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Bryce Holdaway Blog post by Bryce Holdaway

Is Your Property Portfolio Built On Sand or Stone?

Isn’t it interesting to see the celebrations people have at New Year’s Eve when we’re seeing out the old year and welcoming in the new one? We tend to flock to iconic buildings and iconic bridges all around the world to capture the moment when the clock strikes midnight. If you think about Australia, everyone likes to flock to the Sydney Harbour Bridge. They take a selfie, and they capture that moment with something beautiful in the background.

But have you ever thought about the fact that no one tends to take that photo when the bridge or the building is actually being built. When the foundations are being hauled, and they are being built from the ground up. No one is interested in looking at that because it’s just isn’t the same effect, is it? When you think about the Statue of Liberty, it’s the same, and then the Burj Khalifa. The tallest building in the world in Dubai in the middle of the desert. If you have a look at the foundations of that building, no one really wants to take a photo with that in the background. They want to see the end product. They want to see the factor that comes, from seeing all that. And so my point today is the foundations in whatever we do in life are never glamorous, but they certainly are essential. They are absolutely essential. Just take for example, if someone wins the lotto, and they’re entrusted with all this money, if they don’t have foundations in money, they often lose it all up. In fact, 70% of lotto winners end up bankrupt because they just don’t have that foundation in money management. So I want to encourage people as they walk towards 2017, I want to make sure that they have got their investment foundations right when it comes to building a property portfolio.

And my first suggestion or the first foundation, is we need to make sure that we get a mentor. Stand on the shoulders of giants. Just learn from the people who have done it before you. And it’s not as though you have to have a face-to-face with a mentor because peoples’ time is often pressed. But there are so many avenues for people to virtually mentor you; through podcasts, through youtube channels, through blogs. If you find that their information resonates with you and you feel that there’s a connection or a synergy within their message, it’s very, very easy to do that today with smartphones and YouTube. So there’s no excuse not to have a mentor.

My second one is that you need to be resilient because building wealth is not comfortable or convenient. You have to learn new skills, you have to go against the tide of public opinion and a very small percentage of the population can actually do that. And you need to be able to withstand that because let’s be honest if it was easy, everyone would be doing it.

So, my third foundation is you need to build your tribe. You need to surround yourself socially and personally around like-minded people who are going to lift you up, not sort of put you down or discourage you. And I think you should also surround yourself with a professional team. Because they’re the ones that need to make sure you’re on track to achieve your goals that you set out to achieve. Have a think about oak trees for example. Oak trees, the root system, instead of going really far down, it goes to the side and in some cases, these root systems can go wider than the tree itself. And if it’s next to another oak tree, those root systems can join up together as a part of a tribe and actually perform better. If they’ve got an unhealthy oak tree, they’ll go and plant that oak tree next to the healthy oak tree so that the root system gets entwined into theirs. That’s a classic example of how the tribe mentality works. And if you’re going to be successful you need those foundations of making sure you’re surrounded by the people who are YES people, who know what they’re doing and are subject matter experts and can actually help you achieve your goal.

The other thing too, I think another investment foundation is, you need to sweat the small stuff. And I know there’s a book that says don’t sweat the small stuff and I think in life that’s important but when it comes to money management, you should sweat the small stuff. You should look after the pennies, and let the pounds take care of themselves. And if you don’t have any money SMARTS systems in place to help you trap all of the surplus cash flow, the chances are you’ll squander all the money to get to the end of 2017 and wonder where it’s all gone. So it’s clearly really important that you sweat the small stuff.

The other foundation is you should have a philosophy of being a farmer, not a hunter. Hunters want quick kills, quick results straight away, but farmers know the benefit of planting in one season and reaping in another season. So plant, reap and sow. They know they’ve got to cultivate. They know that there are a multi-year and a multi-season focus rather than just one season. And that’s what farmers do. That’s what I’d encourage anyone who wants to be a property investor to do. It’s to have a long-range perspective, not a short-range perspective. Because I think in 2017, we’re gonna get a lot of negative headlines around doom and gloom when it comes to property. But if we’re resilient and we’ve got that long-term perspective in place, and we think like a farmer, and we’re not just going to pack up our tools and go away just because of a negative headline or a little bit of negative news for the economy. If we think with that long range perspective, property had been a very, very good vehicle for the 100 plus years, so it’s going to be a very good vehicle for the next 100 years going into the future as well.

And my final investment foundation is one, a message that I talk about all the time. It’s about getting the strategy right. It’s amazing how many people don’t have that wealth building strategy in place and it’s important, I mean think about a yacht without a rudder. It will just go wherever the wind blows them. But if they’ve got that rudder or that strategy and know where they’re going, they can get to their destination. Or think about a rocket that is going to be launched. Even if it’s just centimetres out at launch, in orbit, it would be miles out. For you to get your destination right, we need to know that strategy is up front, so you have better chances or succeeding with your goals.

So have a think about this. I believe that everyone can achieve a property portfolio, or build a property portfolio if they get the foundations right. If you think about that tallest building the Burj Khalifa, the foundations they have are 50 metres deep. One Olympic size swimming pool underground just to keep that beautiful building in place. But remember and it’s important to remember this. If you convert learning to knowledge, you’ll become a fool. But if you convert learning into action, you can become very, very wealthy.

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