Business owners looking to diversify their wealth-building portfolio often consider property investment as an excellent way to secure gains and financial stability. However, some entrepreneurs may hesitate to choose property investment as their first option due to its complex processes and the potential risk of financial loss.
In this episode, we speak with investment property expert Chris Gray about navigating intelligent property investments for building wealth. Chris is a master of challenging conventional thinking and teaches people strategies that will help better leverage income and equity so they have cash flow for their lifestyle.
Property investment is an attractive proposition because it offers a potential for consistent and substantial returns, it can be tailored to your budget and the value appreciates over time.
But investing in properties also has its drawbacks. First-time buyers may not be able to assess the best property for their budget and don’t know how to leverage their investment.
This is a value-filled episode where Chris provides knowledge that only the top 1% know. He distils complicated topics into simple, easy-to-understand pieces so you can understand and experience success in property investing.
IN THIS EPISODE, YOU’LL FIND OUT…
- The catalyst that started Chris in property investing (02:22)
- Why property investing is a great strategy for most people (05:05)
- Understanding how to buy the best property (08:38)
- Knowing what type of property to purchase in each location (12:09)
- Maximising your tax to increase your portfolio – what does this mean? (17:00)
- The contrarian view on positive cashflow (20:53)
- How to access your hard-earned assets through refinancing (24:53)
- How to leverage serviceability (28:40)
- The pros and cons of being a rentvestor vs buying your home (31:43)
- The importance of building wealth outside your business (39:00)
- Chris’ formula for building wealth through serviceability and acquiring properties (44:55)
- Leveraging the power of debt (47:03)
QUOTES
- “The golden rule is land appreciates, and buildings depreciate. So you want to get the highest amount of land content you can.” -Chris Gray
- “20 or 30 years ago, property investing was 95% about property. These days, it’s 95% about getting finance, understanding the logic, the mentality, buying the property, renovating it, renting it out and all of that can be delegated.” -Chris Gray
- “High intelligence can be a hindrance because you overthink things, which means you hesitate to take action. Whereas someone naive may think about things differently and just get on and do it.” -Carl Taylor
- “Real estate or investing is a game of finance. The asset is kind of irrelevant.” -Carl Taylor
- “Building wealth is when you understand your numbers enough to realise profit and loss, evaluate whether something is a good financial deal and taking these skills you use in business and applying it outside the business.” -Carl Taylor
Resources
How to Live the Life of a Multimillionaire… Without Being One
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
Entrepreneurs Rising episode 068: Shifting Paradigms for Extraordinary Success In Business And Life with Dean Jackson
Entrepreneurs Rising episode 063: Financial Health Check: Understanding Your Business Finances with Gavin Smith
Entrepreneurs Rising episode 062: Passive Income Made Easy: A Beginner’s Guide to Earning More with Less Work
Entrepreneurs Rising episode 058: Why Not All Bad Debt is Actually Bad
Entrepreneurs Rising episode 057: How Rich is Rich
Entrepreneurs Rising episode 055: Should You Invest Outside Of Your Business?
Get In Touch With Chris Gray
- Website: https://chrisgray.com.au/
- Facebook: https://www.facebook.com/yourempire/
- Facebook: https://www.facebook.com/ChrisGraySydney
- LinkedIn: https://www.linkedin.com/in/investmentpropertyexpert/
- Instagram: https://www.instagram.com/chrisgrayempire/
- Twitter: https://twitter.com/ChrisGrayEmpire
- YouTube: https://www.youtube.com/yourempire
ABOUT CHRIS GRAY
Chris Gray is the CEO of Your Empire which buys homes, holiday homes and investments for time-poor professionals, searching, negotiating and renovating on their behalf. He has been the host of ‘Your Property Empire’ on Sky News Business Channel for over 10 years and was the Real Estate Judge on ‘The Renovators’ on Channel Ten.
As a qualified accountant, mortgage broker and buyers agent, Chris is the independent authority in educating buyers, sellers and investors about residential property in Australia. Chris started buying property at the age of 22, semi-retired at the age of 31 and currently holds over $20m of property in his personal portfolio.
For a FREE copy of his book, The Effortless Empire: The Time-Poor Professional’s Guide to Building Wealth from Property, go to www.yourempire.com.au/book
TRANSCRIPTION (AI-Generated and may contain inaccuracies)
Chris Gray Snippet (00:00):
The main thing about property is leverage. If you’ve got $100,000, generally within property, you can leverage it up to 8090, or 95%. So that understandable by you a 500 grand or a million dollar property. Whereas in shares, most people wouldn’t leverage that. Maybe they’d leverage it 50%.
So even if shares go up, say 10%, on 200 grand, you make 20 grand, whereas that 500 grand or a million dollar property goes by 50 or 100 grand. That’s the main advantage of property, especially if you’re in residential property, effectively, you get a massive return on your money for almost no effort. And so I didn’t want to read the newspapers, I didn’t want to be the biggest genius to try and pick stocks, you actually don’t need to be that clever in property.
Carl Taylor (00:43):
Welcome to another episode of Entrepreneurs Rising,
And today, we have another special guests. This is another guest interview episode. And I’m excited to really dig deep because this is a man who I’ve known about for, I don’t know, at least 567, possibly 10 years. I don’t know, when I first heard his name in my circles.
But we have a lot of mutual friends. We’ve been in similar circles, but haven’t necessarily had a chance to connect. So I’m excited to one actually have a conversation with him. But you get to listen in. And we get to share some really great mindset philosophy concepts around building wealth, especially in the space of property.
So who am I talking about? Well, I’m talking about Chris Gray, and Chris is a renowned figure in the media and property well best known for his contrarian approach to property investment. He began his property investment journey more than two decades ago, and has since built a portfolio worth over 15 million weathering, property, booms, bubbles, and even the global financial crisis.
He’s appeared on all major networks in Australia and internationally, hosting his own television show on Sky News business for 10 years. And it was at the age of 31, that Chris left his full time accounting job as his property investments were generating more income than his job. And that was a turning point, which led him to the Create your empire, a buyer’s agency that helps other people who are time poor to either find their dream family home, or to create wealth through intelligent property investment, where he and his team are out there helping secure, negotiate and find those deals for you.
He’s very passionate about empowering people to build wealth. He’s got books, courses, all this information around his contrarian approach. So if you want to learn more about Chris, you can go to Chris Gray, dot Comdata, you that link will be in the show notes, which you can find at rising dot show. But let’s say hey, so Chris, say Hey, everyone,
Chris Gray (02:45):
thanks for having me.
Carl Taylor (02:46):
No, thank you for coming on. So I was thinking about where to start, because this is a huge topic, right. And one of the things on your website, it says, it’s a quote from you, I want to let everyone know that they can make real wealth through property by doing the complete opposite to most people. So I think that’s a good place to start, you know, the complete opposite to most people. So we let’s define what most people do. And let’s go from there
Chris Gray (03:09):
Okay, so I guess we’re the mentality comes from is my skill base is numbers. So I’m an accountant. But I’m not a very good accountant. I failed tax three times, but I just think logically in numbers. And so when someone tells me what to do, whether it’s work, or play, or whatever else, I could convert it into numbers. And the numbers generally tell me to do the opposite.
So to give you an example, when I was 21, I earned 10,000 pounds, which is about $20,000, which wasn’t a lot of money, it’s still not now. And so none of my friends bought houses or property, because it’s too expensive. And you want to go down the pub, and you want to have fun. But I wanted to move out. And I worked out, I couldn’t afford a one bedroom unit because it would take all my wages.
But if I could get the mortgage, I can actually if I could give it a three bedroom house, I could actually live for free because I could rent two rooms out. So I basically pitch my dad to say, look, I’m not after and I’m just after a guarantee for a couple of years. And I ended up buying 100,000 pound house for 80,000.
So my two year salary overnight, and then I live for free. And it was just the logic of the numbers saying I can’t afford the small, but kind of supersize it Big Macs doll, and I can actually afford it. And that thing at 2122 that I carried on repeating and I thought I’ve earned two year salaries from doing nothing. And I’m living in a house better than any of my friends for free. There’s got to be something in here. And that was the catalyst that really got me going. I love that
Carl Taylor (04:35):
and when you say you you are to your salary is that in the capital growth is that in the saving on the negotiation,
Chris Gray (04:41):
and effectively the savings of buying an underground base for 80,000. And then within a few years, it was up at 110 120. So probably within a couple of years. I made three or four years salary and paid no tax because I still own that may so I’ve never make up against tax.
Carl Taylor (04:56):
Yeah, got it. Got it. I love that. I love that. Well I As you know, our audience is typically entrepreneurs. And we’re very focused on how do you obviously build a better business and I’m big passionate about building a better business is one that works without you.
But once you get to a certain stage in business where you’ve got cash flow that’s predictable, you got enough potentially to pay your own lifestyle costs. Usually you get to a stage, you’re like, Okay, well, I want to start building wealth outside of my business, too.
And that always comes his argument, do I go property? Do I go shares? Do I do something completely speculative, like crypto or other other assets? So if you’re talking to an entrepreneur who’s like, you know, I’ve got some consistent cash flow going here. I haven’t touched property yet. What would you be saying to them to start thinking about where would you start?
Chris Gray (05:42):
Sure. So the appeal of property to me is I’m actually naturally lazy. Now people say you can’t be lazy, Chris, your dad at 31? I think my portfolio is now 20 25 million, you’re over achiever?
How can you be lazy, and well, I am, but I work hard, so that I can be lazy. And on that property, because the main thing about property is leverage. So if you’ve got $100,000, generally within property, you can leverage it up to 89 to 95%. So that under brandable, buy you a 500 grand or a million dollar property. Whereas in shares, most people wouldn’t leverage that, maybe they’d leverage it 50%. So there may be borrowed 200 grands worth of shares.
So even if shares go up, say 10%, on 200 grand, you make 20 grand, whereas that 500 grand or million dollar property goes by 50 or 100. Grand. Yeah, and obviously, a tax because you don’t sell it. And so that’s the main advantage of property is you don’t have to be that over, especially if you’re in residential property. If you buy a normal, good property, average price in a good suburb in Australia, generally, it goes well over time.
And generally, it’ll always be rented out. And so effectively, you get a massive return on your money for almost no effort. And so I didn’t want to read the newspapers, I didn’t want to be the biggest genius to try and pick stocks, you actually don’t need to be that clever in property.
And quite often, I say, Here’s my strategy, because I used to come from Deloitte, where there’s obviously a lot of clever people. I said, My strategy is too simple for you. Because you’re too clever. You’re trying to find the latest, greatest thing, you’re trying to find some kind of way of, I guess, manipulating the market or finding the latest, greatest thing. Whereas I just go and do it. You’re trying to pick the market, you’re trying to time it all the rest of it. You’re just too clever, saying you’re stupid, I think and just get on with it.
Carl Taylor (07:32):
I think there’s really something in there. Even in all sorts of circles, I’d rather be investment or even in business, that sometimes high intelligence can be something that holds you back a hindrance because you overthink things, you overcomplicate things, which means you hesitate to take action, whereas someone who just either is naive or you know, just thinks about things differently.
They just get on and do things. And I’ve definitely witnessed this in my own life where I’ve overcomplicated things, and other people who didn’t know that they shouldn’t or couldn’t do that thing. Went away and did it. And then they’ve had all this great success. And I’m sitting there getting frustrated going, Well, wait, why did that work? So I think that’s extremely true.
You know, my own journey with property only got into property three, three years ago, I think it was now because for a long time, I just kept going not to bubble. It’s just it’s overpriced. You know, like 10 years ago, I was like, nah, this is ridiculous, it cannot keep going.
And so I stuck to shares and crypto and things like that. And only three years ago that I finally pulled the trigger on property. And then after I bought the property is when I finally actually the penny dropped about the value of debt, and the power of debt and just things you know, if you knew 10 years ago, our life would be very different. But I’m grateful to be in the game again now.
So all right. I’m a business owner. I’ve got this cash flow. I’m going Yep. Alright, I want to keep things simple. I like what you’re saying, Chris. So obviously, you’re a buyer’s agent. So you know, do I go and just engage a buyer’s agent? Do I just go and buy any old property? I mean, you’re saying that in Australia, at least, if you buy fairly well, you’re going to do do okay.
But then I hear other property experts who are like, Well, you can’t just go and buy any old property, you know, you’ve got to buy the right investment grade property, or you’ve got to have done your research into the suburb or the area. So would you say those people overcomplicating it? Or is there an element of truth to that?
Chris Gray (09:15):
Look, there’s a bit of truth in all of it. And it’s all about balance, because whatever you bought 10 years ago, as long as you didn’t buy in a mining town, chances are you’ve done very well. But if someone does it all day, every day, and they’ve done it 20 or 30 years, and that’s all they do, they’re obviously going to do it better than you. So the golden rule is, is do something, whatever you do, just do something, at least you’ve got a chance of getting a result.
Or as obviously, if you do nothing, then we will know that you’ve gotten a chance. But the main thing is is delegating and that’s one of the things that I learned at nearly eight so a lot of people ring me up and so Chris, you’re you’re super busy. I won’t take any any of your time because you’re on Sky News, you run a business, you’ve got young kids, you travel overseas, you’ve got a portfolio all this And I said, Well, now I’m actually completely free because I delegate everything.
So if you look at my diary, it’s almost I have maybe one or two meetings a day, I’m trying to do two hours work a day at the moment. And the reason being is I believe in professionals. And if someone does something all day, every day, they’re going to do it better than me. So even though I’m a Qualified Mortgage Broker, I did that, to understand how banks thing, I never read a mortgage. I’m a qualified accountant, but I’ve never practiced in 20 or 30 years.
But I know the questions to ask the accountants to lead them in the right direction of what the result is that I want. So again, is one of the buyer’s agents on our team. He’s been selling property for 10 years, and then he’s been buying for me for 10 years. So for 20 years, he’s been out in the market speaking to the agents all day, every day, literally 99% of the properties he buys, he buys them pre auction, and quite often before they come on the market, which means that the average person job while on the street, never even gets to see those properties.
So is going to buy a better property, he’s going to buy it at a better price. And he’s going to buy it in a quicker timeframe than someone that’s a first time buyer going out to go and do it. But at the same time is if you’re a first time buyer, or so you haven’t got the funds to pay for a buyer’s agents go off and do your own thing to start with. And there’s a few simple rules you can follow.
So if you avoid the CBD, because there’s no limited how high you can go, and nominee Aziz want to live in the CBD. So if you go that five to 15, KS, with his three storey height limits, which means there’s no more property that can be built, you buy a secondhand medium price property with a lock up garage and a block or 12 or something. And you get an independent valuation to prove that you’re not overpaying. You’re not going to go too far off.
Carl Taylor (11:46):
Yeah, got it. I mean, that’s a good tip, do an independent valuation, not just straight the banks valuation, but something independent there too. And so it’s interesting, you know, obviously, in Australia, at least there’s an argument between No, you don’t want to buy a unit you want to you want the lands what’s most valuable, you want to buy a whole freestanding house now, obviously, in the round around the CBD that’s getting harder and harder to find. You’ve just mentioned they’re buying a unit, I’m guessing for you, it’s like there is it’s horses for courses in your mind, or is there a difference?
Chris Gray (12:16):
So it all depends where you buy. So yes, the golden rule is land depreciates, and buildings depreciate. So you want to get the highest amount of land contract, you can, or you buy a house.
But if you’re buying in Sydney, that house in that blue chip area is going to be three, four $5 million. And what happens then is the rental yield comes down because not many people can afford to rent a four or $5 million house, and the ones that can afford it they can afford to buy anyway.
So ideally, you buy around the median price, and you buy what that gets you in that area. So in Sydney, I’d be buying a unit in Melbourne, I’d be buying a townhouse or a semi anywhere else in Australia, I’d be buying a house because that’s what the average person lives it.
So it’s actually about the quality of the land, not the quantity. So save, we take bond ratings for your one and a half million dollars, you’re gonna get an 80 square meter unit, which if you live anywhere else, in Australia, you’re gonna think that mad why? Why would you spend that kind of money down in Melbourne, you’re gonna get something’s bigger, you’re gonna get a bit more of a semi in Queensland, you’re gonna get a three or four bedroom house, you go to the Northern Territory, you’re gonna get 1000 acres.
Yeah, but the thing you did in the middle of summer, are there going to be 50 or 100 people queuing up to rent that 1000 acres in the middle of the territory? Or their house in Queensland? And the answer is generally no.
And so it’s because the quality of the landed Bondi or PG or manly or something like that, there’s so many young people that have got rich parents, they’ve got good city jobs, they earn good money, and they want to spend all their money on lifestyle, and basically where they’re living. They’re happy to pay a premium to get into those kind of areas. Yeah, super interesting.
And so that one and a half million dollars, you generally got two tenants. So you’ve got two young single people with no extra expenses, trying to rent that place, or say the Queensland one, you’ve got one income earner with probably two kids, maybe a private school, and they’re trying to pay for the same thing?
Carl Taylor (14:13):
Yeah, got it. And that makes a lot of sense. It’s just you know, for our international listeners here, just know if you’re not in Australia, some of these No, I know, I know, the property prices in America have started to creep up and I don’t know if they’re quite matching Australia’s craziness of property prices.
But if you hear some of these numbers, just understand that Sydney in particular is very one of the most expensive places in the world to buy a property but that’s not all of Australia. You know, there are places other side of Australia in Perth, for example. You can buy properties Northern Territory mentioned for under a million dollars and they can be big properties.
But this is an important conversation because I think I know what held me back from getting into property for so long is firstly, as a business owner, I was like, Oh, well, they’re not gonna lend me any money. I remember when I was 20, maybe 22. And still business. I was one of my I was my second business and I I sat with a mortgage broker who was in my BNI group, my business networking international group. And she sat down and she looked at my financials and everything said, Ah, you know, you really need to start paying yourself a salary.
At that point, I had been paying myself salaries, like, we really need some salary to try and get you a loan. And crazy enough, I never went and talked to another mortgage broker ever again. So decades went by, and I just kept believing what this lady had told me that it would be really too hard to get a loan.
And so I just continued to believe that either banks won’t lend me anything, the banks won’t lend me anything. And then when I finally decided to pull the trigger, three years ago, we bought a commercial property investment property up in Queensland.
And I sat down with a mortgage broker, and they’re like, oh, no, you could borrow a significant amount of money, like we’re talking millions of dollars. And I was like, Oh, okay. Like, it just completely changed my mind. So if you’re listening to this, and you in any way, have been sitting there going, I’m a business owner, I work for myself, the banks aren’t going to lend me anything. I really challenge you to go and challenge that belief system and actually meet with someone and see if that’s true. Because I was pleasantly surprised.
And I’ve just recently we’re about to buy another investment property. And you’re right now, we’re 2023. There’s a big talk in the media that it’s getting harder to borrow. And out of this, I just met with my mortgage broker.
And basically, he said, I can borrow double what I could borrow last year. So you know, don’t believe all the headlines, talk to someone and find out what your actual situation is. Chris, you’re a man of numbers, is there anything you would add to what I just said,
Chris Gray (16:30):
you know, so a couple of things. So going back on, say, for the overseas people listening, most of property investing is all about mindset. And we’ll talk later on about how you can get my book for free and in some of those resources.
But effectively, it’s all about the mindset. So whether you’re living in Perth, or Melbourne, or Brisbane, or you’re over in the UK or the EU, in the US, the philosophy is exactly the same, you just then need to change it for that label area. So just like I say, I buy units in Sydney, but I buy a house somewhere else, again, the US you buy what the local people are buying.
So that average price in that area, because it means that 80% of the population can afford to buy it to sell it or to rent it. So that’s one of the main things. The next thing when it comes to mortgage broking accountants is this is the contrarian thing. So most people go to their accountant and they say, I’ve got a good accountant because I pay no tax. And the accountants value themselves on giving the clients no tax bill, because then nothing they good.
Whereas I’m doing the complete opposite. I’m saying maximize my tax, which sounds weird. So what happens is I go to the mortgage broker and say, How much money do I need to earn on my tax return in order to get another low, because I know if I buy another property, that’s going to go up roughly at 50 or 100 grand a year, I then go to my accountants and saying this is what I need my accounts to look like.
And it’s not about doing something dodgy with the accounts. But if you’re in business, you know, there’s a big difference. If you put an expense or a an invoice or sales invoicing on 30th of June, or the first of July, it goes from one tax year to another.
So you can actually do things like that, to put yourself in the best position. Most people would delay that sales invoice on the first of July to put it into the next tax year, I’d probably put it into the 30th of June to boost my profits.
So even if I paid an extra 50 or 100 grand in tags, I don’t mind because if I buy that extra investment property that I wouldn’t otherwise be able to get. I make 50 or 100 grand a year compound for the rest of my life. It’s all about trying to see the big picture. Sometimes you got to sacrifice today to gain for tomorrow. But I can bet you 99% of accountants have never been told by their clients. can you maximize my tax?
Carl Taylor (18:43):
Yeah, I’ve never put it that way. But I’ve definitely spoken to my accountants and said hey, like, I need to actually look like I’m making some decent money for the finances to go Yeah, I’m going to stick if you just if you lower tax like crazy, that’s not going to help me get a loan, I have to balance getting a loan and not pay overpay on tax.
So yeah, I’ve never put it quite that way. maximize how much tax? Okay, so, all right, I really liked what you said there. That mindset of going, I need to ensure I can show what I want and what you said they’re going to a mortgage broker first and asking them, What do I need to be able to show you so that I can buy my first property, my next property, whatever it may be, and then going back to the accountant and saying, Okay, well, this is what I need to be able to show.
And, you know, as business owners, we all put certain things through the business that you know, there’s a gray area of was that a personal expense? Was it really a business expense? Like how do you want to pay for it? And if you understand that, you might go okay, well, I won’t put that as a business expense and save that little bit of tax because that’s going to stop me from being able to make this investment that as you said, even if you paid so I’m just gonna repeat for those who didn’t hear what he said.
Even if you pay 50 or 100 grand more in tax that year. buying that property will make 50 to 100 grand a year. He value and profit compounded year on year. So effectively if you can survive one year of it, you’re neutral on the extra tax you paid because of the growth you’ve had.
And then the difference is it’s compounding every single year, growing over and over. So one thing I’m curious about there, Chris is where do you sit on the whole positive cash flow versus negatively geared argument?
Obviously, in the higher interest rate environment we’re in right now, positive cash flow is pretty challenging. No matter whether you’re in commercial properties, you got residential, it’s harder unless you’ve massively paid off and lower the LVR. But there’s still always a big push up for me again, why did I not get into property for so long? The Australian market to me just didn’t make sense because I’d read all the books which were US based writers about property investing, read all the books about a played Rich Dad Poor Dad cashflow I wanted the cash flow.
And the Australian market just didn’t make sense from that point of view. So most of Australians the contract, like I’m curious about the contrarian view, because most Australians have gone okay, well, I’m going to negatively gear, are you contrarian to that? Are you actually on par with that?
Chris Gray (21:01):
So I started investing in 22, in the UK. And in those days, not that I realized what percentages were but we used to get about 10 to 12%, rents, we used to then six or 7% mortgage, so it may say 5% profit. So when I came to Australia, and all my friends, like my new friends, they said, Aren’t we rent cheaper to rent than buy? I said, it can’t be, why would someone tie themselves to a 30 year assets and rent it out for cheap within a cost that it doesn’t make any sense?
And that’s obviously the negative gearing food. And they said, Oh, you get taxed back for that. And I said yet, but you’re still losing money? It doesn’t make any sense. Look, nothing’s changed in the UK. Now the rents are that I. So effectively, they’re the same. So that was the biggest hurdle. And I read Rich Dad, Poor Dad, after I bought about five, six properties. And he was saying positive cash flow. And I said, yeah, it doesn’t exist in Australia.
So the main thought is, is that this is a generalization. If you buy a property near the capital cities, say, look at Bondi koji manly type thing, and say, cost a million dollars, it might cost you 10, or 20 grand to hold on to it. Because assuming you’ve borrowed most of the mortgage, the rent isn’t going to cover the expenses.
So you’re going to have to put in one or $2,000 a month to cashflow it, a positive cash flow property is more kind of something generally regional or more interstate, maybe it’s got double income, in generally you won’t get as much capital growth, but you’ll get maybe six or 7% yield rather than maybe four or 5%. In so the whole equation is, if you bought in the in the capital cities, I’d say it’s gonna cost you 10 or 20 grand, where you might make 50, or 100 grand in capital growth.
Whereas if you bought regionally, you might make 10 grand guest flow, but you might only make 25, or 50, grand capital gain. And so really, this is basic numbers. Again, if you’re a typical average Australian, that doesn’t earn that much money, you can’t afford to buy a million dollar property in Bondi and rich cost you 10 or 20 grand a year. So you need to go positive cash, right.
Whereas if you live in the city, and say you’re a doctor, lawyer, accountant, business owner, and you’ve got sad excess income, just purely on the math, you’re better off something costing you 10 or 20 grand a month to make 50 or 100. Because you’re going to net out at 40. You’re at $80,000.
And that’s good. So if you’re a high income earner, it’s good to get the negative gearing because you get taxed back. And then you want $1 of capital grows, because you don’t pay tax on that. In less you actually sell the property. And ideally, you never sell.
Carl Taylor (23:33):
Yeah, I guess the one of the things that comes up with the idea of like, okay, well, it’s cost me 1020 grand of out of pocket this year to hold the asset, but it’s gone up 50 100 grand, you know, there’s the argument of like, well, yeah, but it was 1020 grand of like cash flow, and it’s gone up in value in asset, but I can’t like there’s a feeling of like, well, that’s I don’t can’t spend that I can easily just access that. What would you say to, to those people,
Chris Gray (23:58):
you can do whatever you want. You just need to know how? Yeah, so do think so. And again, it’s like going to the mortgage broker, it’s not can I borrow? It’s how, how do I borrow? How do I make this work? And that’s always the question, the open ended question is sure, you’re saying it’s impossible.
The bank said, No. Let’s go and speak to 100 banks. There’s someone there that will say yes. And so it’s persistence. So when it comes to something like this, think of it as for savings. This is why buying the family home or buying your own home when you’re a young kid. It’s the best wealth creation in the world because it’s for savings that the mortgage is the first thing you always pay.
So you’ll go without petrol in your car or going on that extra night out or going on the whole day. You’re always going to pay your mortgage people just don’t default on mortgages, because they know it’s such a big black mark said it’s a great way to for saving, whether you’re a business owner or an employee, but the ultimate answer is is you can access that equity. And it’s a simple single refinancing.
So Saying you buy a property and it goes up by 100 grand, if you go and sell it, then the real estate agent will charge you 2% or 3%. When you’re 30 grand, you will then pay, say 50% capital gains, which is, say 50 grand.
And then if you report in other assets, it would then cost you probably another 20 or 30. Some people go and make 100 grand on the property, and they think they’ve got 100 grand profit, they go and sell a ribeye. And all that money’s actually disappeared. So what refinancing is, it’s almost like selling your property to the bank, buying it back on the same day, but without paying any the transaction costs.
So let’s just say you buy a million dollar property, you borrowed 80%, so 800 grand, so you got an 80% mortgage, the property then goes from a million to 1.1 million, you go back to the bank and say, right, my property now is worth 1.1 million, I want to borrow 80% against it.
And I want to use that money to go and buy another investment site. Now, as long as you’ve got the service ability, so they will check to see that you can service that extra mortgage on that extra 80,000 that you borrowed. But effectively what you’ve done, the property has gone up by 100 grand, you’re borrowing 80% of the bank lends you another 80%, you’re actually free to do whatever you want with that money once you’ve got it.
So I typically split it three ways. So son, if I’m building a portfolio, I put most of it into a deposit to buy another property. If my property is a negative geared, I might put some aside is what I call buffer all working capital to help me cashflow that negative gearing in the future. And then later on in life, then I’ll take some out. And I’ll do that to spend his personal spending, which is obviously non deductible debt.
And so in the times where I’m worried about the market, the market might national interest rates might go up, I put more money into my buffer. If I’m growing my portfolio earlier on, I put more into deposits. And then because I’m at a ripe old age of in my 50s. Now, I’ll take more off the table and spend it on night. So you can’t do that. But it is subject to serviceability.
Carl Taylor (26:57):
I love that the the idea of those three different ways of how you use the the extra equity when you refinance and the different stages. And yeah, I believe in the past, you didn’t they didn’t quite have the same stringent rules of the service ability that exists now.
But that’s one of things I think, as a business owners as the people who are able to control how much money we earn in a way that employees just don’t have that ability. It can be fluctuating up and down. But we have that ability to go okay, well, I’m going to either start a new business or I’m going to launch a new product line or I’m going to ramp this thing up and maximize your cash flow to be able to service and show serviceability.
Chris Gray (27:32):
And the main thing is, if there’s a will, there’s a way. So a lot of people say I have a service filthy now you can’t do anything where you can. So last year, I borrowed a million dollars against the property to buy cars.
So as I was into vintage cars, and I showed no income, I told the bank, I was buying cars, and I gave them a property. And I said I want to borrow 70 or 80%. And I want to buy vintage cars. Now I paid a higher interest rate to what most other people were I was paying like seven or 8%.
But if I’d sold that property, I would have paid so on a million dollars, I’d have a 200 grand capital gains tax, and I wouldn’t have an asset rising. And so even though I’m paying 8% on that money, so I’m paying 80 grand a year effectively, for two and a half years, I’m still ahead because I sold it on a joint brand on day one, or is there some pain to underground over two and a half years.
But I still got a property that’s rising. Just last month, Sydney property went up by 1.8%. So already, I’m making money on that property, because I’ve still got it and I didn’t sell it. Whereas people would say why would you borrow 8% and its non deductible debt and whatever else, it’s still better than paying the tax and having no asset.
Carl Taylor (28:43):
Yeah, and this goes to what you said at the beginning. It just really shows it’s knowing your numbers and looking at the bigger picture and going okay, like what is the there’s the opportunity cost if I sell like the higher interest rate understanding the value of that money.
And even as you said, paying the 200 Grand over multiple years, when you factor in inflation, you’re actually paying less than if you’d paid 200 grand today like that 20 grand is worth less in the future than it is today in money.
So that’s just brilliant. I know for me, like, I can imagine being like, oh, no, 8% I wouldn’t pay that interest rate. But what you’ve just said there really, really challenges that thought process. I’m curious question you
Chris Gray (29:23):
said right at the start about using the buyer’s agent is when you’re trying to discover all this stuff for yourself. The stuff I’m talking about? Sure it’s in some of the books, but this is the top 1% of knowledge that 99% of stuff you read from the banks in the newspapers isn’t this stuff.
This is the ultimate kind of thinking. And I’m not a genius or anything. It’s very, very simple stuff. Like everything I’ve said today is isn’t that obligated. But that’s the difference between someone starting on a journey part time to try and work it out over 30 years, whereas someone’s done it full time for 30 years for themselves.
The reason I’ve got so much knowledge is I’m doing it for me. I’m not doing it This advance is not hypothetical stuff. I’m doing it for me. And I know what it’s like when interest rates go from two or 3% to five or six.
And I’m trying to buy or a million dollars for some cars or to feed the family, or to feed the negative theory. I can tell people from experience, because I’m doing it. And that’s the difference between trying to do it yourself and hiring professional.
Carl Taylor (30:23):
Yeah, definitely. So true. And I want to change tack a little bit here. It’s all still relevant. But I’m curious around how your stance on the idea of being a rent investor versus owning your own home.
Like, let’s say you’re a business owner, you have not gotten into property at all. Would you think they’re better off going? What are the numbers say, right is really what I’m asking to go and buy a property as an investment and continue to rent wherever they want to live? Or do they go?
You know what, I’m going to buy my own home first, because I know there’s at least a few listeners that I personally know, who are in that exact situation, do I buy an investment property? Do I buy a home, I can share my own experience, I’m a rent Bester I rent where I live, it’s cheaper to rent the house live in it’s five bedroom house in boy Bay pool, it’s cheaper to rent it even though they just put rent up for us than it would be if I was paying a mortgage even on interest only for it.
And we’ve invested first is that across the board, we see the numbers play out or what’s your mindset on that?
Chris Gray (31:20):
Sure. So the concept of investing is most people can’t afford to live in the house they want in the suburb they want. And so the contrarian way of thinking from our parents have bought and paid off is go and rent where you emotionally want to live, and then invest the equivalent money where it gets a higher return.
And so just like we were talking before about Sydney buying a house because there’s more land content, but it will cost you say four or 5 million. The whole idea about the rent vesting is if you’d bought, let’s say a one one and a half million dollar unit, it would typically rent for about 4% yield.
So $40,000 on a million dollar property. Whereas when you get to say a four or $5 million property, not me, many people can afford the rent on that. And the ones that can afford the rent on that don’t want to live in it, because they can afford their own house. So effectively, the rental yield goes down.
And typically it will go down to about one or 2%. So the thought process is is rather than say buy a $5 million home, if you bought five $1 million properties, they’d all rent out at say 40,000 or 4%, you could then go and read that four or $5 million home for one or 2%. And effectively all your debt is tax deductible.
And you’re then making more money because say 4% on 5 million is say 200 grand, but you might only then be paying out 60 or 70 grand, and then you’re making 120 130 grand profit, plus all your debts deductible. So if you look at the property behind me, so I’m in a whole floor apartment in Dalek, white, obviously you can see the views of the city, right? I mean, we get 360 degree views around Sydney, the properties were say seven or $8 million, we pay about 70 or 80 grand a year in rent.
So we’re paying 1% yield, our rent doesn’t even cover their Stratasys and their land tax. They just started meeting yesterday to talk about redoing the building, I think some of the outside and it’s 100 grand special per unit. And that’s before they’ve started. Whereas for the equivalent, if I had seven $1 million units, I could then be renting them out and be giving effectively 2800 A week or something like that, and paying peanuts out.
And so I’m making literally a couple of 100 grand a year difference. Yeah, it’s but they say the negative side is it’s capital gains. It’s not capital gains three, but my counter argument to that is I’ve had all my properties for 20 or 30 years, I’ve never sold them, I’m never gonna sell them, I pass them on to my kids, if I never pay capital gains tax, who cares?
Carl Taylor (33:48):
Yeah, so sure, exactly. The Capital Gains Tax only comes when you sell and if you sell, and there’s various different structures and different ways of how you could hold those properties.
So yeah, the tax is only relevant if you sell. That’s an really interesting distinction that I’d never heard before. The idea there of going, alright, if I want to live in a house, we have a $7 million property, or what’s the simple math, let’s go with the $4 million, I want to live in this $4 million dollar property where I’ll be paying one to 2% in rent, and then I’ve got enough money that I go and actually buy $4 million properties that are giving me the higher return.
So it’s not just a simple like, oh, what’s cheaper to rent and buy an investment property in which dad is generally true, but actually the strategic pneus of going? Well, I really want to live in a house like this. So therefore, I’m going to invest the equivalent amount to buy that house in these other properties, giving me a higher return and then pay the rent. That way you just packaged it up. I’d never heard it quite put like that. And I really liked that.
Chris Gray (34:45):
So another simple way. So if you buy say you threw in a million dollar property and you weren’t going to go and upgrade, but instead of upgrading. You bought a second million dollar property, if they rent out, say on a million dollar property 800 bucks a week. You then bought two of them That’s 1600 bucks a week, you can use that 1600. Like we’re only paying I think 1800 Here, you put another 200 bucks in and suddenly, instead of living in a $2 million base you living in a seven or $8 million base?
Carl Taylor (35:12):
Yeah, it’s interesting that one thing I, when you say like that 1600? Are we talking after paying mortgage? Or we talking like?
Chris Gray (35:21):
X? Yeah, got it? Yeah. Because effectively, if you bought that $2 million home, you’d still be so paying the same maintenance or whatever else.
So there’s almost no difference of whether it’s that I mean, there’s land tax and bits and pieces like that and deductibility. But the main thing is, is you’re renting your investments out at 4% yield, then if you can jump the ladder to only pay one or 2%. That’s the differentiator, that’s the arbitrage, the tax, and the rest of it is bonuses.
So I never rely on tax, they could take negative gearing out stamp duties, it’s kind of things. The bottom line is you’re receiving 4%, you’re only paying one or 2% out.
Carl Taylor (36:03):
Yeah, and that I mean, that’s the that’s the secret of, you know, they often say it takes a while before you really understand what they’re saying. But real estate, or investing is a game of finance, the asset is kind of irrelevant, it’s really about what you just talked about there and pay, I’m receiving 4%, I’m paying 2%, like, that’s the game that you’re really looking to play.
Chris Gray (36:21):
That’s 100%. So, in the old days, 20 or 30 years ago, property investing was not only 5% about property, these days is 95%. About getting finance, understanding the logic, the mentality, buying the property, renovating it, renting it out, all of that is delegated. It’s easy. So everything is about the money now.
Carl Taylor (36:42):
Yeah, that’s so true. And that’s the beautiful thing like as business owners, we understand we will, I would like to think as business owners. And if you don’t understand your numbers, go back and listen to a few episodes we’ve done on finance.
But generally you understand your numbers enough you understand profit and loss, you understand balance sheet, you understand how to evaluate whether something good financial deal. And so you just taking those same skills you use in your business, and you’re applying outside of your business, to build wealth, because I really want to stress this listener, watch out, you know, if you have a decent business, producing cash flow, you’ve been in business for a while, or maybe you’re still early on in your phase, maybe we’ve only been in business for a couple of years, I’ve been in business now.
20 something years, I’ve had businesses that have succeeded, I have businesses that have failed, I’ve made money, I’ve lost money. Just because you’re successful today in your business doesn’t mean that tomorrow, it’s going to continue to go the way it is. And it’s the saying of you know, make hay when the sun shines. If the sun is shining right now, get cash out of your business, not at the detriment of your current business.
Don’t take cash away if you if that’s going to kill your current business. But if you’ve got excess surplus, don’t go and just buy the cars and go and buy the fancy things seriously start to build some wealth outside of your business to produce that extra security and wealth creation.
So that one day when that business is no longer yours, whether you sold it, whether market changes killed it, or whatever happens, I guarantee you there will be a day even if it’s the day that you die, you will no longer have that business. And your kids probably won’t want to take that business on. So have something else that they’re building wealth. I just I really stress that.
Chris Gray (38:20):
And that’s that’s a very good point. And whether you’re an employee or you’re a business owner, it’s the same thing. So I’m in a group called The Entrepreneurs Organization, which is a group of about 15,000 of us worldwide.
Some people notice YPO, or rail, or WPA, which is just a kind of organizations. And that’s the thing is the majority of people put all of their energy into the one thing, whether it was the partners at Deloitte earning a million dollars, or the employees or business owners within EO as well.
Things change COVID changes, and everyone’s got everything invested, especially business owners, they all think my business is worth a fortune. But often they’re not necessarily saleable anyway, and one event, and James states like COVID, GFC, whatever else. So the whole idea is about is building a plan B. So I started building my plan to be at 22.
But I realized that my plan B was better than my plan about a of having a career, because the amount of money I made in property from literally a few hours versus when I was 22. So I worked full time at Kodak in the head office in the UK. I then drove to central London four nights a week to study accounting, then studied accounting and did the exams at the weekends and stuff.
And I did that for five or six years. Whereas I was making so much more money from property. I got to Deloitte, I was earning 80 grand in 2000 at Deloitte 60 after tax at the same time, I was making 600 grand a year for the property. And so this is the thing is your plan A is actually quite often a Plan B or C and so if you don’t take money out of your business, and then put it into property, the reason I can afford my business is property actually supports the business. So when my cash flows go up and down, we’ve had the credit crunch.
And our business drops 70% revenue literally overnight. But because I had the property, the property supports me. Yeah. And so the thing is, is, take money off the table have that and be, and quite often, you might actually realize that that’s actually a guarantee. And your business sale is then more the bonus, rather than the reasonably.
So when do I probably got the smallest business? But I’ve potentially got the biggest lifestyle, because all of my stuff is passive. So I’m not trying to get my business to 10 or 20 million because I don’t need to, because I’ve got the property doing that in the background for me. Yeah,
Carl Taylor (40:40):
I think there’s going to be a lot of people listening who resonate with that idea. I’ve written in the last probably, I’d say the last year in particular, the number of conversations I’ve had with entrepreneurs who have had for so long this idea, I want to get 10 million, I want to hit 10 million or 30 million, or whatever the big target was. And they’ve been banging on to me about that for years.
And they’ve only just now there’s been a shift. And more of these same people are like, well, actually, you know what, I think I’m just, I’m happy to just slow things down. I don’t want to work as hard as they have been, you know, I just want the lifestyle. It’s been really refreshing, because for a long time, I was the one that was like, no, like, why do you why do you want 10 million?
Like, what do you think you’re gonna get from that. And it’s been really refreshing. But interesting enough, I’m the one that started to shift a bit more like I’m trying to hit this net worth, but I’m not talking about building my business to that level, I’m saying, I want to hear an asset pool valued at as opposed to, I’m trying to get my business to that particular it’s just one component of the whole pool.
And I think as business owners, if you can start to think of that, as your business is just one asset in the entire portfolio, and look at it that way. That’s going to really support you saw a lot of the
Chris Gray (41:49):
people coming into er as part of the integration to get them in and to explain to folks around around the globe. And a lot of them will come in and say hey, look, I turn over this amount of money. I’ve got this many staff this many offices, and it’s a bragging kind of basic thing.
And then at the end, I say, look, I’ve got no office, I’ve never had an office of what nice staff, I’ve got contractors, but yeah, and I only turn over a couple of million dollars. And they say, Oh, God, I’d love to have no staff, I hate them, they drives me nuts. It kills me are having the office, I’d love to lose that the overheads and the rest of it.
And that’s the thing is, it’s all a big bragging thing to say, it’s like all this Instagram and social media and a look, I’m so successful, and I’ve got all this stuff. But the bigger the business, the more grease they had. And a lot of the businesses within the EO actually scaled back and they did after turnover. They made more money, they had less grief, they had less staff, and ultimately they were happier. Yeah, right thing. It’s not all that
Carl Taylor (42:45):
that’s very true. Very true. I think one of the biggest challenges that sometimes come is a business owner gets the point of like, I just I just want passive income, I just want to live purely off passive income.
And but then they get caught in that trap of like, well, then I need serviceability though I need cash flow, to service the loans to continue to build the passive income or to get it where I want. So we there is a period of time where we you know, the business is a big part of providing that serviceability.
But if the bulk of your wealth is in a situation like yours, Chris, where it’s coming from the passive side, the cash flow in the business is just a it’s not as important I guess, is I’m seeing
Chris Gray (43:18):
that street. So basically, I run my business to give me the service LLC to buy the property, which creates the wealth, which is what I’m trying to tell our clients. Yeah, so suddenly, the income is literally just to service. That’s the main thing. But again, the good point is, is most people do say I want passive income.
So Chris, I want to buy a property that gives me positive income, because I know what we’re gonna retire on as income. But I say you don’t need income, you need cash. Because to pay a bill, you need cash, whether it’s income or capital growth should be irrelevant. I actually want capital growth because I need half as much than if it was income, because if I need 100 grand a year to survive, if it’s out of income, I need to earn 200 grand, a 50% tax or undergrounding in income tax, and I’m blessed with 100.
Whereas if I can take 100 grand of capital growth, I’ve then got a still got a spare 100 grand sitting aside. So I need half the money because I just need 100 grand to spend, if that can be capital gains free, or if even if I’ve borrowed it, even if I’m paying five or 6% compound interest, I’d rather pay five or 6% compound interest and pay 50% tax on day one. It’s the same thing. We’re not talking about selling cars or selling the property to pay the 200 Grand in tax day one versus borrow the money and pay it off over a few years and still have an asset that’s rising. And this is a really fine point. But most people don’t get it.
Carl Taylor (44:47):
Yeah, my head I’m trying to think about what questions to ask to make that clear. I mean, I get what you’re saying. I guess if you could sum it up in just the simplest way of saying what you just said, just to make sure was Lanza people is there another way you could put that?
Chris Gray (45:03):
Sure. And look, it’s in my book, which people can get for free. So that’s an easy way to explain it, they can give it to their accountant to understand it. In business, it’s a really simple concept. But in personal life, to effectively borrow your money, or your wages doesn’t make any sense.
So I guess to explain it again, is, if you need 100 grand a year to survive, you need to earn 200 grands worth of income from your business, to pay 100 grand of tax to then give yourself 100. Whereas if I took 200 grand equity from my properties, I’d paid me 100 grand, and then I paid maybe five or 10 grand in interest.
And then I’ve still got 90,000 left over, which I could use to then go and reinvest and buy three or 400 grand property that makes more money than the interest and stops me in the first place. Where I know whether people are watching this first thing in the morning last night. I know it’s hard, it’s actually really simple. But if you can see it on a bit of paper, I hopefully will explain things.
But even if it took us five years to understand this or to get the right advisors, start getting your head around it, because it’s it’s magic. It really, really is. And it’s completely legal. There’s no funny business, there’s no tax dodges, or anything like that. It’s basic mathematics.
Carl Taylor (46:22):
I know in America, I don’t know if it’s been started to be clamped down on now, it’s not something we can easily do in Australia outside of the property space. But a lot of the big tech startup people, they’ve got huge, like someone like Elon Musk, he has all this equity and value tied up in the shares of Tesla and SpaceX and these companies.
And he didn’t pay himself a salary and people like, oh, do that sounds good in the media, I’m not taking a wage, what he doesn’t necessarily tell publicly to people is ball, he’s just taking loans on the value of his shares. And he’s living off that money.
That’s it for him, it’s cheaper to just like what you said, it’s cheaper for him to pay the interest on the loan on his share value that actually sell the shares pay the tax lose the rising value of that. So he holds on to his equity in his companies, he doesn’t have to pay himself as an expense from the company. And it sounds good to to be I’m not taking a wage, but he’s still happily living quite a decent lifestyle, because he’s borrowing against the value of his company.
Chris Gray (47:18):
So in reality, most people are actually doing this in the country, but they’re doing it the wrong way. So they’ll go off on a whole day and spend 10 or 20 grand on a credit card, they’ll be paying 20% interest on a credit card.
That’s effectively what they done. They borrowed money to go off on holiday to buy things that they couldn’t afford, and they’re paying 20% in interest. You do it the other way, you do it in advance, and you pay five or 6%. And you do it in a controlled budgeted manner with your accountants approval completely differently.
Carl Taylor (47:51):
Let me just clarify what I think I’ve heard you say. So what you’re saying there is, you know, if you’ve got some property that’s gone up in value, what you could do is go you know what, I know I’m going to take a holiday and there’s a high chance that I was going to put this on my credit card.
But instead I’m going to borrow refinance the property, and I’m going to access what’s called 50 grand, I’m able to access 50 grand of equity. And I’m going to do that at the beginning of the year.
And I’m going to get to have this cash. And I’m going to put some aside for those two holidays, I’m going to have a 10 grand bucket here and another 10 grand bucket there. There’s my two holidays planned.
And then I’ve got some extra cash here to live on. You’re right in that if they were going to put those 10 or 20 grand on the credit card anyway, the interest rate would have been, what 20% or something like that or more compared to, well, I know my loans, I’m paying around seven ish percent at the moment on most of my investment loans. So like, what’s called five to 7% interest instead is if I understood correctly, what you just kind of said,
Chris Gray (48:43):
well, first of all, let’s put a quick disclaimer in here to cover by not financial advice. Isn’t financial advice before you do anything, go to your mortgage broker, your accountant, your lawyer, all the rest of it. And this is what I’m an advocate for for anything, never go to any seminar, any podcast, go and implement financial staff without paying for the advice.
The advice is cheaper than making the mistake. So let’s say that poverty has gone up 100 grand, and you could borrow 80 grand against it. If you can’t buy that 80 grand, you’re pretty stupid. Because you’ve taken most of the money compound interest. If property drops by 10%, you’re screwed.
Because you can’t afford the repayments. If you take a small percentage out 10 or 20 grand for instance, I don’t think that’s too much of a problem. As long as you didn’t go and reinvest the rest of it to then make sure you’re making more money because say you’re going to take 10 or 20 grand out you’ve got 60 grand left, you leverage that five times to buy a 300 grand property that then goes up by five or 10% over the long term that makes 5030 grand to me, I think that’s okay.
The average Australian probably shouldn’t do it because the chances are they’ll dig a hole in there. A big, big help. Yeah, again, right advice and the right everything else in balance, I think it’s okay.
Carl Taylor (50:08):
Yeah, I think I think it’s super important right is you got to know yourself. If you’re someone who, in the past have built up a lot of debt, or you struggled with repaying debt, then learn about all these things.
But tread cautiously get advice, don’t just dig yourself into another hole, we do not, I do not advocate that. I know Chris does not advocate that, like, please be responsible. But understand the power we’re talking about here is the power of debt and changing your thinking of the game of finance.
Because that’s really when you get to a certain stage, like in the hustle stage of building a business. It’s still a game of finance, but you don’t realize it like it also stage it’s, I don’t know how to describe it. It’s just it’s hard work. It’s pushing, it’s figuring out product market fit. It’s all these things.
But when you get to a certain stage in business in life, it really you start to realize that it’s all just a big game of finance and resources, right, you’re paying for a staff member, you’re paying for stock you’re paying, it’s just all about and it goes to one of our previous episodes when we talk to Dean Jackson about the who not how, and I don’t know if you picked up on it.
But the early start of this conversation with Chris, he basically was talking about that same principle, but he lives by of, he’s going to find other people to do those things. He delegates out, he finds the who’s rather than worrying about the how but what Chris did really well just want to look back on this is he went, you know, he became an accountant and understood accounting concepts, he became a mortgage broker to understand the mortgage burden, he didn’t actually practice in those areas.
But he got the knowledge to be able to articulate very clearly what he wants, when he then delegates it to a who. And if we go back, if you haven’t listened to that episode with Dean Jackson, it’s exactly what Dane talked about is if you’re really able to articulate clearly what you want, you don’t have to worry about how to figure it out.
You just find the WHO to do it. And if you’re now sitting here going, Well, I’m wanting to talk property, I want to look at this stuff, I would highly recommend that it’s worth a conversation with a who called Chris Gray and his team. So, Chris, where you mentioned your book, where can they find the book, and how, what’s the next best step for them to work with you or talk to you?
Chris Gray (52:11):
Sure, so probably the best website to go is to your empire, they’ll come down to you. Or you can always go to Chris grand, and absolutely links in there. So there’s a couple of books on there. So the main book I wrote back in 2008, is for the SMS empire. And this is how to build this multimillion dollar portfolio, how the rent vesting works, how boring capital works, all of the pretty much everything in there for about an hour’s read or an hour’s audio.
And literally in 50 years, we haven’t changed a word. Or we’ve changes the examples when a relative were 500 grand, then we changed it didn’t 17 to be immediate. And now we really need to change it to be one and a half 2 million because that’s what we’re spending on the average average property.
If you want some fun and games, there’s another book called How to live the life of a multimillionaire without being one. And this is a book or writing COVID. And this is the fun stuff. So if you want the multimillion dollar home, the super yacht to supercar flying first class to the price of economy, all the fun things in life, this is a book about how to spend it, but how to spend it better.
So you could rather than live in that $2 million dollar house, I believe in the sixth minute. And rather than fly economy, how to fly business, or first or free, all these kinds of fun things. So the whole idea is is if you work hard, and you put extra hours in to build these assets, you’ve got to have the fun at the same time, because I always assume I’m gonna die tomorrow.
And I don’t want to have a bucket list. So sure, get the assets first, rather than spend it first and not have any asset, get the assets, but then reward yourself and then have that fun at the same time. And I very much believe in getting the best advisors you can. So not worrying about how much they cost. So I spend about 70 or 80 grand on accounting.
But I’ve hired previous partners from the heads of Deloitte private that now have their own business, because I could have a bookkeeper for 70 or 80 grand, or I could outsource a lot of that start. And just to get an hour or two hours every couple of months with one of the heads of the biggest accounting firms that were advising billionaires and multinationals. I don’t need them in my business full time.
But when I’m trying to borrow money or do some weird stuff, I need his brain for an hour or two. And it’s it’s it’s worth a fortune. So much better to get someone for like the interim CEO or interim CFO is much better than having that 40 hour person that basically is a blog that
Carl Taylor (54:34):
Absolutely, there’s a huge amount of wisdom in that and maybe we could unpack that in another episode. I appreciate all of your time on today’s episode, guys. I highly encourage you if you’ve got this far. Go back and re listen to this episode because there are going to be golden nuggets that you missed the first time around, so go back, hit play.
Also, later this week, I’ll be dropping my solo episode where I go a bit of My takeaways from this episode, so make sure you tune in for that too. As always, if this was your first time tuning in, thanks for joining us. I really hope you got value out of this episode, I encourage you to go back and listen to some of our previous episodes. We’ve had other amazing guests just like Chris, we’ve talked about shares, we’ve talked about building businesses that work without you.
We’ve talked about marketing funnels, we’ve gone in so many different directions. And then also there’s all these great solo episodes from me yours truly Carl Taylor, sharing some my experience and takeaways on building businesses that work without you and building wealth in and out of your business. So please subscribe if you haven’t, longtime listeners.
Thanks for being here. If you found something really super helpful in this episode, reach out I’d love to hear from it. I’m sure Chris would love to hear about it too. And if there was someone who came to mind, like just take a moment and think while you were listening to this, was there anyone in your world that came to mind? Maybe it was a mother, brother, sister, friend, Uncle team member, someone probably popped in your mind at one point, whoever it was, find the little Share button of this episode and send it to them.
They came to mind for a reason. Make sure that they get exposed, you can just say hey, I was listening to this and you came to mind. Check it out. That’s all you need to do. I would appreciate it because it means you know the podcast gets in front of other people, but they’re going to appreciate it more because there was a reason you thought of it. So up until now he next and connect with you next on a future episode. Keep up the journey.
You’ll find all the notes you need at rising.show and see you later.
Carl Taylor Outro:
You’ve been listening to Entrepreneurs Rising. Thank you, dear listener for tuning in. I appreciate your time and look forward to connecting in future episodes. If you would like show notes or any resources from today’s episode, you can find them at rising.show rising.show. You can find a show notes for this episode and all other episodes as well as links to socials and or the ability to reach out and connect with me make your suggestions for future episodes. Until next time, keep up the journey.
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