How to Exit the Rate Race!

How to Exit the Rate Race!

Well 2017 has kicked off in a big way, it’s going to be a massive year and we are already a quarter  down. What have you done to better yourself or how have you helped others? Have you set your goals for 2017 and is your vision board filled with pictures, dreams and aspirations? What is your mind set for 2017? Are you a glass half full person or half empty? I have been around many mentoring groups and inspirational business leaders and the biggest common thread is you need to start with your mind set. Exiting the rate race takes time, planning and action. You must make some time towards actioning your goals. Now when I’m referring to the rate race, I’m talking about being part of that daily grind. To exit the rat race means you are able to have the freedom and quality of time, which comes with having surplus money and cash flow and not working from week to week. I love what I do so it is not really work, I have created a life style, living in a desirable location, surfing in the mornings, eating great food, travelling, the ability to pay my bills when they are due, spending time with my family and having that awesome work life balance. Now I’m not saying I’m completely ready to stop working with passive income of $200k plus per year but I’m on my way. How have I been able to begin to achieve this? I started in the world of property investing back when I was 27, buying my first property – a town house...
Advanced Strategy – Chris Pullen Practices what he preaches!

Advanced Strategy – Chris Pullen Practices what he preaches!

Buying an Advanced Strategy Investment Property Where do you start if you’re looking at purchasing an Advanced Strategy Investment Property? First you need to have some goals – where you would like to be, how does your future look, what do you want for your children, do you want a particular lifestyle or simply more free time? This comes back to writing these goals down, maybe start with a vision board. From there you can plan on how to achieve these goals. This is very important and you may need to engage some experts to help you with the desired outcome. Experts such as an accountant, finance broker, property strategist, financial planner, insurance broker, architect or building designer, lawyer, town planner, builder and the list can go on. What I want to talk about today is the actual property that I purchased and the numbers and the plan behind it. After starting the business I wanted to build my property portfolio as fast as I could. Firstly I had to save like buggery to form a deposit to put towards the property purchase. I am a very good saver, but as I needed about $140,000 I had to put my head down and bum up – this took about two years. Now I had a plan to purchase two duplexes in 2016 and I did. It is the first one that I’m going to talk about today. I started by working out my goals and vision board – actually putting a picture of the proposed duplex on my vision board. Then I did my numbers…. did I have enough...
Buying Property With Friends / Family

Buying Property With Friends / Family

If you’re looking for a creative way to overcome being locked out of the property market by rising prices, buying property with a group of friends or relatives may be a solution. It can also be a minefield though, so here’s how to avoid it all turning to custard. While the excitement of banding together in such a life-changing moment can put everyone on a bit of a high, you need to plan for situations in which things might go wrong. It’s essential you have all been completely upfront from the start about what you want to achieve by purchasing property together, as well as your personal expectations about timelines for purchasing the property, paying it off and selling it. And all of this must be documented in a co-ownership agreement. Your finance broker can refer you to a solicitor or conveyancer with experience in working on co-ownership agreements, who can advise and create yours and make sure it is suitable, providing the necessary legal protection for everyone involved. The big question will be what structure your ownership takes. There are two options: joint tenants and tenants in common. Joint tenancy is the most common ownership structure in Australia, as it is how most family homes would be owned. However, because friends are less likely to share assets and long-term debts than a couple, and less likely to will their assets to each other, the ‘tenants in common’ model would usually be more suitable for this situation. Under this model, each person owns a specified share of the property’s value. These shares may be equal, but needn’t be. So,...
No Time to Buy an Investment Property?

No Time to Buy an Investment Property?

I am often talking to my clients about how busy their life is and that they seem to have less and less time to do the things they love; like spending time with the family, going on holidays, enjoying their hobbies and even having romantic time with their partners….. So where are you going to get some spare time to consider your finances, set your goals and get an investing plan? You need to fit this in around your job or business, your children, your partner, your fitness and your weekend hobbies. Life just gets in the way and before you know it you’re in the Rate Race or on the hamster wheel….. going round and round and getting no further ahead. Well something needs to change – because becoming smart about your investing and knowing your finances can make a massive difference to your lifestyle later in life. When you start thinking about your retirement…. where do you want to live – close to the beach or in the city? I bet it’s not in a dingy flat in an undesirable area! Will you get the best medical care available or are you happy to be just a public patient….  wait in line and take a ticket? All of these variables in your retirement years can be determined right now! You know with the amount of people I talk to; the majority when asked what is the balance of their superannuation – or how much their current house is valued at – they don’t know the numbers? There are sometimes hundreds of thousands of dollars locked up in...
Don’t Put All Your Eggs in One Basket!

Don’t Put All Your Eggs in One Basket!

How NOT to Finance an Investment Property…. I’m sure you have heard the saying ‘Don’t put all your eggs in one basket’. It is a metaphor that if you were to potentially drop the basket with all of your eggs in there together – all of them could break and you would be left with none. This goes for property investing too. What I’m going to focus on in this blog is the lending side of building a property portfolio. After a conversation with a new lead that came through last week, they said to me, “Chris we need to have a meeting with our bank to see what our lending limit is.” My reply was….. “It’s interesting you are going to a bank to tell you how to build a property portfolio! There’s a good chance that the loans officer you see does not have a property portfolio; do they even understand what you are trying to achieve? They just quickly work out a loan that they sell from the banks products that might not even suit your needs. Do they do a goal setting session with you to try and find out what your short and long term goals are? How many questions do they ask about the property, do they understand what an advance strategy property deal is? How can you know what the rental return of the property is if you have not found one yet?” Now the bank is a business and they are there to make money for their shareholders – are they going to be the best representation for you and have they...
Lifestyle Property Market Set For Double-Digit Growth

Lifestyle Property Market Set For Double-Digit Growth

Tim Lawless – research director  at CoreLogic says lifestyle property markets will very shortly experience substantial price growth. “Some of those iconic lifestyle markets that are close to capital cities like the Sunshine Coast, the Central Coast near Sydney, Surf Coast near Melbourne, and even the Margaret River in WA are all showing higher levels activity and that’s pushing prices higher,” Mr Lawless said While much of the value of these markets was wiped out by the 2008 Global Financial Crisis, property prices have started to recover in recent years. “We saw that growth prior to the GFC and then lifestyle spending pretty much evaporated in 2008 on the back of people selling their holiday homes for obvious reasons. From 2008 to 2012, iconic Bryon Bay saw dwelling values fall by about 15, nearly 20 per cent but they have well and truly recovered now, rising by about 10 per cent per annum,” Mr Lawless said. “You can see the same thing in Noosa or the Gold Coast, where the price growth isn’t quite as strong but we’re definitely seeing a recovery back to 2007 standards.” There are two major driving factors behind this growth. “We can see this sea change trend where buyers are coming out of Sydney and Melbourne with high levels of equity thanks to the wealth creation effect with property in those areas, and who are now looking to unload some of that wealth into holiday and retirement homes near coastal areas.” “With our ageing population, you’ve got to imagine there’s going to be a growing demand for these lifestyle markets as the Baby Boomers put their feet...
Welcome 2017 – Lets get visual!!

Welcome 2017 – Lets get visual!!

It’s that time of year where we all start to re evaluate our lives, goals and dreams. The time of year when we start to set our goals and what better way to do that than create (or update) your vision board. Start to achieve your dreams through visualisation. Whether you believe it or not visualisation works. Athletes have been doing this for years to improve physical performance. Studies have shown that the brain patterns activated when a weight lifter actually lifts weights are similarly activated when the weight lifter just visualised lifting the weights. Millions of every day people visualise their goals on a vision board. A vision board is an instrument used to help us clarify and focus on our life goals – whether it’s personal, business or both. You literally display your goals by finding images or text in magazines or any print media, cut them out and display them on a decorative board where you will see it frequently throughout the day. Dan’s Vision Board                                                     Kate’s Vision Board       An example of 2 very different vision boards…   The idea behind a vision board is that when you are constantly reminded of your goals and what you want to achieve that your life will change to align with those desires. A vision board is the most effective visualisation tools and mind exercises available to you. It serves as your image of your future, a clear representation of...
Aussie Ladies Take Note

Aussie Ladies Take Note

According to consumer research nearly a 1/4 of our Aussie Ladies (22.4%) are passing the buck to their partner or other family members relating to financial issues. This is compared with just 6.6 per cent of men. Women are also more inclined to suffer from debt-related stress than men, with a 1/4 of women surveyed admitting that debt causes them daily stress, compared with 14% of men. RateCity.com.au spokesperson Laine Gordon remarked that more needs to be done to ensure that Australian women have the same opportunities as their male counterparts. “It’s troubling to learn that not only are women earning less, but many are feeling overwhelmed by money and consequently leaving the decisions about their finances up to their partners,” Ms Gordon commented. “We want Australian women and men to feel equally empowered to make good decisions about their finances and take control of their money. But more needs to be done to make that a reality,” she added.  Ms Gordon emphasised that the key is increasing women’s exposure to good financial information, as research shows that men spend more time per month informing themselves about credit cards, bank accounts and superannuation than women. “We also know from previous studies that women are more likely to contribute a smaller amount to their savings each month and on average have a smaller super balance than men,” Ms Gordon noted. “Today’s pay gap has serious implications for women, who typically live longer than men and are more likely to have time out of the paid workforce to care for children and elderly parents,” she said. “This can put some women behind when it...
Keeping Your Christmas Budget in Check

Keeping Your Christmas Budget in Check

Christmas is fast approaching and Santa has already laid plans to destroy all your good budgeting work for the entire year! With Aussies set to spend close to ten billion dollars on Christmas gifts this year, now is not to the time to go blowing your budget. You can still get all the warm fuzzies of watching your loved ones open awesome gifts without crying into your empty wallet for months into the new year. We all know Christmas is an expensive time of year. With additional time off work, extra mouths to feed, holiday & travel plans and of course that adorable letter to Santa from your 5 year old containing a list of items that will easily smash your credit card limit. Listed below are a few tips and tricks to meet your Christmas Budget that even Santa would approve of. Some need to be put in to practice well before now so maybe a heads up for next year. Set a Christmas Budget – Write a list of every single person that you need to buy for, an amount you feel comfortable spending on them and STICK TO IT. If you go $3 above on one person – make sure you make it up on another, a small overspend on every person can add up! Do a Secret Santa – If you have a large family and everyone usually buys everyone a gift – it may be time to suggest a secret Santa. This way you can set the budged that you are all comfortable with and instead of getting 10 pretty average gifts from the rellies you get...
How to Buy Without a 20% Deposit

How to Buy Without a 20% Deposit

When you consider that a small flat in Sydney could set you back half a million dollars at the moment, saving up a 20% deposit to buy that flat – $100,000 can seem an overwhelming – or just plain impossible task…… That’s where lenders mortgage insurance can help! Lenders mortgage insurance (LMI) may be an added expense, but it offers buyers the opportunity to dive into the property market earlier, without saving up an entire 20 per cent of the property’s purchase price as a deposit. What exactly is lenders mortgage insurance? LMI protects the bank or lender, should a home loan go into default, guaranteeing that the lender will get its money back if the property needs to be sold and there is a shortfall in repaying the loan. While a 20% deposit generally provides a good buffer against any drops in property value over the life of a loan, LMI can also provide the same protection, meaning borrowers can purchase property with a smaller deposit. What’s in it for you? For the borrower, it may seem LMI is just another expense to cover, but this insurance can mean that some buyers will be able to enter the property market with only a five per cent deposit saved. In the example above with a $500,000 property purchase – this brings the deposit down from $100,000 to just $25,000. And, if the market is hot and prices are rising rapidly, paying LMI so that you can buy now could be cheaper than taking the time to save a bigger deposit. In the time it takes to save a higher deposit amount,...
Line of Credit – Good or Bad Idea?

Line of Credit – Good or Bad Idea?

A line of credit (LOC) can be a very appealing idea, with immediate access to the limit of a mortgage and no extra approvals necessary. Used wisely, it can be very helpful, but it can also spell disaster for the unprepared. A line of credit (also called a home equity loan) allows you to access the equity in your property as needed. It can be a standalone product or almost any type of existing loan can be split with a line of credit. Interest is usually slightly higher than the standard variable rate. A line of credit may be useful for property investors, who can finance further property purchases or renovations using their existing properties’ equity without applying for new loans, or business owners who can use a LOC in place of a business overdraft to make large equipment purchases at lower interest rates. Used smartly by owner-occupiers, a LOC can be an ideal way to reduce the total interest paid on a loan. An entire salary can be deposited into the LOC account, with everyday purchases being made with the account balance in the same way as they would with a regular savings account or credit card, as long as the minimum repayments, usually only interest, are maintained. While it can be an advantage for mortgagees who deposit their entire income and use only what they need, resulting in extra repayments being made each month, the lack of requirements beyond paying the interest when due and staying within the credit limit can spell disaster for those with poor financial discipline. If mortgage payments are treated as available credit for...
Mum and Dad Investors Make $120k on First Property Deal!

Mum and Dad Investors Make $120k on First Property Deal!

I wanted to tell you about a story about one of my clients. The typical Mum and Dad investors – a working couple who wanted to get ahead and did not know where to start. Both husband and wife have been working hard all their lives and have just about paid off their current house. They are in their mid 40’s, have excellent job stability making a moderate income and their kids have left home. They came to Blue Wave and asked…. “Chris we want to start to invest but don’t know where to start, can you help us?” I said “Sure, let’s sit down and work out your goals and what you are trying to achieve and from there we will devise a plan to get you there – how does that sound?” “Chris that would be great.” Was their response. So their plans were; to build some assets to provide cash flow into their retirement. They wanted to travel more and have planned to have an overseas trip every year and enjoy life a little more. There was also a 5-year plan to sell their house and open a bed and breakfast / cabins, to again allow for some more cash flow but slow down and be able to leave their jobs and move to a new area where they will have a small business that they own outright. Sounded sweet – so we had the goals and now we needed the plan. I told them a little about what I do and what I specialise in. My passion is really advanced strategy property deals, such as duplexes,...
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