22 Oct The new generation of investor – Simon Pressley
Simon Pressley from Propertyology says the most successful young investors are more ambitious about financial independence than their parents were. And it’s paying off for them. Find out how and what they are doing.
Kevin: Simon Pressley from Propertyology says there are many more Gen Y investors entering the property market but they’re doing it in different ways. Also, when speaking of Millennials, he believes the most successful young investors are more ambitious about financial independence than their parents are and it’s paying off for them. Simon joins us to discuss the impact of Gen Y and Millennial property investors.
Simon, thanks for your time.
Simon: Always a pleasure, Kevin.
Kevin: How are they doing it differently?
Simon: A lot of them are taking the rent-vestor trap.
Simon: Not a trap at all; opportunity. I just think it’s fantastic that at such a young age, they’re taking their financial future more seriously than perhaps what they’ve been given credit for as a generation. We hear a lot about the Gen Y who are spoiled and they just want it now and they pout their lip when they don’t get it. And while that might be the case for some, it’s certainly unfair to blanket them all like that.
We’ve really enjoyed, as a business, working with lots of Gen Y’s who are, I would say, probably more financially savvy than, in some cases, their parents. They’re more flexible to trying different things and perhaps as they’ve entered the workforce, they’ve reflected back on what mom and dad might have done, the decisions they might have made and where they’ve ended up and gone “Yeah, but you’re not going to be relying on a pension, and we want something better than that. We’re going to need to do things differently to what you did.”
Kevin: Isn’t that incredible? We’ve quite often talked about the lessons you can learn from your parents and listening to the conversations around the table. I notice in the report that you’ve released – which is available as a download, of course, on our site – you say that Millennials are less set in their ways and they’re braver than previous generations, probably because they’ve learned some great lessons from listening and watching their parents.
Simon: Yes, that’s right. Sometimes we’re sat down and spoken to or we read things in a book, and other times, we learn just be observing. Children learn from parents all the time, sometimes just from observing.
The age pension statistic – I know we’ve spoken on that before on this show, Kevin – it’s alarming, and it’s something that as a nation, we’ve never addressed. But we have 3.7 million living Australians today who are aged 65 or more, and according to official federal government statistics, only 18% of those are financially independent.
That’s 45 years in the work force, but of course, we’ve never taught financial literacy, we’ve never encouraged households to invest. And I think a lot of Gen Ys, whilst they haven’t been encouraged either, they’ve had to figure out for themselves that we have to do something different to what mom and dad and their grandparents did.
Kevin: There’s probably another influence too, and that is technology. I do believe that this generation coming through is the one that’s going to benefit from the most information. We’ve never had this much information as what’s available on the Internet – shows like ours and sites like yours that provide great schooling for young people about how to get into property, Simon.
Simon: I agree, and I think this is what has contributed significantly to the Gen Y really opening up their mind to alternative ways.
And they live differently to what their parents did. Airfares were very expensive for their parents, but they’re much more affordable now, so they want to travel more. They’re prepared to be more mobile for employment. While some might want to always live in their hometown, others are prepared to, for example, go to London and live and work for five years and then come home whilst they’re doing that.
We’ve helped lots of expats invest. They earn their money abroad and they invest here, or they might live in an expensive city – Sydney, Melbourne, Perth, somewhere like that – want to get in the market but aren’t ready in their life to really anchor themselves to the family home. They still want to have choice and be flexible but recognize the importance of getting in the property market.
They might rent a really nice apartment that they probably couldn’t afford to buy, so they’re really happy from a lifestyle point of view, but their savings, they’re saying “Why do I need to buy a property in the city that I live in?” They have more a mindset of, say, a share investor, saying, “Australia is a big country. There are massive opportunities out here. Where is the best place to get my money working hard?” And that’s probably going to be somewhere other than the family home.
Kevin: It’s that rent-vesting attitude. The other thing too, my memory of growing up was that you had to have a house and your house was your security. You didn’t really think past investing; it was just a matter of securing that house. But that’s all changed, where kids nowadays, because of things like rent-vesting, don’t look at it as a home to live in; they look at it as a property to invest in. There’s a totally different mindset, Simon.
Simon: It’s a completely different mindset. We see that in the style of dwellings, as well. Apartments were very rare in this country 20 or 30 years ago. The typical family home was a quarter-acre block with a Victa lawnmower and a Hills Hoist clothesline, but a lot of the Gen Y, even if they could afford that, are going “I don’t want to be mowing lawns on the weekend and maintaining the garden. I want to be closer to town. It’s too expensive to buy a house close to town.” It’s just a completely different mindset.
Kevin: Just inside the transcript on this interview, we have a download link for you to get a little bit more information, or you can just simply go to Propertyology.com.au, and you can reach them through our website, RealEstateTalk.com.au, as well.
Always good talking to you, Simon Pressley. You always make so much sense. Keep those reports coming, mate. They’re fascinating reading. I love them. Thank you.
Simon: Thank you, Kevin. Have a great day.