A fast-track introduction to accelerated wealth building through property investment
7 steps toAcceleratedwealth
J o h n F i t z g e r a l dF o r e w o r d b y I a n L e s L I e
All the things they
don’t tell you about
Property Investment
John L Fitzgerald
5th Edition
Seven S
teps to Wealth
John L Fitzgerald
Buying an investment property can be like swimming with sharks... very dangerous. In this practical and refreshingly jargon-free book, John L Fitzgerald lifts the veil on building wealth through investment real estate.
How it can be done - and how it can’t.
How to select an investment property for sustained capital growth.How to optimise rental income and tax benefits.How to structure the finance and manage the risks.
And how not to fall foul of bad faith and bad advice.
John L Fitzgerald is not an investment theorist. He has personally created and managed wealth using the principles outlined in these pages - and successfully helped others to do the same, through Wealth Building programs and workshops Australia-wide.
“John Fitzgerald’s ‘Seven Steps to Wealth’ is a fascinating book by someone who is not only a fine author but is a man who writes from personal experience and is generous in sharing his knowledge.”
Mr Bert Newton AUSTRALIAN ENTERTAINER
“After reading John’s book ‘Seven Steps to Wealth’ I could not but relate and have an affinity to his successful philosophies.
I, like John, can testify that the acquisition of good land can reap enormous capital gain over a short or long term.
I hope those readers who will be as absorbed as I in ‘Seven Steps to Wealth’ will take up the gauntlet and enjoy the ensuing rewards.
Congratulations, John, it’s a really good and factual read.”
Dr. Betty Byrne Henderson AM FAIM FAICDNamed one of the “Leading Women Entrepreneurs of the World 1998”Trustee Committee for Economic Development of Australia (CEDA)
All proceeds from the sale of this book benefit The Toogoolawa Childrens’ Home Ltd, Australia.
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The Bali bombings happened in October and my wedding to Nerissa had been planned for 14th December of that same year. So, that was my first real short-term goal: to really focus and work and drive towards marrying my girl. I was not given all that much hope, but we got there. And there is no doubt in my mind that the determination to make that ceremony helped me to kickstart the journey into getting back and playing AFL football. One thing supported the next … and the next …
So, the goal to continue my career followed. However, throughout the process I realised I knew little about burn injuries and soon I knew I had a long, long road ahead. It would take two to three years to fully recover.
My next goal was to get back and play, yes, but the ultimate was to play and play and then play one game only. I was able to achieve that milestone on 6th June of the 2003 season when I returned to play for the Kangaroos against Richmond. What an amazing night that was. The main objective was achieved as we won that game, most importantly! From a personal point of view, I was thankful I could play my part by kicking a goal and helping to set up the last one that ultimately got us across the line. But when you are involved in a team, it’s about team success. And the team did it.
From there it’s been about the next phase of my life – retirement. I worked at the AFL for six years after I officially retired, with involvement in game development and coaching the national team. Presently, I’m working at the Bulldogs Football Club as List Manager, in control of overseeing recruitment, the lists and the contracting process for our players … so maybe some might say I am not quite retired. Basically, I am obviously still heavily involved in something I love – football. So I reckon I’m lucky, in lots of ways.
The outcome of my story is a real positive, I think. And, in telling it, I am happy to be able to tell whoever wants to read this that being with an Australian company such as Custodian did help when we needed it. Custodian has been a great journey for us. One we’re still on. We have a lovely home in Melbourne … still with a little debt sitting on it, but the Custodian program is a ways and means by which we have been able to set ourselves up. We have two young boys, one eight and one six, so beyond primary school we have education costs to consider with them. All told, we plan to continue with Custodian, as we know Custodian’s our way forward.
My life and work are busy, but we all need to make sure to get some time away. After what I went through, and after what Nerissa went through with me, I know it’s important to get away, spend some time with the family, overseas or anywhere in Australia, and do the things you love. Custodian is the road by which we can do these things and I hope to continue to do more.
Jason McCartney
Jason’s Custodian Story
Jason McCartney is a Custodian investor, AFL footballer and Bali bombing survivor.
I looked at a few property groups before I became part of the Custodian group in 1998. And it’s been a fantastic journey. At one stage my wife and I had six properties. Through the miracle of compound growth that John speaks about so often, we chose to capitalise on and sell three of those properties in order to fund our family home in Melbourne. Only recently have we recommitted to our wealth building journey in order to purchase another property.
My background is AFL. I played with Collingwood, Adelaide and the North Melbourne Kangaroos. In 2002, I unfortunately found myself caught up in the Bali terrorist attacks in Paddy’s Bar. I was only five metres away from where the first of the explosions went off, set there by a suicide bomber. I sustained burns to 50% of my body, my eardrums were perforated and I sustained numerous shrapnel wounds.
When I go back to that time in hospital in 2002 in my mind, I remember sitting there – laying there – as I couldn’t do much else, and knowing Nerissa was really concerned with trying to think about all the things she had to take care of at home. I remember one thing she asked, ‘What about the investment properties? What do I need to do about them, Jason?’
‘You don’t have to do anything,’ I said with some confidence. ‘Custodian is a well-structured program. They’re well set up and they’ll take care of themselves.’ And they did.
That’s what I’ve found with Custodian. Once you get set up and get started, it will take care of itself. And what I said to my wife then is still true: ‘It’ll be OK … it’ll be fine.’ And it has been.
Obviously, it was a very difficult period for my family and me as I found myself in a hospital, fighting for life. But I had amazing support. I think that’s what’s really important with whatever you do, that ability to set goals and challenge yourself. But you need outstanding people around you, and I certainly had that and more.
It was a struggle. But I had tremendous support and with that, and determination, in three-and-a-half weeks, much to the surprise of my surgeons and the people at the Alfred Hospital, I was released. A rehabilitation program came next, with the ultimate goal of me getting back to playing AFL football again. But before that I had a more immediate goal to achieve.
....continued on back page
Inside front cover & back_with spine_V2.indd All Pages 19/05/15 12:25 PM
John L. Fitzgerald
Extract – 7th Special Edition
‘In an ever changing investment climate you need an all-weather, proven property strategy. And this is it.’
‘In an ever changing investment climate you need an all-weather, statistically proven property plan.And this is it.’
Seven Steps to Wealth
First published in Australia 1998 by Toogoolawa Children’s Home Ltd.
(ABN 73 053 100 351) now Toogoolawa Schools Limited.
Seventh edition: May 2015© 2015 John L. Fitzgerald
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of the publisher in writing. Every effort has been made to trace the copyright holders of statistical information and diagrams reproduced in this book. The author is grateful to BIS Shrapnel, The Real Estate Institute of Australia, Residex, Business Review Weekly, ANZ Bank and the Australian Bureau of Statistics for permission to use selected data. No responsibility can be accepted by the author or publisher of this book for any action taken by any person or organisation relating to any material contained herein. Property investment is a complex and constantly changing field and all readers should seek independent and detailed advice as to the relevance of any part of this material to their own specific circumstances.
National Library of Australia Cataloguing-in-Publication date Fitzgerald,
John L., 1963–
‘Seven Steps to Wealth’
‘All the things they don’t tell you about property investment’
Extract ISBN 978-0-9942905-0-2
Real estate investment – Australia
Other authors/contributors – Toogoolawa Schools Limited
Text John L. Fitzgerald with Pattie WrightEditor Pattie WrightCover Art Direction & Design Angie Ross, Spellbound CreativeCartoons Chris GroszPrevious 6th Ed. Cartoons Dennis Holmes to concepts by
Claire Louise WrightFinished art and design Mitch Keys, Electric Designs,
New Zealand
Printed and bound in Australia by McPherson’s Printing Group, Maryborough, Vic.
To Mary Fitzgerald
We are all teachers. Some teaches explain.
Some teachers complain. Some teachers inspire.
CONTENTS
INTRODUCTION John L. Fitzgerald 1Jason’s story 7Just Who Is John Fitzgerald? 9Notes 26Start-up Quiz 28
CHAPTER 1Why build wealth? 31Notes 43
CHAPTER 2 Why residential real estate? 45Notes 65
CHAPTER 3 A structure for growth 67Notes 80
Any Other Questions? 81
Glossary 83
Property Success Table 85
Round-up Quiz 86
Quiz Answers 88
Conclusion 90
Custodian 93
Contacts 94
Toogoolawa Schools Limited 96
Your Book Order or Donation 97
Introduction 1
INTRODUCTIONA short speech is a good speech. Whoever coined that was
right. So, with this thought in mind, let’s get right to the point
of this Extract. The pages ahead are meant to assist you in
becoming familiar with the basis of my statistically proven
property plan for achieving financial security and to embark
upon figuring out how to get compound growth. And if you’re
not sure what compound growth is, good – that’s why you’ve
picked up this book. In fact, Einstein referred to it as the 8th
Wonder of the World. And I can tell you it’s a financial miracle.
And … if you read on, I’ll show you why it’s a financial miracle.
But first, a question: “Why have you even opened this book?”
It’s a presumption that we all want to be wealthy. In truth,
our research shows us Australians want to be comfortable,
not necessarily wealthy. But we all know we don’t want to
be broke, right?
So, the obvious answer as to why you are reading this book is
that you want to secure your financial future using a statistically
proven property plan. Plus, you simply want to get ahead.
And you can. These two answers are correct. You might have
others and all would be right, such as:
• How can I pay off my home much quicker and make a passive,
tax-deductible income just as quickly?
Now there’s a terrific challenge that gets right down to the core
Extract - Seven Steps to Wealth2
of things for many people. And then there’s the big one:
• Why do you have to settle for just getting-by when you can
get ahead?
This too is just as easily answered as your first question.
With such a simple step, you have taken your first big step. So
well done!
The second step is to take heed of where Australia is right now.
The most striking of these positions is with our population. Post-
GFC, Australia has experienced the biggest population boom in
our history. Nearly 250,000 people per annum immigrate to this
country and our total population is growing by nearly 400,000
per annum, equating to double or even triple as a percentage of
any other developed country. This situation will lead into, in my
opinion – and it’s already started – the biggest property boom
ever in our history. Added to that, Australia has the lowest interest
rates I have ever seen and that’s over some 30 years. An unheard
of scenario! Even better … this growing population will be with
us for 10 more years, so my next comment is important: take
advantage of the timing and get involved in property investment
through wealth building – as timing is nearly everything in life.
In addition, and new to the market, is the Self-Managed Super
Fund (SMSF) investment buying. On top of that, Chinese buyers
are purchasing real estate in this country, for the first time ever.
This mix provides a fertile platform for long-term growth.
Introduction 3
It’s safe to say there will be no better time than right now to plan
and build your own wealth for your future and that of your family.
Success, I believe, and have proven, lies in repetition. So
start that repetition in a time of surging population growth,
affordable low interest rates, new buying groups and economic
stability. This climate will give you even more initiative and
confidence to begin.
This Extract of the 7th Special Edition of Seven Steps to Wealth
is my gift to you as part of your introduction into how you
can secure your financial future through understanding what
the numbers say.
Ooohhh, numbers, you say?
Sorry, let’s take a minute here.
I control well over a hundred million dollars of property and
I have done that over 30 years. Accumulation, that is. The
difference between me and someone else you might listen
to is I have the numbers in dollars to prove it, whereas many
others have just a colourful story. And, as I said in the first
edition of Seven Steps to Wealth - sadly not an original line,
but nonetheless a very good one – ‘A fool and his money are
easily parted’. Therefore, my first coaching tip to you is to look
behind the person and study the numbers. And that applies to
everyone in the property business, including me.
Extract - Seven Steps to Wealth4
Here are a few numbers that we can claim:
• I first registered my business on October 13, 1981.
• That’s over 30 years of continuous success.
• Should you have any doubt about Custodian or me? Since
1998, our clients’ properties have increased in value by
close to $1 billion.
• In that time, I have bought, sold and developed more than
10,000 properties.
• I wrote the book Seven Steps to Wealth, which well over
150,000 Australians have read. It is has gone into its
7th Special Edition after 20 years in print. It is widely
acknowledged as the benchmark strategy. And it has also
been translated and successfully published in China.
• We have delivered over 6,000 properties to our clients.
With all being tenanted.
• We have over 3,000 clients.
• Our clients’ property portfolio is in excess of $2.9 billion.
• We have property in the four main capitals of Australia –
Sydney, Melbourne, Brisbane and Perth – and have worked
within these markets for over 10 years.
• Over seven hundred real millionaires have been produced,
with case studies to prove it. These defined ‘millionaires’ are
people with four or more properties – over 11 times the
national average. This equation puts those clients in the top
1% of all property-investing Australians.
Introduction 5
• Investloan, a fully owned internal finance arm, has funded
well over two billion in investment loans.
• Our clients have paid, on average, $212 per square metre
for their properties, which now values at over $564 per
square metre. A great set of figures! (Make a note of this
as I’m going to be talking about this later as the real ‘real
estate’ meaning.)
• Our clients have saved approximately $440 million in tax.
That sums it up for me: numbers that work. We have a program
we know works and we are a company on which you can rely.
My hope is you will be able to find the answers by coming with
me on this journey to become a Custodian. And I am confident in
saying that this Extract is the best, most informative introductory
volume on wealth building you will ever read.
I’ll leave you with this thought:
If you want to do property, talk to me. I do property.
If you want to build wealth, you must speak to me.
And I will listen.
Look to the future. It’s an exciting one and I am excited for you.
John L. Fitzgerald
CEO
Custodian
Invest Different
Extract - Seven Steps to Wealth6
Introduction 7
JASON’S STORY
As I have mentioned, numbers do tell a story, a very necessary
one in wealth building. But, just recently, the human importance
of what we do here at Custodian was summarised so well by
Jason McCartney, Australian hero, AFL player and long-term
Custodian client, when he spoke at our annual Kick Start client
event for 2015.
You can read Jason’s entire story on the inside front and back
cover of this Extract, but when he personally related how being
a Custodian client helped both he and his wife in their time of
dire need, I thought, my work is done. I’ll let Jason re-cap what
took place at his hospital bed:
In 2002, I unfortunately found myself caught up in the
Bali terrorist attacks in Paddy’s Bar. I sustained burns to
50% of my body, my eardrums were perforated and I
sustained numerous shrapnel wounds.
Obviously, it was a very difficult period for my family and
me as I found myself in a hospital, fighting for life. But I
had amazing support.
When I go back to that time in hospital in 2002 in my
mind, I remember sitting there – laying there – as I
couldn’t do much else, and knowing Nerissa was really
concerned with trying to think about all the things she had
to take care of at home. And I remember one thing she
Extract - Seven Steps to Wealth8
said, ‘What about the investment properties? What do I
need to do about them, Jason?’
‘You don’t have to do anything,’ I said with some
confidence. ‘Custodian is a well-structured program.
They’re well set up and they’ll take care of themselves.’
And they did.
That’s what I’ve found with Custodian. Once you get set
up and get started, it will take care of itself. What I said
to my wife then is still true: ‘It’ll be OK … it’ll be fine.’
And it has been.
That sums it up for me! This is an example of our point of
difference here at Custodian, where real-life evidence of the
numbers working and the program remaining strong in a time
of need is there for all to see.
Introduction 9
JUST WHO IS JOHN FITZGERALD?I would ask, if I was you.
And just who is suggesting he can help me achieve financial
security?
It’s a good question, a necessary one for you to ask. I often
think we can take some professionals too casually at their word
about their expertise, when all the while we should do our own
due diligence and investigate who we are considering working
with and trusting; so let me answer your question by giving you
a potted history of ‘Fitzy’.
First and foremost, I am a builder of wealth. And a successful
one at that! I don’t think there is a category on any of the
Australian Tax Office forms for this profession, but that is
what I do. And I have helped build the wealth of thousands of
Australians. I have assisted over 3,000 Australians, just like you.
Ask me and I can tell you about their case studies. Many have
become friends and remain clients. I wouldn’t move away from
me either if someone had made me a millionaire, by the way!
I am also the man with an established Australia-wide group
called Custodian, which has over 30 years proven experience
in the property business. It is through Custodian that I can give
you the confidence in knowing you too can build a property
Extract - Seven Steps to Wealth10
portfolio with a statistically proven property plan. I can show
you how to do it – successfully. To plan for the future. To build
for the future. Because it works! But let’s take one step back
and I’ll fill you in a little on my history.
My story might help you understand why I do what I do
and where I come from. Again, its not complicated. I’m not
complicated. I am an Australian born and bred in the outer
suburbs of Melbourne, Victoria … perhaps like many of you.
I’m pretty much an average person: if anything, a bit below
average academically, and a bit above average in sport. I
once bought a table tennis table, ‘flat packed for easy home
assembly’. After half an hour of wrestling with the instructions,
I found a nearby 15-year-old who was able to put the whole
thing together, ‘as advertised’, in about three minutes.
So, I’m not good at everything!
But I am a proven front-runner at building wealth.
And, if I can build wealth, so can you. Seriously! And if that’s
all you really need to know, feel free to skip the next few pages
and go straight on to Chapter 1.
If not, my history continues – you have been warned.
I was born in Melbourne in 1963 and spent my first eight
years in the middle-class suburb of Moorabbin. My father
was a menswear retailer and went into business on his own
at the age of 30. By the time he was 37 he had built up three
menswear shops in Collingwood, Belgrave and Stawell. He was
a devout Catholic from an Irish Catholic family: five children, all
Introduction 11
in Catholic schools. My mother ran the home full-time, having
left a career as a ballroom dancing instructor to marry Dad.
The school holidays of September 1972 changed my life – all
our lives – suddenly and forever. My oldest brother David
(then aged 12) went, as we often did, to visit Uncle Morris’s
farm near Shepparton. We heard later that he and our cousin
Peter were lighting a fire when David, who was practising his
notorious balancing act on a log, lost his balance and fell into
the fire. Uncle Morris got him to the hospital, where he was
found to have third degree burns from knee to ankle, and
given skin grafts. I remember visiting David at the Shepparton
hospital, the slick lino floors and the cold concrete walls.
He was there for six weeks. One Tuesday morning dad drove
out to visit him – and never returned. On his way home, the
car was sandwiched between two semi-trailers and driven off
the road; he was killed instantly.
At nine years old, I sensed there was a purpose behind those
rollercoaster days, believing even then that everything happens
for a reason. That was the start of what I now see as a journey
to discover my own purpose in the world – a journey that has
since become one linked to the creation and use of wealth. (If
there’s a ‘bigger’ purpose to your reading this book, I hope it
will become clear as you read on.)
Extract - Seven Steps to Wealth12
My mother had to take over the businesses, as well as run the
family. She did a tremendous job, showing amazing business
acumen for someone with no direct experience. You may
have noticed I dedicated this book to her. To help her cope,
in 1974 we three boys were sent away to a boarding school,
where I skipped Grade 6 in order to go to the same school
as my brothers.
It was pretty clear from the first that I’d make my mark on the
sports field, not in the classroom. I made the first 18 football
team in Form 4 (Grade 10) despite being a year younger than
my classmates, and I excelled in athletics and all the various
sports on offer. I am very health and fitness conscious to this
day, and am grateful that I was able to take part in so many
sports so early in life.
I left school in 1979, having just scraped through with enough
of an aggregate to get my HSC. It was expected I would go to
university, or at least repeat my HSC in order to improve my
marks, but I decided against both, as the academic life was not
for me.
Having barely lived at home from the age of 10, and as boarding
schools make their students independent, I knew it was time to
decide on my own life. By then the sum total of my worldly
possessions fit into a locker 1.8 metres high by 40 cm wide,
so some decisions were made easy. With all this in my young
mind, I decided to ‘get in amongst it’, as the saying goes, and
see what life was all about.
Introduction 13
A friend and I had planned to hitchhike to Queensland – I
wasn’t old enough to have a car, being not quite 17. By January
1980, the friend pulled out, but I nevertheless shoved things
into a backpack and headed off alone for the Gold Coast. On
a hot day in that January, my brother drove me to the outskirts
of Melbourne, dropped me on the side of the road at the Ford
factory on the Hume Highway and wished me a well-meant
‘Good luck and see ya’. I had a couple of hundred dollars in my
pocket. I was on my own.
My arrival on the Gold Coast was great timing – and I do believe
in timing. The Gold Coast was in the midst of a property boom
and I knew immediately I wanted to be a part of it. I applied
for several real estate positions as a salesman and eventually,
through contacts, got a start with Bert Cockerel, who had
an office in Surfers Paradise. To call Bert a ‘jack-of-all-trades’
would be an understatement. I remember going to visit a motel
he owned on the highway in Surfers, called the Golden Sun
Motel. It’s now the site of a 30-storey high-rise named Zenith.
Bert owned the Palm Beach Picture Theatre as well and was a
keen – read ‘mad’ – fisherman. He did the fishing report for the
local radio station and he did it splendidly. Bert was a great guy
and I owe him a lot to do with my start in life.
I had gone around to see him about signing my application for
a licence as a real estate salesman. I told him that I was not
yet 18, as required, but Bert wasn’t fazed by technicalities, and
neither it seemed was whoever rubber-stamped the application
forms for my registration as a real estate salesman, despite me
Extract - Seven Steps to Wealth14
being up-front about my date of birth. Does that make me the
youngest ever? Perhaps it’s better not to ask.
Less than a year passed before I was introduced to George
Margolis. George had built a fortune in real estate during the
1960s – and then lost it in the crash of 1974–75. When I first
met George, he was re-emerging from bankruptcy, but he
had a good plan. With all his knowledge and contacts, and my
energy, we would make a tremendous partnership. So at 17
and nine months old, I became an associate partner of Cousins
Real Estate. I still didn’t know anything about real estate, but
fortunately, I was a fast learner.
Those were the heady days of the early ’80s: looking back,
‘incredible’ is the word that comes to mind. And at my age
and with my experience (neither of which were particularly
impressive) I was able to advertise for people willing to invest
in a private property trust to develop units – and literally secure
dozens of investors who were prepared to punt $50,000–
$100,000 on my ability to acquire a site, construct a building
and make a profit.
Like I said: ‘Incredible!’
Of course, it wasn’t just ‘my ability’, as I had the sound
building advice of a structural engineer who was part of the
management team – and, of course, George Margolis.
I remember all too well the high-rise buildings going up along Old
Burleigh Road and the Surfers Paradise strip, where units would
Introduction 15
be settling in a building such as Aquarius. The developer would
attend settlement, only to see the property transferred two
or three times on the spot! Greed, as ever, was the underlying
factor. Real estate agents were promising that if speculators
bought, they could on-sell the unit immediately, because of
the sky-high demand. It was not uncommon to see units, sold
off the plan by the developer for $150,000–$180,000, resell
for $250,000, then $400,000, then $500,000 at settlement! I
call this the Bigger Fool Theory. If you invest in real estate on
this basis, you have to be sure there’s a bigger fool than you
coming along behind, to give you a back door. On the heels of
greed, as ever, came the crash. In 1982, you couldn’t give high-
rise units away for love or money! Literally tens of millions of
dollars were wiped off the already over-inflated prices paid by
investors at the height of that feeding frenzy.
Developers also had their problems. Notably Dainford
Limited. This company had built most of the high-rises on the
Gold Coast, having just completed the Peninsula building, the
tallest and one of the best-located buildings in Surfers Paradise.
A record number of people who had acquired the units on the
basis that they could on-sell them found they couldn’t – and
defaulted at settlement.
The ups and downs of the early 1980s taught me a very
quick lesson: real estate is an ever-changing market and while
buildings are its prime ‘product’, it is the land that is the true,
limited commodity. People repeatedly made the mistake of
paying a premium above already inflated prices for a building
Extract - Seven Steps to Wealth16
that of itself was commonplace and easily replaceable.Things
haven’t changed much. Speculators are still madly snapping
up inner-city units in Melbourne and Sydney, despite one in
five currently having to take a loss on resale! And no matter
how many books I write on this general subject, this sentence
will vary in its figures, but never its impossible imbalance. Ask
yourself this question: What percentage of Australians do you
think buy units to live in, as owner-occupiers? Take a guess.
Answer: less than 10%.
There I go, getting interested in real estate again. I need to
go back to my history, as promised. So, let’s return to when I
purchased my first house. It was a house and land package in
Shailer Park, Brisbane, and in 1985 I bought it for the tidy sum
of $49,000. I borrowed $47,000 on it – which sounded like a
lot at the time. But the deal meant that I could start out with
just $2,000 of my own money – today that property is worth
over $500,000 (2015). So, that’s where I started. With not
much in the way of dollars and one load of a belief in myself
and what I had learnt.
I had cottoned on to an invaluable lesson. The fact that it
was land that appreciated in value, not buildings. And that
this created some rather encouraging mathematical effects,
namely, if the house goes up by 10%, the land will go up by
20%. Armed with this information in 1987, and with a couple of
houses under my belt, I approached one of Australia’s largest
developers, Dainford Limited, and asked them to finance me
Introduction 17
into land estates. Dainford generally took ‘long positions’ in
the market (meaning they were committed to projects that
wouldn’t provide income for 3–5 years), so my formula for
acquiring land and immediately turning it into income was
pretty attractive.
Together, our first project was a 1,200-lot estate at Loganholme,
south of Brisbane. This was acquired as an englobo parcel –
meaning before subdivision and infrastructure development
– for approximately $2,500 per lot. At that time, lots in that
area were selling for around $25,000, with houses selling for
approximately $60,000. As house values crept up to over
$140,000, the raw land value rocketed to $90,000, forcing the
englobo land up to approximately $40,000–50,000.
This sounds like a complete sweetheart deal, but for wealth
building purposes I wouldn’t recommend it. Land on its own
generates no regular income (unlike a rentable property) and
despite the potential for super profits, roughly nine out of 10
land developers go broke in any 10-year period. I was one of
the lucky ones.
In four years, Dainford and I developed and sold over 1,000
properties together. Yet, for all that activity, I soon realised
I would have been a lot wealthier, a lot sooner, if I had
constructed homes on 10% of the allotments I developed and
sold, and simply kept them as rental properties.
I have been in the business for over 30 years and I have bought,
Extract - Seven Steps to Wealth18
sold and developed over 10,000 properties. I have probably
made most of the mistakes that can be made – although
I like to think I avoided a few, through seeing them coming,
and I have gathered a pretty good idea of what makes a good
investment, and how to make a good investment work even
better. I realised you don’t have to be a property developer to
build wealth in property. In fact, rather the reverse – most go
broke, as I have mentioned at one time or another, in pushing
ahead on bigger and bigger projects.
The present day finds me continuing to work and succeed.
Otherwise you wouldn’t be reading this book or listening to me
at any of my seminars. I run and own Custodian – a property
investment company in Queensland. I have fathered happy
children and contribute to the assistance of underprivileged
children. This particular part of my life has taken shape over
25 years as I established and funded Toogoolawa Schools
Limited. This school provides free education for youth at
risk. Specifically, for children who have been excluded from
mainstream schooling. I’ll talk more about this later in the
book, because this is the ‘why’ for me.
Of late I spend a good deal of my time in China pressing the
flesh for investment in this country, and I give hundreds of
investment seminars a year throughout Australia. I am asked
for investment and wealth building advice from Canberra to
Broome and all stops in-between. I mentor, offer philanthropy
and live a happy life. I could also stop working. But that has
never occurred to me as I actively enjoy helping people to build
Introduction 19
their wealth because then that wealth goes on to help others. It
is a flourishing circle for all involved.
So now you know who John Fitzgerald is. How about I tell you
about my company, Custodian? The two go well together, like
two peas in a spring pod in a vegetable garden.
Since 1994, my company, Custodian, has worked on a system
– based on the structure outlined in this book – that facilitates
a successful wealth building program for ‘ordinary’ Australians,
none of who ever turn out to be ‘ordinary’, by the way.
We have held Australia-wide property events on wealth building
for those interested in the concept of property investment
over most of the years Custodian has been in business. And, as
a piece of confidence for you, we have never faltered. Never in
the recent GFC, never before, and I hope, if I have lived up to
my own rules, never since.
From the start, I set out to do things a little differently from
other developers and marketing operations I know. Through
Custodian I have sought to build very solid relationships with
thousands of our clients, beginning with their first property
purchase and successfully continuing on to assist them with
further investments in building a wider portfolio. Custodian
has worked with these clients over many years of monitoring
their capital growth and helping to guide them step-by-step to
establish a handsome property portfolio. As John Fitzgerald,
I am a hands-on CEO and owner of Custodian and if you
Extract - Seven Steps to Wealth20
become one of our clients you will get to know me well, and I
will help you well. And profitably.
It’s been fascinating for me to see people come fresh to the
ideas of wealth building, and to watch where they get to. It is
both professionally satisfying and personally a pleasure for me
to be able to observe this. It is, of itself, rewarding.
Some of the people we work with are top sports people.
They have need to reduce their tax liabilities and shift their
thinking from ‘income’ to ‘wealth’ for a future beyond sport.
Others are those ‘ordinary’ Australians I spoke about earlier
who might never have thought beyond paying off their own
home and earning a decent salary until they retire – but for
whom the words ‘financial freedom’ (or is it ‘millionaire’?)
conjure up a whole new world. And right here I might add a
taste of reality. If you wish to place a small, regular, amount
of money into a bank savings account over a 20-year period,
do the sums at how little you will earn on the present low
interest rates compared to placing the same amount of money
into a leveraged investment in property at the same interest
rate? I don’t need to show you the figures, but they are
astronomically different; they are weighted towards property
success by some six to one.
In saying this, I am thus very proud of the fact that some of
our clients, those who started with us so many years ago now,
own up to five to six properties. Many others have eight to ten
and some even have ten or more. We have one investor with
Introduction 21
19 properties, and a family with over 30. In fact, Custodian
can boast creating over 700 millionaires to date. My team walk
the walk, for example, collectively owning over 120 investment
properties themselves. I don’t know of any other organisation
with such positive results. And, on a personal note, I know all
of them.
BECOMING A CUSTODIAN AND
WHERE MY LIFE AND WEALTH HAVE LED ME
There’s another dimension to all of this for me. Whatever
our clients’ initial motivation to build wealth may be – and I
guess we all start out ‘self-centred’ with this to some extent
– I’ve watched person after person achieve more than wealth
through the journey. Many have also found perspective and
definite purpose and much more than financial reward. For
many, this outcome was most unexpected.
I have had my own major shift in thinking along the way. As you
may have gathered, I knew from a pretty early age that I wanted
to be wealthy and I set some ambitious goals for myself and
went after them aggressively. I got there and when I did I found
my perspective had changed.
There are very few really wealthy people in the world. Very
few. And I believe that it’s pretty much up to those who control
and enjoy the world’s wealth to help those who don’t! Once
I had pulled myself into the former category, I felt the weight
of that responsibility. I say ‘weight’ because it is exactly that.
Over time, however, I have found an opportunity to use my
Extract - Seven Steps to Wealth22
wealth responsibly – to make a contribution to society – and
this has been one of the most joyful and enriching experiences
of my life.
Mentors are important people, and it was my mentor who
challenged me to look for a purpose in life. There’s a great
saying in Africa: ‘We have two hungers. The lesser hunger is
for the things that sustain us and the greater hunger is for the
reason why.’ And it was my mentor, when I was only 25 years
of age, who caused me to pause as I celebrated my success
– multimillionaire, house owner, property developer and
investor, etc., etc. He asked me a most important question:
‘So, what defines you?’
My answer was, ‘Well, I am this person.’
He then said, ‘You are not this person. There are so many other
people like that.’ And without missing a beat, ‘How are you going
to define yourself ?’ he continued to ask. ‘The only way to answer
that question is what you can actually give back.’ And with that
salutary advice he then gave me a book to read about a person
who had dedicated his life to working with youth at risk, and
it resonated with me very intimately, because I could have
been one of those youth at risk. I decided then and there that
I wanted to make a difference. And when you make a decision
to take action, I promise the universe does open up for you.
That happened for me in 1990, when I met a husband and
wife psychologist team – Ron and Suwanti Farmer, and
together we established The Toogoolawa Children’s Home,
now Toogoolawa Schools Limited. Ever since, some of my
Introduction 23
wealth has funded this outstanding school, thus creating unique
educational opportunities for troubled youth.
To give you some idea of our ongoing intent and success
at Toogoolawa, all the boys have either been expelled or
excluded from main street schools. We have a saying there
that they are either mad, bad or sad. But, to be honest, they
are just highly stressed and traumatised youth because their
upbringing has been unimaginable and beyond comprehension
for many people. Personally, it took a lot of tears for me to
come to grips with the fact that they need me to be there for
them, rather than pity them, or feel sorry for them, and so I
do. Stress and trauma is interesting because every study on
education tells us that for kids to learn they need to be in a
happy environment, and that’s our challenge at Toogoolawa as
many of them have come from anything but happy. We’ve had
to reinvent education in a lot of ways, and I am proud to say
that the state and federal governments have acknowledged us
by giving us a three million dollar building grant as recognition
of our school being leading-edge in what we do. We have, for
example, a ratio of social workers to students higher than any
other school in Australia and we focus on getting the kids to
feel good about themselves and teaching them what they need
for a healthy future. In fact, Toogoolawa means ‘a place in the
heart’. As we try and teach the kids, and recognise that there
can be many difficult things going on in their lives, as in the
wider world, there is always a place in your heart where you
can find safety, security and solace.
Extract - Seven Steps to Wealth24
This is an important and ongoing part of my story and my life. In
fact, that’s how I start my week every week when I’m at home,
and I have done so for 20 years. At 9 am on Monday mornings
I’m at the school with the boys and teachers doing what we call
‘affirmations, quiet time and the thought for the week’. When
we help people build wealth, we are not shy of urging them to
think of themselves as custodians – as well as creators. To think
of wealth as an enabler in making a difference in the world. The
choice of my company name was therefore no coincidence.
Custodian is what we are called and we live the values that the
name implies, and hope you will as well.
Custodian openly expresses its corporate mission and
philosophy quite simply, and we encourage each person who
joins us to become a fellow Custodian.
Purpose: To create wealth
To serve humanity
Integrity: To accept responsibility
Truth: To keep questioning
Integrity Truth
Purpose
Introduction 25
Of course, none of this may be important to you right now.
Feel free to put it all aside, but just let it idle in a corner of
your mind somewhere, for later. First, start building wealth so
you and your family can meet your future needs – or to set
yourself a challenge. And as you build wealth and meet your
goals, perhaps you’ll remember this seed of philanthropy sown
here. Perhaps you too will find something more, something else
to invest in for the future of our country.
On that note, let’s move on to the business of building wealth!
Extract - Seven Steps to Wealth26
NOTES !
Introduction 27
NOTES !
Extract - Seven Steps to Wealth28
START-UP QUIZSo you can get to know us, and for Custodian to get to know
you, try out this Start-Up Quiz.
The following questions will help you focus on beginning to
understand how to build a financial future for yourself, often
with what you have at hand. The quiz may also remind you of
where you are starting from in order to build that future.
Don’t worry if you don’t know all the answers yet – you will.
By the time you attempt the Round-Up Quiz at the end of this
Extract, I know you will surprise yourself.
There’ll be no prizes right now, no frozen chook or meat tray
waiting at the door when you leave. But by completing this quiz
you will begin to inform yourself about your financial situation.
There will be more to come. More security and more flexibility
in your life ahead … so read on and answer honestly.
Introduction 29
1. In making a wealth building investment decision, what
would be more important?
£ How you felt about it
£ How it stacked up logically
2. In considering a residential investment property for wealth
building, what would be more important?
£ Rental returns
£ Taxation benefits
£ Capital growth
3. Is it prudent for me to acquire property close to where
I live?
£ Yes
£ No
4. Which institution(s) effectively control the affordability of
housing in Australia?
£ Real Estate Institute £ Banks
£ Property developers £ Valuers
5. Is the number of renters of property in Australia
£ Increasing?
£ Decreasing?
Extract - Seven Steps to Wealth30
6. In choosing a location that is going to give capital growth,
which factor is most important?
£ Proximity to transport
£ Proximity to schools
£ Percentage of investor-owners
£ Established capital benchmark
7. What is the ‘established capital benchmark’ of an area?
£ The median price of property in the area
£ The highest price of property in the area
£ The lowest price of property in the area
8. What was the average land size of an urban house in the
capital cities of 1970?
£ 450 m2
£ 650 m2
£ 750 m2
£ 1,000 m2
Sorry, but I’m not going to give you the answers at this
point. That’s what this Extract is for. Forget about this
quiz altogether for the moment. Read the following three
chapters, and by the time you get to the end you’ll be able to
tackle the same questions again. And with answers provided
by what you have read.
Chapter 1 - Why build wealth? 31
Chapter 1Why build wealth?
Extract - Seven Steps to Wealth32
DO YOU WANT TO BE WEALTHY?Silly question, right? Everybody wants to be wealthy.
Actually, no.
Crazy as it sounds, after we polled over 5,000 people, the results
showed us that many of those involved were offended by the
connotations of ‘wealth’ and ‘wealthy’. Their more personal,
and in fact, honest comments were that they just wanted to be
comfortable. But they really do want to be ‘comfortable’.
Here is where I need to take you to the numbers again, because
as I tried to reinforce in my Introduction, lots of people have
stories, but there’s only truth in numbers when you get to the
core of things. And to
be comfortable now you
need to be a little wealthy.
I’m not playing with words
here, not being clever; I
am being, in fact, precise.
Imagine the security and the freedom of retiring with enough
money to do all the things you’ve always wanted to do, for
as many years as you’ve got – and not having to rely on the
government for a cent!
It seems extraordinary, but when we surveyed 2,200 people
in the south-west Brisbane area, 78% of them said they ‘never
thought about building wealth’.
Nearly all of us retire below the poverty line!
What’s going on?
Chapter 1 - Why build wealth? 33
Let’s look at it another way.
How much do you reckon you’d need – per year – to live
comfortably in retirement? I’m not asking you to do budgets
and calculations and adjustments for inflation, although at
some stage, if you were thinking about talking to an investment
advisor, it would be a good idea to have an idea of your financial
position. Well armed is well served as the saying goes.
I’m just talking ballpark figures here; what kind of a sum per
year would you want to retire on, in today’s dollars?
Most of the people I talk to would say something over $70,000
per annum.
Your own estimate: $_____________
That estimate may be perfectly realistic for your own financial
circumstance; you’d have to do a few calculations to find out.
Extract - Seven Steps to Wealth34
How Australians Retire
The following chart shows what Australians actually do
retire on.
How Australians Retire
Source: ABS 2011 Census
In order to retire on $70,000 per annum, you actually need
around $1.5 million in assets, plus you need to own your own
home. That’s a lot for some and far too much for many. And
that’s only in terms of today’s dollars. In 20 year’s time, with
inflation at 4%, the equivalent sum would be $150,000 per
year, requiring $3 million or so in assets. How many of you
have millions in assets? My answer would be not many.
Therefore, how many of you have a plan in place to build up
those kinds of assets by the time you retire? Apparently, only one
in 100 of us! It used to be five in 100, so we’re only getting worse
at looking towards our retirement in wealth building. But, if you
Chapter 1 - Why build wealth? 35
are that one in 100, please accept my congratulations and best
wishes, and feel free to stop reading (although there may be a few
things in this book that will surprise even you). If you are not one
of those, it’s your responsibility to change this for yourself! (Think
about it. On whom would you want to be financially dependent
when you retire? The government? Your kids? Read on … it could
be both financially and personally very worthwhile).
WHY AREN’T MORE AUSTRALIANS WEALTHIER?
It’s a great question. And there are a number of answers to it.
(I haven’t included ‘waiting to win the lottery’ – although, with
$75 billion ‘invested’ in gambling in Australia each year, you’d
think we were pretty serious about this as a retirement plan!)
We don’t have enough money to build wealth
Wrong. The structure I’ll show you in this book allows you
– even encourages you – to start small. You only need a
combined annual gross income of $100,000, and a small
amount of cash or equity in your own home or other property
to get started. Wealth is accessible to most Australians. Mostly,
it’s about using the resources you have, taking sensible advice
and direction and restructuring your cash flow.
And all that takes is:
(a) knowing how
(b) choosing to give it a go
Extract - Seven Steps to Wealth36
Our parents never taught us to build wealth
Most people my age were taught that we would grow up, go
to a trade or get a university degree and then find a job. With
today’s less-than-stable job market, in both professional and
trade areas, the surety of work is far less available than it was
only a few decades ago, so we need to make our money work
smarter, earlier.
In times past, we’d save up enough money for a deposit on a
house, and we’d use our work income to pay off the loan on
that house over 25 years … then maybe we could consider
another investment. Sound familiar? Well, that’s exactly what
most Australians do.
I call this ‘income thinking’. We need to replace it with ‘capital
thinking’. This is my first piece of real advice. Think ‘capital’!
There’s always a safety net
I think this is part of the same thing. Our grandparents seemed
to live fairly happily on the pension in the post-war years, and
in the ’50s and ’60s, Australia enjoyed a relatively high standard
of living compared to other nations. Of course, that was when
there were about 18 taxpayers for every pensioner.
Today, there are less than four taxpayers per pensioner, and
if demographic trends continue downwards, within 20 years
there will be less than one taxpayer per pensioner. Meanwhile,
because we’re living longer, the average Australian will have to
fund at least 20 years of retirement. It won’t be long before
Chapter 1 - Why build wealth? 37
the government simply won’t be able to afford the age pension
– even at its current meagre levels. So we might like to think
about making our own arrangements.
We don’t like debt
This is another of those helpful attitudes our parents taught us.
There are some sound values behind it – self-reliance, pay your
own way, don’t put your hand in your pocket unless you have
the cash to pay for what you want when you want it. It’s true
that escalating debt is a concern for everyone. What we need
to distinguish between, however, is debt on consumer items
that depreciate in value (like a car, a dining suite, or a stereo
system) as opposed to
borrowing on an asset
that appreciates in value
and generates income,
like property. The latter
kind of debt (a) supports
the borrower’s ability
to make the necessary
repayments, and (b)
offers a profit on sale of
the asset.
On the other hand,
you could buy a new
BMW Cabriolet for, say,
$100,000, and by the
time you drive it out of
Our parents never taught us to build wealth
Most people my age were taught that we would grow up, go
to a trade or get a university degree and then find a job. With
today’s less-than-stable job market, in both professional and
trade areas, the surety of work is far less available than it was
only a few decades ago, so we need to make our money work
smarter, earlier.
In times past, we’d save up enough money for a deposit on a
house, and we’d use our work income to pay off the loan on
that house over 25 years … then maybe we could consider
another investment. Sound familiar? Well, that’s exactly what
most Australians do.
I call this ‘income thinking’. We need to replace it with ‘capital
thinking’. This is my first piece of real advice. Think ‘capital’!
There’s always a safety net
I think this is part of the same thing. Our grandparents seemed
to live fairly happily on the pension in the post-war years, and
in the ’50s and ’60s, Australia enjoyed a relatively high standard
of living compared to other nations. Of course, that was when
there were about 18 taxpayers for every pensioner.
Today, there are less than four taxpayers per pensioner, and
if demographic trends continue downwards, within 20 years
there will be less than one taxpayer per pensioner. Meanwhile,
because we’re living longer, the average Australian will have to
fund at least 20 years of retirement. It won’t be long before
Today there are less than four taxpayers per pensioner. In 20 years....
Extract - Seven Steps to Wealth38
the showroom, it’s only worth $85,000; if you borrowed
$100,000 on it, you’re already facing a deficit of $15,000,
which you have to pay off. Each year, more of the same; you
could end up making payments of $12,000 for four years – and
still face a balloon payment of about $70,000 (which may, or
may not, equal the capital value of the car by that time). Now,
that’s debt.
Ironically, people routinely run up thousands of dollars in ‘small’
debts on consumer items – but baulk at taking on a mortgage.
So, let’s get debt into some perspective. You can’t build wealth
without acquiring substantial assets for capital growth, and
you can’t realistically do that without borrowing the money to
invest. This is called ‘gearing’.
What I am suggesting here is we offset what we owe to the Tax
Office by investing in property. Tax is the biggest debt you’ll
pay in your whole life. They take 30%+ of everything you earn.
They take this money so the Australian government can look
after you in retirement – which I am not convinced of. They
give you the option. You can borrow to buy property and use
the money that you would pay them in tax later, or to service
the loan.
As a somewhat salutary fact, even the Treasury predicts that
when every superannuation contribution from every worker in
Australia is finally mature, our pension bill will only reduce by
some 6%. It’s quite plain – we all need to look to our financial
and retirement future.
Chapter 1 - Why build wealth? 39
Start small, think big – make success a habit.
If you’re interested in gaining this habit, there’s an interview
that might be of interest to you. A great friend of mine, Peter
Richie, started McDonald’s Restaurants here in 1971, and he
is a great businessman, a real success story. He built over 500
stores in the preceding decades and if you want to hear the
story of McDonald’s and its real estate story in Australia, Peter
recently spoke at one of our annual Custodian client events
and it can be accessed at www.custodian.com.au
It’s an income world
What does ‘being wealthy’ mean to you? It’s an interesting
question to ask, don’t you think? And a core question in the
arena we are now having a conversation about. For some,
it just might be a difficult one to answer. For many it might
be a big salary, with a lifestyle to match. But that’s not how
wealth works. Income by itself doesn’t make you wealthy. It
often means you just spend some. You save some (maybe),
and inflation gradually wears its value away. Capital, on the
other hand, is material wealth that can be used to produce
more wealth, through investment. Capital grows, income flows
(mostly, through your fingers).
Unfortunately, most people don’t get past income; they don’t
get their money growing and working for them. The system is
there – but only capital-focused people use it to build wealth.
Extract - Seven Steps to Wealth40
If there is something you should take away from this early
chapter, it’s this:
You can’t save your way to wealth.
Wealth building is strictly for those in the know
Some investment advisors would like you to think so. But the
good news is that property investment need not be the sole
preserve of financial experts. By the end of this book, you’ll
know enough about ‘leverage’ and ‘negative gearing’ to get by.
You’ll have a simple investment structure and clear principles to
work with. And if the whole business seems like too much of a
hassle, remember – you don’t have to do it all yourself! You can
get advice and help with everything from working out an initial
budget to managing a whole portfolio of investment properties.
Custodian is just one example of an organisation that offers a
whole range of services in the property investment field – you
could get advice from other sources. Look behind the veil. Try
to find someone who has actually done what they are advising
you to do! This goes for accountants, financial advisors and real
estate agents: there are some good ones who have built wealth
– that’s the first credential I’d look for.
Wealth building is strictly for sharks
It’s easy to get that impression – and not everybody relates
to the idea that ‘greed is good’ the way we seemed to when
Michael Douglas first said it in the movie Wall Street in the late
’80s. I do believe it is of benefit to challenge the way we think
Chapter 1 - Why build wealth? 41
about wealth. Sure, it’s about quality lifestyle, providing for
family, a financially secure retirement, control over your future
and all that good stuff. But it is also about responsibility.
As I outlined in my personal story, the Custodian philosophy is
that those few of us who are fortunate and informed enough
to build wealth can – and
must – choose to use it
responsibly. Wealth puts
us in a position to help
those in trouble and need
– and to shape the kind of
fair and hopeful society
we would want our
children to inherit. It’s also
our responsibility to educate the next generation to manage
and preserve capital, for our nation’s financial and social
wellbeing. Custodian believe that this is what true investment in
the future means – and we find that it yields the most valuable
and satisfying returns.
We encourage all fellow wealth builders to adopt this
philosophy. This book is about what’s possible – in all sorts of
ways. Sharing in the custodianship of our society’s future is one
way of being all you can be.
Sharing in thecustodianship of our
society’s future isone way of being
all you can be
Extract - Seven Steps to Wealth42
WHAT’S THE SOLUTION?
At the risk of sounding like a sportswear advertisement, it’s
quite simple:
Just think differently!
JUST THINK DIFFERENTLY!
CAPITAL, NOT INCOME.
When we talk about ‘wealth building’, we are talking about:
• establishing a structure, or system, to manage your
cash flow
• acquisition of assets (in this case, residential real estate)
• capital growth; that is, increasing the value of your
investment over time.
Your investment may, of course, also offer you income and
tax advantages. But it’s the capital growth that counts. It’s the
capital growth – combined with compound growth – that make
millionaires.
And as it happens, most millionaires achieve capital growth by
investing in real estate.
This Extract will take you through the initial step-by-step of
how it all works, and what you have to do.
Chapter 1 - Why build wealth? 43
NOTES !
Extract - Seven Steps to Wealth44
NOTES !
Chapter 2 - Why residential real estate? 45
Chapter 2 Why residential real estate?
Extract - Seven Steps to Wealth46
If you just look at results, you’d have to say that property makes
good investment sense. It does!
For example, it is consistently a major source of wealth for the
wealthiest of Australians (and 90% of millionaires worldwide).
Residential real estate, in particular, scores high on any quality
you’d look for in an investment – and remember, your purpose
is capital growth.
SECURITY
Residential real estate offers the security of ‘bricks and mortar’
compared to the fluctuating values of shares and commodities.
Even compared to the manageability of commercial and industrial
properties, over the medium to long-term. And, even allowing
for the ups and downs in real estate values we all hear about, the
underlying trend shows remarkably steady growth.
Source of Wealth
Source : BRW Rich 200, 2014
Chapter 2 - Why residential real estate? 47
You can see this trend quite clearly in the next table as well as
with the one following. These clearly depict house prices over
the last 30–40 years.
Source: RP Data/REIA, 2014
In fact, the growth pattern has stayed pretty constant
throughout the last century.
Sydney Median House Price
Source: ABS/RP Data 2014
$
$
$
$
$
$
$
$
$
House Price GrowthCapital City
1966 1976 1986 1996 2006 2015
($) ($) ($) ($) ($) ($)
Melbourne 13,000 37,000 83,700 144,000 330,000 660,000
Sydney 15,000 42,000 97,600 202,000 472,000 858,000
Brisbane 9,700 30,000 60,400 132,000 325,000 505,000
Adelaide 10,000 31,000 77,700 110,000 280,000 429,800
Perth 10,200 38,000 55,100 127,300 365,000 550,000
Extract - Seven Steps to Wealth48
Roughly speaking, this means that residential property has
historically doubled in value every 8–10 years. And don’t forget
that with the population continuing to grow, the demand for
housing must also continue to increase.
PERFORMANCE
The following graph by the Reserve Bank of Australia (RBA)
produced in July 2014 shows residential property as the best
investment asset class over the past 30 years. And these are
just averages.
The better your real estate investment strategy is – where you
buy, what you buy, how much land content there is and how
you finance – the better the returns can be.
Some of the statistics actually downplay the performance of
property. Take median house prices, for example; over the last
Long Term Asset Class Returns
Source : RBA, 2014
$1,638,400
Value of $100 Aust residential property (11.1% pa)
Aust shares (11.5% pa)
Aust cash (5.6% pa)
Aust bonds(6.9% pa)
$409,600
$102,400
$25,600
$6,400
$1,600
$400
$100
1926 1936 1946 1956 1966 1976 1986 1996 2006 2016
Chapter 2 - Why residential real estate? 49
20–25 years, the median house price in most of the capital cities
has increased by between 8–11% per annum. But look at that
‘median house’ in the 1980’s: it’s on a standard quarter-acre
allotment, or 1,000 m2. Look at the ‘median house’ today due
to urban sprawl; the standard lot size has decreased to about
450 m2! Remember, it’s the land value we’re mostly interested
in. If you look at the actual value of that quarter-acre block in
the capital cities, it has well outperformed the supposed ‘median
house price’ and presented huge wealth building opportunities,
particularly with the advent of dual occupancy or subdivision.
LEVERAGE
Because of its security and performance, residential real estate also
represents ‘security’ (in the legal/financial sense) or collateral for
loans. Most banks regard residential real estate as prime security,
against which some will lend up to 90–95% of the property’s value.
_________________________________________________
Definition
Gearing is borrowing money for investment that provides
reliable income.
_________________________________________________
‘Leverage’ in mechanics is a way of turning a small amount of
force, at a strategic point, into a much greater force. (Think of
a car jack.) Financial leverage works the same way: you can use
a small amount of money to acquire an asset of much higher
value, on which you reap larger returns and growth. (This is a key
factor in the performance of property, as compared to shares,
as a long-term investment. We’ll look at it in more detail soon.)
_________________________________________________
Extract - Seven Steps to Wealth50
Definition
Leverage is gearing your investment so that the proportion of
capital you invest is low in relation to borrowings; say, 20:80
or 10:90.
Equity is your ‘net worth’, the value of assets that is actually
yours, or accessible to you. In other words, the value of your
assets minus the debt you owe on them.
_________________________________________________
If the value of an investment property goes up, and the mortgage
on it stays constant, your equity – or net worth – increases.
Basically, the high degree of leverage on residential property
allows you to build wealth by using just a little of your own
money – and quite a lot of other people’s!
This is great news, because it means you don’t have to be
wealthy to build wealth! Residential real estate is actually one
of the most affordable
investments around.
The confidence of banks
with residential property
allows you to use your
increased equity as
security in a fairly liberal way, to piggy-back one purchase on
another and build up a portfolio of properties – as we’ll show
you in Chapter 3 – so that you benefit from compound growth.
You don’t haveto be wealthy to
build wealth!
Chapter 2 - Why residential real estate? 51
WHAT ABOUT SHARES?
A lot of people will try to tell you that shares are a better
investment than property. It’s true that some shares show a
higher income return. They are easily tradeable, and shares in
major companies have the advantage of high liquidity – they’re
practically cash. In fact, prior to the crash of 2007–08, shares
even measured up to property based on annual returns.
Obviously that will change after the global financial crisis (GFC)
and the All Ordinaries Index fall of around 47%. Shares are
rebounding, but they have a long way to go - and property,
in some markets, may also be at the peak of its cycle. So let’s
acknowledge that both show good capital growth. I’d still argue
that property is the better investment, however. Why?
The difference is the leverage. You can buy property on a 10%
deposit, because it represents a bankable security. When it
comes to shares, however, most banks will only lend 50–60%
of the purchase value. Big difference … big!
Here’s an example: Bill and Ted both have $50,000 in cash. Bill
puts his down as a deposit on a property, while Ted uses his to
buy shares.
Let’s assume that in the first year, the value of Bill’s property
increases by 9.8%, and Ted’s shares go up by 12.6%. Which was
the better investment?
Extract - Seven Steps to Wealth52
Bill’s Property Ted’s Shares
Deposit $50,000 Deposit $50,000
Banks will loan 90%
$450,000
Banks will loan 60%
$75,000
$500,000 @ 9.8%
Capital Growth
$125,000 @ 12.6%
Capital Growth
Return $49,000 Return $15,750
Bill gets a better return by over three times in property.
Bill’s equity has gone up from $50,000 to $99,000 ($549,000
minus $450,000). That’s a return of just under 100%.
Ted’s equity has gone up from $50,000 to $65,750 ($140,750
minus $75,000), a 32% return.
Numbers tell us everything.
So even if the shares have twice the ‘growth’ factor, the
property offers more than twice the growth in true capital
worth (equity) – simply because of its leveraging ability.
Property’s reliability makes a difference, too. When banks
lend on shares, they usually reserve the right to a margin call
should the shares drop in value. (A margin call is where you
Chapter 2 - Why residential real estate? 53
are required to provide a cash top-up to maintain the agreed
loan-to-security-value ratio. So if you borrowed 50% of the
value of shares, and their
price drops, you would
have to pay off part
of the loan so that the
outstanding amount still
represented only 50% of
the value of the shares.)
This can be scary, because
some banks can give you
just two or three days to
rectify the problem; if you
have a falling share price,
you could be topping up
on a daily basis!
Banks don’t, however, require a margin call on three to five
year loans on property, particularly at the lower-end price
bracket. So there’s no risk of them selling you up because of a
temporary hiccup or glitch in the market!
WHAT ABOUT COMMERCIAL PROPERTY?
Commercial property includes land and premises used for
retail, offices, industry, entertainment and hospitality – anything
from the corner store to a Westfield centre. While residential
property values are expected to maintain their rising trend,
the future for commercial and industrial property is much less
certain – and that’s generally reflected in the amount banks
Even if the shareshave twice the‘growth’ factor,property offers
more than twice thegrowth in true capital
worth (equity) – simplybecause of its
leveraging ability.
Extract - Seven Steps to Wealth54
are willing to lend. Moreover, while the growing demand for
rental property allows you to be a relatively passive investor in
residential housing, you can’t take the same kind of back seat
with commercial property.
When you buy a commercial property, you’re buying land
plus buildings, plus goodwill. If the property is tenanted, its
purchase price will generally be based on the rate of capital
return it offers, which may be a far cry from the building’s
replacement value. Let me give you an example. A friend of
mine once developed Big Rooster (now Red Rooster) outlets.
He purchased land for around $80,000 and built premises for
around $100,000, including car parking and landscaping and
so on. He then leased it to Big Rooster for a whopping $40–
45,000 per annum, and sold on – showing a10% return. This is
good development business.
The point is that an investor buying a Red Rooster outlet is
paying a premium of $200,000 for goodwill – in effect, for
Red Rooster’s continued success. But if Red Rooster left those
premises at the end of the lease, you would be left with an
empty shell, with a replacement value half of what you paid for
it, and limited ability to attract new tenants, since the premises
were purpose-built for a particular fast food chain.
There have been some real horror stories since the GFC. For
example, people borrowed to invest in companies that no
longer exist, such as Westpoint, Timbercorp, Great Southern
and Storm Financial. Tens of thousands of investors were burnt.
Chapter 2 - Why residential real estate? 55
A sad fact: while I am writing this Extract, the ANZ Bank is
issuing writs to hundreds of people who had invested in the
now-defunct Timbercorp. This type of tenuous investment,
and the subsequent hard-hearted corporate reaction, goes a
long way to the warning ‘buyer beware’.
Horror stories about margin calls are not just related to the
companies that went broke. They also relate to the big ‘blue-
chip’ companies, as their shares also lost significant value in the
GFC. This made the banks call on their margins, and investors
needed to come up with the cash within two to three days.
In many circumstances, the banks sold the shares and then
pursued those investors for the balance of their outstanding
debt. This resulted in some people having to sell other assets
or even their own homes. From my perspective, margin loans
are a very high-risk way of investing in shares and making
money, especially if you do not have the cash to meet the
margin difference.
I remember an investor telling me he had found the perfect
way to build wealth. He had bought large tracts of land and
leased them for a 10% return to emerging timber companies
Timbercorp and Great Southern. He said he could buy these
properties for $800,000 and with the timber companies renting
them at 10%, he could see no better way to make money. I told
him the Red Rooster story – how they were bought out and
closed many of their shops – and that it was unwise to put all
his eggs in one basket – especially in an industry as fickle as
growing trees supported by tax savings.
Extract - Seven Steps to Wealth56
Early in 2009, both Timbercorp and Great Southern went
broke. They ceased making payments and left investors with
large areas of land with small trees growing on them. The land
has almost negative value because it does not provide income
in its current state and the cost of clearing the land to provide
income would cost hundreds of thousands of dollars. Future
use of the land would also be subject to council approval and
potential rezoning.
Businesses come and go – and not just geographically. You have
to think about the retail areas around you. The last 20–30 years
have seen the mushrooming of regional shopping centres, which
have squeezed out many high street shops and neighbourhood
shopping centres. They come complete with entertainment and
refreshment facilities so you can stay all day and pick up a few
more impulse buys. With the advent of 24-hour shopping, it
seems only a matter of time before these shopping centres, along
with petrol station/convenience stores, completely take over.
I am not saying all shops
are bad; what I am saying
is leave it to the specialists
and big companies. Some
of the biggest and best in
the world do it very well
and even so, they too experienced tough times during the GFC.
It is a similar story with office buildings. Office tenants will
come and go, and the office buildings will often age quickly and
Businesses comeand go – and notjust geographically
Chapter 2 - Why residential real estate? 57
require you to spend money on capital works and lease fit-out
incentives as well as taking risks on tenants, which, during a
downturn, could be high. The better buildings will rent well but
these are $10 million investments – not what you would call a
starting point for average Australians.
Banks look at commercial property differently to housing. I do
have a sizable commercial portfolio but it is something I have
dedicated managers working on almost full-time. When the
banks reviewed my debt levels during the GFC, they did not
blink on my housing debt but they did require me to get all
of my commercial properties revalued, and then they wanted
me to lower my loan-value ratios to below 70% of the new
valuations.
If that doesn’t say something, nothing does. I am not saying
commercial property is a bad investment, but it is a specialised
one for a small investor. If you are keen, you could invest in
property trusts with a range of commercial properties, enabling
you to spread the risks of tenant downturns. However, while
commercial property offers a reasonable income base, it does
not have the best potential for capital growth or for duplicating
your success to build a portfolio.
MEANWHILE, THE FUTURE FOR HOUSING...
Fortunately, we all have to live somewhere. The wonders
of modern technology still haven’t provided any alternatives
to living in some form of housing. (Indeed houses are still
the norm, outside medium to high-density urban areas). We
Extract - Seven Steps to Wealth58
know we have long-term
housing growth because
Australia currently has
the highest population
growth in our country’s
history. However, as
our population ages, this
growth is not home-
grown, it is occurring
through migration and,
we are not only short of
houses now, but we will
need a lot more homes
over the next 20–30 years
to cope with the growth
needed to replace our
retiring baby boomers in
the workforce.
AREN’T WE ALREADY INVESTING IN
RESIDENTIAL REAL ESTATE?
One of the things I like about residential real estate is that
it is a known quantity for a lot of people. They may not be
entirely comfortable with the language of finance and banking,
leverage and gearing, but they have some experience of the
sector, especially if they own their own home. This can be
pretty reassuring if you’re sticking your toe in the shark infested
At least you know youknow how to choose
and buy a home
Logic and emotion can give you two
conflicting messages
Chapter 2 - Why residential real estate? 59
waters of investment for the first time: at least you know that
you know how to choose and buy a home.
Sorry, but actually this makes for rotten investment decisions!
It’s a bit like taking up snow-skiing.
If you haven’t snow-skied, it’s a great sport – and if it’s
accessible to you, I recommend that you give it a try. I learned
some of the basic principles when I was a kid, but only took
it up again about 10 years ago, having water-skied for many
years. And now, on my annual visit to the snowfields in Victoria
or New South Wales, I’m constantly reminded of two things:
1. Snow-skiing and water-skiing may look vaguely similar, but
if you try to snow-ski the same way you water-ski, you end
up on your face (or worse). The apparent familiarity makes
you feel pleasantly confident, but it can also blind you to the
fact that the principles and techniques involved are quite
different.
2. Logic and emotion can give you two conflicting messages –
and if you’re doing something that ‘feels’ risky, it’s the feelings
that shout loudest! When you’re on top of a mountain,
thinking about heading down, logic and science and the ski
instructor and all those good things are telling you that to stay
in complete control, you need to lean down the mountain,
with all your weight on your downhill leg. Meanwhile, your
emotions are telling you to keep your bum as close to the
Extract - Seven Steps to Wealth60
snow as humanly possible! It’s easy to say ‘go with the logic’,
and I’m the first to admit that, for a novice, hurtling down a
mountain at 30–40 kph doesn’t feel ‘in control’ at all. And,
yes, the temptation to lean cautiously back into the slope is
fairly powerful. But that’s the reason you see me, and a fair
few others, losing control on the slopes and ending up with
our bums on the snow. We let emotion, not logic or science,
make our decisions for us.
And that’s exactly how too many people invest in real estate.
They take the (largely emotional) experience they have
in choosing their home, and try to apply it to choosing an
investment property. Logic and science go out the window –
and so does capital growth.
So what are the right criteria to use?
CHOOSING A HOME
When we choose somewhere to live, we naturally go with our
emotions, gut instincts and lifestyle choices, and quite rightly:
this is going to be your home. We walk into a place with our
partner, having looked at several properties – perhaps not
even knowing what we’re exactly looking for – and suddenly
we’re in love. It’s the place of our dreams (or looks like it could
be, with a little work).
I had exactly the same experience buying the property where
I used to live. My fiancée and I had been looking for months,
and because of our lifestyle we particularly wanted acreage
Chapter 2 - Why residential real estate? 61
land near water. On a rainy Saturday afternoon, I drove up the
driveway of perhaps the twentieth property I’d looked at. I got
out of the car and knew instantly – this was the one. I made
an offer on the place before I was halfway through the front
door – and without even consulting my fiancée. Talk about
risky decision-making. Fortunately, she had exactly the same
response to the place when we went back together the next
morning – and of course, we did eventually get around to going
through cupboards, flicking switches and checking carpets.
Later, I pulled down that house and built another one, and I am
the first to admit I completely overcapitalised on the place as
an investment. Even so, it was a great way to buy and make a
home! If you’re happy in your own place – be happy. You need
to ‘feel at home’ where you live; it makes a huge difference to
your work and other areas of your life.
But it’s not the way to invest in residential real estate for capital
growth.
CHOOSING AN INVESTMENT
PROPERTY … NOT!
I always seem to get people coming up to me, bragging they’ve
started ‘wealth building’, and all excited because they’ve
just purchased an investment property to take advantage of
negative gearing, etc., etc. They sound like they’ve won the
lotto – and they want to tell me all about it.
Extract - Seven Steps to Wealth62
They spoke to their accountant and bank manager, got the tick,
and went off in search of a property. Their first port of call was
the local real estate agent, because after all, they’d purchased
their home through him, and they’d got chummy over the
years. And would you believe it? ‘The Perfect Property’ had
just come on the market – ‘Just Around the Corner’ from their
home! Old Mrs Reid’s house was for sale; she was moving into
a retirement village, and had signed a contract to purchase a
unit. It was such a big house, and she couldn’t look after it any
more. And what a bargain! (‘She’s asking $500,000, but I’m
sure if you made a cash offer you could get it for $475,000 …’)
Our couple can’t believe their luck. They’ve driven past Old
Mrs Reid’s house a thousand times, always admired it, and now
they not only get the chance to buy it, they can get it for a full
$25,000 discount on asking price! Within 30 days, they’ve got
themselves an investment property …
Why did they choose this
particular property? ‘It’s
ideal: we can drive by it
every day on our way home
from work!’
Does that sound like a
dumb reason? It does,
if your purpose is to build wealth. (In fact, our couple have
broken just about every rule in this book).
Does that soundlike a dumb reason?
It does, if yourpurpose is tobuild wealth.
Chapter 2 - Why residential real estate? 63
And do people really do that? It sure looks like it. Of the
Australians who own residential investment properties:
26% INVEST WITHIN THEIR OWN POSTCODE!
CHOOSING A PROPERTY FOR CAPITAL GROWTH
Here’s where the logic and science come in. There are three
questions we need to ask ourselves, if we want to invest in
residential real estate for capital growth:
1. What structure will best utilise my cash resources to allow me
to build up a property portfolio in the shortest period of time?
2. What sort of property will give me the highest capital growth?
3. What location will give me the highest capital growth?
Unfortunately, most Australians who invest in property
don’t ask themselves even one of these incredibly important
questions – let alone all three – which is why 97% of them don’t
maximise their capital growth or their tax benefits. And why
only 1% of them build enough wealth to retire on an income
(in today’s terms) of the average wage of $75,000 per annum.
Just one more statistic: less than 15% of all property investors
buy more than one property. But one property won’t make you
wealthy. You need to focus on building a portfolio of five or six
properties over 10 years. Remember these numbers if you want
to build wealth over time in a financially healthy way.
Extract - Seven Steps to Wealth64
So, the good news is that this catapults you to the very top –
that magic 1% – of successful investors in financial security and
freedom.
Therefore, it’s time to ask – and answer – the three big
questions.
We’ll start with structure, in Chapter 3.
Chapter 2 - Why residential real estate? 65
NOTES !
Extract - Seven Steps to Wealth66
NOTES !
Chapter 3 - A Structure for growth 67
Chapter 3A structure for growth
Extract - Seven Steps to Wealth68
In order to build wealth, you need to:
• establish a structure
• to acquire assets
• for capital growth
• and then duplicate the process to develop a portfolio.
Why do you need a ‘structure’? You need a structure because
there are different elements involved in making your investment
work. You’ve got land and buildings, equity and loans, tax and
tax benefits, rental income and outlays, and time. The mix and
balance of all these elements needs to be just right in order to
accelerate portfolio development and maximise capital growth –
and it needs to be do-able, time and time again. If you can work
out what the ‘best fit’ is, and set it out as a simple formula, you
can achieve predictable results – without having to juggle all the
balls in the air all the time!
And you can duplicate the strategy without having to rethink
it every time! Remember – one property won’t make you
wealthy. You need to use the equity growth in that one property
to acquire a second, third, fourth – a portfolio of properties all
providing (compound) growth. That’s when it gets exciting!
Building wealth using property is a bit like building muscle
using weights.
There are different elements to building muscle.
Chapter 3 - A Structure for growth 69
The weights are only
the vehicle you use
to build the muscle.
(Some people seem
to think just owning
weights is good for you
– but it’s using them,
and how you use them,
that counts.)
Technique is important.
You need to use a
weight that is within
your capacity, and to lift it correctly, in order to stretch a specific
muscle. Then you can gradually build up to heavier weights.
Diet is all-important in ‘fuelling’ the exercise. You need the basic
energy of carbohydrates, a reduced fat intake, and an increased
intake of protein, for specific muscle growth.
Finally, rest is essential. The muscle actually only grows when
resting after being stretched.
A weekly or fortnightly exercise routine incorporating all these
factors would provide an efficient, effective structure to follow.
It might seem as if I have gone off into a TV guru type of
health exposition here, but consider the analogy I am posing:
Technique, Diet, Rest …as opposed to Structure, Assets,
Growth and Duplication. Whether you are building wealth or
Start small, think big!
Extract - Seven Steps to Wealth70
building your health, it’s the same process, just different words
(and there are no gym fees for wealth building). Remember –
success is a habit!
OK, SO BACK TO WEALTH BUILDING!
An effective structure for wealth building will incorporate the
same kind of elements.
• A ‘vehicle’ for building wealth – in this case, residential
real estate. The land is the vehicle for capital growth, and
the building is for generating rental income.
• A ‘technique’ to maximise the effectiveness of the vehicle
for your purpose of capital growth. You need to select
a suitable vehicle: the right property, in the right location.
And you need to start – and stay – within your financial
capacity, at the bottom end of general affordability,
where most people can afford a first property. As you
see growth, you can begin to build up a portfolio – more
properties, not more expensive ones.
• ‘Fuel’ for your investment. With a basic level of available
equity and income, you can secure finance. With the right
property and the right lender, you can borrow 90% of
the purchase price. You put in just 10% of the capital, and
access 100% of the capital growth. That’s the beauty of
leverage. In order to make this work, without draining
your personal resources, you need income from the
property, to service the debt. If you optimise the rental
income and maximise the tax benefits available, you can
effectively offset all your outlays, not just the loan interest,
Chapter 3 - A Structure for growth 71
but also maintenance, rates, fees and so on. As long as
your costs are covered, you won’t be putting any strain
on your cash flow – and you shouldn’t be able to get into
too much trouble! In other words, you’re setting things up
so that there’s a lot to gain – and not a lot to lose.
• Meanwhile, you need to let your investment ‘rest’ in
order for it to grow. Over time, the value of the property
(in particular, the land component) increases, and – since
your debt stays the same – your equity also increases.
Once you have a 10%–15% increase in value, you can
use the extra equity to ‘fuel’ the purchase of a second
property – and so on, and so on, using exactly the same
formula, and with no further claims on your income or
other assets!
At the end of a 10-year period, you can have built up a portfolio
of, say, six residential properties this way. If they’ve shown
sufficient capital growth (and remember, house prices have
doubled every 8–10 years over a century – with a blip caused
by the GFC which pushed that cycle out) you need only sell
one or two of them to reduce your borrowings on the whole
portfolio. This leaves you with strong equity in the remaining
properties, plus the ongoing rental income from them.
Extract - Seven Steps to Wealth72
The overall structure can thus be illustrated as follows:
Structure
Duplicate
Capital Growth Reliable Cash Flow
Land Content Rental Income
Timing Tax Deductions
Location
Finance
If all this seems too good to be true, I can tell you that it is
possible. I’ll be showing you how.
Case study: McDonald’s Restaurants
McDonald’s restaurants is one of my favourite examples of a
system based on real estate.
When Ray Kroc established the McDonald’s franchise system
in 1954–55, the menus consisted of only nine items, and the
restaurants prided themselves on being able to sell and serve
a 15-cent hamburger inside 60 seconds. By the end of the
’50s, there were more than 80 restaurants across America, and
each franchise sold for around US$900: franchisees also paid
Ray Kroc a percentage of their investment as a franchise fee
to cover administration. Unfortunately, huge business growth
Chapter 3 - A Structure for growth 73
can’t be sustained by limited capital – and therefore limited
capital growth – and in the late ’50s, McDonald’s nearly
collapsed under its own weight.
What enabled McDonald’s to grow into one of the outstanding
businesses of the 20th century? Structured investment in
real estate. The company had previously acquired all of
the restaurant properties and then leased them back to the
franchisees, retaining management of some restaurants
themselves. In the following decades, this strong real estate
base financed the building of thousands of restaurants all
over the world. McDonald’s is today worth billions of dollars
because of a fundamental decision to restructure their cash
flow, allowing them to acquire property, and to secure a steady
demand for tenancy (through the success of the franchise),
thus generating rental income. They started out with little or
no equity.
That’s pretty much how Custodian’s structure works – by
supplying property to willing tenants (within an affordable
price range), to finance the building of a real estate portfolio
for sustained capital growth.
HOW IT ALL WORKS: AN OVERVIEW
1: Gearing
You borrow 90% of the value of an investment property, giving
you 10% equity. All it takes is 10% growth in the property’s
value, and you have 100% return on the capital you invested,
per annum!
Extract - Seven Steps to Wealth74
Your 10% could represent a cash deposit, or you could use the
equity in your own home, which may be more tax-effective.
2: Cash flow management
But what about the loan interest and all the other costs of
doing this? Surely they eat away at your 100% return? No.
That’s where the structure comes in. It’s all about cash flow
management, the basis of all successful businesses.
Ability to Duplicate
Capital Growth
Rental Income Tax Benefits Outlays
Reliable Cash Flow
+ =
100% Return P.A. on Capital
Growth @ 10% $50,000
Loan $450,000
Deposit $50,000
Price $500,000
Chapter 3 - A Structure for growth 75
3: Equity growth
462You need 10–15% equity growth to give you the 10% equity
you need to duplicate your strategy with your next property.
And repeat. And repeat again.
If there’s a warning bell ringing at the back of your mind about
the debt you’ll have chalked up by this time, don’t worry. I
promise to put that into perspective later on.
THE STARTING POINT
You can begin to build wealth now if you have:
• about $100,000 annual (combined gross) income
• and $100,000 in available equity (in your home or other
property) or cash deposit (although there are ways of
getting around this too).
Don’t forget, you needn’t actually pay out any of your income.
It’s just an indicator of your ability to repay a loan, one of two
criteria – equity being the other – on which banks and other
Value and Debt
Loan debt: $450,000. Property final value: $1,079,462. Source: Custodian
Extract - Seven Steps to Wealth76
institutions lend money for property investment. In fact, you
could actually increase your net income, thanks to tax savings.
THE BEAUTY OF COMPOUND GROWTH
If I took just one cent and doubled it each day, how long
would it take to turn it into a million dollars? The answer is
just 27 days. Sounds amazing, doesn’t it? That’s the power of
compound growth – growth on growth (on growth …). The
following graph shows how you can access that power, from
the minimum starting point cited above.
Financial Goals
At Year 12 Net Assets $2.81 Million Positive Income $64,313 p.a.At Year 12 Net Assets $2.992M. Positive Income $60,092 p.a.
Buy 6 homes over 10 years at 8% capital growth
Year 9
Year 12
Year 11
Year 10
Year 8
Year 7
Year 6
Year 5
Year 4
Year 3
Year 2
Year 1
Optional Sale
Asset Growth
Chapter 3 - A Structure for growth 77
HOW MUCH CAN YOU ACHIEVE?
Here’s a slightly more aggressive use of the same structure.
I can’t tell you what your goals or commitment should be, or
what your potential is. It has to be up to you.
My best advice is to allow yourself to start small, and to think big.
After more than 20 years of coaching investors, many clients
have six, eight, ten homes and more. Some clients have as many
as 15–20 homes. They started small and built momentum. As
the capital value of their properties and their income grew, they
were able to duplicate to achieve compound growth. Many of
them are now millionaires and multimillionaires by using exactly
this system.
Financial Goals
At Year 12 Net Assets $5.33 Million Positive Income $142,934 p.a.
Buy 10 homes over 10 years, with option to sell in Years 11 and 12
Year 9
Year 12
Year 11
Year 10
Year 8
Year 7
Year 6
Year 5
Year 4
Year 3
Year 2
Year 1
Optional Sale
Asset Growth
Extract - Seven Steps to Wealth78
WHAT DOES IT TAKE TO MAKE THE STRUCTURE
WORK?
We’ve already mentioned key elements – but let’s get specific.
There are seven basic steps to building wealth:
1. Buy land for capital growth
2. Optimise your income
3. Maximise your tax benefits
4. Finance to build
5. Aim for affordability
6. Make time work for you
7. Be all you can be
Be all you can be is a good way to finish my three introductory
chapters of the Extract of Seven Steps to Wealth, don’t you
think? But read on to the final pages and talk to us. As you can,
‘Be all you can be’ and we can help.
ANOTHER THOUGHT – THAT DIY-STRATEGY
THING
Sadly, many Aussies have a ‘do it yourself ’ mindset. And over
the years I have encountered a lot of people who, having
attended one of our events, read my book ‘Seven Steps to
Wealth’ and have then thought, Bingo! This is easy. I can do
this myself.’ As I said above, ‘sadly’ – they have been wrong.
These same people have come back years later with disaster
stories asking me if I can help them sort out the mess they
Chapter 3 - A Structure for growth 79
have gotten themselves into. Some of the stories have been
quite dire.
The world specialises today, and when it comes to building a
property portfolio, it’s no different. You need a team of experts
around you. I have that team of experts – they are called
Custodian. They are specialists in research and valuations,
town planning investment funding, project management and
construction, accounting, financial planning and much more.
They are the Custodian team and they are at your disposal.
Can I say I don’t know any truly successful person who would
say they have gained success alone. I am successful because I
have an A-team of professionals around me and together we
achieve great success. Just think outside property investment
for a minute; no sporting team is successful based on one star
player. It’s a team effort and I would caution you to not attempt
a true wealth building journey ALONE.
Extract - Seven Steps to Wealth80
NOTES !
Any other questions? 81
ANY OTHER QUESTIONS?Great, I hope you do. Ask away! I love questions about
this business. Questions are a good thing. And I hope you
have many, as it shows you’re aware and proactive … and
not procrastinating.
Write down what you feel you don’t know. That’s what the
few ‘Notes’ pages are for. Take a moment after you read each
chapter and just scribble down your queries.
I haven’t been in this business all these years to not be able to
answer most or all of your queries. Why not try and find out
which one I can’t answer? It may sound as if this is a personalised
business I am offering here, but it’s not. I am a team. I have a
team, an Australia-wide team of experts who can assist with
all your queries. And some are even named John. But there’s
only one Fitz!
You need to attend to all the information you now have at
your fingertips so you can make informed decisions about your
financial future.
We all want it to be clear for you from the very beginning.
Extract - Seven Steps to Wealth82
Just ask if you do have any further questions, like ‘What’s that
mean.?’ or ‘What is this when that happens then?’ or even ‘Just
where did you get those stats from?’ All the questions you have
can be answered. And answered honestly.
As an added help, this Extract includes a two-page Glossary of
words to help you further understand the terminology used
in the financial/property investment sphere. It might save you
a question or two. I had to learn them and they have stood
me well. So it’s your turn. I have also included a small table
of property successes within Custodian. It’s not a wildly
comprehensive table of property purchases and their eventual
profits, but it’s enough to let you see, in a straightforward
manner, just how much you can make on buying a property
when you’re advised by Custodian.
So your next step is to talk to one of my Custodian
team. Attend one of our Property Events. Or call us on
1800 174 999 and join Custodian’s team of wealth builders
www.custodian.com.au
My colleagues are all trusted experts and they can answer (or
assist you in continuing to ask) any questions you may have.
Sceptics make the very best investors and I like to answer all
comers in this field of enquiry. I am – we are – comfortable with
questions. And even more comfortable with making you money.
Now keep turning the pages – Custodian’s contact details are
in the few pages ahead.
Glossary 83
GLOSSARYCapital Any form of wealth that can be used to create more
wealth. Most commonly in the form of cash or equity in other properties.
Capital growth An increase in the market value of an asset above the purchase price. Also called capital appreciation.
Compound capital growth
The rate of return on an asset, usually expressed as a percentage on the original amount of capital over time. Put simply, growth on growth on growth.
Compound growth
Growth on growth.
Debt service ratio
The amount of money you can borrow relative to your income in order to service a debt. Usually expressed as a percentage.
Depreciation The reduction in value and usefulness of an asset over time.
Duplicate A strategy to build steady wealth over time, using the capital from one property to buy another prop-erty. If you keep duplicating this strategy, you will create compound growth.
Established Capital Benchmark (ECB)
A benchmark used to identify a potential high growth property, based on proximity to far more valuable properties. Used in conjunction with other criteria.
Infrastructure Public and commercial facilities such as road, rail links, schools, playing fields, hospitals, shopping centres, etc.
Integrator A business that pulls together all the components necessary for clients to achieve a performing investment.
Land content The percentage of the purchase price represented by land value. If you purchase a property for capital growth it is the land content that usually grows in value. The higher the land content, the higher the capital growth.
Extract - Seven Steps to Wealth84
Loan value ratio (LVR)
The amount that can be borrowed to purchase a property relative to the purchase price. Usually expressed as a percentage.
Leveraging The degree to which an investor is using borrowed money to supplement an investment.
Managing developer
Like Custodian, a managing developer is a person or entity that deals with all aspects of developing an investment property on behalf of their clients.
Market value The dollar amount of an asset estimated in the cur-rent market looking at comparable assets as a guide.
Negative gearing
An investment strategy whereby tax deductions are used to minimise the shortfall between an invest-ment property’s income and its outgoings.
Non cash loss An accounting term that includes items like depre-ciation.
Prime cost item An item (for example, a fixture or fitting) that either has not been selected, or its price is not known at the time a building contract is entered into and for the cost of supply and delivery of which the builder must make a reasonable allowance in the contract.
Positive gearing The opposite of negative gearing. The returns (in-come) in property investment are greater than the outgoings. This surplus amount will usually attract income tax.
Stand-alone security
An asset that guarantees a lender their loan until the loan is repaid in full. Usually the property is offered to secure the loan.
Valuation A report generated by an independent property professional, outlining their opinion of a property’s current market value. Commonly used by lenders to ascertain the security value of a property.
Property Success Table 85
Est
ate
Nam
eD
ist
C
BD
Pop
Pop
per
Hsl
d
Sub
urb
%
Ren
ters
Lan
d C
onte
ntM
edia
n W
eekl
y R
ent
Ren
tal
Yie
ldD
ate
R
elea
sed
Ave
rage
C
WB
P
rice
on
Rel
ease
Feb-
14%
in
crea
se
Mid
dlet
on G
rang
e N
SW43
km51
53
35%
53%
$325
5.5%
2010
$420
,000
$590
,000
40%
Jord
an S
prin
gs N
SW59
km14
,721
3.1
25%
53%
$450
5.4%
2012
$446
,500
$530
,000
19%
Har
ringt
on G
arde
ns/P
ark
NSW
60km
2,25
73.
413
%53
%$4
655.
1%20
12$4
85,0
00$5
50,0
0013
%El
ders
lie H
illcr
est N
SW7k
m4,
252
2.7
22%
52%
$570
6%20
11$4
70,0
00$5
30,0
0013
%M
orni
ngsid
e H
ouse
s Q
LD5k
m9,
399
2.2
42%
31%
$460
13%
1998
$180
,000
$550
,000
206%
Pim
pam
a R
iver
s Q
LD42
km12
,439
2.8
29%
41%
$415
13%
1999
$162
,000
$425
,000
162%
Wyn
num
Wes
t QLD
17km
11,7
452.
929
%45
%$4
1513
%20
00$1
68,0
00$4
30,0
0015
6%C
ashm
ere
QLD
21km
8,94
83.
315
%35
%$5
8015
%20
02$1
98,0
00$4
70,0
0013
7%Tr
ugan
ina
VIC
23km
9,13
83.
311
%41
%$4
007%
2007
$315
,000
$420
,000
33%
Der
rimut
VIC
18km
13,3
153.
123
%42
%$4
007%
2007
$315
,000
$415
,000
32%
Poin
t Coo
k To
m R
ober
ts V
IC25
km32
,413
3.1
17%
58%
$390
6%20
10$3
65,0
00$4
45,0
0022
%C
ragi
ebur
n V
IC26
km20
,784
3.1
14%
48%
$380
6%20
10$3
54,0
00$4
15,0
0017
%C
anni
ng V
ale
WA
15km
30,6
663.
125
%48
%$5
5013
%20
01$2
20,0
00$5
80,0
0016
4%M
alco
lm P
ark
WA
17km
30,6
663.
215
%46
%$4
309%
2003
$260
,000
$540
,000
108%
Mer
riwa
WA
36km
5,57
13
15%
46%
$400
8%20
05$2
45,0
00$4
60,0
0088
%A
shby
WA
24km
2,39
42.
412
%47
%$5
709%
2007
$330
,000
$520
,000
58%
* Fi
gure
s co
rrec
t at t
ime
of p
ublic
atio
n
CU
ST
OD
IAN
PR
OP
ER
TY
SU
CC
ES
S T
AB
LE
Extract - Seven Steps to Wealth86
ROUND-UP QUIZAs promised at the start of all this, here is the Round-up Quiz.
It’s an opportunity to show yourself just how much you’ve
learned and remembered. More importantly, it could show you
how good you are now at looking for answers, once you know
what the questions are, of course.
I do encourage you to have a go at this quiz, now. Let yourself
notice how easily the information comes to hand with the
information you have gained from only three chapters of this
Extract. The answers should come easily. If not, ask us.
1. In making a wealth building investment decision, what
would be more important?
£ How you felt about it
£ How it stacked up logically
2. In considering a residential investment property for wealth
building, what would be more important?
£ Rental returns
£ Taxation benefits
£ Capital growth
3. Is it prudent for me to acquire property close to where I live?
£ Yes
£ No
Round up Quiz 87
4. Which institution(s) effectively control the affordability of
housing in Australia?
£ Real Estate Institute £ Banks
£ Property developers £ Valuers
5. Is the number of property renters in Australia
£ Increasing?
£ Decreasing?
6. In choosing a location that is going to give capital growth,
which factor is most important?
£ Proximity to transport
£ Proximity to schools
£ Percentage of investor-owners
£ Established capital benchmark
7. What is the ‘established capital benchmark’ of an area?
£ The median price of property in the area
£ The highest price of property in the area
£ The lowest price of property in the area
8. What was the average land size of an urban house in the
capital cities of 1970?
£ 450 m2
£ 650 m2
£ 750 m2
£ 1,000 m2
Extract - Seven Steps to Wealth88
QUIZ ANSWERSThis will take moments, but it will give you an insight into what
you have already learnt. Check your answers against ours in
both the Start-up and the Round-up quizzes that I hope you
completed earlier.
1. In making a wealth building investment decision, what would
be more important?
£ How you felt about it
£ How it stacked up logically
2. In considering a residential investment property for wealth
building, what would be more important?
£ Rental returns
£ Taxation benefits
£ Capital growth
3. Is it prudent for me to acquire property close to where I live?
£ Yes
£ No
4. Which institution(s) effectively control the affordability of
housing in Australia?
£ Real Estate Institute £ Banks
£ Property developers £ Valuers
✓
✓
✓
✓
Quiz answers 89
5. Is the number of property renters in Australia
£ Increasing?
£ Decreasing?
6. In choosing a location that is going to give capital growth,
which factor is most important?
£ Proximity to transport
£ Proximity to schools
£ Percentage of investor-owners
£ Established capital benchmark
7. What is the ‘established capital benchmark’ of an area?
£ The median price of property in the area
£ The highest price of property in the area
£ The lowest price of property in the area
8. What was the average land size of an urban house in the
capital cities of 1970?
£ 450 m2
£ 650 m2
£ 750 m2
£ 1,000 m2
I’d make a bet on the fact that you answered all of the
above correctly.
At least I hope so.
✓
✓
✓
✓
Extract - Seven Steps to Wealth90
CONCLUSION‘What’s Next?’
OK, the conclusion is … you’ve got to do something. Don’t
become a statistic.
Sorry, but lots of people read books, study programs, surf the
internet, attract contradictory information overload and get so
confused it’s easier to do nothing … and then they read more
books … and then they don’t do anything. And time passes! There’s
a great saying I learned when I was 17: ‘If you’re standing still, then
you’re going backwards.’ It’s as true today as it was then.
Procrastination is a big problem, and it kills our dreams. I have
given you the numbers in this book, but too many of us are
retiring absolutely flat broke and relying on the pension. We don’t
want to be wealthy, we want to be comfortable, as our research
shows, but few realise what that means in numbers.
Now you have a taste for it with the knowledge I’ve given you, as
well as with the skills and tools you need, but I need you to now
take the next step.
And I’ll make it very easy for you. You can email me with any
questions you’ve got. You can also sit down with any of my
Custodian team so we can get to know one another so we can
understand your goals and how we can help you achieve them. It is
helpful to do what we call a ‘general financial health check’ to first
Conclusion 91
and foremost identify where you are and where you want to go.
And secondly, how fast compound growth will get you there.
That’s free. So if you don’t do that I’m certainly asking myself why.
Obviously, when you sit down with us we’ll be happy to offer you
a full copy of Seven Steps to Wealth. I suggest you should read it,
re-read it, dog-ear the pages, highlight it and talk it over with your
family, your kids, anyone who is interested, and then talk to us again.
As you can see, we talk the talk, but we also walk the walk. Our
numerous Custodian Property Events are important because
they allow people the opportunity to educate, investigate and
begin to build wealth. They bring together that small percentage
of Australians who are doing something about their financial
future. Come along to one of these events and talk to us or
to the people who have come along on this journey with us.
And these people are successful. They are successful not just
because they are doing something about their financial future,
but because of their mindset: they are positive, responsible and
most importantly, proactive.
So, I urge you to take the bull by the horns and pursue the next
stage of how we can help you at Custodian.
So, what’s keeping you?
John L. Fitzgerald
CEO
Custodian
Extract - Seven Steps to Wealth92
Standing poised in anticipation of challenge
and opportunities,
mind and body and balance.
He summons his talents to realise the
sanctioned visualisation.
With determination, integrity and conviction
of truth, service to humanity is his foundation.
He is honour-bound.
“The Custodian”
Custodian 93
Custodian John Fitzgerald first established the JLF Group of Companies
in 1981. As one of Australia’s most trusted property,
development and financial services corporations, it embraces
more than 25 entities. JLF has forged a successful business built
on the strong core values of integrity, trust and proven results.
Custodian is a JLF subsidiary wealth building company of
John’s vision. Founded in 1997, the company has assisted
thousands of Australians to build sustainable wealth, providing
a comfortable lifestyle at retirement. The numbers speak for
themselves; clients, success stories and secured retirements.
Visit www.custodian.com.au/thefacts
Custodian serves clients Australia wide and has offices in
Sydney, Melbourne and Brisbane.
Extract - Seven Steps to Wealth94
ContactsHead Office
JLF Corporation Head Office
Custodian House
7027 Southport-Nerang Road,
Nerang Qld 4211 Australia
Phone: (07) 5527 4999
Free Call: 1800 174 999
Fax: (07) 5527 4955
Email: [email protected]
Websites: www.custodian.com.au
www.jlf.com.au
95
What would you like your next step to be…..?If you would like to attend one of Custodian’s Property Events
(online or face to face), or you or any member of your family
require further information on any of our services, please visit
www.custodian.com.au or call 1800 174 999.
Let us know what you think
If you have any comments about this book, or you would like
to let us know how the wealth building concept is working for
you, please contact us. You are most welcome to write or
send an email to John Fitzgerald at our head office.
Send your email to: [email protected]
To order a copy of the book
If you would like further copies of this Extract please visit
www.custodian.com.au/7stepstowealth
Extract - Seven Steps to Wealth96
Toogoolawa Schools LimitedEver since establishing Toogoolawa School, John Fitzgerald has
directed much of his energy and a great deal of his own money
into helping fund the continuation of Toogoolawa Schools
Limited.
Toogoolawa assists students in striving to live a strong and
happy and productive life utilizing the five universal Human
Values: Love, Truth, Peace, Right Conduct and Non-
violence.
Find out more at www.toogoolawa.com.au
Contacts:
Drs Ron & Suwanti Farmer
Toogoolawa Schools Limited
351 Creek Street
Ormeau Qld 4208
Telephone: (07) 5546 7998 or (07) 5547 5866
Your Book Order 97
Your Order is Your Donation
AND IT’S TAX DEDUCTIBLE SO A WIN-WIN FOR BOTH
YOURSELF AND TOOGOOLAWA’S CHILDREN!
The proceeds of every book you purchase is donated in full to
Toogoolawa Schools Limited.
To order your copy of one of John’s books, or to make a
donation to Toogoolawa, please visit
www.custodian.com.au/7stepstowealth
Choose from the following great reads -
‘We Can Be Heroes’ by John L. Fitzgerald
‘Seven Steps to Wealth’ by John L. Fitzgerald
‘Love Changes Everything’ by Dr. Ron Farmer
Thank you for your support
The Bali bombings happened in October and my wedding to Nerissa had been planned for 14th December of that same year. So, that was my first real short-term goal: to really focus and work and drive towards marrying my girl. I was not given all that much hope, but we got there. And there is no doubt in my mind that the determination to make that ceremony helped me to kickstart the journey into getting back and playing AFL football. One thing supported the next … and the next …
So, the goal to continue my career followed. However, throughout the process I realised I knew little about burn injuries and soon I knew I had a long, long road ahead. It would take two to three years to fully recover.
My next goal was to get back and play, yes, but the ultimate was to play and play and then play one game only. I was able to achieve that milestone on 6th June of the 2003 season when I returned to play for the Kangaroos against Richmond. What an amazing night that was. The main objective was achieved as we won that game, most importantly! From a personal point of view, I was thankful I could play my part by kicking a goal and helping to set up the last one that ultimately got us across the line. But when you are involved in a team, it’s about team success. And the team did it.
From there it’s been about the next phase of my life – retirement. I worked at the AFL for six years after I officially retired, with involvement in game development and coaching the national team. Presently, I’m working at the Bulldogs Football Club as List Manager, in control of overseeing recruitment, the lists and the contracting process for our players … so maybe some might say I am not quite retired. Basically, I am obviously still heavily involved in something I love – football. So I reckon I’m lucky, in lots of ways.
The outcome of my story is a real positive, I think. And, in telling it, I am happy to be able to tell whoever wants to read this that being with an Australian company such as Custodian did help when we needed it. Custodian has been a great journey for us. One we’re still on. We have a lovely home in Melbourne … still with a little debt sitting on it, but the Custodian program is a ways and means by which we have been able to set ourselves up. We have two young boys, one eight and one six, so beyond primary school we have education costs to consider with them. All told, we plan to continue with Custodian, as we know Custodian’s our way forward.
My life and work are busy, but we all need to make sure to get some time away. After what I went through, and after what Nerissa went through with me, I know it’s important to get away, spend some time with the family, overseas or anywhere in Australia, and do the things you love. Custodian is the road by which we can do these things and I hope to continue to do more.
Jason McCartney
Jason’s Custodian Story
Jason McCartney is a Custodian investor, AFL footballer and Bali bombing survivor.
I looked at a few property groups before I became part of the Custodian group in 1998. And it’s been a fantastic journey. At one stage my wife and I had six properties. Through the miracle of compound growth that John speaks about so often, we chose to capitalise on and sell three of those properties in order to fund our family home in Melbourne. Only recently have we recommitted to our wealth building journey in order to purchase another property.
My background is AFL. I played with Collingwood, Adelaide and the North Melbourne Kangaroos. In 2002, I unfortunately found myself caught up in the Bali terrorist attacks in Paddy’s Bar. I was only five metres away from where the first of the explosions went off, set there by a suicide bomber. I sustained burns to 50% of my body, my eardrums were perforated and I sustained numerous shrapnel wounds.
When I go back to that time in hospital in 2002 in my mind, I remember sitting there – laying there – as I couldn’t do much else, and knowing Nerissa was really concerned with trying to think about all the things she had to take care of at home. I remember one thing she asked, ‘What about the investment properties? What do I need to do about them, Jason?’
‘You don’t have to do anything,’ I said with some confidence. ‘Custodian is a well-structured program. They’re well set up and they’ll take care ofthemselves.’ And they did.
That’s what I’ve found with Custodian. Once you get set up and get started, it will take care of itself. And what I said to my wife then is still true: ‘It’ll be OK … it’ll be fine.’ And it has been.
Obviously, it was a very difficult period for my family and me as I found myselfin a hospital, fighting for life. But I had amazing support. I think that’s what’s really important with whatever you do, that ability to set goals and challenge yourself. But you need outstanding people around you, and I certainly had that and more.
It was a struggle. But I had tremendous support and with that, and determination, in three-and-a-half weeks, much to the surprise of my surgeons and the people at the Alfred Hospital, I was released. A rehabilitation program came next, with the ultimate goal of me getting back to playing AFL football again. But before that I had a more immediate goal to achieve.
....continued on back page
Inside front cover & back_with spine_V2.indd All Pages 19/05/15 12:25 PM
A fast-track introduction to accelerated wealth building through property investment
7 steps toAcceleratedwealth
J o h n F i t z g e r a l dF o r e w o r d b y I a n L e s L I e
All the things they
don’t tell you about
Property Investment
John L Fitzgerald
5th Edition
Seven S
teps to Wealth
John L Fitzgerald
Buying an investment property can be like swimming with sharks... very dangerous. In this practical and refreshingly jargon-free book, John L Fitzgerald lifts the veil on building wealth through investment real estate.
How it can be done - and how it can’t.
How to select an investment property for sustained capital growth.How to optimise rental income and tax benefits.How to structure the finance and manage the risks.
And how not to fall foul of bad faith and bad advice.
John L Fitzgerald is not an investment theorist. He has personally created and managed wealth using the principles outlined in these pages - and successfully helped others to do the same, through Wealth Building programs and workshops Australia-wide.
“John Fitzgerald’s ‘Seven Steps to Wealth’ is a fascinating book by someone who is not only a fine author but is a man who writes from personal experience and is generous in sharing his knowledge.”
Mr Bert Newton AUSTRALIAN ENTERTAINER
“After reading John’s book ‘Seven Steps to Wealth’ I could not but relate and have an affinity to his successful philosophies.
I, like John, can testify that the acquisition of good land can reap enormous capital gain over a short or long term.
I hope those readers who will be as absorbed as I in ‘Seven Steps to Wealth’ will take up the gauntlet and enjoy the ensuing rewards.
Congratulations, John, it’s a really good and factual read.”
Dr. Betty Byrne Henderson AM FAIM FAICDNamed one of the “Leading Women Entrepreneurs of the World 1998”Trustee Committee for Economic Development of Australia (CEDA)
All proceeds from the sale of this book benefit The Toogoolawa Childrens’ Home Ltd, Australia.
Most Australians would
like to be wealthy.
Most Australians retire
below the poverty line.
What’s going on?
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