460 | How To Navigate Cash Flow Challenges During Rate Rises: Real Life Case Studies

And Ben Kingsley , chair of Property Investors Council of Australia and a back-to-back winner of the Property Investment Advisor of the Year Award , and both are partners of the multi-award winning Empower Wealth , co-creators of Moa , the Freelife Style Design Act , as well as bestselling authors of the Armchair Guide to Property Investing and Make Money Simple Again .

Stay tuned as they bring you the Insiders Guide to Property Finance and Money Management .

Or some other people who have said , hey , here's some opportunities that have come my way , but I need help navigating the best pathway for me to do that .

So I reckon people are going to get a lot of benefit out of the dissecting of the back stories and what people are going through , and our hope , ben , is that people go oh , all right , there are some other people out there going through some stuff as well , and this is the thought processes that they're going through and this is the thought processes that the

team that they're working with go through to help them navigate some of the sequencing that they need to do .

of things are happening and you can see that , yeah , when you do sit down in the light of day and take the emotion out of it , there are pathways forward . And if you can't see those pathways forward , it's always good to get some professional advice to help you on that journey .

Ben , I've reached the end . Oh no . No , we want more Morgan , more Morgan . It's number 13 in the art of spending series and I mean what a terrific journey . Hopefully our audience has been going on . All cuteos to Morgan . As I've said at the very beginning , go and check out his stuff , read his book , yeah , read his book . Like . These are his ideas .

I am just using them as discussion points to put them into your mind , but I hope you've had a chance to reflect on some of these as we navigate what I think is one of the better thinkers . I read his blog regularly . I think he's a clear thinker I love .

I'm grateful to you , mate , because you put him on my radar 18 months ago , or something , I must admit . You said you should read this book . I did , and then it's been wonderful since . So today we're on number 13 . So I'll riff off the list at the end .

But number 13 today is spending can be a representation of how hard you've worked and how much stress went into earning your paycheck . Hmm , okay , what does that mean ? So he talks about someone who works 100 hours a week and hates their job . They may have an urge to spend their money frivolously Can I say that word frivolously ? You did in it .

Well , first one was a struggle in an attempt to compensate for the misery of how they um , how their paycheck . Can I talk today ? Let's see if I can get my words out ? So the misery of how their paycheck was actually earned .

So he says never have I seen money burn a hole in somebody's pocket faster than a lawyer or investment banker receiving their annual bonus .

Oh , that's interesting Because after 12 months of working until 3am modeling in Excel the most God awful , miserable jobs these are his words you have to have an urge to prove to yourself that it was all worth it , to offset what you sacrificed . So that's interesting .

I've I've observed and listened and um heard from investment bankers and they have the same sort of discussion where you have this , this utopian view of what that looks like to be in that world and then , when you realize you have to give up so much of your time and often so much of your soul , um , you , maybe you can relate to that .

An investment banker might be listening to this guy and you don't know what you're talking about . So that's fine . But the person who was held underwater for a minute when they get above water they don't take a calm breath , they gasp , they're compensating for what they've lost .

So it's same for people who've worked their tails off in a miserable job and have that same sense of gasping with their money to spend it as fast as possible . So question is , can you relate ? So the officer could hold to Ben , I reckon this is you , so you're ready for this .

Okay , ben Kingsley , the most capable of uh , most capable of delayed gratification , the most patient with their money ? Often those who enjoy their work and generally love what they do . The pay might be good , but the urge to compensate for their hard work with heavy spending just isn't there . So there's a contrast , right ?

Someone who doesn't like their job needs to justify that it's worth it . So they do it in a bunch of spending . And at the other end of the spectrum is someone who really loves , has purposeful work , has meaning in what they do and they go . I just don't have the same urge , and then clearly there's spectrum continuum in every way .

But um , so that is that is Morgan's final observation that spending can be a representation of how hard you've worked and how much stress went into earning your paycheck . So before I summarize , ben , your thoughts on today's one .

But I have no doubt that there's a reward for effort piece in there and I think if people are working those extreme hours , that it could be easily justifiable in their own narrative and their minds that you know that that little extra bonus or extra amount that I got is splurge money , because I do need to reward that , because I'm not fulfilled in the work

that I'm doing . I reckon there's a good argument to that . Um , yeah , so I think there's . There's merit in what he's trying to say . The scale the bell curve is would be an interesting one in terms of that , cause I I can see it .

I also see it in salespeople's lives , where you know they're living beyond their means and anyone of those people who like to , you know , keep up with the Joneses and in anything that they do about that Impressional people . They're the ones that when we see their financials , we go .

You don't really need to do that , but you know that's , that's the world in which they want to play in . So they're going to have to work their butts off to try and earn the income and which sort of try and teach them a well , if you can trap a bit of that and put it into the future . Tomorrow you'll be better off than they will be .

I mean , some of the best stories I hear are those people who earn double the income of that sit , that mum and dad , who have teacher jobs and , you know , in retirement those teachers are worth more because these people burned all of their cash on discretionary , you know rubbish items and these people had that delayed gratification story and so ultimately they're in

a better financial position .

Yep , I've , I've sacrificed a fair bit during the week to do something that I do not love , so therefore , some of my spending reflects my sense of wanting to feel like it was actually all worth it . So , who knows ? Yep , so that's the , that's the final reflection .

So we have been chatting about the art of spending Because , if we remember way back to the beginning here , ben , it was a conversation around people can see our assets pretty clearly . So , kaya , drives to the house you live in , right , but it's , it's the spending that is behind closed doors . So this whole series has been about .

Well , let's unpack some of the nuances around our spending . So the first one was your family , background and past experiences influence your spending preferences , okay . The next one is can you get entrapped by spending ?

So , rather than using money to build a life , your life is built around money , and I think it was the , the Vanderbilt mansion we talked about in that particular one Frugality , inertia . A lifetime of good savings habits can't be transitioned to a spending phase . We've talked about that in terms of financial anorexia , ben .

Number four was the emotional attachment to large purchases , particularly buying a house , especially your first one . So to say that we can remove emotion is just a work of fiction . Number five was the joy of spending can diminish as income rises because there is less struggle , sacrifice and sweat represented in those purchases .

Number six was asking $3 questions when $30,000 questions are all that matter , and we challenge people to see if that that's what they were doing . Number seven was social aspirational spending is trickled down consumption patterns from one socio economic group to the next . European travel used to be just the rich . Now European travel is the middle class as well .

Number eight and underappreciation of the long-term costs of purchases , with too much emphasis on the initial sales price . This is very much an American view . Where is it really worth buying your home for yourself ?

Cause you , you haven't thought about the costs and the taxes and all those sorts of things , whereas the great Australian dream is very much alive and well here . Number nine no one , and this is my favorite of all time . I said it at the time . I'll say it again . I'll bore you if you ever catch up with me and tell you this is my favorite .

No one is impressed . No one is impressed with your possessions as much as you are . So that's the man in the car paradox . Number 10 , not knowing what kind of spending will make you happy , because you haven't tried enough new and strange forms of spending . That was good .

Number 11 , the social signaling aspect of money , on both things you buy for yourself and charity given to others . Number 12 , the social hierarchy of spending , positioning you against your peers . And , of course , today we've talked about number 13, . The final one spending can be a representation of how hard you've worked and how much stress went into your paycheck .

So there you go , folks . Hopefully that's given you some insights into something that will hopefully help you better rein in your spending . Ben better . Make yourself super clear on who you're spending for , because most people that you're spending for aren't even noticing .

And if you can actually rein it in , spend less than you were and trap some of that , put it into some investments chances are you're going to be one of those people who gets to buy your time back . So thank you , morgan , for your thought leadership on that . It's wonderful . So today , mate , we're going into story mode .

We're talking about some case studies of some people , because what it is is .

We thought that it would be a good idea , ben , when we were chatting that some of the scenarios that we get with our clients around what's the problem and how do we solve them I just feel like it's going to be really good insight for people who are not at the cold face , not doing this all day , every day , and sort of understanding some of the challenges

that other people are facing and what are the steps and the sequencing and the ideas and the strategies that go around , making sure that , hey , here's my problem and here's the solution . So , ben , I'm excited to get into this with you today .

Design and finance and debt is a part of that story , and so obviously we benefit from having hundreds and hundreds of clients that we're helping month to month , and just some of the feedback we get in some of those case studies are just worth sharing because it just goes to show for our community you're not alone .

There's other people trying to solve for these problems as well . So I really do feel like by sharing these types of stories , it's just going to again bring awareness but also bring some confidence to those people who are just thinking about their own situation and how they potentially solve for it , and there's help out there if you need it .

So hopefully you can see this or you might hear something that's a little bit of your story , or it might prompt you to think , oh okay , I don't have to suffer alone , because what some of these stories will highlight is that behind closed doors there's a bunch of stuff and there's a bunch of conversation , in a lot of cases , a lot of anxiety that's going on ,

that as soon as a you know , we all open our front doors , we , you know , we put on our suit of armor and go out and face the wall .

But hopefully people can get benefit from two parts of this bed , and one that we've highlighted here , just hearing that other people are going through some stuff , and two , getting a sense of what some of the solutions are .

So let's kick you to what we've got four stories that we want to share today for the community , and the first one , damien from our team , gave us the details here . Now we're not going to say anyone's name here Ben , where it's going to keep it totally anonymous just to protect those people . But the circumstances are 100% real here .

So there are existing clients that were due to roll off a fixed rate of wait for it . Ben 1.99% you know , wouldn't . Wouldn't that be nice to keep that going for a little while . That was going to happen in September 23 . So they've been on that fixed period for two years .

So in the in the throes of COVID obviously fixed , and so this becomes part of the fixed rate cliff narrative that everyone has been chatting about . So , 18 months into the loan now about to expire , into the two years . So here's the , here's the problem that we're trying to solve . I wanted to refix in the loan so that they could secure payments .

But here's the kicker in this story , and it's a big part of the story and it's sort of it'll . It'll speak to everyone's hearts here . They want to provide some certainty during the birth of their second child and therefore provide confidence in the repayments for the next two to three years .

Now , Ben , lots of people having children , lots of people are facing the thought of um going down to one income , all those sorts of things . But there is a bit more to the story for this couple here , so we'll get to that shortly . They also wanted to have extra funds to upgrade the family car to support their growing family .

But here's the facts the female applicant here was the major breadwinner and not a lot of maternity leave was being paid . So the surety around the budget , based on the savings I already have and the income over the next couple of years , is really , really critical here , Ben .

But obviously we're about to learn why they wanted to get ahead of the curve because the first experience with their first child was quite a challenging one .

So they had their first child six years ago and , from the experiences there , there were multiple medical complications as part of going through obviously firstly falling pregnant and then , obviously , delivering that child , and so a lot was learned by the family in terms of these medical complications and , based on the evidence and information that were provided with ,

that was going to also be highly probable by having that second child . So when you think about that , usually that's not usually a six year gap between basically having children . Right , usually you'll see the gaps in the sort of two to three year time range . So this is something that's been really important for this family .

They want to go back there again and have a second child , but what their challenge is here is that we realize that this puts both the mother and the child at serious risk , and so , when you are talking about that , potentially having honest conversations in the household also mean what does it mean if things go wrong ? What does that mean for our ?

Obviously the health of those two individuals , but also what does it mean for the financial security of the household ?

Right , we always financial security is an underpinning element , a foundation element of any household's comfort levels and their peace of mind , and so whenever you're getting to these types of situations , it's always prudent to basically do these types of exercises .

So that's the challenge that this household was facing , and so , again to their credit , they wanted to get in front of this particular challenge by doing some planning prior , because they expected that their costs were going to go up significantly .

So there's all those sorts of things going on and , to your point , couple that with the anxiety that you get from thinking okay , we've had one experience where it wasn't smooth sailing with our six-year-old and now we want to go back and have another child .

Just the mental ups and downs of going through all the machinations of everything you've just described is something that I had to pause and reflect on when I was running through this scenario , ben , because for the grace of God , they go . I've been very lucky through my two boys that they were reasonably straightforward .

I've spoken before about my youngest having autism challenges but generally speaking , we've been very blessed so we haven't had to think about these sorts of things . So we've got strain not only emotionally , we've got strain physically and then strain financially if we don't get this right .

So getting certainty for this particular couple , for the avoidance of doubt , was the number one , two and three priority to make sure that could happen . Not only that , they had some out-of-pocket bills that popped up previously , with some health complications that were not covered by insurance .

So , as you can imagine , if you go through that process , and then you navigate that in that child six and then you're going to have a second child and , unfortunately , some of the signs are suggesting that they're progressing in a similar fashion to that first baby . So therefore , they're putting more mental load . State of mind is being increasingly challenged .

So the last thing you need , ben , right now is are the worries outside of putting all of your energy and focus on that .

So , in terms of the plan here , what was discussed and what was the problem-solving that we were trying to , the solution that we were trying to come up with is that we wanted to get a cash buffer , so we wanted to take advantage of the equity that we had in the family home makes complete sense .

Get that cash process done and get it done earlier , rather than obviously trying to apply for lending with the pending birth of a second child , and going down to a single income Always makes that more challenging from the lenders and the credit assessment point of view .

So it was really clear that if we could take out this portion of buffer which would also allow us to accommodate the upgrade of the car , utilize the equity that we had in our home and then get that assurity around , those repayments is going to be a critical part of the solution .

That was going to bring peace of mind to this couple so they could focus on their mental strength could focus on a successful and safe carriage and delivery of child number two .

But they wanted to move out of that low fixed rate of 1.99 early , because , even though those increased costs would have been incurred , because obviously refixing for certainty at a higher rate was clearly putting impost on the family . But that wasn't the main problem they were trying to solve .

So , from what we did the details we've just described the main problem they were trying to solve was certainty , and certainty now and certainty for the next few years . So that's essentially what they did . They . So the plan was simple how can we make the cash out process as easy as possible whilst keeping them in the loop the entire way ?

Because it's just something that they needed to have know that it was being looked after and there was no sort of challenges that would sort of come along .

So they wanted to have their finances and the appropriate focus being made here , because if your state of mind as a family is deteriorating somewhat , everything just needs to be simplified as quickly as possible . So , and as we've highlighted . We want to make sure it's simple , All right . So that's the backstory . That's what the problem was .

That's what the plan was . So we went to a lender it wasn't one of the big four , but it was in the next tier , ben because they had competitive pricing and quick and easy processing to get things done right . So that was the idea Fixed most of the debt , but left $100,000 of variable to take advantage of .

They had some cash , so they put the cash into offset , which could provide them with the liquidity and the funds that they need to do a couple of those things we talked about , including at the beginning , but also meaning that for the majority of their lending , it was a lock and they knew exactly what they were looking to do , ben .

This is about basically saying , all right , well , we want to move a little bit earlier , rather than we understand that we would have had some additional savings if we had have done the fixed rate right this month , but no , we planned for that six months earlier .

We've rolled over this high cost , but there's a reason for that , and that makes that particular household feel very comfortable , very much at ease in terms of not having to worry about their financial situations . So all the focus can go on again what we were talking about before , and that is the safe arrival of the second child for all parties concerned .

The loan docs were issued with incorrect rates to the clients . But we took control of that before that got to the client . So it was first of all , it was communicated why the loan docs would be voided . The correct docs were issued shortly , so it was a less stressful signing experience . So that was something that just proved it's not perfect , ben .

In the real world , stuff happens .

So those 20 different people need to make sure that they're dotting eyes and crossing teeth and that creates that risk of error , you know , in terms of the final product being produced . But of course , any good team at our end needs to make sure that we're vetting and there's quality controls .

And so to Damien's point that was detected early by his team and we were able to get those documents reissued which , again , like even refinancing , it's not as stressful as a purchase because it doesn't have that same set date .

But it's still important that you know that you're keeping well communicated and I love reading all the reviews we get about how well we keep our people and our clients in the loop in terms of how things are moving forward with the progression of their loan application . So that's another good story , that sort of . You know .

I always use the analogy that we're like a duck on top of the pond , the duck looks like it's gracefully moving beautifully forward , but underneath there's a lot of work going on , a lot of you know .

So I think that's another good analogy in terms of what's happening behind the scenes and that just takes again another load of pressure and stress out of it , because it's not every day that you know , households have to deal with banks , have to deal with the process , have to basically get a charge , a mortgage charge , against their title , changed over .

All of those things are happening in the background . There's a legal process that's going on as part of that story . So it really does help in terms of being able to , you know , provide that level of comfort and knowledge in knowing that everything's moving smoothly or , if it isn't , that we're on top of it if it does fall out of the rails .

it was no news . So it's kind of in the same family of idea here that , as long as communication is done in this case , the communication was hey look , there's a problem , but we're on it and so for this couple of certainties is incredible . So what was the end result ? We avoided maternity leave financing challenges .

So if we had awaited for maternity leave to kick in , that would have provided a world of discomfort for trying to get the application done , so , front footed looked around the horizon and also provided that stability and the cash out so that they could do the things that they needed . So that was considered a good outcome , Ben , that's a win .

Now , it doesn't necessarily be defined by lower costs , because in this case , it was actually increased costs , but it's more than just costs for a lot of people . So thank you , Dayma , for sharing that one . Hopefully that's helped you folks . The next one , Ben , is from .

Barton , from our team , Shared this story of a single mom with the 12 year old son , and I love this story and I've got to say I think for single mothers in the community they need statues built . We've said this before , Ben . They're just really , really up against it . So in this story it just is resilient and amazing and speaks to mindset as well .

So as we unpack this , just keep that in mind , that this is someone who is doing some incredible work and modeling some incredible behaviors for her 12 year old son . But here's how we set this one up Ben , this particular person , she was a listener of the podcast for a long time , so bought her own home and bought an investment property .

So take a bow , it's brilliant . So doing all the right things to put herself in a position to build wealth over time . Okay , You'll see in the story as we go through no child support here , so doing it independently . So brilliant , brilliant stuff .

But then here's the challenge that presented in this mother's world and it came in the order of an interest rate cycling , interest rate tightening cycle . So unfortunately she was really susceptible to any interest rate movements and in terms of her lending profile . This is the bit where I really want to honor her .

She was aggressively trying to build her portfolio to take advantage of the wealth building outcome that we speak about , that we talk about the passive income that comes from building assets , but unfortunately , the struggle to afford the rate squeeze became real and started having a conversation with Barton Ben .

So it's just one about sort of saying my plan is for myself and my son to be able to have a comfortable retirement and , in this particular case , the timing of that . And then obviously , yeah , if we were listening to the conversations around the COVID period , we were thinking that interest rates were going to stay down lower for longer .

We didn't have any of this inflation conversation risk sort of at that time in our thinking . So obviously the tightening cycle that you're referring to , bryce , has been one of the sharpest in history , and so that aggressive tightening cycle has meant that in this particular case , we had to just reach out .

We needed some type of confidence , and that's what I love about this particular story with Bart and his client . She's reached out and said I can foresee a challenge with my cash flows in terms of what's going on there .

So I want to get validation , I want to get insight before I make a rash decision Right , and you've heard me talk about this with Bryce and both of us sort of saying do whatever you can to hold on to your properties during this period , because this period will not last . We are in a contractory territory by design . It is a design to slow the economy .

It is designed to erase the inflation problem that we've got , and so there is going to be some pain that's going to be experienced by many , and so this is an example of someone sort of saying I am willing to try to avoid failure as much as I can and my absolute last resort will be to sell that property , because I understand the cost of getting in , the

cost of getting out , and I haven't been able to see the fruits of my labor in terms of being the small business owner , and this property hasn't been held for the decades like we hope it will be . So she is effectively sitting down and saying how can we solve for this problem ?

It's never the monster under the bed that we're afraid of , it's the thought of the monster under the bed . So in this case , wanted to front foot name , the fear , what was it ? What does it look like ? And so it was not an option to fail . But here's a couple of limiting issues here .

She couldn't refinance , couldn't get any more lending , so come November we're moving from that 2% space to the 6% space once it comes off fixed . So again , someone who's caught up in that headline fixed rate scenario what happens when they expire ? Well , this is a real life scenario . So the a-ha here was there's two options .

Option number one was to just batten down the hatches , make some lifestyle changes , cut down on expenditure . So that's the first option . And the second option was to sell the investment property , keep their existing home , keep their existing lifestyle , but just move into a delayed wealth building strategy .

So but what we do know from this very , very resilient woman was that option two was not something that she wanted to entertain at any stretch , other than a last resort . So option one batten down the hatches was what they did . So here's some of the language when tough times come , you push through . By doing that , you improve yourself over time .

So that's just incredible resilience , Ben . So , here's some of the conversations went we're going to get through this , no matter what . We're going to cut our costs . We'll have an exit strategy on standby in case we don't get through . But here's the number one priority we're going to change our lifestyle so that we can keep this .

So , just to reiterate , there was no child support , there was no extra lending and there was an option to do some extra work , an extra day of work . So that was something that was part of the thinking as well . So she went away for three months and pondered the option .

So and here's the beautiful part that I want to see her and talk to you about Ben is sat down with her 12 year old son and empowered him , said here's where we want to go , here's our current scenario , and so we're going to come up with it together , because this is our life . What are we going to do to actually get ourselves through this ?

And so effectively , she was having the conversations over the dinner table .

Long term gains is what she's attempting to do here . She's thinking longer term around that . So the fact that she's having that open dialogue with her son to give him context , give him understanding , and then together they're stronger . So if he's on the same page in that conversation , they're going to work together .

And he might say at 13 , mom , I'm going to be able to maybe do a paper round or maybe get some sort of money on the side . Now all of that money goes into the pot to potentially help them succeed .

And I just this is a can do attitude that we want all Australians to have , that never give up , never say die attitude is what this great nation was built on , from battlers who have been able to break through , and I think this is a great story of that sacrifice , to be able to see where she can get to and then ultimately come up for clear air in a

year or two's time and really understand that they've done a great thing here and they've been able to get through .

I just wonder , you know that's that's , that's lessons and skills and mentorship and leadership that this this mom has over her son , which is just going to be life changing for him . So they , they decided to adjust their discretionary spending . So they changed their lifestyle to improve their long term outcomes . And again there was a couple of things .

There was a mitigation plan to protect her into the future , but also gave peace of mind around two scenarios .

So we've got the scenario of OK , this is what we're going to do , this is the plan that we've got together , but also , having a worst case scenario in place , they had an exit plan if it did go to to a point where they couldn't adjust their spending . They couldn't if there's further interest rate rises and all those sorts of things .

But at least there is now two parts , very clear parts that they can see so that they can demonstrate a delayed gratification . 101 here , it's just just an incredible story .

So about the grocery spend , you know there are plenty of stories out there at the moment about people making meals that are significantly cheaper but are still healthy .

So think about you know , obviously , the raw materials that you make that food out , of , those types of things in terms of , rather than that , you know the pre-processed , pre-produced sort of stuff which has higher cost associated with it . So there's there's lots of different ways in which you can look at that .

Obviously , yes , she was struggling from mortgage prison and even and this is a really important point , if you haven't spoken to your broker in the last three months , there has been some significant changes around how refinancing can potentially occur .

Where buffer rates we've talked about this before , about 3% buffer rates they have been significantly reduced under certain circumstances .

So if , in your case , you're not sure , you need to go back to your broker and find out whether there is an opportunity here , and in some cases , some lenders also have a little bit of cash out , and in other cases , some lenders have switching to interest only period , which is all about changing that repayment level .

And the final option for those people who are experiencing these higher repayments you can hear it in a lot of advertising that's going on and that is about resetting your repayments , which effectively means that you're setting your loan term back to a longer period of time , and when you do that , that does significantly reduce your payments .

Now , of course , there's a there's a cost to that , and that is , if you only make those minimum repayments , it means you're going to pay higher interest over long term . But , to our point , if you are paying that interest , you are holding on to an appreciating asset .

So it does make financial sense that you would consider all options when it comes to looking at cash flow .

So in this particular case , extra work , taking on an extra day or taking on a second job , or doing whatever you can to find money selling stuff around the house that you're not using or that is not bringing great value or great joy to you , to just help with that cash flow story . Minimising costs in terms of car travel . You know electricity .

Fortunately we're coming into spring and summer , so hopefully some of those costs will come down because electricity is so expensive . So these are the types of things that we are saying to all of our community .

There can be a way we understand that there will be sacrifices , but we promise you from our 25 years of doing this that getting out of the , getting out the other side , you will be thankful for it .

We don't want situations where couples are looking at each other and saying , oh , I wish we didn't sell that property , wish we still own that property in 10 years time from now . That that , for us , is a fail . So , hopefully , do what you can .

If you are listening to this now and you're in a state of anxiety or you know someone who might be in that , just send them the links that they can listen to this .

Because if you even just rewind back to the conversation you and I had with Lawrence Hugo around what foreclosures look like , what debt negotiation looks like , he's reached out to us to say , as a result of that , one of our listeners was facing what seemed like an insurmountable challenge running a company that had 80 people and then those people were then in a

position where , because of one podcast listening to one person , that negotiation happened , which then secured the rest of those 80 jobs . So the multiplier effect . So when you and I heard that , we were stoked for one , you know the multiplier effect of that . But it's funny how we're not in the 80s . The banks don't want to repossess your house .

They want to do that as the very last option and if you can look for other alternatives that might be able to help . So don't leave it to the last minute . As you said , have conversations with folks early . There might be debt prison opportunities for you . There might be cash out opportunities for you so that you can buy some time .

So I think we summarized that . But this story that we've just talked about is a story of resilience . It's a story of mindset . It's a story about empowering children to be a part of the journey and also keeping an eye on the prize at this to shell paths and doing everything they can whilst planning for best case scenario and planning for worst case scenario .

So thanks for sharing that . That's a . That's a rip up , all right . Next one , ben , is about a sequencing challenge to allow a lifestyle change . So let's let's set this up , mate .

By design , and this particular story is is a story of transitioning states , and that's never easy to do if you're also trying to transition to another Place to live and to work , if the job that you're doing is not on a keyboard and you know you can't work remotely . So in this particular case , what's what ?

The problem that we were trying to solve for was a situation where they wanted to avoid Renting in the next location they're going , so a clear idea about where they wanted to live and what they wanted to buy , and they didn't want to have that lost year of renting or whatever that looked like . So , but we've got a nurse and a coal miner .

They're living in New South Wales , looking to go to Western Australia , perth , to set up their new life . Okay , and so Part of this particular story is if you go to a lender and you're telling your lender , here's my jobs , and then they say what are you , what's your plan ? Oh , we're gonna buy a house in in Perth .

And they go , well , it doesn't service if we keep the existing property and we've got the new property , we can't actually service that . And then also , there's another big problem here is like , okay , if you're moving , you can't do those jobs remotely .

I mean , you know a nurse , well , maybe you can do telehealth , but in terms of this particular situation note the miner and the the medical professional needed to needed to obviously find gainful employment .

So so there's a sequencing story that has to happen here , and the easiest way to think about this is Planning and spending a bit of time in terms of pulling this story together . So , number one they were quite smart around , right ? How do we get the sale of our existing property ? How do we realize the best result ?

And well , that is just to you know , present it in its best form , and that meant some renovations and so doing some tidy up as part of that . Now , the best way to do that is get out of the house . And so they decided to rent , to get out of the house , to obviously Set it up and then style the property to get the best result for sale .

They also have the benefit of being in a situation where , when you are renting , so you're you put an application in yes , you have the rent on that particular property , but the sale of the new property is also going to mean that there's going to be proceeds of that which are ultimately going to mean you'll get your pre-approval For that future purchase in Western

Australia . Now the job story needed to be really clear that we're going to continue to keep working where we are until we find gainful employment I mean that next location . So guaranteed incomes are really critical for lending . You can have the most equity you think you've gotten . The banks should lend you money because of the equity and the asset .

No , no , it's all around the income and the service ability . So continuation of income is really important .

So , to cut it short , they effectively decide to buy the by the property in WA as an investment purchase , which also then substitutes the rental income that they get that they're paying in New South Wales , which means their borrowing power is effectively neutralized or maintained at that higher level .

And they go off and buy that property in WA and then effectively settle on that purchase , whilst then starting to think about , you know , securing their jobs in the West , and so this is a classic sequencing story .

And you know what problem are we trying to solve , for well , we're trying to solve if we can avoid rental Over in WA , which delays us for 12 months to get what we want . We're confident that , obviously , the two industries that we're associated with will give us gainful employment . There's a chronic shortage of nurses in WA .

Obviously , it's the biggest mining state in the country , so mining jobs are also , you know , available over there . So , you know , stay where we are , continue to keep doing the work , get our letters of offer of moving across there and away we go in terms of being able to execute on that particular story . So it's a terrific outcome .

It means that there's no real dead money in terms of all or time delay In them getting into their own or occupied home and and getting to set up their new life in their new state .

Then stage two became the pre-approval for the next purchase , as well as Optimizing all those sequences that you said . So there's a couple of key things here . They couldn't wing it . It was . It was not possible to wing it .

A couple of reasons is they needed to get simultaneous settlement on the selling of their home and the settling on the new property to make the bridging of the finance work . So that was super important for really strong communication , getting solicitors and vendors to all be in sync on that as well .

And then , to your point too , been there , they had very challenging transient natures of the role , which meant that they needed to sequence that correctly so that they could actually Service the lending and do what they needed to do .

So they got interest only for on the lending for two years so they could maximize their surplus in those first two years so that they could adjust to the WA way of life . They built in a hundred K buffer so that they have that emergency fund as well as assist with those relocation costs . So the end result was the application Prevaled .

But here's the best bit the clients action their relocation plan . They've settled in Perth , they've secured the property they wanted in WA and they secured jobs in WA . So there's a few moving parts that were going on there . So that cannot , you know , to reinforce that . You cannot wing that To be doing something as complex as that .

But in this case we had a really good outcome for this client .

So I'd be saying to anyone who's looking to relocate that this is sort of the the perfect blueprint Plan to follow if you're thinking about staying there for the longer term . So just , you know , some people might yep , I'm gonna try it for six months .

So if you're gonna do that and you're not a hundred percent sold on the long term , then renting would be , I think , a more prudent way of doing it .

Because , yeah , we all go on holidays in particular locations when this is going to be great , yeah , but you're not going out every night and dining out and having great experiences actually working there on a day-to-day basis .

I suspect that's going to continue for the next 12 months . That markets red hot . So ultimately , you know there's a capital growth story that they've bought into and are going to get the timing right In terms of some of that upside and their property value over there . So I reckon it's a . It's a good story all around .

Well , this story is the importance of getting Strategic advice , the points of getting good advice , the importance of getting advice that actually is in the best interest of your medium Term future , not just your short term future . So we've got a scenario here . We've got a client that purchased their third property during COVID .

So what that looks like is a principal place of residence plus two investment properties . Now , this wasn't a podcast listener . Initially was a referral from a friend of a friend who said you need to chat with Luke's , but they had a , they had a plan that was that was . That was good .

They would have two investment properties and they're in their home as , so they can get the passive income , so solid plan at the 30,000 feet level . So here's the problem that we were trying to solve was that Luke actually met them 12 months after the third purchase . Right , and what had happened is the advice received prior .

To just be clear prior to chatting to Luke was had convinced them to go to a smaller lender at interest only so that they could maximize the purchase price that they that the client wanted at the time . So that particular lender favored that . So they put all their lending on interest only and , just for context , is about $1.4 million with the lending .

But some of the anxiety that existed in this scenario was this smaller Lender was doing rate cycle increases that were not tied to the RVA , so it's actually higher . So it created a whole bunch more anxiety . So when when Luke met them , they were , they were quite anxious .

Their Repayments were about to double because they were also moving from interest only to principal and interest , so their initial borrowing capacity was that they were unlikely to be able to refinance , therefore putting them in In in the category of mortgage prisoners .

So so it was a ticking time bomb when the repayments were about to become exorbitant and the mortgage stress was was pretty high . So the point here is the short term was optimized and maximized for , but it didn't take into account any , any Future rate shifts that were obviously subsequently saw . So it's it's put them under pressure , been it hasn't ?

And so just prior to the GFC , money was cheap globally , right , we had pretty low interest rates , money markets were lending credit , collateralized debt obligations and basically repackaging Securities and making money cheap . So that means second and third tier lenders were able to find really cheap funds globally .

And the consequences of when the GFC happened was that those funding markets basically froze and the cost of money became significantly more expensive and the likes of the wizards and all of the you know , the Rams , home loans and all of these sort of pure lenders who don't source their money from Depositors , had an explosion of cost and they had to pass those

costs on to their borrowers . So it meant that even though at the time prior they were getting these really cheap interest rates and really attractive offers , that that came home to roost and was very , very difficult . It was very expensive to get people refinanced out of that . Fast forward to this cycle and the same sort of thing .

We had the cash rate at point one of 1% . We had money markets getting access to cheap funding , and so these second and third tier lenders had very competitive products out there .

But to your point about out of cycle increases , here's what's happened now , obviously , with the cash tightening cycle happening and you know , basically yield markets and financial markets adjusting , bond markets adjusting , all of that , cost of money has gone up .

And so you know , obviously a lender buys a wholesale rate of money , they put a net , net interest margin on and they , they package it up and sell it as a mortgage To these people in these particular places .

So this is the consequence of you know , of that , these , these costs have gone up significantly , and so that has meant , in this particular case , that this household has been one of the potentially tens of thousands of households that have seen their cost base rise considerably and quicker than they expected it to go up .

And you only need to look at some recent research from Eliza Owen at Core Logic , where there is definitely a pattern of short term buy , hold and , sorry , buy , sell Over the last two to three years . So , yeah , you know we all had guaranteed incomes during COVID . The markets were moving , property was the flavor of the month .

Everyone was jumping in the property market . We were told interest rates were going to stay low off for longer and so . But now we're sort of saying these people are the forced sellers and so to this point at the time , they didn't know any better .

Now I would have thought that the broker who was potentially Doing that original deal and sort of saying , okay , I'm hearing what you want , but what a great broker should also be doing is just not be a yes man , right , or a yes woman . They need to sort of say , okay , that is then , this is now . But I've got experience of several cycles .

And what are we ? What are we ? What are we baking into our cash flow models that says what if interest rates go to five or six percent ? How will we be able to , you know , be able to accommodate that as part of our planning ? And it's very clear , unfortunately for this couple , that this wasn't anticipated .

And again , it's for the thousands of people who are now reconsidering their situation where they've had to turn these properties over in the last two or three years or they're now starting to turn them over , and some of them may not recover their costs .

It's probably going to be their fortune , it's probably a break even because property prices have gone back up again . But in some cases , if you bought at the top end of the cycle and you're now selling because you can't hold that property , there's going to be red ink on the page , and so that is definitely going to be a learning lesson .

But it's also , you know , learning lessons are good but it's time lost .

You know , like it's now , you know it's probably going to be another year or two before they're able to get back in the market so effectively that's a five year cycle that they're now in a situation where , oh you know , could we have gone for a cheaper price point and could we have planned a little bit better , or what could we have done in terms of our

living costs to see whether we can hold on to that . Now , fortunately , they've got one other investment property , so it's not , you know , it's not game over for this particular couple , but it's just a classic reminder of planning short term to planning long term .

Well , you can actually still have conflict of interest where there isn't that third party vendor .

So we don't know the , we don't know the story of the mortgage broker that they went to before , but it's quite possible that they've had the conflict of interest of their client's best interest or their own best interest , because the larger the loan is , potentially the larger amount of upfront commission , they get the larger amount of trail that they get on their

book as well . So again , we need to have that discernment around the advice that we're getting is that's why an investment savvy mortgage broker is , in our view , the elite positioning , because they're actually thinking of the portfolio and what we've just talked about . What does it mean for the next move , what does it mean for the next purchase ?

And if you've got someone who's actually thinking broadly like that , well , they will have certain elements of self interest that are at play , but their self interest will be okay .

I want to build the relationship over a longer period of time , which means if I actually do plant the seeds and add value into the client now , then my agenda gets served during the journey anyway , but it means that I'm second in line rather than .

What appears to be a potential challenge in this particular advice is they may have put themselves at the front of the line .

So we always like to buy the best land and the best location as best we can . Now , you know , of course , you get them right some , you know most of the time , but there's also areas that you make as part of that . But it all comes down to the case by case for the household , and that is the story here .

So it's effectively so it's saying yeah , you know , have you done the right thing and can you hold on to this asset if interest rates are going to go higher ?

And it's clear that , yep , that there is going to be several investors who are going to have to tap out because they've got themselves into too much gearing too much debt , and we'll ultimately see those properties come onto the market over the course of the next three to six months as well .

And then , if they offered , they got some valuations done , because there'd been some improved valuations which meant that they could reduce the rate by a further 0.2% . So what that meant is it gave them breathing space and a few months to workshop how best to proceed . So that was number one . That was the first aha .

So what they decided to do and we will put a qualifier on this but they decided that they would sell their most recent purchase . So here's the qualifier Our goal is to hold as long as possible . Our number one rule is to hardly ever sell . Okay . So it was not done lightly .

The recommendation to sell was not done lightly , but the buffers were important here and the need to restore stability was critical , right .

So what selling enabled them to do is restore the structure , put the portfolio back into a stable position , because you're up to your point before , ben , they still ended up with one investment property still , and so that they could then reset and go ahead . Now , okay , there was recycling costs that was factored in .

There was opportunity cost that was factored in , so in this case , it just became a white knuckle ride on cash flows and buffers , which is to the point that we said earlier , which the person who's trying to help you maximize the amount of lending . It also needs to have that accountability of the maximum amount of defense that you've got as well as well .

So so the end result was this it's important to get good advice , not just advice , because the initial advice needed to have two parts what that one , what they wanted to do , and two , what could happen if unforeseen circumstances . And this was this was the bit that was missing initially , right ?

So so they got the advice that allowed them to do what they wanted at the time , but it didn't adequately prepare them for what could happen . So here's here's the scenarios that could have happened Interest only , terms expired , tick , that happened . Rba rate rises Okay , that happened .

And then there was even changes to their own position , so that actually impacted on their buffs as well . So it's important here that the relationship is prioritized over the transaction . So we're now getting them ready to re enter the game for that third purchase .

But sadly the reality of this scenario is there has been a bit of wasted time here , there has been some recycle costs and there has been some anguish and anxiety as a result .

So if you had it down , a planning exercise , you know , in terms of building a property plan , you wouldn't have bought at this price point . You would have made sure at the time you would have got adequate buffers that traded you through a minimum of six months , but preferably 12 months , of any changes .

And then that's the time that you need and then by hopefully that time , we will start to see the cash rate coming off these , you know , sort of very restrictive settings and coming back to more normal life Levels over the course of that 12 month period . So you know a learning lesson . We're not perfect . We all make mistakes , we don't .

You know we're not singling this person out as an isolated incidents . We understand that it's quite common . We understand the brokers might think they're doing the right thing by a customer in terms of finding a solution , because the customer has asked for that solution . That can also be true .

So it's just one of those ones where you know that that , that experience and that knowledge you gain over time and then being able to harness that into the advisory work that you do , speaks volumes to helping and protecting those types of households , and for me , that's the greatest joy I get in .

You know , running an experienced team and being able to make sure that we try and check for blind spots where we can . There's still always , you know , sort of unforeseen circumstances where even the best planning may be undone , but this is a case where maybe , just maybe , some of this could have been avoided .

We covered a wonderful scenario of a single mother who's who's planning seeds of mindset into a 12 year old son whilst batting down the hatches there .

We also looked at a sequencing scenario where someone needed to get their ducks lined up in a row , and that becomes a bit of a platitude been , but the ducks being in a row were super important here for the married couple that wanted to move to WA and then obviously , that last one we just spoke to then was around .

Let's start with getting advice , but then the next sub level of getting advice is getting the right advice , and clearly we talked to that point as well . So there's some , there's some takeaways been that we want to really bring home here for our audience . So let's kick it off . We want to make sure that they're not transactional focused .

You know , yes , we've also won , you know , national Excellence Awards for the work we do and I think that's wonderful recognition for an amazing team that we've got . But let's bring this back to a broader story around the type of investments heavy broker that you want to be working with .

You don't want them to be transactionally focused , and we talk a lot about that in terms of we're here to solve lifestyle problems , right ? So we're here to work with our customers and build relationships , not only for the here and now but also into the future , as they design their lifestyle by design to achieve that financial piece outcome .

So , so if they're very transactional focused , then you know that's not in their best interest . But story is , had two deep conversations with that single mom and they've done no lending . It's just about you know that sounding board in terms of what that looks like . So they've got to be solution focused .

So you know , ultimately , as part of the problems that they're addressing , what are some of the solutions that they're bringing to the table how much of those solutions provide for , you know , adequate risk margins and and buffers and safety nets as part of that particular story .

Now we spend a lot of time in our brokering business also fixing bad lending advice , and so you know that's that's also part of the mix in terms of people coming over to our business because their broker hasn't been able to do that . So you definitely want your broker to .

The minimum expectation of a really solid broker is excellent communicator , strong subject matter knowledge , but then the you know , the X factor on most brokers is their problem solving skills around the different solutions that they can bring to the table Substitutions of security , loan to value ratios , un-cross securitization , sequencing transitions to interstate migrations ,

looking at LVR levels that you were talking about before and pricing to those LVR levels . The world is moving interestingly .

P&i , different cost structures associated with that Brokings become a lot harder to do than what it was 10 to 15 years ago , and so credit needs to be to all of those great brokers out there who understand the nuances and the effort that they have to go to is significantly higher than what it was 10 or 15 years ago to get a solution .

So I think from that point of view now , that's great for the industry , it's great for the professionalization as well , but the other sort of things that I'd be looking at when it comes to finding that sort of really , really strong investments that be broker .

And if you're someone who's in a privileged position and you're not in distress , well , now's the time to be on the front foot , to be looking for optimizing and opportunities for you so that you can position yourself in a way that you can take advantage of whatever life circumstances throw at you . But we've talked a few weeks ago about our housing market update .

We see that there's obviously opportunity for the people who are positioned strongly in their household finances to get ready for what we think will happen in 2024 . So , again , depending on which lane you identify with Ben , it still . It still comes down to not leaving it to the last minute , seeing what your solutions are , looking for creative ways .

Hopefully , those stories we've demonstrated are a cross section of creative ways that people have tackled the problems that they're facing in sequencing and staging those problems . Now , ben , within more . We have money stretch , so you want to .

So if you do want line of sight , and then there's a free tool inside the more platform and the more app called money stretch , and it's it's just .

It is it's so focused on cost of living and it allows you to measure those cash flow impacts and it's designed to give you a line of sight of how much your cash or how much cash you're going to have available in terms of changing to repayments , starting a family , putting kids into certain school programs that cost a little bit more .

So if you have those sort of impacts on income and expenditure , you can play in this sandpit . It doesn't affect your ultimate financial position . That's separate in the platform . So you export all your information into money stretch and you have a play around in there and that's going to give you some line of sight or confidence on that .

And again , any , any reasonable broker worth their salt is also going to have a good idea in terms of how those cash flow outcomes . Or look In our case , some of our brokers obviously use that tool , you know , as part of that particular story .

So it's a really important message just for anyone who's thinking about before they're making to your point price , about pre planning . Before you're making any decision , run your numbers . It's free to log in and get set up . Yes , takes a little bit of time to get your numbers in there , but , again , your outputs are going to be only as good as your input .

So I would encourage you this is these decisions are going to be worth tens of thousands , if not hundreds of thousands , of dollars towards your future wealth .

So if you can't find , you know , half an hour to an hour to dedicate to actually do some investigations in terms of what your situation looks like , well , unfortunately you might be one of those people who'd be sitting on the sideline saying how come I couldn't do that ? Well , there's a good reason for it .

Number two is go to your investment savvy mortgage broker , have a conversation with them and front foot it in step number three If you do not have an investment savvy mortgage broker , ben and I would love our team to help you solve any problems that you have that you can identify from those 4K studies or something that's totally unique to you .

So if you go to empowerwealthcomau , leave your details there .

Our team will reach out to you and help you identify the problem , give you a sounding board if that's what you need and hopefully offer you some solutions that we think that , in line with the conversations that Ben and I have with you each week on the podcast , they are well and truly in alignment with that as well , so we'd love to help with that .

So , if you want to just make sure before you put all that effort in , if it's the tool that you're looking for , take a look at that video , and we've also got other tutorial videos on the more YouTube channel , which is M , double O , double R .

So you need to live a thousand lifetimes to see the scores of problems that experience , investments that are being more which brokers have faced and solved each week , each month , each year . So that is a fact , right ?

So that's how you get to buy your time back , because if they've experienced some of these things and know how to overcome them , you get to lean on and benefit from the experience of those , in some cases , mistakes , in some cases , experience that taught them those lessons .

So and so , hopefully , you can see that from some of the stories that we've actually shared today . All right , so if you want to avoid the time ignorance of tax sorry , the time tax of ignorance learn from others . So my life hack today is just to get the conversation started . Reach out to get some help from your investments . Savvy mortgage broker .

If you are someone who has opportunity , great , go down that path of exploring what your opportunity is . If you're , on the other hand , just someone who's experiencing anxiety right now .

Put your hand up and speak to someone to get some help because , again , you're going to need to live a thousand lifetimes to just get the same level of experience and stories and process and anecdotes that they know . So don't do it alone .

If you're feeling like in some of the case studies we've just described , that that it's just feeling too heavy or too much , or you need outside perspective or an objective . Look at your circumstances .

Start the conversation today because in both situations whether you're assessing opportunity or whether you need to relieve some form of anxiety in both situations you will either win or you will learn , and or both will get you closer to where you want to go , ben . So I just want to really want to lean into that today .

Those stories were intentional from us to get people to take action , depending on which lane they're in opportunity or anxiety . But the quicker you put your hand up to ask for help , the better the opportunity will be for you .

I'd done my training , got my qualifications , but I was trying to problem solve and I had one sort of mentor that I could ask a few questions of , maybe twice a week . So what was I ? An investment savvy broker that I have the years of experience ?

No , now , over the course of six or nine months , I then met up and grouped up with another small group and all of a sudden , there was five brokers . Now , in the next six months , I had so much more knowledge gain because I was able to run scenarios and understand their experiences .

So the sum of those five brokers getting together really helped me a lot in terms of accelerating my experiences and my problem solving skills .

And so when you are thinking about the investment savvy broker and the team of brokers that you're going to be , you want to try and get with a team that have a good size brokerage where they're able to sharpen their iron , sharpen their knowledge from literally hundreds of deals that they're doing on a week to week , month to month type basis , and so that , to

me , is when you can really get the sum of the parts as a great value . And , of course , I am very super proud of our own mortgage-breaking business in terms of the work that they do and with a team . I think we've got about 16 full-time brokers in there now or thereabouts .

They are experts at what they're doing , because if they have a unique scenario that they haven't seen before in the thousands and thousands of deals that we've done , they've got a team to lean on to help get a solution to the situation or the scenario that's in front of them .

So that is very powerful also when you're thinking about the mortgage-breaking business that you're also going to be considered using .

So , bryce , we've got some really fantastic data out from the recent survey that we'll be promoting , which is the ninth annual property investment sentiment survey driven by the property investment professionals of Australia and congratulations to Nicola and the team for pulling this together 1700 and I think 16 odd surveys were completed , so record number of surveys and

over the course of the next few episodes , in terms of what's making property news , I'm going to be talking to some of the results . So here's a couple of interesting results in terms of the reason for selling a property .

So if you are now thinking of selling a property , one or more investment properties in the next year , what would be the reason for selling Now ? 47% of people said government increasing or threatening to increase taxes , duties , levies that make it less attractive to investing property . That's 47% of people saying that is the main reason why I'll be selling .

Second to that is the tenancy legislation , so all the reforms going on that's taking the control away from me , from the property that I own , is the next reason . And then , with 40% of the people surveyed saying what would be the reason for them selling , is the interest rate story .

So they are big numbers in terms of influencing the decision of a potential investor who's getting out of the market , and we know the consequences of that . Now , building on that particular story , where were some of the locations in which property investors sold over the last 12 months ?

And this should be super concerning for the Victorian government because 25% of the people sold in Melbourne . So they sold in Melbourne , followed by 23% in Brisbane . So the two state governments who are increasing taxes or threatening to increase it and then removing them or , in Victoria's case , introducing an extra levy , this is not great news .

And we're talking about 25% Melbourne , 23% Brisbane , like for context , sydney only 9% , perth only 7% , adelaide only 6% . So just gives you an idea that there's a real concern here for property investors . So if Melbourne is on the nose , victoria is on the nose in the short term and obviously people might be saying what does that mean ?

Would you be investing in Victoria ? Well , bryce and I know that we've been doing this for 25 , 30 years now that regulatory change will occur , like what we saw in New South Wales when they introduced a 1% stamp duty for premium for investors . They quickly reversed that 18 months later and nothing's happened with Sydney prices .

But for those people it's meaningful , for those people who are tapping out or who are looking to invest . So I'll have more to say about ranking the states in their results as well as I unpack some of this data coming out of this latest release .

I don't plan to sell , I plan to weather the storm , I plan to hold them for the long term and I have property in Queensland and I don't plan to sell and I plan to weather the storm , but they are concerning .

But I guess that sort of reinforces a lot of the conversation and a lot of energy that a lot of people probably don't understand that you've put on behind the scenes to try and represent property investors , because it's a very compelling voice that you've just described there as to the psyche of the property investor .

And if you were to extrapolate 47% as an exercise of how many people , if property investors left the market , that's well over a million properties that would go up for sale and if you take a certain percentage of those would be bought by owner occupiers and some of the people go there , that'd be great . That's a great idea .

Well , the poor old tenant will have less properties to be a part of . So it is a significant extrapolation exercise if you did play that out using that stat for what would be a remarkable challenge for the property market in general if that was to actually happen .

So even though our GDP grew by 0.4 of 1% , you take out the exports , you take out the government spending , such as hydro 2.0 , the snowy mountain scheme .

So without the government investment in infrastructure , without the export boost that we've got through gas and higher prices for our natural money , it would have been a negative GDP read , and so the consumer demand is not there .

Now the biggest fear for most economists who study this sort of stuff about the prosperity in the short term for our economy is dwelling investment , is falling off a cliff , and that dwelling investment not only has direct investment but also subsequent indirect investment that flows on into the economy that can stimulate jobs and economic growth .

So this is a real problem for the economy and it's obviously a real problem for tenants and homelessness and all of the other things that are attached to that . So the reason why , you know , if you look at this and say , oh , that's really disappointing , I feel really , really bad for property investors . Don't feel bad for property investors .

The smart ones are playing the long game . They're not going to tap out . But the ones who may have come in the fair where the ones at Bryce is talking about they'll put their money elsewhere and when they do that , there'll be less supply and that will result in higher rents , you know , and less economic activity , which means less jobs and a slowing economy .

So I think the important thing is you can't look at property investment in isolation . You've got to understand the overall economic impact that these small business operators are also investing their money into a long term investment return , but it's also stimulating and it's productive for the economy . So I think that's also an important message here .

That is a remarkable amount of respondents to that survey , so that's super helpful . So , mate , just another great conversation today , hopefully sharing some stories with our community that will help them understand that there are people going through some stuff just like them and there are some ways that they can navigate that .

My little tip is to listen to it at one and a half speed . Now , for those of you that are time poor and don't have the option to go back to the beginning , don't worry , because we've got you covered as well .

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