Alright , folks , welcome back to the Property Couch , this edition of the summer series , which is definitely in the shadows of Christmas . Ben , it's beginning to sound a lot like Christmas , but today's show is a ripper .
We are talking to a mum who did not let divorce stop her progress and is also a role model to her daughters and teaching them how to fish rather than giving them the fishbend . It is a great episode . What else do we cover ?
Well , because it also explores Bryce , the challenges of school fees and potentially braces and , obviously , a rising interest rate environment . So it's about that mindset and that strength to overcome the battles of cash flow as we look at this particular story .
Folks , it is a ripper episode , let's rip into it now .
Welcome to the Property Couch where , each week , you get to listen to two of Australia's leading property and money experts Bryce Holdaway , co-host of Location Location , location Australia on FoxTel's Lifestyle Channel and co-host of Escape from the City on the ABC .
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 more , the free lifestyle design app , 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 .
Alright , Ben . We've got another very special guest on this edition of the Summer Series . We're talking to TPC listener Lisa Keynes . Welcome to the Property Couch , Lisa .
Thank you very much . Very happy and excited to be here .
We're excited to chat with you Before we push record . You mentioned you've been listening for a little while . How did you stumble across the podcast in the first place ?
That's actually a really interesting question . It was such a long time ago I don't really remember . I probably read about it somewhere and then I started listening , but I think at that stage you were only up to about episode 20 or 30 . And I used to have quite a commute to work , so I used to just listen to it in the drive on the way to work .
And now Thursday afternoon drive home is my most exciting day of the week .
I get to listen to it on the way home , which is great Well after several years , I'm excited to hear that it's still something to look forward to on a Thursday .
Thanks for tuning in , but you know what the first question is going to be on Summer Series , but it's just in order for us to get a bit of a sense of you and money management in your back story . Can you let us know if you were having conversations about money growing up over the dinner table and if so , what were they ?
Look , I can't recall having actual conversations around the dinner table , but I was very privy to sort of things that were going on and I think I was quite observant , even from a young age , as to what was happening . So mum and dad were very hard workers . They worked .
Dad worked for his uncle in a trucking landscape business and then mum used to work at night time and pretty much dad would come in and look after me while mum went off to work . And then , when I was relatively young , my parents they bought a milk run business , so they started doing that .
And so I just remember having a lot of coin and money around on the dinner table and having to pack that up and then get that off to the bank . And I'd go to the bank with mum and practice my handwriting on the little deposit slips . Gosh was in the big queue trying to bank the money , yeah . So I was just sort of very aware of it .
I didn't really have any concerns about money , like I didn't have fees , that things weren't getting paid or anything . And then when I was about nine or 10 , mum and dad bought a business in the country . So we moved out of Sydney and to the country , which was pretty big and our lifestyle changed completely .
So it went from having mum and dad at home all the time to them working seven days a week , 24 hours a day , sort of on call , again , working really , really hard . So it was actually a motel and it was in country , new South Wales , so , yeah , so it was quite just an eye opener .
But , like you know , I learned about customers and people paid to stay places and why people were traveling and all that sort of thing . Yeah , so that was quite interesting .
And then being in the country , mum and dad , I think , suppose , got exposed to what a lot of rural families do and that's like sending their kids off to the big smoke for their education , and so then that's what they did with me .
So I went off to boarding school , came back to Sydney and went to boarding school for my high school years , and so that was a huge eye opener , particularly in the way of money and seeing how different families lived and different types of jobs , and I just sort of really got a sense there that , you know , some people can earn lots of money and blow it .
Some people can not earn a lot of money and have a real lot to show for it . Well , some people can be really really really well off and you would never know .
What were you seeing to draw those conclusions ? What were you exposed to ?
I think just all the different types of students at the school and what you know families , what cars they drove , what they did for holidays , versus you know us in the boarding house .
We , you know , were pretty much country kids and would just go back to the country for holidays and things , but we were all the families were paying massive amounts of fees for their kids to be there . So it was just a real experience , I suppose , to see how different people and different jobs got certain you know levels of income and that sort of thing .
And so , just for context , any siblings I don't know , so only child .
So I think that was probably something , because , I mean , my parents weren't wealthy by any means , but they were very hard workers and I suppose they just always put their money away and paid their way and paid their bills and sending me off to school was a big thing and my mum used to say to me it's basically just meant that they didn't buy a second car .
For that period of time my education was the second car pretty much .
And given that you were running the motel in this location , what sort of holidays did like ? Did they leave for a week or anything like that ? So , and how many years did they run the motel for ?
We were . They were there for about seven or eight years and I think we had one holiday in that time . I remember it distinctly . We went to Queensland , did Dream World and and that was it . I think it was a week holiday . We used to , we did used to go and visit family and friends around different places and we'd have come .
People come and visit us and I suppose because we were in a motel , family and friends would come and visit us , but yet no holidays , even just nights out , we didn't , because they were running the motel .
Yeah , and in terms of obviously single person you mentioned earlier , you didn't feel like you missed out on anything around clothing or being part of the next big thing , because you know it sounds like you were financially OK .
Yeah , I look , I probably did feel like I was left out and didn't have as much as everyone else . But , in reality I didn't . I had everything I needed .
Yeah , the biggest thing probably for me was when we moved to the country that mum and dad went around to go to school events or to go to sports events , and so I didn't get to do as much activities as I used to be able to do before that because they were working . But on the other side I was in a very small town .
So , you know , I had a lot of freedom and could do a lot of things , fun things that I probably wouldn't have done elsewhere .
OK , so let's fast forward then . So you graduate through school , off to university , or do we ?
Yeah , I did go to uni and I just always had this dream , or just assumption , that I would go to uni . I didn't know what I was going to do or what I wanted to do , but I was just always going to go to uni . So I did a business degree , got out of uni , got my first job in the city and , ironically , my first job I was a working marketing .
So I was a marketing assistant on a major property development like a high rise I think there was about 700 units off the plan selling in Sydney .
So it was a real eye opener as well , because I saw these people coming in and learned that there was people buying it for investment or people buying it to live in what people were paying and I was just like I think at the time they were paying 200 , 300 , maybe up to $400,000 . And I was just like , how do people afford this ?
And now you just think that was a steal .
Any insights that you got that our listeners could benefit from , from being on the inside of a development that does high rise , and some of the things that they need to do to attract people's attention , to be interested in the product .
Probably not really Like we did a lot of marketing . There was a lot of off the plan activity around that time , like I remember Meriton being very heavily marketed and things and people buying it Any rental guarantees Lisa . No , no , not the one that I was working at .
You were talking roughly .
Late 90s , 96 , 97 .
Yeah , so , yeah , so it's just really interesting . That one thing I would say is that , looking at the way people were living like there was so close confines and like nobody had a choice of the design of the apartment it was either blue carpet or black carpet , I think it was , and that's what you had and everyone's unit was exactly the same .
Yeah , but yeah , it was an interesting sort of first job and yeah , and then I sort of moved on from that after about 18 months .
A homogenous product . So let's talk about obviously you've been exposed to money . You're seeing basically bills being paid , with people checking out of their motel rooms and all those things . How did you have your banking set up when you first started operating ? Your own finances .
Look , I probably didn't have anything Fancy , I just had an account and probably a savings account . Yeah , what I did learn when I was working on that property development the sales manager that was there . He used to talk a lot about shares and Manage funds and all that sort of thing and and .
I was telling property off the plane . What does that ?
tell you I was very kind because I didn't get commission , I was just salary . He got a bonus and he gave me a thousand dollars out of his bonus . Wow , that was just huge . And so I was like I'm gonna do something good with this .
So I just put it into some managed funds and Still got them to this day and just at times just put some money towards it and so so if you , if you're learning a lot of lessons from mum and dad just by observing and you mentioned , there wasn't any Conversations over the dinner table , so we get to university you do this first job that you talk about .
How are you ?
How are you forming your money habits and your budgeting habits around receiving those first pay Checks ? What , what , what are you leaning on or drawing on to try and you know the cash on your money .
Yep , so definitely like the philosophy of you don't spend it all , like you know what your bills are coming in , know what you've got to pay , know what you've got cut the salary coming in , so payment coming in , what you've got to pay in terms of bills , and then trying to bank some .
So I would say that I've always tried to bank some , but I wouldn't be . I wouldn't say I'm an amazing saver Because I never seem to have huge amounts of savings , but I always .
There's a reason for that , which we're about to learn as we play out your story .
Yeah .
So so I do want to move to . Sounds like money isn't sort of something that's Easily lost , it's quite disciplined , there's a good behavior around that particular story and then ultimately you find a partner and you start getting serious about that partner .
Tell us , take us through that first phase of that relationship and and what the sort of dreams as a couple we're going to look like , and and and what sort of eventuated , because we know that there's obviously a pivot that comes off the back of that .
Yeah , we say even probably before that I just had an interest in investing in finances and things . And I I went to visit my parents one weekend and my mum was reading the local paper waiting for me to arrive and she Said , just seen a property , I think you should buy it .
And I was like , oh , you know , I know anything , and my parents aren't risky People , you know , they just work hard to pay their bills , save a bit of money , yeah . So we went to have a look at this property and mum was like , oh , I've heard you can do like sort of borrow all of the money or you can do like a deposit guarantee or something .
So she did some initial investigations and and then I ended up buying Investment units in Gosford right , and it was really Close , like really walking distance to the , the center , the shopping center , close to the water . It was like a relatively small block , about 12 units , that sort of thing . So I thought this was amazing .
Like you know , here I am buying the first property as an investor , renting it out . But really when I look back I knew nothing .
How old were you then , lisa ?
I'd say I was About 27 ish maybe .
Okay .
That unit in Gosford .
I reckon I paid about , I'm going to say 150 , 170 .
Oh , big bucks . Can you remember back then how much of a deep breath that was to actually part with your money to buy ?
something for 150 . Yes , yes , absolutely , absolutely . And throughout all the years . When I look back at the times of doing it , of buying something , it's always been oh my god , if you don't buy it now , you're never going to be afford it , you'll always miss out , You've got to get in now .
So you know that's sort of the mantra for the young first-home buys now as well , and I think you know you're getting . It's just you're far away , You're far away .
My first one was 199 940 and I thought it was an enormous amount of money because the median price for a house in Perth at the time was 158 and I paid 199 940 for a three bedroom apartment .
So I Remember a friend of mine Her dad was a dentist and I kind of thought he was really good the money , and he looked at me with just the , the color went out of his face . He goes you have you done the right thing ? And it just undermined and made me so nervous , if I so . So so the point that you know further to your point doesn't matter .
When you buy your first one is a gas moment anyway . So you know , just you got to embrace the gas . But I guess the other thing too is I look back at that first property and I would not buy that property again . You know , you know . But I think it's the , I think it's the most important purchase that I made Because it got me in the game .
My second one was a hell of a lot easier and then now I've obviously got multiple properties down the track , but , um , the that first one is so incredibly important because if you get if it's kind of like just building that that muscle memory of making a decision and taking action and stepping forward . So um so got got for 150 .
You said you wouldn't buy it again . Why ?
Well , I Got struck with some huge special levies . So I being on an okay income , being by myself , no responsibilities , the pay repayments and everything for fine , that was all all okay . And then I think I got struck with I think it was about a 10,000 to 12,000 dollar special living .
Yeah , which which was really tough .
And then , yeah , and then about a year or two later , they had to do another one , which was about 5,000 .
And do you remember what you were repairing ? Was it concrete cancer , was it sort of it ?
wasn't , it was leaky balconies . And what really got me was I was on the ground floor , so I didn't even have a balcony , so I didn't even get new tiles .
I think we've all got a story . I used to serve as a body corporate that had a lift and the the block tower that I was in didn't have a lift .
And you had to pay for it .
Yeah , well , it's just as you know they , you know body corporates , you work out your unit entitlement and then you know divided up . But a portion , a large portion , was the lift maintenance in the central block that I wasn't a part of , but that doesn't matter , it doesn't discriminate in body corporates , it's happy to have a share the love around .
So , but if it wasn't for those special levees , looking back , would you ? Would you have still not made the decision ? Or was it just the special levees ?
That the special levees and the body corporate was difficult , like it was just work , yeah . But then also Gosford went under major development and the council were just putting up high rises everywhere .
So I know when I first got it , I think I was renting it out for like over 200 $270 a week and then by the time I was selling it I think it was only getting about 200 a week . Oh , it was actually going backwards because the supply there was just so much Units and they were all new and my unit wasn't .
It wasn't an older complex , it didn't have the pools that , all the lifts of the gyms or anything . So , yeah , it was more difficult to get a tenant .
So so what you're saying , the elisa , is if there's a lot of supply of rental accommodation , rents go down . You need additional rental supply , see rings go down , yeah .
Okay , yes , at least . So why was it ? Why was a unit I'm trying to get into the psychology of your mind at the time around why you bought a unit when potentially could have bought a house . You know , because there'd be a .
There'd be a bunch of people here who have never invested in property and if I think back to my why , I bought the apartment and probably felt a bit more straightforward . I don't know why .
Because if you buy a house , you got maintenance and gardens and more upkeep and , without understanding the fundamentals of Investing , it kind of just felt a bit safer just to buy an Apartment because it was contained and it felt like it was more controllable .
But was there , was there anything for you that you can remember or relate to around why you took a unit when you you could have bought a house ?
To be honest , because I wasn't even looking like , okay , I'll do it , but Also because of my age . I'd never lived in a house , I'd only lived and rented in units , so I was very comfortable with unit living and I sort of understood it . I didn't really understand what came along with having a house and what you have to manage and finance .
Because you you know at the time you're exposed to sitcoms like friends , and how I met your mother and you know , that they were all . They were all based out of apartments out of America , so they were very influential at the time , whereas I think back to country practice and sons and daughters and some of those All ones that are all houses .
So I would country yeah that's right .
So yeah , so you say some of our millennial listeners are just going . What are you talking ?
about .
So you bought this unit in Gosford . So what , what's , what's next on your life ? So you said , you bought that on your own .
I did and then I I was renting in Sydney and so then I sort of Working around with different people and they were all starting to buy properties to live in in Sydney and so I was like , oh , I should do this . And this was around the early 2000s and again , think that the mantra was if you don't buy now , you'll never be able to afford in Sydney .
You're , you're never . Prices are going up , you've got to get in . So I bought a townhouse to live in in in Sydney , a two bedroom townhouse in Marsfield , and Lived in that Whilst I still had the investment property , the Gosford property , and I lived there for a number of years before I Got married and then bought a family home .
So bought the family home in 2007 in Sydney as well , and so I did keep the Marsfield property as well . So I was sort of collecting them along as I went . So I bought the , the family home and again at that time it was like a gosh , how can people afford these properties ?
I think we paid five hundred thousand for the property , felt like we had such a huge mortgage and how , how do people afford it ? Like , how can we afford this ? But if we don't get in now , we're never gonna get in .
So how much was the Marsfield one ?
I wish I had kept it .
Yes , there's one yep wish I had of .
Yes , yep , because I think he's .
When did you sell it ? When you were selling the board .
So yeah . So obviously , once having the family home and you know felt like we had the hugest mortgage in the world , and then we were starting to have children , so I was going off from maternity leave there was things that we wanted to do around the house .
So I firstly sold the Gosford property , and the Gosford property didn't really come away with too much money but it financed the building of our pool . So we put the pool in our home .
So the net profit out of the transaction Bought a pool . Bought a pool after holding it for how many years ?
Ah , close to 10 years , I'd say Eight to eight years .
And you expected it in the capital gain .
Yes , so that's it . Yeah , I didn't come away with a lot of money , but I got some great tax returns along the way .
So negatively weird , yep . And then you've got this , you've got enough money to basically , so not every property is a winner . I mean , obviously there's opportunity cost in that particular story .
That first one wasn't negatively geared , though , was it Because you're getting two 70 a week . So on 150 per cent .
Yes , to start with . Yeah but I had lots of expenses with all my body corporate and it was fairly high body corporate to start with without the special living things on top of it .
Well , there's a little tip to go the rent return after body corporate when you're buying in units to compare those because that's often can dilute it . So you bought the family home . You sold Gosford and then Marsfield . Did you sell that to fund the sauna ?
No , that was to fund the first child . Which will be available right away yeah , so basically I was going off on maternity leave and actually had my first child in 2008, . And that was about the GFC time . So interest rates were going up and up and up .
Yes , they were .
And I remember that happening and panicking and like how am I going to manage all of these ? I'd had some tenant problems at the Marsfield property , not paying . I had to get the sheriff , or the property manager had to get the sheriff to evict the tenant .
So it's just becoming a bit of work to manage , plus wanting to put the money into our own home and going off on maternity leave and things , so just needing to increase the cash flow . So I sold the Marsfield property and sold that for 580 something , 586 , and actually with that one the agent actually came to me and said , are you interested in selling ?
And I was like , well , what could I get for it ? And when they told me I was like , yeah , ok , let's sell .
So , you made a couple of hundred . In what time frame ? You bought in 2000 and you sold it roughly 2008, .
So about five years , four to five years .
OK , gotcha .
Yeah . So yes , I sold the Marsfield property , but I'd said to myself because I really , really wanted to invest in property and I sort of made a deal with myself that if I sell this then I'm going to do some research , do a course and just really try and use this money to leverage me into buying something in the future .
Well , that's right , because people doing some rough math would think that it's just too underground clean , but it's not . I mean , that would have probably been negatively geared as well . You're just getting back a bit of the costs that you've already put in as a sort of a bit of forced savings , because five years did yield you a return .
So that's pleasing , considering the duration of that first unit , and basically giving you about 30 grand a buy , paul . There's not much joy in that story . So you have your first child . How many children did you eventually have ?
Two , two , two kids .
Beautiful , yeah , ok . And you got the family home , the two kids , and then you're starting to think I need a plan . Well , I'm going to invest in property , I'm going to get educated and I'm going to make sure that I'm going to put my money to work hard for you . So you're doing a nice tick of that box .
I like the idea of getting educated , I like the idea that you've realized that for your money to work harder for you , it's not going to do that in a bank and in some cases , not an offset account either . And you've got the two kids . So what's the line of sight looking forward at that moment in time ?
Yeah , so I was reading a lot , reading a lot of books . Excellent your property investment magazine , I think it was called .
Yeah .
I used to watch lots of TV shows and things and that's where I first saw Ben on one of those shows .
So yeah , so I just did a lot and I basically I found a company that was running some investment property education courses and started talking to them and went and did the course , sort of learned how to look for a property that's going to have good potential .
So very much along the lines of what you say Own or occupy appeal , scarcity in places where there's lots of variety of industry , that sort of thing . So future job , employment prospects . And so I got a plan and so I was on a journey then . I think the actual original plan was to buy 10 investment properties .
Oh 10 .
That was the original plan . How did you feel ?
about that . You get a plan that says deliver 10 . You're three properties deep , so it's kind of 3x what you've done . Was that something where you went yeah , no problem or something else ? What did you think ?
about that . I was one portfolio , yeah , so you're starting again , yep .
Exactly . So I was starting again , I thought , wow , 10 . Like really , do you really think I can get 10 ? And so I'd sort of set myself the goal about six . I didn't actually think I'd ever get to 10 . I'd set my goal a bit lower and whilst I was on this journey , my husband whilst he had no problem with it it was not of interest to him whatsoever .
So , obviously , having to then go home to say , oh you know , we're going to buy 10 investment properties , he was just like you're kidding , there's no way we're going to do that . So I had , you know I also had to sell it to him as to how this was going to work and feel confident that it was going to come off .
Yeah , so I started and I probably in about four years , bought five to six properties . So it was in pretty quick succession .
Yeah .
But what I'd learned this time around was about the finance structure , and I can't . I know , bryce , you always say it's a game of finance and it really truly is like it's about getting that finance right and managing the cash flow and then everything else just sort of does it in the background .
Okay , so there's a lot for us to lean in there . What was the science behind 10 ? Was it an aspirational number of properties , or was there a value attached to that ? Or is there a passive income ? What was the North Star that you were going towards that 10 would fulfill ?
Yeah , I don't recall there being a particular income goal or anything , it was just with your situation . Over this period of time you could get 10 properties .
So , and as I said , those very basic calculated models yes , Well , to be honest , back then too , if that was , what are we talking ? Roughly 2008 , 9 , 10 ?
Yeah , actually , 2013 was when I bought the first one , so 2012 was probably when I was doing the course and starting to get ready , because to be honest .
The narrative around that period of investing history was here who dies with the most properties wins . It was a numbers game of properties rather than . This is . What I'm really proud of with the podcast is because some of the narrative that we were talking about was it's not how many you've got , it's the value .
It's about retiring out the debt and it's about actually having the rental return providing you with some cashflow to live on , because it was very much a gain for the people who weren't investing back then .
It was a narrative around how much equity you could build and how much equity you could harvest , and how much equity you could harvest to actually live on , rather than retiring out debt and have the passive income . So it was very much that was the norm back then . It was all the magazines had seven properties in seven months and then properties in 10 months .
It was just a numbers game .
Yeah , yeah , and that was sort of the goal , or what was talked about was trying to just get a number of properties as quickly as you can .
Yeah , so I'm gonna sort of move into the area of the relationship story here now , because you gave me a little bit of a clue early , lisa , around that you came home to tell your husband what you're doing and he had no interest in it . There was no connection , no alignment around goals and what lifestyle by design looked like together .
Then we hear a story about a number of properties , because that's what we could afford to do , because we had this simple calculator and we could use the equity and as long as we kept buying high yield properties , we could keep adding and adding more and more , but there was no North Star , there was no sort of thing to go towards .
And so I wanna ask the question , because obviously I know a bit about what happens next but what was it that triggered a disalignment in those values and those goals which led to a change in your circumstances ?
Yes , well , we definitely went aligned on our money goals at all and for running the household .
Like we were both on very similar incomes and in running the household I sort of managed all the finances and I was someone who liked to have the money ready to pay the bills and all that sort of thing , whereas my husband definitely wasn't , and I think he was getting frustrated because he just wanted to spend and do whatever and I was trying to be safe and
secure and build for our future , et cetera , anyhow , and then , yeah , some other things outlying that happened and yeah , and then we split up .
So it was actually , ironically , I was about to sign a contract on a property , on the sixth investment property , and we were doing it as a joint owner , literally found out that day about our relationship and everything was all over Red Rover and I had to ring up the solicitor the next day and had to ring the mortgage broker and try and get everything changed
in like 12 hours to secure the property still and had to then refinance it to just my sole name . And , yeah , it was pretty horrible .
So you still play that out of head I still play through it .
I probably shouldn't . I don't know .
Well , I just think it's fascinating if we can just go into your mindset because you're engaging in a hugely emotional experience in your relationship and yet you have the presence of mind to go . I thought you were gonna tell the story that you stood down and rang the agent and said Got the deposit back .
Yeah , but no , you've said I just need to pivot and get my own name on it and go forward . I find that fascinating and actually inspiring .
It's funny because you know what ? It didn't even cross my mind to back out of it . I just had that deadline .
This is what I was doing , this was the path that I was doing , and so I just had to change it and went ahead with the purchase , and yeah , and so then I basically had six investment properties and our family home and the marriage was just put .
Crumbling so could you cash flow it on your own ?
Probably not , because , with the banks , the banks were using my husband's income , as in the what do you call it ?
So you still use the pre-approval that you had with both of you on the servicing side and you were able to get the loan over the line and with you just on title , because you were still technically married .
Yes , yes , I think so .
Yeah , I'm not sure .
I know we did a very late switch to a different bank , and yeah , and then it was just purchased solely in my name . So maybe the income service ability was done just on my name , but on the other properties his income had been used .
Yeah , yeah , yeah , okay . So , and the reality is you were still legally married and you still . Your net assets together would have been seen as joint and several liabilities , so hence why I suspect the lender took them on both . So then you've got to go through the whole financial breakup . Let's not talk about the personal element of that .
Let's actually talk to the numbers . What did that result in in terms of what you got to keep and what you had to let go ?
So I didn't actually rush all the settlement stuff . I was trying to stay in the family home for as long as I could , so I sort of just left that situation as is . And then after a couple of years , obviously we needed to do the settlement .
But in that time I had actually sold to the investment properties because I just needed to to reduce my debt and what I was paying because I was paying for all of it .
So I was glad to say yeah . Did your ex-husband contribute to any of the mortgages on any of the properties ?
No , no , no .
Now that would have been adjusted for in the financial settlement . I suspect if name on titles and all of those other things .
Yeah , yeah yeah exactly .
Well , if he didn't want the investment properties , were you buying them in your own name ?
To start with , yes , because that was the strategy . So the strategy was to buy so many in my name and then to start buying some jointly , have joint ownership , so then so basically , once I'd used up my tax refund ability , then put it into his name .
So we bought one property jointly and then we were about to do the sixth together when that all changed at the last minute . So yeah , so the others were just in my name . But obviously when you're married it's all part of the pool . And yeah , it just all fits .
And then kids will play a role in terms of percentage breakdowns and sweep of breakdowns and all the fun that goes with that . I only know that because we deal with relationship breakdowns with , obviously , our clients .
Yeah , I have to say it's pretty awful . 1 in 5 ?
Yeah .
Yeah , and so when I was speaking to mortgage brokers to try and work out what I could get money to do and could I buy them out of the family home and all that sort of thing , they were basically saying you know , you'll be lucky if you can keep three investment properties . I think that's all you know .
Buy out the family home and be able to maybe keep three . And then , just as I was going through all that process , I think is when all the interest rates were at their lowest and I was managed to retain four and so , but it meant going to a second tier lender , it meant giving up my credit card .
I'd split the loans across two different banks , so you know I was paying a bit of a higher interest rate , that sort of thing . So it was a sacrifice to keep the four . But I sort of believed in the theory that that was going to be my security and my plan for the future and my retirement . And I'd been on the journey and done so much .
I just didn't want to lose it and have to start all over again . So it was like try and hold on to as much as I could .
Yeah , well done and that is a great story because you know , talking to our community here , the record is pretty challenging .
In a lot of households where there's only a single income , it almost is the reverse , that there's not much more that that person can be able to do other than potentially grab the remaining portion of the family home , as the other partner usually leaves .
So to retain the owner-occupied home and four investment properties , that's a pretty good outcome and obviously to do that you were still working full-time , I'm assuming to be able to get the lending that you're required to hold , that pegged at , because that is always the risk and I want to emphasize this again for the community , because I think there's a teaching
lesson here . But quickly you go , the harder you go , and the least amount of alignment that you have between you and your partner on doing this story , it doesn't usually end well . So I'm trying to be polite here , lisa , in this sense .
But I think because we do I mean we get to sit in front of hundreds of clients every month and if you don't have an alignment in terms of what the long term aspirations and the goals are , and you can't get a money alignment story together if you can manage your money separately .
That might be one pathway forward , but over time you know that value alignment will be what keeps you together and when that starts to deteriorate , then other things happen . And you know human nature and human things occur , and that's where we're all not perfect creatures , but that's probably the biggest thing in terms of .
You know , we've had couples who have come in and you know we ask one of the questions sometimes are you both here under your own free will and like because you look at one person with their arms crossed and it's like someone's here under sufferance and I want to work out . You know how interested are you ?
Or are you a believer that it's possible or not possible ? Because some of the time it's just skeptical , like they're just they just don't know what they don't know , and so and then naturally cautious and I think that's healthy . But in other times it's just like I don't know .
I'm not sure this is the right thing for you both to do , because if you can't work out what you both want , then getting into a lot of debt and holding onto the investment properties for two or three years I reckon there's going to be red ink at the end of this story . So be sensible about what that story looks like .
And you know , and if , but if you have that North Star and , to your point , you were , you know , thinking really smartly about how you set your family up for a very , very comfortable time . Make no mistake , six properties plus a family home 20 , 30 , 40 years later , is life changing , not only for you and your then partner , but the kids I mean .
They get to ultimately live off the legacy , you know , and the inheritance that comes off the back of that . So if that's not a big enough carrot for most people to take action , I don't know what is right . And then then you've got , you know , to your point , you , your parents , didn't take a second car because they had to put you through boarding school .
And then you've got all of these stories about private school for you . You can , you can set up a trust fund for the next five generations of kids going through it . Educate like . So . There is real merit and aspiration in that particular story .
But I tell you what , if , if you're both of you are , you know , unsure to a really strong degree , then it's best just to wait and just to sit back and say , well , let's , let's just talk about goals . Let's talk about values . Let's talk about value alignment . What we're here to do , what does lifestyle by design look for you versus looking for me ?
They're all really important decisions that anyone should have before they even have children and start being in a relationship .
That's good marriage advice .
Is that your lived experience , though , lisa ? Because you , you know I'm trying to , I'm trying to get the timeline right here , but it's set around 2012 . You were embarked on four years of buying five , five properties , and then you went to the sixth , around the time that there was relationship breakdown . Would it be fair to say that there wasn't a lot ?
Was there , or was there not a lot of equity in those investment properties that you'd stacked up quickly ? So , therefore , your , your partner , your husband's going well , I'm , I'm happy for you to keep them , because that was your project anyway , because there's a lot of debt . And if there had to be an equity , I'm sure it was a different conversation .
But again , I think you're . I'm trying to think of the women who were listening to this , hearing your story , who who are being inspired by this , because there is , there is a lot of courage being displayed here , right ?
Because in one of the biggest events that you're facing in your life , you have the presence of mind to say hey , listen , I want to stay the course of what I'd started , even though there wasn't a lot of balance sheet evidence to suggest that this was working to , to , to stay in the game .
I'm , I'm , I'm , I'm luckily married and have been married for some time . So I don't even know what it means to try and navigate this on my own , but you've done it , I think it's .
I think it's a good way Well . I get very shaky and worried . Am I doing the right thing ? Is this all going to work out in the end ? And then I'll see something or read something . I think , yep , no , it is , it is . I've just got to trust in the process . It's going to work . And and then I'll get shaky again .
And then I have to say , in the last 12 months , with the interest rates , it's it's been tough .
Let's talk to that . What's been going on for you .
Well , I'm in mortgage prison . I can't refinance at all . I got close I think I was about 10K or 15K short in serviceability , couldn't get over the line to do it . So I'm still with the second tier lenders . I am only paying interest , only so . So that always makes me a little bit nervous , in that I'm not actually paying anything down .
But I've gone from having an investment portfolio that was really maybe only costing me about $200 a month to maintain to this year . It's gotten up north of $4,000 a month to to maintain , and so it's like what do I do ? What do I do ?
So I'm holding on for everything I can for now and I've got myself a deadline for , say , middle of next year and I'll reevaluate then , and just I'm just trying to get myself through .
Now , what did you do to , to be in a position that allows you to do that ? Because I think , I think we need timeline context again when , when did the divorce and settlement all go through ?
So all the settlement went through in 2021 . So only sort of two years ago , right , and I was able to refinance everything and not be actually paying anything extra than what I was paying before . So , and I think that was because of the low interest rates , so that that really definitely helped .
Did you get a little bit of a buffer in that refinance , a little bit of breathing spots ?
Luckily I had some cash buffers and savings and that was something you know . Through this experience that's the biggest thing I've learned and I know you've always said make sure you've got cash reserves etc .
I had , I had about a year's salary worth of cash savings and offsetting the home , family home , and so that's what I've been using to get through is just dipping into that . So I've sort of set myself a limit because I am worried I'm never going to get that amount of savings back ever .
Well , that'll change , but that you know , I can . I can confidently predict that over the next five to 10 years , If you can continue to maintain the rage , is the owner occupied . Home interest only as well .
No , so it's principal and interest .
Yep , okay .
I've got . I've got a lot of equity in that .
Yep .
It's yeah , so it's principal and interest . Got a lot of equity but again I can't refinance I think .
So , so , right now you're going through the psychological behavioural challenge of getting wobbly knees , messy middle , messy middle , but for a couple of reasons . This one is around .
You're seeing your bank balance go backwards and so , even though there's a , there's a positive number in there , it's falling slowly , pretty quickly , and you've set yourself that timeframe for the middle of next year .
And yes , you know , as , as I've been saying for the last sort of three or four months now , do whatever you can to hold on , because there will be a . You know there is a silver lining here , but you are definitely in that , that sort of uncertain centre or wobble , you know , messy middle , as Bryce was just saying .
So my view on that would always be try and be creative . Do you think your parents might want to take a small interest in , in one of the properties that may one day be bequeathed to you anyway ? Do they want to give you an advancement in terms of what might be a pending inheritance ?
And now and I know that that sounds like well , I'm a proud person I don't want to have to ask . You know , I don't want to hear that might sometimes have , like I told you , so you went too aggressive , or whatever that story looks like there's going to be certain parents around there like doing that . But do whatever you can . Do whatever you can .
I don't talk to the community here , not just to you , lisa . Hold on to those properties , don't , don't give in . I mean , we are seeing record numbers of people taking down second jobs and that is the reason why the market is holding on .
But if we are to think about , you know what's going to happen into the new year and obviously you know we're recording summer series here . Now it's it's . It is unsure about when rates will come down because the economy is still so strong .
But the moment the economy starts to lapse , then that that's the trigger point , because you've got to remember that , from an RBA point of view , is that the the change over . You know that that movement back into turning that economic flywheel again takes some time and the RBA are very conscious of that .
If they're still trying to land the plane holding on to as many jobs as possible , they need to get that ratchet on that wheel , because it takes literally months , if not quarters , for that economic wheel to start turning again . So there is this real lag that goes through .
And so by the time they realize that and the markets normally get it wrong is interest rates will start coming down sooner than what most people might think .
Now the other thing to think about too , lisa , is your tax refund is going to be larger than it's been for the last couple of years , right ? So that's something that comes up because you're paying a bunch more interest , so that means the actual negative gearing that you're having is actually higher . Are you using the Back ?
When I started it was the 221D form , but it's now the form 1515 tax withholding variation . Are you familiar ?
with that form . Yes , yes , so you're using the 221D form now on yes , really yes , I have done that for a few years and yes , definitely did it , and I actually made it pretty aggressive . So I got a fair bit back through my monthly pay , probably for the first half of this year because I needed it like I desperately needed it .
Can you tell our listeners what that actually means for you ?
Yes . So instead of getting the return as a lump sum after the end of financial year , I'm getting a little more , paying less tax each month as I go along with my salary , so getting a bit of that return back each month . So that has been helpful in helping with the cash flow , for sure .
And so I did get a tax return , but not a super big one , and so I've just parked at that . It's like normally , if I get a lump sum , I try and do something fun with it , something good for the house and save some , whereas I'm just not able to touch anything . It's just going into the coffers to try and find things .
Because what we don't have context on . You said to kids but you've got two daughters , your two daughters , teenage daughters , and they're watching you and you're setting an example for them that you will bear fruit for later , watching you navigate this . So how , how are those conversations going with your daughters ?
It's really funny because I try to talk to them about it and they are just not interested whatsoever . Oh mom , do you have to go over this again ? So they're not interested .
So I really am just hoping that they're learning by watching and I sort of every now and then sort of tell them you know , I'm going to teach you how to do this when you get older and you know , got to get you know good education so that you can work somewhere where you love and do well . But yeah , they're not really very interested in it .
In fact , I told them that it may be a tight Christmas and they were just mortified , yeah .
Yeah , no , it doesn't have to affect them . You know what you need to do Download the more . Get them to download , the more app . Right , download them on the mobile and for them to put their savings and their financial position in and get them to have a look at their wealth speed .
And then they have their income speed and say , yeah , because , because ultimately you know you can use this at any age , from 12 to 112 , right , but the idea of showing them that , all right , well , that's that's what my money is earning for us , and then show them your platform and say that's what our money is potentially earning for us , but right now , you
know there's a cash crisis , cash flow crisis , so that's what we've got to be . But if that goes , what can I give for you over here ? One but two is like now you're in control of your money or you have visibility on your money . You'll see whether they're , you know , problem aware and that helps them in terms of understanding .
You know that problem aware story and I think part of the mission we're on is just making people opportunity or problem aware , because most people just go through life in a fog about their money and their situation and that's why only five or so percent of people really do retire comfortably and a self-funded retirees at that really comfortable level , not just
self-funded retirees to just supplement a bit of income and , you know , have one maybe overseas all that every five years . We're talking about , you know , being in a position where you can choose what you want to do , which is a nice little segue into , you know , my final question .
I mean this series , the summer series , all has always been about what money means to you . When you talk about having stability , travel , work , life balance , freedom and security , I mean they are . You know they're the cornerstones of what we would consider lifestyle by design , right ?
Freedom is time , security is that financial position that gives you that comfort and that's what's building up this nest egg that you're doing Work , life balance , or you'll start to enjoy that , you know , hopefully in a few more years .
The children just walked in the door .
Well , they can say hi , yeah .
You know , while we're live , say hello .
Say hi , say hello .
Hello girls . Hi Welcome to the property couch .
Yes , I forgot about this end of school day .
That's all right . And then stability . I mean what you're trying to do is create stability for your family . Now , the girls probably don't appreciate that just yet because you know they're not aware of what it takes to run a household and their commitments . They turn a lot on , electricity comes through and I just think it's magic right .
So I think , from that point of view but in you know , they're the words you , you know , highlighted in terms of when we ask that question . But tell us what was , tell us , tell us in your words what , what having this financial backbone is going to mean for you and your girls .
Yeah , well , that that is absolutely my big focus is to always have something behind me that I can fall back on . So I am worried that you know I have only got myself to rely on in terms of income . You know anything can happen with my job . So you know I'm probably 15 years old away from retirement .
You know I could lose a job at the 10 year mark and not get something for five years . So having the properties is definitely something that can just help me .
I could sell something down and I just want to be able to use them to sell to pay off my own mortgage so that I don't have that expense , because I think in retirement if I'm just paying , living , just funding that few holidays here and there , I'd be very comfortable .
But if I was having to pay a mortgage as well , then that would just be a bit more of a stressful push . Yeah , so that's sort of my goal , and just always having something that I can fall back on , because I think as a single female like it is nerve-wracking to know at the end of my career , am I still going to get employed ? I don't know .
Well , you're well read and you know that .
You know , one of the biggest and fastest growing groups of people who are suffering from financial insecurity are middle-aged women , and so you're an example of someone who has planned and hit a roadblock and a big roadblock but you've been able to overcome that challenge and you've been able to demonstrate the can-do attitude and that ability and that to get over
that and continue to keep moving forward with your story .
And you and your girls are the beneficiary of that and hopefully they'll realise that in maybe a decade's time , right , but I think you know that's why your story is so powerful for our middle-aged women who are thinking about how can this possibly work for us , or , you know , giving up hope on being able to build a financial nest egg .
Now , that financial nest egg , maybe there may be an opportunity to build one or two inside a property portfolio , but there might be just an opportunity to , you know , start to invest in your super and provide , you know , for those people as well . So we are not sitting here saying every middle-aged woman should start investing in residential property .
It absolutely needs to come down to a case-by-case story . But having that financial security , having that financial literacy , being able to , you know , be self-determining .
That gives people a sense of pride , gives people a sense of purpose and , you know , if that just touches those people in our community who are doing it tough over this summer period with record high interest rates , you know , reach out to a financial counselor , reach out to a financial planner If you're thinking about property , reach out to a property investment
professional to do the numbers . You know , there's nothing lost in having an initial consultation and getting into a position where you're at . So I really am so thrilled , lisa , that you're able to do come on to the podcast , tell your story , because it is .
It's a success story and , no matter what way you're looking at it , it's a classic case of taking action , isn't it ?
I'm trying to articulate my final thoughts that I want to give to Lisa , but I kind of want to just double-click on what Ben's saying , because you're the reason why we want summer series to go ahead , because there's people out there who listen to your story and there's certain parts that they can take away .
But you are technically one of the more disadvantaged , right , because if you've got a gender pay gap and then when you're having children on maternity breaks , you're not contributing to super , and then you're trying to contribute and raise children , you know , with great character on your own , whilst trying to navigate the insecure feeling of knowing that you're the
only one that has to do so . It is incredible , right , it is incredible . So I guess the takeaway from me is and hopefully the message that lands for other people is you're just choosing your hard .
You're choosing a hard now so it's easy later , because you could choose easy now , which makes it hard later , so you get to choose your hard and you're actually just choosing your hard now . And I just want you know if there's not many people in your world that reinforce this foyer , I want to be one of them to say well done .
And I mean that , I don't mean to be condescending , it's just a brilliant story . It is so inspiring to Ben and I , but it's inspiring to other women who will hear this and take away some of it .
So I really , really hope that it comes off as planned , but only time to .
Here's the deal ?
I think it will . Your resilience has already been on show .
But reach out to us if you you know you get wobbly legs . We'll have a look at the numbers and we'll see what .
Yeah , look , I would absolutely love to , because I do get nervous and think am I on the right path ? Absolutely .
And there are options there . So I think it's just to Bryce's point you need a mentor , someone who can hold your hand and reinforce that confidence to you , and we all do . We all need a set of besties and a set of group and a crew , a team . You need your A team to be able to help you through these difficulties .
You're not alone , and I think that's a real message . So I'm going to hand the microphone over to you now , lisa , in terms of what inspired you to come on today and watch your message to our community , this is the time for you to share .
Yeah , well , look , to be honest , I always listen to the podcast , but I do love the Summer Series and as I'm listening to everyone's stories , I think I wonder if my story is interesting . Probably isn't , but you know there might be something in there . So and I always think , well , what would I say ?
But yeah , it's just literally to show the story and to say that I think there's many ways to skin the cat , like there's many ways to do it . The one thing I've learned , like you say , is timing the game . So , having the properties now for near 10 years , I've seen the proof in the pudding of how much they've gone up in value and the rental income .
And so I sort of say to myself , if I didn't have any debt on these properties , I'd be living off $100,000 a year rental income . Problem is , I do have a lot of debt , so that's not going to happen . But you know , I've got to just get those plans in place to try and get that debt down .
Yeah Well , I guess at the end of the day you're saying I hope I can keep these properties . It's even if worst case scenario it's probably divesting one so that you can make sure that you hold the rest of them , so that you can actually buy the time to let them do the work . So I think you've got equity in them .
You've got the properties , obviously over time . One thing we didn't ask is do you think that the rents are optimized on them ?
So that's something that I've just recently gone through . So three of the properties the rent was up for review around August September this year , so I was able to put them up . Significantly Felt terrible to the poor tenants , but in my cash flow position I really did not have any choice and I've got one .
The fourth property will be reviewed in January , so that will be able to go up , so that will help the cash flow position and so I've got a few things and I've finished paying for a set of braces middle of next year as well .
So that's what I'm going to do .
Yeah , very true . So I'm going to echo what Ben said . Lisa , Reach out to us . Let us have a look under the bonnet on that portfolio . Ben and I rub our heads together and see if there's anything that we can do to add value to the discussion .
For you to have someone to bounce it off , but again on behalf of everyone here on the Property Couch on the Summit series . Thanks for sharing your story .
No , thank you very much for having me Really enjoyed it . Thank you .
Thanks , lisa , it was amazing .
Thanks .
Ben . What an inspiring story of someone who has stared down divorce , was able to hold onto these properties and is feeling really proud about that achievement .
Yeah , I mean it's a determination mindset . That was a really determined mindset that we're seeing here around a particular story . So I mean there was grand plans , 10 properties . Now the goal is six . But what we also discovered is that misalignment there that obviously also played a contributing role in terms of that separation .
But that determination to maintain that property and the value and the benefit that she sees in terms of time in the game , there's some real value and that's an understanding that Lisa had in terms of that particular story , wasn't it in terms of she's going to be sitting back going .
If I can just hold on , if I can just battle through this particular piece , and so if I'm coaching her , I'd be sort of talking about the money stretch inside more . That is an awesome tool to be able to adjust for those . So you can take effectively your current financial position .
You make a copy of that , you get it into money stretch with the latest interest rate movements .
You can then start to see just how long your money is going to last you from a cash flow point of view , because if interest rates are going to stay higher into that sort of middle of next year , you're just having that piece of mind , knowing and if the things are going to get tired , I guess what you're going to have to do again this would be the
coaching work that I'd be doing is I'd be sort of saying what's essential , what's discretionary , what can I cut back on , and then putting those through and seeing the impact of those savings .
Also about the time that it buys me on the more platform through the money stretch tool as part of that would be something that I'd be directing her to to get some of that piece of mind .
Yeah , and I guess also just being a pillar of strength for other marginalized , financially marginalized people in the community , because divorced women they do it really tough right .
She has shown that even the story about when a property purchase had been made and in between that property purchase and settlement they decided to separate and still wanting to proceed with that .
So my hope is that this is a message for all those folks out there who feel like that marginalization means that they can't get ahead , and Lisa is really providing that sort of beacon on the hill for those people to realize that it's not one and done . There are ways that you can navigate that if you're willing to choose your heart .
And you can see from Lisa's story that she's choosing her heart now because holding the properties and all of the expenses that have teenage girls mean that household cash flow is tight . But her hard period is now so that in the future it's easy .
Because it could be quite easy to reverse that and make it easy now and sell some of these properties and make it easier now , but that means in the future to be hard . So I'm really inspired by her story .
I am too , and I think what she's probably also holding that determined position on is she saw her parents do the hard In terms of we saw that in the backstory around what she learned around money and the parents basically running a motel working effectively seven days a week to run this place .
They did their hard , so they've got the fruits of that labor and she's now going through that sort of hard stage for her .
But if she can hold on , there's a magical compounding story and message here for her and to anyone in the community who might be doing it hard in terms of cash flow right now do whatever you can , because if you can hold on to those properties , this phase of economic slowdown will pass , interest rates will ease off at some point , hopefully next year and then
you'll ultimately be in a better financial position by doing so .
Now , folks , as we continue this summer series , we want to reflect and pause at this moment and wish you all a very merry Christmas and a wonderful holiday period . So , for those of you that celebrate Christmas , we hope you get lots of Christmas presents under the tree , and for those of you that you don't , we hope you enjoy this time with your family .
And I made a special shout out to you too , ben it's been an incredible year hanging out with you , as it has been for the last eight years .
But to you and your beautiful family , mate , I hope you have a wonderful Christmas as well , and you and I will be back next week , but obviously we're going to pause and reflect and cut the Christmas turkey ourselves .
Yeah , merry Christmas to you too and the family mate . You do a great job in leading the show . We really appreciate everything you do here In terms of those people around the world who are doing it tough or experiencing challenging times .
Our thoughts and prayers are always with those people battling with ideologies around the world and sort of middle-aged men thinking they know better .
Anyway , I won't go down that rabbit warren other than to say , if you are , this is the time , even if you don't celebrate Christmas , to also get close to loved ones and to family and friends and just connect in a festive manner and appreciate and be grateful for all of the opportunities we have and I'm certainly grateful for being born in the best country in
the world . Very , very grateful for that opportunity . And Merry Christmas to all of our community and we hope you're having a great time during this festive season .
Well said , mate . So until next week .
Knowledge is empowering , but only if you act on it . Merry Christmas folks . See you next week .
Hey folks , bryce here again . I just wanted to catch you real quick before you go .
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