over-leveraging, and you shouldn’t be borrowing to your maximum affordability, because you don’t know what’s going to happen in the marketplace, you don’t know if your property’s going to be rented 52 weeks of the year. You don’t know how interest rates are going to be affected. So I think that’s a very good thing, in my opinion.
Kevin Turner: Yeah, fair enough. Okay. It’s good to hear that side of it as well. I guess that’s a very conservative view. Many people would say that they’re risk takers, and they’re going to borrow as much as they can. But what I’m hearing from you is that this may not be then environment to do that, Chris.
Chris Christofi: No, because … I definitely agree it’s not the environment to do that, but in all my experience, which is since 1999, so 20 years in the property market, the ones that come back and the distressed sellers in almost 80, 90% of the cases, are the ones that have over-leveraged or have got wrong information. So if you eliminate that element and make sure you can have a big deposit and you have a good buffer zone and safety nets in place, that will mitigate that number, or reduce that number exponentially. Which I think, from where I’m sitting, might not be good from a sales point of view or a business point of view, but I definitely think it’s good from a consumer’s point of view, which is what’s more important to me.
Kevin Turner: Yeah, very good and wise words there, Chris. Thank you very much.
Kevin Turner: Chris Christofi is from Reventon, R-E-V-E-N-T-O-N.com.au. Check it out for yourself.
Kevin Turner: Chris, thanks so much for your time, mate.
Chris Christofi: Thank you very much for having me, Kevin.
The ‘holistic’ approach to property investing – Sana and Mona Ali
Kevin Turner: Sana and Mona Ali moved to Australia from Pakistan at the age of 15. Years later, the once struggling migrants successfully turned their $40,000 savings into a $5 million portfolio, earning the moniker of the Property Twins. All before the age of 30. They now advise investors to take a holistic approach to investing. We asked them what that means. Hello ladies. How are you?
Mona: Good, thanks.
Kevin Turner: Good. Mona, if I-
Sana: Kevin, how are you doing?
Kevin Turner: Yeah, I’m great, thanks. Mona, I might just ask you. It’s been an incredible journey. Did you picture that it was going to be this successful at the outset?
Mona: Kevin, the journey really started with us looking for security parcels in our family. But I would say, yeah, at some level, yeah, we did feel that there was a bigger purpose and there was a bigger plan. And as soon as we started buying properties and going out to open homes and experiencing the life of a property investor, we fell in love with it totally. And it just felt like a natural thing to us. And early on we decided, yeah, this is going to ultimately become our lifestyle.
Kevin Turner: That personal experience is like, I guess, going to university, isn’t it? Do you think that’s helped you? Is that what you try and teach others? And could you explain to me what you mean by a holistic approach to investing?
Mona: Kevin, I’d have to agree that it is a bit like independent learning and going to university, the whole journey. Because you’ve been there, you’ve done that. And in many cases you can look ahead, then clients can in the future in terms of what is best suited to them. And you do look at it holistically and buy that. What I mean is whether they’re buying a home or an investment property and what their mid to long term goals really are. So taking that whole big picture in their life circumstances into consideration to determine a finance strategy is very important. And leveraging your own lessons and experiences, that extremely helps people move along with their goals.
Kevin Turner: Yeah. I suppose, Mona, if I could ask you, I’ve been going back to the early days. You went from being property investors, then you became finance brokers. That’s almost like the final piece of the puzzle. Has that enabled you to stretch this even further in terms of how you help people?
Mona: Kevin, in terms of the mortgage business being the final piece of the puzzle, yeah, I would say, yeah, it’s definitely helped us help others move along. Our own journey and our own experiences have play a key role in helping others, purely because being investors ourselves we are able to have these discussions with what choices people are trying to make. Whether they are wanting to buy their own home or whether they are looking at investing, or they are looking at a hybrid of two options. And also just in terms of finance, really, one of the key things that we have realised and that we work with our clients on is knowing that finance is actually one of the key things that they need to look at upfront.
Mona: And also with that, there’s a common misconception that people need to find the property first and then they’ll sort out the finance later. But in the current lending environment, it’s even more important to be able to plan ahead and to able to work out your goals upfront and look at how finance looks like for you. And if you do end up buying a property first, what if you come stuck down the track and you can’t move forward with your moving life circumstances? So absolutely it’s enabled us to help people in a more holistic way really.
Kevin Turner: Yeah, there’s some really good points there. Sana, if I could just ask you, do you see yourself as facilitators or mentors? I mean, how deep is your involvement with the people you help?
Sana: That’s a really good question, Kevin. I believe we see ourselves as a bit of both.
Kevin Turner: Yes.
Sana: Because mortgage brokers, the common thinking in the industry is you just do a product or you just do a transaction. But the involvement is a lot more than that, and what it involves is really understanding what people’s goals are and where they’re heading in life, and where they will be in the next five to 10 years. So a lot of coaching or mentoring comes into the picture when you are digging deep into their lives and how it will help them move forward. Because what we found in our own journey and talking to hundreds of people is you can’t really help people unless you’ve built a connection with them and truly understood who they are, where they’re going. And just working on them on a human level, that you’re really wanting to help them rather than just hand a product to them.
Kevin Turner: Do you have a mentor or mentors, or do you mentor each other?
Sana: Oh, we do have a mentor. Rolf Latham is our mentor. He’s one of the top brokers in the industry and we still work with him because someone who has been in the industry for 18 years, you can never get enough of the learning from them.
Kevin Turner: Yeah, I guess that’s a great lesson, Sana, isn’t it, for anyone who’s in investing is to look around for a mentor? Someone who can guide them. What would you suggest for someone who’s looking for a mentor? What should they be looking for?
Sana: So mentors can come in different forms. It could be a property mentor, it could be a business mentor. And I would say you need to work with someone who listens to your goals and really explores them, and digs deep into why you want to invest or why you want to buy your home and really help clarify that direction and focus for you. And, for example, like Mona was saying, someone who wants to buy a home versus an investment property and also wants to upgrade. And really determining clarity for them and helping them through the decision-making process. And that’s what a good mentor or mortgage broker, for that matter, would do for you.
Sana: And it’s even more important today in the current lending climate determining the cost versus benefit of whatever actions you’re about to take. Because no one size fits all. And someone who has been on that path can be really one step ahead and forward think on where you’re going, and really help facilitate the decision-making. So having someone to bounce ideas off, someone who can give you their input on why they would do things a certain way, that can really help.
Kevin Turner: Yeah. No, great advice. Mona, Sana, thank you so much for your time. It’s been great talking to you. I can see why you bring so much wisdom to the table. Thank you very much for your time.
Sana: Thanks, Kevin.
Mona: Thank you.
40 cap city suburbs with strong cash flow – Simon Pressley
Kevin Turner: The primary objective of most investors is long-term capital growth, but this strategy requires financial resilience and patience. It’s the cash flow from your property that enables you to hold it while patiently waiting for the next growth cycle to arrive. We know that large parts of regional Australia offer above average cash flow, but did you know that within most capital cities there are also certain suburbs with strong cash flow? In some capital city suburbs the rental income puts money in your pocket from day one. To tell us more about this and highlight a few of them, we’re going to demonstrate that in the graphic that’s underneath this interview on our website.
Kevin Turner: Simon Pressley, who is Propertyology’s head of research. Simon, thanks again for your time.
Simon: My pleasure, Kevin. Always good to talk about cash, isn’t it?
Kevin Turner: Yeah, always very good to talk about cash. I know that you’ve been championing … That’s a hard one to say … rural Australia in terms of its grown potential. Really interesting here to see you talk about some on the suburbs in the city. We should never forget them, should we?
Simon: No, we definitely shouldn’t forget them, and by and large property investor’s a creature of habit. They tend not to fly too far away from the nest. We thought we’d produce some data. I don’t think it’s been produced like this before, showing the best, from a cash flow perspective, the best suburbs in our eight capital cities.
Kevin Turner: There’s about 40 in the list that we’ll publish below this interview. Looking at the distance from the GPO, the median house price and the annual holding costs. Interesting, this. Why have you done it in that way, Simon?
Simon: The annual holding cost, what we did there … Obviously the biggest expense to a property investor, Kevin, is generally the loan repayments. It really depends what each individual property buyer, how much they borrow. Whether they’re borrowing 100% or 50% or whatever. In our table, we worked out the holding cost, if there was a 20% deposit or if there was even a 10% deposit. How we calculate it was the average rent for a typical house in each of these suburbs. The interest on the loan, we also made a provision for things like property management fees, insurances, basic repairs and maintenance.
Simon: It was surprising how some suburbs even borrowing with only a 10% deposit was still putting two or $3000 cash before tax, mind you, in the investor’s pockets. Factoring negative gearing benefits it would be more. Again, that’s before any price growth.
Kevin Turner: Just to make it clear, Simon, the list that we’ve got below, you’ve chosen … Is it five or six out of each capital city of the eight capital cities?
Simon: Yeah, so out of eight capital cities, we’ve picked the five best performed suburbs from a cash flow perspective. That’s how we get 40 all up. The capital cities are Sydney, Melbourne and Canberra didn’t have any suburbs where a property would be cash flow positively. Typically probably would be cash flow positive without having a really big cash deposit for each individual investor. But five other capital cities had one or more suburbs where they would be cash flow positive, but even the ones that weren’t technically cash flow positive, Kevin, the annual cost to hold a typical property …
Simon: We’re talking two, three, four thousand dollars a year. $100 dollars a week type stuff, not much more than a date night.
Kevin Turner: They range in distance from the GPO from something like eight kilometres out to 60, 70, even 80 kilometres. In some states like New South Wales you’ve got to go a fair way out from the GPO.
Simon: Yeah, you’ve got to go right out to the Central Coast, which is officially still part of greater Sydney, although you might be talking a good hour or sometimes more commute from the heart of Sydney. That’s a long way out. Middle ring suburbs in Sydney and Melbourne, a typical house, we’re not talking anything fancy, their cash flows are by no means strong. You’re talking sort of 15, 000 to 13, 000 dollars per year to hold that property. In a climate where those two big city markets prices are actually declining, that would be an uncomfortable situation for those investors.
Simon: But our other capital cities, there’s lots of opportunities out there to buy affordable properties with strong cash flow and even though many locations in Australia, especially capital cities, the rate of growth might be mild, that doesn’t hurt the investor much when the cash flow really doesn’t affect your house or budget too much.
Kevin Turner: Interesting very interesting insight. Make sure you check out those figures, look at all that list. it’s just below this interview on Real Estate Talk. Thanks for you time, Simon. Always very insightful. Propertyology’s head of research, Simon Pressley. Thanks again for your time, Simon.
Simon: My pleasure, Kevin.
Mozo tips Syd and Melb values to decline – Steve Jovcevski
Kevin Turner: In a report released this week by Mozo, they’re predicting property prices will decline in Sydney and Melbourne by as much as five and six percent. Mozo’s property expert Steve Jovcevski joins me to explain. Steve, what’s caused you to say this?
Steve Jovcevski: Well, I mean, some of the main factors involved is the tougher lending criteria introduced by APRA, and indirectly by the Royal Commission. So APRA, about two years ago, started cutting back on investors and also interest only loans about 18 months ago. Now, that takes a little while to filter through the system and it has come through the system now. The investor portion of it was scaled back in April but the effects are still being felt.
Steve Jovcevski: So that’s probably the main, overarching one for the property market as a whole, Australia-wide. But if you look at Sydney and Melbourne, there is certain pockets of oversupply in apartments, especially in Sydney at the moment, which aren’t helping the situation. Vacancy rates as well are increasing, in Sydney especially where property prices have been affected by vacancy rates that are increasing and tenants have more choice. Therefore the rents are actually falling in some areas.
Kevin Turner: We’ve seen property prices increase in Sydney by about 85% in the last five years. Isn’t this more like maybe just a slight correction?
Steve Jovcevski: Yeah, I would say it’s a correction at this stage. And we’re just basically predicting at the moment a further 5% to go. And then we assume and we hope that there’ll be some steadying next year. But you never know. It just depends as well with the bank increases. Obviously we’ve seeing Westpac increase their rates slightly, which hasn’t helped the situation. And other banks may follow. So it’ll really depend as well on what the banks do in terms of interest rates increasing.
Kevin Turner: A lot of talk about how unaffordable property is, particularly in Sydney. But we’re seeing demand rising from first home buyers. Surely that flies in the face of that, wouldn’t you think?
Steve Jovcevski: Yeah, absolutely. That seems to be the silver lining at the moment. First home buyers have had more opportunity to get into the market. So it’s been more difficult for investors to get a loan at the moment. And owner-occupiers, there has been some incentives. Even from developers themselves where you find a lot of developers giving free stamp duty or things like that as an incentive for first home buyers to buy these properties. So definitely a positive for first home buyers.
Steve Jovcevski: But the problem is at the moment the finance side, there are more curbs in terms of the lending. Expenses basically are being scrutinised a lot more than they used to be. So all those things are difficult for all lenders. However, at the moment first home buyers seem to be benefiting the most. However, if things continue the way they are, especially with the lending side, I don’t think that will continue.
Kevin Turner: You’re predict-
Steve Jovcevski: And it might worsen.
Kevin Turner: Yeah, sorry, Steve. You’re predicting greater price declines in Melbourne by as much as 6%. How much of that has to do with oversupply and stronger lending criteria? Can you put it all down to that?
Steve Jovcevski: Yeah. I mean, the other thing to remember is Melbourne hasn’t really come down much at all. Sydney’s already come down quite a few percent. We did see a bit more of a drop in the last quarter, and the 6% is really what we’re predicting to the bottom with Melbourne. And we don’t think it’ll go any further. So that’s some of the reasons. It’s just not as far along into the correction cycle as Sydney is. And, I mean, at the moment the first home buyers market, and huge population growth in Melbourne as well, has weathered the price correction stall much better than Sydney has. But it will too decrease at some stage. And also in terms of listings, we saw 11% increase of listings from July 2017 to July 2018 in Melbourne. So there’s more supply coming on board compared to last year.
Kevin Turner: Perth, of course, has been struggling. You’re predicting that that might just have turned around.
Steve Jovcevski: Yeah, yeah. We think that it’s sort of come towards the end and the bottom for the Perth market, and it should start to go up steadily from here. No huge increases, but definitely shouldn’t be going down anymore in price.
Kevin Turner: I notice you’re saying that the growth in Hobart is going to continue. It’s been quite phenomenal, hasn’t it?
Steve Jovcevski: It’s been incredible. It’s hovering around that 12% mark year on year. Some of the key factors there are the vacancy rates, which are under 1%. I mean, anything sort of under 1% will sort of keep investors interested. And you find a lot of the investors are interstate investors from Sydney and Melbourne trying to get some value in a market that’s increasing and not decreasing. So definitely there’s still a way to go there. But we think that by next year sometime, it should start to taper off and slow down.
Kevin Turner: And what do you see ahead for Brisbane, Adelaide, Canberra and Darwin?
Steve Jovcevski: Yeah. So Canberra’s continuing, we believe, to increase. Relatively affordable compared to Sydney and Melbourne, and there’s a larger proportion of high income earners. It’s continued to increase solidly and there are low vacancy rates as well. And there’s always a demand for rental accommodation due to the transient government employees that come in and out due to the Federal Government being there and parliament. So, yeah, we’re seeing the next six months prices to increase by about three and half percent. So it will be a solid year again for Canberra.
Steve Jovcevski: And looking at Brisbane, about 2%. So we’re not seeing the huge drops that there’ve been in the Melbourne and Sydney markets that we’re predicting. Just a steady increase, although there still is an oversupply of some apartments in inner city Brisbane. And obviously they’re going to be affected by the constrained lending criteria as well. But overall they’re going to have a better year than Melbourne or Sydney.
Steve Jovcevski: So Adelaide’s steady as she goes, as she always is. It’s one of those markets that just seems to increase three, four percent a year, and I would expect that will continue because it has been doing quite well this year. And there’s still a steady sort of increase in listings. Not a huge amount of increased listings, which always bodes well for price increases. And Darwin is still bottoming out, unfortunately. We’re predicting about minus 3%. After the end of the commodity boom, it’s been steadily decreasing. There’s still an oversupply of units yet to work their way through the system and be mopped up by prospective buyers. So it’s expected that it’ll continue to decline, but at a slower pace than it has been.
Kevin Turner: Steve, thanks very much for your time.
Steve Jovcevski: No worries, Kevin.
Time to ‘un-learn’ what you think about money – Vanessa Stoykov
Kevin Turner: After going on a 25 year journey of discovery, Vanessa Stoykov now believes that to truly grow long term wealth, we need to un-learn everything we think we know about money. As a result of this journey, Vanessa has crystallised this knowledge and experience down to five pillars for creating financial success. Vanessa joins me to talk about those pillars, and how we can get started.
Kevin Turner: Vanessa in your book ‘The Breakfast Club for 40-somethings’ you talk about un-learning money and re-inventing yourself. Hello and welcome to the show. What do you mean by that?
Vanessa Stoykov: Hello, and thanks for having me. Well really what I mean is, what are the behaviours you have around money, whether they’re conscious or unconscious, that may be holding back your financial future? And that’s really how the five pillars diagnostic test was born on you know, are you spending too much on credit cards which is the pillar called Desire? You know, is that the thing that’s holding you back from long term providing for you to have a comfortable retirement?
Vanessa Stoykov: Do you have a deep-seated belief that probably started with your parents or your family that you know, you don’t make enough money or money’s hard to keep or there’s never enough to go round? Because those kind of beliefs are very limiting on how you spend your money, and how you view money.
Vanessa Stoykov: There’s a third one, which is called Action. So most people know buy a house, put money in the bank. But that’s probably a 1970s, 1980s version of how to grow wealth. Because property’s pretty much at its peak. It’s starting to drop. So buying a property isn’t the real answer to wealth creation.
Vanessa Stoykov: So most people need to see a financial planner. But you know, they don’t know what, you know, they don’t want to admit what they don’t know, they don’t trust financial planners. So you know, I’ve built a guide on our website to show how to identify a good financial planner. Because you know, if you know the right questions to ask, you can find someone very good. So it’s jut a matter of knowing what to ask.
Kevin Turner: Can I take you back to one of the first points you made, and that is about desire. Is it about the fact that we don’t quite know what … we get our wants mixed up with our needs? What we really need.
Vanessa Stoykov: Well exactly. And I think the older you get, I mean I wrote the book and made it about 40-somethings, because I think you know, I’m 45, smack in the middle of that. I think you get to an age where you realise another new car, or another overseas holiday, or another watch, or all the things that you might be into, are the things that if you just kept what you had for longer, and then put that money that you’d spend on that into an investment, or into your super, I mean then you’re going to be paid back in spades. As opposed to buying something which is a liability, not an asset.
Vanessa Stoykov: And most people don’t understand that. Assets are things that appreciate and make you money, and liabilities are are pretty much everything else. Jewellery, cars, dinners out, furniture, all those things are liabilities. And that’s sort of a very basic explanation of how people need to view their consumption.
Kevin Turner: In the book, and also in your five pillars, you spend a fair bit of time talking about mindset. Mindset around money. And you touched on a point there about almost delayed gratification.
Kevin Turner: I’m much older than you, but when I was educated by my parents, one of the things we didn’t talk much about was money and how to handle it. But it seems to me that this current generation, and I know that’s a generalisation but this current group of young people coming through seem to be a lot more savvy about money, and the need to save.
Vanessa Stoykov: Yeah, I’d like to think that. I think the super system’s been in place now for a long time, so you know, we’ve yet to see a full cycle of that. I think it’s started pretty close to when I started work, but you know, I’m not near retirement yet. But I think this generation is much closer to digital, to information at their fingertips.
Vanessa Stoykov: Does that mean they’re better with money? I think they’re better at talking about it than previous generations, but I still think they need help. And they sort of need to be exposed to dinner table conversations around legacy, what you want to leave your kids. You know, we’ve been doing some interesting research on that, and people are very divided on what they want to leave their children in Australia.
Kevin Turner: Yeah, there was a study that I did an interview on just this morning actually, that talks about how two in three Aussies believe that parents should be providing more, or sacrificing more for their siblings’ financial future.
Kevin Turner: I struggle with that. I really do. I just think that you know, we’ve got to make our own sacrifices as we go along.
Vanessa Stoykov: Yeah, look it depends on your financial situation you know. There’s obviously some families that are doing everything then can and you know, the fact that they get their kids to the point where they can then work is as much as it’s possible for them to do.
Vanessa Stoykov: But there’s others that spend money in a way that if they had a better plan and a way to use it, they could set up a legacy for their kids that meant that they could have a house deposit, or they could pay for their university. Or you know, things that people’d like to do, but don’t really know how to go about planning for it.
Kevin Turner: It’s a matter of giving them a start.
Kevin Turner: I mentioned earlier about you know, my experiences in growing up. But certainly the lessons that I would’ve learned from my parents don’t necessarily apply today. Because things change.
Vanessa Stoykov: Yeah exactly.
Kevin Turner: They evolve.
Vanessa Stoykov: Our parents made their money off property. You know, all you had to do as a baby boomer was hang on to a property that you paid 20-something grand for, and watch it grow. Particularly if you’re in a big city. So-
Kevin Turner: Talk to me for a moment about mindset. How important is that in the overall equation? It’s … I mean it comes up in your belief systems?
Vanessa Stoykov: I think it’s everything to be honest. Because if you don’t have the right mindset around money, then everything else falls out from that. So you know, I know a lot of people who are under a lot of pressure, and these are people who either earn great money and just let it slip through their fingers, or people who don’t make much money and think that’s the situation they’re in for life.
Vanessa Stoykov: And they’re the wrong mindsets in both ways. I mean if you’re making a lot of money, how to free up cashflow and invest it so you don’t have to work like crazy is a mindset in itself. And if you’re not making as much, how to get a side hustle and think differently about how to bring in more income and then invest it.
Vanessa Stoykov: You know, you’ve got to have the mindset of, “I want to change my financial situation. I want to do more with it.” And everything comes from that. It’s exactly like losing weight. I sit there and look at people in bikinis and think yeah, I’d like to look like that. But am I willing to do the work? Hell no. So …
Kevin Turner: That’s exactly right. I think that’s a beautiful way to finish off and sum up as well. Vanessa thank you so much for your time. And a great read; it’s called ‘The Breakfast Club for 40-somethings.’ Vanessa’s been my guest.
Kevin Turner: Thanks for your time Vanessa.
Vanessa Stoykov: Thanks for having me.