Hey there folks . It's Bryce here , and Ben and I are excited to bring you our new podcast mini series based on our best selling book , the Armchair Guide to Property Investing how to Retire on $2,000 per week where we give you an insider's look at the making of our book , chapter by Chapter .
Now , the reason this mini series came into being is because , back in 2020 , we did a series of Facebook Lives to help us bust out of COVID lockdown blues and , instead of reading the book word for word like an audiobook , we told behind the scenes stories , chapter summaries , anecdotes and back stories to bring each chapter to life in a unique and insightful way .
Now we've brought together all the audio from these sessions , so you'll see for yourself why more than 45,000 copies and counting have been read on the way to retiring on $2,000 per week through investing in property , and we talked about these concepts in our trademark casual and conversational style .
So if you've ever thought about retiring on $2,000 per week or wondered how to live a life by design , doing what you want when you want , or you've dreamed of travel or philanthropy or anything in between , then this mini series is for you .
We want to give you the Armchair Guide to actually do it for yourself , and if you'd like to get a copy of this best selling book for yourself to play along at home , you can get a free copy at wwwTheArmchairGuidecomau . We'll rush out a copy of the book to you on us if you simply pay for postage .
We hope you enjoy the series and you design a lifestyle that you want to live . So dive in and enjoy each episode as you learn how to retire on $2,000 a week . Last week , what we did is we , because you're in isolation .
What we thought we'd do is yeah we're certainly socially distanced here , but because everyone's in isolation , we thought we would provide as much content as we could , totally .
So what we're going to do is we've got our bestselling book here .
It's sold over 20,000 copies and we are going to do the chapter highlights , Ben . We're not going to read it like an audio book , but we are actually going to go through the highlights . So last week , if you haven't seen that , you can go and check that out .
But basically we were talking about building your own knowledge base , so we went through some of the key items we talked about . The state of your wallet plays with the state of your mind , Ben . We quoted Dr Kathleen Gurney about our feelings towards money . We went through a few key items there too as well , so go and check that out if you missed it .
But today we're going to talk about the psychology of investing . But , there's a very interesting backstory that comes with this . Well , there is Bryce .
So the backstory goes like this . So we were building a simulation software that measures cash flow movement every month and we were trying it out in the early stages of building our property plans . That we do , and it's fascinating .
So , when you get the power of compound and you get money movements , you get huge swings either way in terms of the impact of money .
So when we started delivering these plans and doing advice and providing solutions to our clients , we were like this is incredibly powerful because you can measure that money so you can see the income coming in , you can see the expenditure , what you got trapped and how you put it to work . So that is just incredible in terms of what it looks like .
So we were like oh , we've got to share this . This is some fundamental pillars that absolutely need to be shared . So I'm like Bryce , these are the four fundamental pillars , pillars , pillars . And I said I think we've got to call them pillars in the book . So that was when we were writing this part of the chapter and we were looking for a framework .
I said we've got to call them pillars in the videos and add a better answer . What did we call them ?
Well , it just gives you a bit of an insight onto what I like to write a book with a co-author , because 98% of it's fun , it's the 2% when you get a little robust on some certain sections , but we decided to call them levers instead of pillars .
Better name , far better name , because you can explain it better with actions , bryce , can't you ? Well , you can because the idea is that one of ?
the things that we were really frustrated around was the fact that people would give sausage machine cookie cutter advice where prior to us doing the podcast and prior to us doing the book and things like that .
Quite often someone would say I want to invest in property and the person typically a sprue car would say oh , that's great , I've got this property over here . You should buy this one and a stock list . It was so frustrating because , just like a hat that is apparently one size fits all better , it really doesn't tailor .
So the idea of the full foundational levers is time , target , income and expense , and we'll get you to define those in a sec .
But to give you an idea of what that looks like , if you can imagine that you're in you know bulldozer or a tractor or a one with the front end loader , and you've got four levers and essentially you want to be able to tailor the hole that you're building in front of that particular piece of machinery to the specific needs that you want . You don't ?
want to just say you can have a hole there and that's the only hole you can have .
Because you want to move the lever forward , you want to move it back , you want to move it , you want to move it to the side , so that , ultimately , you can get the hole delivered exactly where you want it to be . And that's kind of , I guess , the segway into what the definition is . Well , I mean .
I think that's why it's the right naming right , Because with those levers . I can do lots of things . A couple of levers can spin me around and the other levers can basically dig , build whatever it is .
And so when we did come down to sitting down with clients and we were building this particular advice piece , I said I always say to people , I said I'm not going to be a life coach , I'm not going to be sitting here , how you can earn more money and do all that type of thing . I'm trying to get to a situation where I can .
I can talk to you about the money that you have got coming through , and then I can talk to you about your expenditure in both essential and discretionary . But here's your lump sum of income , here's your lump sum of expenditure . This is the surplus that I've got to work with .
And then when we started to model that out , that's about then putting leverage and one property , two properties , three properties , offer when . And so those were really powerful insights that people can give . But remember , we always talk about starting with the end goal in mind and reversing from that .
So the whole idea of setting a retirement target from an income point of view and a time point of view the other two critical leaders is that if you turn the working income off , then that does obviously have a critical effect on how quickly the debt retires , whether you've got enough liquidity to get you through , and so one extra year of work at the end of
the strategy is phenomenal in terms of how it can collapse , debt , or how it can not . And so it comes back to a conversation around what are we trying to achieve here , and that's why it's not a cookie counter model , because it's . There's no one size fits all .
This is a tailored conversation around your levers in terms of when do you want to retire , how much do you want to have , and then also looking at the expended chart today , tomorrow and all of the changes that go in it , and it becomes , when you get a model like that , incredibly insightful to make the invisible visible because you're able to play with those
levers . So for me , it was like it was a no brainer . You know the customer could then see all of the aspect of it , and I needed to go into book right up front because that's you know . Hence why it's chapter number two . Right , it's just . It's just a foundation understanding of what we were trying to teach .
Now , folks , we are talking about the armchair guide to property investing . I want to show you how you can get a copy of this later on , how you can get it for free . So stick around for that .
But essentially what we're doing is we're going chapter by chapter to give the highlights and some of the stories and some of the the back , the backstory , anecdotes on how we arrive .
But I guess quite often the way that you can conceptualize how this might be important is because someone might come in bed at the beginning of their life cycle where they've got lots of time on their side but they don't necessarily have the resources . They haven't had their home for a while , they may or may not be a property owner .
If they are property owner in the early stage of the life cycle , you may not have a lot of equity .
You're in that early stage of building a career , may not have the right income , versus someone on the opposite end of the scale who's really reduced on the amount of time that they have , but they're in peak earning capacity , got plenty of equity in their house and all those things .
So that's why this is so powerful , because ultimately this whole game you know the subplot of our book is how to retire in 2000s a week it could be three . If you could be one , it could be 500 bucks , but whatever it is , there is this end goal where I want to create a lifestyle where I no longer trade my time for money .
It's actually a passive result . That means that I can either roll over or roll out if I want to in the morning .
Then I then know what that actually means for me , based on how much time I've got , what target I'm after , because how many times have you got someone come in here and they , they read the book and they say well , that's targets , 2000 a week , whereas other people say you know what ? She no need 60,000 in a year , I should only need 40,000 .
So it's important it is , and the power of doing the simulation is to sort of say okay , so let's say , let's put the difference , it's 80,000 . If you worked an extra two and a half , three years , you could be in a position where that 60 , that 80,000 could actually be 95 .
So it's it's not linear in the sense that one extra year gives me an extra five grand or two . It's actually like one extra year gives me an extra 10 , two extra years gives me an extra 20 .
And we are talking about that being passive income over time , because what you're doing is you're either retiring the debt or you're effectively building an asset base through your accumulation phase that's bigger , that will obviously keep growing whilst you start to slow down in terms of your work requirements and your efforts .
So it is unbelievably empowering to know what your scenarios are . And then you've got . You know how do you retire the debt out ? Well , obviously , that you can leave a legacy for the kids , if you've got any , or you can just sell them down and basically go off and into the sunset in your Harley or whatever it is .
So that's why you know , once we understood that these levers all play a role , getting them down and simplifying them for the average person to understand has been , I think , really important in terms of people being confident about moving forward with their investment strategy .
It's one of our foundational frameworks . It's a key one that you need to understand , because if you think about income , you kind of think , okay , what if I get a pay increase ? But what about if you want to go on a sabbatical ? What if you want to take six months off ?
What if you are in a commission only position , where in the high season you're only this and in the low season you're only that ? Or what if you're like a real estate agent ?
is a good example Ben , who last year's results are no guarantee of what this year's results are going to be , so you've got to be able to play with those fluctuations , be conservative . So that's around income . What are some of the things around expenditure time and target that people should think about ?
Well , I think from an expenditure point of view , it is the essential and discretionary . And being in a situation where you can understand what discretionary means and what essential means , I mean even when we go grocery shopping there's a few little things that might land in the tray or in the trolley I should say Nothing's discretionary .
Surely my little sort of dark almond and chocolate and almond sort of find their way in when they're on special . I was in the trolley . That's obviously discretionary spending ice cream . Discretionary spending any type of confectionery all of those types of things are discretionary spending , so you can even find value in terms of that .
And it's amazing when you can model okay , well , if I've my $250 a week that I spend on groceries , $30 or $50 of that is actually discretionary .
When we model the change to the overall wealth position of that particular person , it is quite phenomenal in terms of what that choice is to have that little bit now , Now we're not saying it's all about waiting for a time , and so you know , there's the expense piece .
We're not saying it's all about waiting for a time and target the first thing people talk about , Bryce , when they go to time and time as well , as early as possible . Yeah , as early as possible would be good . And I always say to people well , okay , well , I was mentioning before around how much income you want in retirement .
It's like what if you did work one or two more years but you're 80 , went to 100 , you know , went to $2,000 a week . All right , now you got me interested and I think in today's terminology and the value of property as we see it today you know we wrote the book some five years ago it's really important to understand that .
You know , as a young person now you might be thinking that home ownership is not in your reach , but the reality is you're going to live far longer than what our parents did and our grandparents before that , so you're going to be blessed with an incredible long period of time .
So I think from a from a mindset point of view , I would be thinking that an early retirement is 65 because you're still going to have potentially 20 active years of retirement , whereas when the government first introduced a pension , it was introduced when people retired at 60 and died at 62 .
You know , so it wasn't necessarily something that makes it last for long . So really important reason and so we want to play with those levers to make sure , and you want to play with those levers when you're doing your own modeling in terms of what is important to you as you design the plan that you want to have .
Yeah , and the time really comes into a compounding effect , isn't it ? Because the compounding is the eighth wonder of the world . So , being able to , he can either one or two or three , because people say I want to tie by 40 .
Yeah , just just remember that there's no super that kicks into that point . You got to be able to get to work .
So a couple of things on the expenditure to just to round that off . Good , yes , please do Short term , medium term and long term . So you got to plan for kids . If you've got kids moving through different life cycles or , based on what you want to do , upgrade your home .
So the important thing that we wanted to reinforce with this framework and make it important right at the very beginning is that real life happens to . Yeah , imagine that . Buying investment property real life happens .
You want to rent a kitchen , you want to go on a holiday .
You want to send kids to school private versus public .
You know , sort of religious schools , whatever that independent schools , whatever that looks like A nice rule of thumb today is around 400 . So we have a range of , say , between 350 and 450 in today's dollar terms . Where we are talking about that's roughly what per person is .
We are talking about that's roughly what per child is going to cost for those discretionary and feeding . You know , feeding those children per month in addition to those school fees . And if there's extras like horse riding and and certain specialized hobbies , motorbike interests , all of those things are extrapolated beyond that as well . So it's important to know .
But that's a good rule of thumb to get people in that . So that's why , when you're having children , it's really is , because , I mean , that's one of the , that's one of the big things that we see people .
If I had my way , bryce , I might make one of my best pieces of advice for anyone around money management is buy home before you have kids , or get a deposit for a property and get into the property market before you have children , because it is going to be incredibly difficult to own property in a very , very wealthy country like Australia is and will continue
to be if you don't do that . So I think putting putting the ducks in the right order will have a very material benefit for you and your happiness . Not saying that money is everything , but you know if you're struggling piece of mind and piece of it's really important .
So if you know , if I can give one piece of advice in this Facebook live right now , it's a please don't rush into the children program before you potentially at least have your foot on the property ladder , because I think if you , if you have aspirations for the great Australian dream , that's one of them that won't get you there if you decide to have your
kids before you do that .
Also Ben . So , folks , we are reading from our book , we're not reading from the book , with summarizing key concepts and principles from chapter two of our book . The armchair guy is probably investing . Stick around for just a couple more minutes . We're going to show you how to get a free copy of this book .
But the last thing I want to talk about this chapter been on that four framex is around . The target is about being clear that , as we say , $2,000 a week , it's just . It's just a really a title that we put there because it's common .
But some people some people may be earning an income and expense and the time that suggests that that target of $2,000 is woefully optimistic . Or , on the flip side , you might have someone who's got so much time and so much reserve that $2,000 is woefully under what they could do .
So the important point is around being realistic around what that target looks like . If we know what the income and expense is and we know how much time you've got , then you can have a realistic conversation around is that target $2,000 realistic or not ? Because that's important .
And I must admit , early on , when I was investing , when I started my portfolio , I had really no idea where I was headed other than probably around the concept of he who dies with the most property wins . It was kind of this just massive game of monopoly where it's just accumulation . Whereas now once you know what that target is .
Once you know what you're aiming for , you get a very clear vision of what you need to do , what steps you need to put in the pond to be able to get to the other side .
I think what's a really good tip here is around the concept that replacing your income . So if you've got household income , net income of 100,000 , that's the one to go after .
I think what a lot of people who are on really good incomes , bryce , are going to have a bit of a shock in terms of if they've got incomes around that sort of 130 to 150 net of all costs .
The challenge is going to be for those households is they're going to get a rude awakening if they haven't built up a wealth base and so they're reliant on that working income as opposed to that passive income .
So a good starting point is to try and at least have a minimum of 100,000 or whatever your minimum wage is that you're bringing in now in terms of net income , excluding mortgage commitments and kids .
So that's a good way to start , and then anything above that is a real bonus , because what we don't want to see people doing is getting that real let down around the idea that , well , I used to live really , really well when I was working and now I've had to take the foot off the accelerator because there is an expectation from those people that they're going
to live the same sort of way and they have a rude shock . So the earlier you start , hence that time , the more time we have , the greater the wealth we can build .
That doesn't mean that if you're in your late 40s or 50s it's not a good time to start building for 65 , so you still got 10 to 15 good years of being able to build some substantial wealth , and it doesn't all have to be property could be in super or whatever the appropriate vehicle is for your circumstances and your risk profile .
But that's the message I wanna take for people is like 2000 was a baseline for us . If we've got plenty of time to work with you , but if we don't just think about the income that you're currently earning , if you're satisfied with that , that gives you everything you need and you're happy , then try and at least hit that target as your starting point .
So yeah folks we are talking about concepts in our bestselling book , the Armchair Guide to Property Investing . We want you to get your hands on this . I'm gonna tell you very , very shortly . But we just talked about chapter two , which is the Psychology of Investing Time , target , income and Expense . Next , facebook Live .
We are gonna go through the five essential steps and I've gotta say that was a really cool part five years ago , ben , when we got together and we thought what are those steps that you need to take after each other to find that we are super excited about that . So there you go , folks .
We've done chapter one , which is building your own base , getting the head space right , working at why you need to do it . Chapter two was the four foundational levers . We're gonna be pillars , but became the four foundational levers that you must understand before you embark on them . And , as I said , the next step is to show you the five important steps .
So if you want a copy of this book .
you just go to thearmchairguidecomau . We'll give you a free copy , and if you want to catch more insights like this , we do a podcast every week , apparently .
Ben , we do . It's called the Property Couch and it's number one property podcast , money and finance and investment management . So I'd love to have you along lots of , hopefully valuable educational insights , and we get some of the best minds in the country to join us on the Couch and share their views and insights . So , yeah , check it out .
We would love for you to check that out . So , folks , every Thursday at 3 pm you can check it out at thepropertycouchcomau . Hey there , folks . Bryce , here again to say thanks for tuning in to the latest step of the armchair guide to property investing mini series , which we hope is adding value for you as we show you how to retire on $2,000 per week .
Now , before you go , ben and I are keen to get a copy of the book into your hands . So we've bought a copy for you . All you need to do is to get your hands on it is to go to wwwmichaelcomau , just to go to wwwdiamchairguidecomau , and give us two things . One , tell us where to send it . And two , simply pay for the shipping and we'll do the rest .
Once you leave your details , we'll rush a copy out to you and you can start reading along with us as we unpack the book chapter by chapter here . And if you like the audio book version , we've got you covered too . You'll receive an option to get that when you enter your details , and you'll be able to get your earbuds on that too .
Go to wwwdiamchairguidecomau to get started . Thank you .