Do You Believe Everything You Read?
  • 11 November 2017

Do You Believe Everything You Read?

Are you maximising your potential or do you believe the fake news in the media that there is a housing affordability crisis? If people are told something often enough and long enough they tend to believe it.

It's a lie!

In my 50 years in property, I've never known property to be so easy to buy. What is the difference between rich people and poor people? Looking back it's definitely getting the right education. I was fortunate that I had a hunger for property from a young age and more fortunate that I ran into people who had the right knowledge. In contrast, I know people who received their education in different ways - engineers, doctors, solicitors. While they are well educated, they are poorly educated in wealth creation. That is why we started the Club, we are solely there to educate you in wealth creation while others are just there to sell you something. We are still world unique, with free education - Free today, free forever.

Below is the chart from the ATO showing the shareable investors by income. It compares 2014 with data from 10 years prior to 2004. A lesson from here is those earning under $87,000 find it much harder to get into wealth creation. I believe they have been misled by the media that they can't afford it. The reverse is true, our latest magazine carries the story of a young couple denied funding a year ago now has $1m worth of quality, new well-located properties. The difference between us and the bank is the education provided by the Club on how to hold these properties for a few dollars per day.

Let's educate the Reserve Bank of Australia (RBA)

It's amazing the heads of all these Government Departments are really poorly educated on wealth creation. They rely on working all their life for a salary and receiving a big pension at the end to sustain themselves.

Here are some examples of the RBA's lack of wealth intelligence:

  • Interest Only loans are a "riskier type of borrowing" - totally wrong. Interest Only loans are 100% tax deductible if you buy the right property which is well located with high rental yields, you can own a brand new property where the tenant and the tax saved can cover your outgoings. Risk-free!
  • Principal and Interest loans are not tax deductible. However, the RBA are actively forcing investors to change over their interest-only loans to P&I.
  • House price, growth and debt levels continue to grow rapidly, but the RBA state property investments on interest only as risky. Crazy thinking. Someone is accumulating good debit in a rising asset and it is deemed as risky? How can you accumulate assets without borrowing? If you are wealth educated you would see the value in continuing to borrow to accumulate rising assets.
  • RBA's view on risk is based on ignorance of the facts. The facts are, that we are now over $6 trillion in property in Australia with just 20% gearing. That's a massive amount of wealth that wise investors have accumulated in Australia. It dwarfs the money that has been wasted in super. We know that super after all your lifetime of paying into it will run out in 5 years. Your property will not!

RBA, APRA, Treasury and our Treasurer have combined to attack property investors of late. Do you know the RBA's only international research shows that this attack is a waste of time and just simply transfers money to the banking sector? It's in their report where it refers to the RBA’s detailed analysis of the housing markets in Norway, Canada, and New Zealand that have also experienced sharp rises in prices and household debt levels". While the measures appear to work in some degree "it was difficult to assess their effectiveness and that the impacts tend to diminish over time"! So get in, do a lot of harm, transfer a lot of money from consumers to the banks with no net gain in achieving falling property prices! The banks get wealthy to pay the Liberal Party's Bank Tax. The heads of the Government Departments have lots of work to occupy their time, but prices continue to rise.

Can someone tell these mandarins the banana story? With our huge on supply, prices will continue to go upwards. APRA, RBA and Treasury have all worked very hard to do the reverse. Their actions have limited supply.

Summary

It's interesting that these career public servants did not offer an alternative wealth creating strategy! They can only be investing in shares. We know that the share market now is lower than it was 10 years ago. We know that a number of companies that were around during this period have gone belly up. Not safe brick and mortar.

So, if you are earning less than $87,000 a year, are you going to be fooled by the media and place your future on the pension? Did you know, the pension is equivalent to approximately $200 a week! Don’t risk it! Our Club members are currently getting educated and getting wealthy now. Don't believe the media, get educated simply contact enquiries@propertyclub.com.au or call your Property Mentor.

Kevin Young

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