The hot seat

What was your first job?

My first real paying job was actually window cleaning. A guy across the road from where I grew up ran a domestic window-cleaning business. So when I wasn’t studying for my associate diploma in business, I spent my working days window cleaning very nice two-storey houses in some of Melbourne’s nicest suburbs. This money went a long way in helping me save a deposit to buy my first property at 23.

What’s the best money advice you’ve ever received?

My dad never sat me down and said, “Son … ”. Instead I watched him work three jobs (with an airline and two part-time cleaning jobs), plus Mum did some part-time work too, to support me and my brother. Their hard work gave us a great upbringing but also saw them retire at 55. So it was actions rather than words which taught me to work hard.

What’s the best investment decision you’ve made?

I’m very satisfied with compound returns on the properties my wife and I have bought over the years, so the best decision for me was to educate myself on all things residential property. I’m talking about researching property markets, understanding what drives demand to push prices higher, learning about cash flows, lending and leverage, and finally how to minimise risk. There are no shortcuts on this stuff.

What’s the worst?

On the property front, that first property I bought when I was 23. Some smart accountant who was moonlighting as a property expert told me to sell it because I was now paying tax on the rental income. That was a dumb decision which has cost me about $600,000 in equity – and still growing!

On the share front, back in 1994 I bought 4800 shares in a small government business which was privatising via an IPO ... Commonwealth Serum Laboratories (CSL). It listed at $2.30 a share. I thought I did well when I sold them for around $6. With buybacks over time the share equivalent price would be around 75¢ at IPO and it is now worth over $150! Not to mention just under $100,000 in dividend payments. Ouch!

What is your favourite thing to splurge on?

That’s easy – travelling. I was fortunate to grow up in an airline family, so that meant a lot of air travel both domestically and around the world. Experiencing different cultures, making new friends, visiting incredible natural and man-made wonders, and getting a true appreciation of all humanity and this amazing planet is priceless.

If you had $10,000 where would you invest it?

Cryptocurrencies, of course! Just kidding. My wife and I have been building a property portfolio that will generate us healthy passive income for our retirement years, or should I say our continued travelling years. Our plan is to buy two more properties over the next couple of years and then focus on paying off the debt. So the $10,000 would go into the offset account against our family home debt to reduce the loan interest for now and it helps improve our equity position.

What would you do if you had only $50 in your bank account?

My planning and actions have ensured that scenario will never happen.

Do you intend to leave an inheritance?

We have two boys under 8 so, yes, we plan to leave them a part of our legacy ... the part we don’t spend on travelling. That said, the most important legacy will be what we have learnt on our financial journey.

What do you think is the biggest issue facing property investors?

Short-term confidence. As the daily news feeds continue to speculate on the cooling property markets in Sydney and Melbourne, combined with regulation and policy interference (designed to also cool the market), some investors will lose their nerve and act irrationally. Investing sensibly in property is all about playing the long game.

Finish this sentence: money makes ...

... more of it, if you put it to work (invest) wisely.