Back twenty years ago when my journey began I was completely overwhelmed with where to begin, working long hours in my business to support my lifestyle.
Once I gave up on finding the one big idea that was going to create my wealth I started to focus my attention towards the small things that I could do, often that would point me in the right direction to start moving me forward.
I was working full time on my income and part time on my wealth. It was as if I was pushing a snowball up a big mountain. In the early stages I was using all of my energy and appeared to be getting nowhere, but once I reached the top the snowball continued to grow and gain momentum without me having to do anything. All of these years later it continues to grow and gain momentum. Each year without any effort from me, it is unstoppable!
I created my wealth and freedom in what I like to call the slow-fast way.
See there are strategies that may have got me the results I was after quicker, but all of them required work to maintain, which meant that I would have been buying myself another job. These strategies mean there is always a ceiling to how much you can earn, because if you stopped working them they’d stop working for you.
Looking back on it now I am glad I stuck to my strategy of creating 100% passive income because there is no ceiling to how much I can earn and every year my snowball gets bigger and faster.
Because I hunted out successful people and basically copied what they did. I found that 90% of the world’s millionaires have used one particular vehicle to create their wealth. Their chosen vehicle is property. I think this figure has changed slightly over the past few years with the advancement of the internet and recent mining booms, but property is still the number one by far.
So what makes property the preferred vehicle for the world’s millionaires when there are so many different options?
Well, I can tell you the reasons why I have stuck with property as my main vehicle to create my wealth. Over the years, I have researched every investment vehicle that I could find, every new cutting-edge strategy that promised to make me a million dollars overnight without me doing any work and here’s what I found…
Rarely Do They Work!
These investments fall short in one of four areas…
- Not Enough Returns
- Too Much Exposure and Risk
- Too Much Work To Maintain
- They’re A Scam
Although I am not claiming to be an expert in every investment vehicle, I am just using my 20 years of experience as an investor to form an opinion. When I started my journey, I had a simple plan. I wanted to work full time on my income and part time on my wealth, until my wealth would support my lifestyle then I wouldn’t have to work anymore.
With that in mind whatever investments I choose had to be passive, which means that it constantly generates income for me without me having to do any work. I also didn’t want to worry about what was happening to my investments, passive also meant that I didn’t have to think about it. All I wanted was the money to show up in my bank account regularly.
Here is why I chose property as my vehicle and why after fifteen years it remains my vehicle of choice.
When it comes to most investments you can only ever get returns on a 1 to 1 ratio, in some of the better investments you might be able to leverage yourself to a 5 to 10 ratio. However, banks love property and are happy to lend you up to 90% of its value, which means you can invest in a 90 to 10 ratio. To put it another way, you can purchase a $300,000 property with as little as $30,000
Long Term Proven History
If you track property growth over the past hundred years,
Without fail and despite all the economic booms and busts it has averaged around 10% growth per annum, meaning that property prices have doubled every seven to ten years for the last century.
Cash On Cash Returns
Consider this, you have invested $30,000 to purchase a $300,000 property, with the banks’ lending you finance the remaining $270,000. The average capital growth over the past 100 years is 10% per annum, but because you have leveraged the purchase price, the return on your cash investment is actually 100%, instead of 10%, so whatever percentage the property goes up that year you multiply that by 10.
I know what you are saying right now, “But George, we have still got a loan to repay.” That is what we have tenants for. They pay you a fixed amount of rent each month so they can live in your house.
The banks aren’t the only ones who love property. The government love’s property as well and offers huge tax incentives for owning an investment property. There are tax advantages to buying investment properties, owning investment properties and even renting out your investment properties to tenants.
Now there are some strategies involving property that do carry large risks, these are not what we are talking about here. Generally speaking, though investment properties do carry a much lower risk, especially with the strategies I am sharing with you.
Such as the saying “Safe as………. Houses!” They do not say, safe as shares. Actually, when you want to borrow money to buy shares what do the banks want? They want a house as collateral. The banks want a house as collateral even when you borrow money for a business.
My tenants deposit large chunks of money into my account regularly and I do not have to do anything, it is a perfect relationship for me. Now just as with the risk factor, not all property strategies are passive, my opinion of these are, they are jobs, not investments and although they may provide good returns it is not something I am terribly interested in.
It is easy to tell why 90% of the world’s millionaires have chosen property as their vehicle. Property is supported by banks, governments and fulfils one of our basic human needs. Unlike most other investments it is also multi-dimensional which means you are not just relying on cash flow or growth, it provides you both.
When it comes to investing in property there are countless strategies that you could use to build your wealth.
I have invested using every different strategy you could think of.
When I first accumulated five houses that were all negatively geared and all in the wrong areas. I was working hard seven days a week trying to pay off my mortgages. It was very frustrating as soon as I got a tiny bit ahead, everything I made went towards the mortgage and I felt like I was back at square one again. I knew there had to be a better way.
So in search of this I went to seminars, workshops, brought training DVD’s, met up with successful entrepreneurs all around the world. I must have gone to every property guru under the sun. This was a 10-year journey.
Then I finally put all of the pieces of the puzzle together and came up with the Positive Property Blueprint. This skyrocketed my success in real estate and it was a game changer. Now I had a system to buy real estate and instead of having to work harder each time I bought one, now I could work less if I wanted to and truly create a passive income. The strategy I swear by is in my book “Positive Property Blueprint”
And this approach enabled me to build such a large portfolio that I truly never have to work again.