18 Oct Seek advice outside the family unit – John McGrath
Property identity and CEO of McGrath Real Estate, John McGrath, adds to the topic of how to educate kids about investing in property and the power of money by sharing his experiences growing up in a family where it wasn’t that important. He sought the advice of mentors outside his family circle.
Kevin: Well, to continue our topic this morning about the advice that you should be giving your children about real estate, I’m joined by John McGrath.
Now, good morning, John.
John: Good morning, Kevin.
Kevin: John, I’m really keen to get your perspective on this. I want to talk to you about the company, too, and its phenomenal growth. But just before we do, is there anything that you wish you had known when you were younger, about starting out and investing in property that you’ve now learned?
John: Probably not a lot, Kevin, because I was fortunate that I was surrounded by a couple of great mentors, and their advice… Actually, I was probably clever enough at that point, one of the few things I did well in my early stage of career was to take their advice, which was to invest as early as I could and live very frugally and utilize property as – if you like – a forced saving.
I bought my first property in inner Sydney when I was about 20, turning 21. Believe it or not, it was $90,000 in those days, and of course, you’re lucky to get anything under $1.5 million now in Sydney, in those price ranges.
But the key thing around advice is not how to find good sage advice; the key is do you take it and are you disciplined? I put all my savings aside, I lived within my means, and I cobbled together a little deposit, bought a property, and once you’re on the first rung of that ladder, subsequent purchases seem to be a little bit easier.
Kevin: Yes, I’ve heard many stories about you as a young person going along to auction. You obviously had an interest in real estate from a very young age, John.
John: Well, yes. Funnily enough, Kevin, not at school. It was my unfortunate HSC result that made me have a real think about what I wanted to do with my life. It was soon after school, I thought real estate would be an interesting career, and the more I learned about it and I got into it, the more I loved it.
The people side, I’ve loved for 33 years, the property side, the design side. The investment side is great because I’ve seen people now, I’ve sold them portfolios of properties. Like we’ve just been talking, they started when they’re in their early to mid-20s, and they’ve now amassed 10 or 15 properties, and that’s exciting to be a part of that journey, as well.
Kevin: John, what were the conversations like around the kitchen table when you were growing up? Did they relate to property at all or investing?
John: No, not particularly, Kevin. My family was just an ordinary family, and my father used to run a pub. So my forte in my early days was at sport, and I wanted to be a sportsperson, and unfortunately, injury prevented that.
I was not particularly from a business background, but the minute I got involved in business, I found it intriguing, even as a late teen. Unfortunately, I didn’t do well in the high school certificate as I mentioned, and I’m not particularly proud or not proud of that. It was just a fact, I didn’t apply myself, because I thought sport was going to be my lifelong career – at least my career for a period.
Anyway, when that wasn’t to happen, I started thinking, “What am I going to do next?” And real estate, for me, was just something that was a very important part of life. We all need a roof over our head. It was a great way to earn money.
I used to read BRW 200 Rich List when I was very, very young and dream about “What have these people done?” I used to see, every third one was property. They had property as a base of their wealth. I thought, “Well, yes. It’s interesting, it’s important to society, and it’s a particularly good way to build some wealth in the future.
That was the starting point and the more I got into it, and hopefully, the better I got at it, it turned out to be very much that way.
Kevin: John, the company that bears your name, one of the fastest growing real estate companies in Australia, it’s been a huge success for you. You’ve mentioned a couple of times about your HSC results. How do you go from something like that to being the founder of such a hugely successful business?
John: Look, I think it’s one of those things in life, you know. They talk about taking overnight success taking 20 years, and I think the catalyst for me getting serious about life was a very bad HSC. I got 18% in the HSC, and as I said, it’s not something that I want people, young kids, to role model me on.
But it is what it was, and I did find that I was in a very painful period in my late teens, and the only way that I felt I could get out of it was get good at something. When sport no longer became a career path for me, I really put my head down, and it was really, just one day at a time.
I started renting flats as an 18 year old, Kevin, and I got very good at that. Then I started selling when I was 20, selling real estate, and after six very slow months – at the beginning, the first six months I didn’t sell a property – but I got my act together after that, and then it really grew from there.
It’s one of those things like when people haven’t visited your kids for a while and they say, “God, your kids have grown,” and you look at them and think, “They have,” but when you see it every day, it doesn’t have that same impact. I guess, my career, I think about it as just 33 years of everyday, going to the office, trying to do a little bit better, trying to support my team, delivering great service to customers. Then when you look at it, you think, “Well ok, if I look back, it has been an exciting ride.”
But, I think like a lot of entrepreneurs, Kevin, I’m very fixated on the future, so rather than dwelling too much on “What have we done thus far?” I’m very excited about “What are we going to do?” I think that’s a big part of it. You’re continually stretching yourself to just see how far you can go as an individual and indeed how far your company can go as a group of individuals.
Kevin: That looking ahead that you just said, John, do you think that’s helped you stay grounded? There have been tremendous success and there have been a lot of disappointments, I guess, along the way, too. But that staying grounded is fairly important in continuing that growth, isn’t it?
John: I think so, Kevin. Look, not everyone who achieves some level of success remains humble and grounded, which I think is very unfortunate because I see a lot of successful people, and some of them, it totally goes to their head and they really become unattractive people in many ways. They’re still successful, no doubt.
I’ve always felt all-round success, which is healthy, happy, good friendships, doing something you love, and if there’s a great financial reward that comes with that, that’s a bonus.
But, I think when you come from humble beginnings, and you work your way through, I think the smarter people realize we’re all the same. No one’s better than anyone else. We all have some degree of fortune and luck in our lives.
You’re right; it’s the disappointments along the way that are inevitable. Anyone who thinks they can achieve great success without having a degree of failure along the way, it’s just not going to happen.
You’re always going to have disappointments. Perhaps the more successful one becomes, or a company becomes, or an individual, the more people like to take pot-shots at you, and I think that’s just a part of the journey. You have to be able to deal with that because I don’t think you can avoid it. Success, to some degree, polarizes people and attracts attention.
Kevin: John, great talking to you. Thank you for giving us your time today. Congratulations on what you’re doing with the business, too, and all success for the future.
John: Thanks, Kevin. It’s always a pleasure speaking with you. Thanks for having me.