Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - Max Phelps on Spending, Fast and Slow

Starting point is 00:00:00 I don't want to waste knowledge. That knowledge is in my head. I didn't mention this before, but I've been obsessed with dying since I was in my early 20s. And that's because at age 47, my dad had his first heart attack. And at 54, he had a quadruple bypass. And I never thought he'd make 60. Now, thankfully, he made 76, died a couple of years ago. But I've been obsessed with assuming I'm going to die. I don't want to die having not shared this message with other people.

Starting point is 00:00:29 and that's what drove me to write the book. Welcome to Get Invested on the Property Hub podcast channel, the leading weekly show to help you unlock your full self-health and wealth potential. I'm your host, Bushy Martin, and each week I go deep with the best investors, experts, leaders, and founders to find out what it takes to break free from the grind, discover freedom, and live by design. Subscribe now and join me and get invested in the life you really want. Let's get started. Hi, Fred and fighters. Why is it that you just never seem to have enough money to do all the things that you want to enjoy in life?

Starting point is 00:01:07 Well, today, you're going to find out as well as learn what you can do about it so that you can get more out of your life and live the way you want. Following our captivating and engaging chat in part one with Max Phelps on his very interesting personal, professional and passive journey and the great lessons learned, we're now going to deep dive into his fascinating new book, Spending Fast and Slow. why your money disappears so fast and how to slow down the flow and the title reminds me of one of my very favorite books thinking fast and slow by nobel prize winner daniel kahneman who's a well-renowned psychologist and one of the pioneering fathers of behavioral economics

Starting point is 00:01:45 which i'm now sure has been part of the inspiration having sped read your book max so welcome back and let's get invested again thanks for having me back on again i love it and yes definitely. Daniel Kahneman, one of my heroes. Yeah, likewise. I just love the way he thinks and bring the sort of emotional, psychological mindset part to the whole equation, which economists like to ignore at the best of stage, because I think we're automatrons or robots. But to sort of get into your book, which is a- Econ. Exactly. Now, I love the book.

Starting point is 00:02:22 Having sped read it, there's some really meaty subjects there that really open people's eyes to the opportunity that's before them to better understand themselves, to be able to then better manage their money. So to set the scene, what are the biggest problems and mistakes that people make around money and saving and investment, Max? well the the first thing is trying to fix your savings in other words send a fixed amount to savings and then spending everything else um that's typically what most people the way they set up and and the other big thing is that most of us and this is what i did for years as well have your pay land in a bank account you have a debit card linked to that bank account and you've now just screwed yourself from a psychological perspective you'll you'll never be as good with money until you change that habit and almost you know probably 99 of aussies are in that situation

Starting point is 00:03:17 right now your pay lands in a bank account and you have access to that bank account it's crazy once you understand the psychology absolutely batshit crazy i totally agree now there's an allied exercise to this which and you've touched on uh in the green room and that and that's people's misuse of offset accounts. Do you want to share a little bit of light on that one as well? Yeah, so one of the big myths in our industry is the, you know, oh, what you do is get the offset account and put what you pay in the offset account and have a credit card,

Starting point is 00:03:43 leave the offset account, get 55 days injury-free, and we're going to imagine you pay off your mortgage. And it's all slogan mirrors and utter bullshit, and no human can do that properly. And I go, oh, but I did it, I did it, I paid my mortgage. I actually had a guy once said to me, I paid my mortgage off in seven years because of doing that. I said, okay, how much was your mortgage?

Starting point is 00:04:01 he said it was $700,000. I said, okay, well, based on the interest rates at the time, for you to pay your mortgage off at a $700,000 mortgage in seven years, you pay massively more towards that mortgage by earning lots of money. So it was paying lots of money towards your mortgage. I said, what was your average credit card bill? And he said, $7,000 a month. I said, okay, that's a pretty big credit card bill, by the way. By the way, this is a guy who was spruiking property. He was making a fortune off selling off the plans. So he's making really good coin. He goes, anyway, seven grand. I said, okay, let's just imagine for a second, your credit card bill is seven grand a month. The only benefit from having that money

Starting point is 00:04:41 sitting in the offset account is that $7,000 sitting there for a year. Now interest rates at the time around 5%. 5% of seven grand is $350. So you save $350 a year by using that strategy. that did not pay off your $700,000 mortgage in seven years. In fact, $350 a month, $350 a year, sorry, it takes something like 10 years before you save one month's worth of repayments in theory, but in practice, you've got to pay a $395 annual fee to get the bloody thing. You've saved nothing.

Starting point is 00:05:15 You don't think the banks are idiots. They're not going to give you the money for nothing. And I go through that exercise with people all the time. you say well okay supposing you didn't manage that seven grand on a credit card supposing you actually tried to stick to a sensible amount like five grand a month for example and you just plop five grand a month into an account that was just for spending you would stick to that five grand because that's what you've got and as human beings we're brilliant at using the resources we've got available to get the outcomes we want that's

Starting point is 00:05:45 what we're good at that's what biology has trained us to be good at doing yeah we get when we use a credit card none of that kicks in we just we're just acting like baboons yeah totally agree well that's a great segue in into your book spending fast and slow so to kick off on that and max why did you write it what are the key messages and and who's it best suited for well so why did i write well i'm i we learn from my mistakes right and as far as i'm concerned if i've learned from my mistakes can i help other people learn from my mistakes too can you please not make the same mistakes i did um and and so for 12 years my wife and i so my wife and i very different personalities with money i was raised in a family of nine kids no money as a tight ass and i'm still a tight ass

Starting point is 00:06:33 today in most areas of my life my wife on the other hand she was also raised with very little money the difference is in her household it was normal to gamble now when you're in a gambling household you've either got no money because it was all spent on the wrong stuff or you get the win and when we get the win we go and get the washing machine and we go and get new stuff and we have all stuff so it's like when when you've got money you spend it as fast as you can and so my wife very much is is what we call a shopaholic she loves to shop now when you put those two together what you end up with is a balanced family where you pay the credit card bill off in full but it's always a bit bigger than you think it should be um and at the same time uh you never really get

Starting point is 00:07:16 where you want to go and you have arguments all the time you're always at loggerheads you know every time i saw the credit card bill it's like you know my wife my wife would get dressed to go out in the evening and i'd look at what she's wearing and instead of going oh you look you look nice to you i'd be going where did you buy that how much was that and i love the fact that you're laughing so silently i don't know if that comes across in the podcast with me, you're sitting there laughing your head off and I can't hear a bloody thing. I'm not trying to make too much noise, so I interrupt what you're sharing with us, Max.

Starting point is 00:07:52 I've never quite seen someone laugh so hard without making a noise, but it's making me laugh too, so thank you for that. But yeah, so this is the dichotomy. So why did I write it? I wrote it because we worked out by mistake how to fix the problem. once we worked out that what we were doing is the right thing and the way we're fixing it was the right thing i tried to then help more people i started coaching people when i saw people in the mortgage business i said oh what we maybe need to do is do this and organize your money this way

Starting point is 00:08:22 and you'll maybe get better and the more i started showing other people the more i realized that other people that and on average just as bad as me and my wife were and on average can go so much better and do things so much better and also we've refined and got it a better and better and better and better process as we've gone so i've actually learned i've learned as much from my clients and coaching this over the last 10 years as i learned by you know accidentally doing stuff and figuring out work and then i found other things that work even better as we go and so i just i don't want to waste knowledge that knowledge is in my head but i didn't mention this before but i've been obsessed with dying since i was in my early 20s and that's because at age 47 my dad had his first

Starting point is 00:09:03 heart attack and at 54 he had a quadruple bypass and i never thought he'd make 60 now thankfully he made 76 um died a couple of years years ago but i've been obsessed with assuming i'm going to die i don't want to die having not shared this message with other people and that's what drove me to write the book yeah i love that it's again the more you see the more i realize we've got very similar outlooks because uh in my own book uh max i actually worked out my drop dead date at the end because there's actual actuary uh yeah and based on your hereditary and your my longevity.com.au is is a site you can go to and find that out yeah so you know based on that prediction i haven't updated for since i've written the book but uh i'm due to drop dead

Starting point is 00:09:55 when I'm 77 so I haven't done a whole heap of years left and it's a great motivator to me a lot of people go oh that's that's really doom and gloom why would you focus on that but I find it really inspirational because it means I've got a limited time to enjoy my time on the planet and try and help as many as I can along that pathway so I love we've got similar motivations there I now want to switch gear in relation to some of the core elements of the book and I'd love for you to talk to us about the intricacies of human decision-making and the cognitive biases and heuristics that lead us astray when it comes to money and spending, Max. Yeah. So you don't realize how gullible we are until you see some psychology studies that

Starting point is 00:10:37 explain it. But Daniel Kahneman put it best when he described the way our brains work, and we have two types of thinking. There's the fast thinking, which is system one. He calls it system one. And it's the intuitive. It allows us to make quick decisions. We need to be able to do that as humans we don't need to sit and analyze a problem you know if there's a saber-toothed tiber coming for us we need to hide run or fight we don't need to sit there pondering which of those is the best thing to do um looking at all the available data and everything else that's doing a spreadsheet is that exactly right run five or hide you know that's your only options pick one do it it's you know and you'll survive and that's how our ancestors survived and so as

Starting point is 00:11:22 human beings we have the ability to make these fast decisions and over 90 percent of the daily decisions we made are made fast they're made just on assumptions that this is probably okay now system two thinking is the slow deliberate style of thinking which is when we're analyzing things and the best thing way and think about this in in terms of when we're spending money is when we're going to buy buy a house we tend to spend a lot more time and effort looking into it and thinking about it and analyzing the properties and understanding how it's going to work with that's a slow decision whereas you know uh buying you know spending four dollars fifty at maccas on the way home on a portion of chips that's a very fast decision we assume it's probably fine the

Starting point is 00:12:03 problem is is that when we add up all those fast decisions from a money perspective they add up to more than we spend on the stuff we think we're spending our money on um and on one of the you probably had this conversation thousands of times too you say to people excluding the rent in the mortgage, how much do you spend each month? And they'll go, oh, you know, a couple of thousand dollars. And they've gone, oh, this is my electric, my gas, my council rates, my water rates, my phone bill, my insurances. They add up all the things, groceries, add it all up. And then they go, well, if that's about 2,000 bucks, we'll add a little bit on for, you know, entertainment. Call it two and a half grand. And then you go, hmm, that's interesting because

Starting point is 00:12:46 according to the bank the household expenditure measure says that you for a household your size you should be spending about three three and a half grand so it seems like you're spending really low um now if i ask you another question um how much do you put on you use a credit card oh use a credit card how much how much is your average credit card bill oh it's about four grand well then you spend four grand a month then but but people are out by that much they think they're spending two two and a half and they're spending four or like this bloody spruiker spending seven grand a month i've got clocks right now spending twelve thousand dollars a month as a household of three they're on great money but but they're worried about their mortgage they're worried

Starting point is 00:13:28 about their repayments and they don't see that that 12 grand a month is the problem yeah he's tough so can you help us then uncover the sort of these invisible forces that shape be our financial choices and the money traps that may actually be holding us back. It's not just money traps. Yeah. So the thing is, there are opportunities to buy stuff absolutely everywhere. If you're at your phone, there's stuff getting advertised to you. I had an interesting conversation with a journalist on the weekend, and he said, oh, you're talking

Starting point is 00:14:02 about impulse shoppers. Now, the interesting thing there is we think about, oh, you're an impulse shopper. My wife's an impulse shopper. week she'll just go and buy a pair of shoes on impulse but what about the guys that spend four dollars on the takeaways or or these days four dollars on a soft drink yeah you can you can drink from a tap for free or spend four dollars on a soft drink and you go oh that's only four bucks it is only four dollars but if you do that twice a day over the course of a month that's not four dollars anymore that's 240 a month that's probably as much as she spends on the bloody shoes or

Starting point is 00:14:36 whatever and and so it's those little things that add up and now unfortunately money is in one generation money has gone from being a real physical thing to being a uh an abstract concept of digits in the sky somewhere um that that we just don't really quite fathom in one generation and it's we've never had this before if money's gone from being a physical thing where i've got money i give you something you give me something and i understand that and i now know i've got less and psychologists talk about the pain of paying i feel the pain of paying because i paid and i've got less money back in the days when we used to use cash for those that remember them you could have a 50 on a note and you always felt bad about breaking the 50 hardly and so you'd say no to

Starting point is 00:15:23 something not because you didn't have the money because you had 50 bucks in your hand because you You didn't feel it was worth breaking the 50 for a $4 fries. And so you wouldn't break the 50 until it was something more substantial. And then once you broke it, the money's gone and it would disappear. And everybody knew that. Everyone knew that money disappeared. And that's why we used to hide it at home, hide it at home in envelopes, in tins, under the mattress. Even in a bank.

Starting point is 00:15:47 Most people didn't have bank accounts that they use the way we do now. Banks were places where you put money you didn't want to touch. Well, it's really interesting, Max, and you've probably seen this of recent, but the number of cases I'm now hearing where if you go into a bank branch and want to pull out cold hard cash, it's pretty difficult now. A lot of the banks don't offer the cash that allow you to do that anymore. So the whole system is really now orientated around this intangible nature of money, which means that we don't understand appreciators value and therefore i can be spending it without even

Starting point is 00:16:24 thinking about it now i want to give you an example of something this is a crazy study true study psychologist did this study if you think you're in control of your money and you think that even groceries is a bill then i want to tell you this story so they've they've lined up people in a supermarket and they've asked them one question on the way in and then they've measured their spending through the supermarket on the way out. That's all they've done. But they had two groups. The first group got asked, how much money have you got in your retirement fund? We would call it super, but it was in America. How much have you got in your retirement fund? And they would answer the question. The question would be tens of thousands or hundreds of thousands of

Starting point is 00:17:01 dollars. The second group of people were asked, what's the smallest note you've got in your wallet? And they would say, oh, it's a dollar or it's $5 or whatever. Then they did their shopping. What do you think was the result of that shopping trip? I can guess, but the ones who said they had $100,000 would spend a lot more because there's this – It's not a gross three-bill. Just because they were thinking of a big number, everything in the supermarket felt irrelevant.

Starting point is 00:17:31 And then, yeah, I'll treat myself to the nicest steak and buy myself some treats and do everything else. Whereas the people were thinking about that $2 or $5 note, which is, geez, everything's expensive these days, and cutting back. And so they walked out of the supermarket spending like 20-odd percent less. That mental priming is something that advertisers do extremely well now. So, you know, our whole system is really stacked up against us. Absolutely.

Starting point is 00:17:59 And it's actually getting worse as a consequence of this intangible nature that money's now taken on. So tell us about the restructuring the flow of money and the fast and slow money system that you talk about in the book. So fundamentally, we need to understand that the way that we're all paid into a bank account that we access, that is wrong. It's flawed. It doesn't work. Now, lots of people have followed other systems like the barefoot system, and they've got their different buckets, and buckets work. But they still come from a flawed concept of our pay lands in an account that we can access. that's the equivalent of dad saying oh i've got i'll give you you know your hundred dollars for

Starting point is 00:18:37 your groceries for the week and put the rest in my pocket whatever's in his pocket is getting spent it's going to disappear much better to put all your money into another system so firstly we talk about double banking anyone using one bank account for one bank so even people following the barefoot system is oh everything's all the orange bank ing yep and everything and they've got their card for this and their card for that and whatever it's all in ing and so once they run out which they're going to do because they're managing their money on a pay cycle which often is monthly and money always runs out in week three then then they go through the the the bank account switch money over and then they spend it and then they go oh but i had to spend money

Starting point is 00:19:16 because of this it was because of the electric bill was due i had to dip into my savings because of christmas i had to dip into my savings because of the rego oh you did it you had to dip in your savings because you spend all the bloody money every pay when you flip things around the other way and budget in reverse so instead of budgeting for the hard stuff the electric the gas and whatever of course you have to work out what those things are going to cost for the year not for the pay for the year because over the course of a year they'll average out yeah work out what you want to spend and give yourself that as spending money yeah not on a pay cycle that doesn't make any sense weekly we all have a weekly routine we see our friends we go shopping we play football

Starting point is 00:20:02 we do what we do weekly yeah and this was by the way one of the things i learned from clients i didn't we didn't do this ourselves you hide the money in a bank account you can't touch no card access um and then you give yourself money every week and not what you think you want to spend but enough just enough to cover the groceries which is not a bill to cover the groceries and whatever else you do on a routine like coffees lunches all that kind of stuff whatever you need for your routine once you get every week now by the way if you do your grocery shopping and it's a cheat week get takeaway go out for dinner do whatever you like it's fine but if you just get went did your grocery shopping it was one of those weeks when you had to buy all

Starting point is 00:20:45 the meats and you had to buy the washing powder and everything else and there's no money left well then guess what stay on the weekend and don't do the stuff that you would have done but you're square for the week and it's fine don't worry there's more money coming next week and any of us can cruise through two to three days with no money but none of us can cope with half a month absolutely that's the the first the first thing is just using two different banks one is one is just for that spending money yeah okay so yeah moving on from there are there so but moving on from there, I want to take a step back. The reason I want to take a step back is because there's absolutely no point in budgeting whatsoever if you haven't got something else

Starting point is 00:21:27 to do with your money. So if you haven't set yourself any goals to save up to buy a home, to pay the home off, to save up to buy an investment property, to save up for a lovely holiday, to save up to buy a new car, if you haven't got any goals to do any of that stuff, then then there's no point in anything so we always start off with your goals and then once you understand the goals then you've got your basic premise of money lands in an account you can't touch you get money every week and then money goes towards the goals and you have a separate account for your holidays and a separate account for the car and a separate account for the future or the investment property or whatever you're doing next the more you separate those

Starting point is 00:22:09 things out the easier life becomes and it also tells you why you're not spending too much this week but we also found that if you only manage money week to week you feel broke and if you feel broke 52 weeks of the year you'll end up dipping into the other buckets so um we call it fun barefoot call it splurge but he mixes holidays and splurge which are completely different things but you need to buy gifts you need to uh buy gadgets and clothes and other things from time to time and we do that i don't care when you're paid monthly and we land that money on the first because if i say to you you know what's happening in your life in november your brain quickly goes oh november well this is this birthday and this anniversary and this is

Starting point is 00:22:57 happening yeah december we know it's christmas or whatever you're celebrating you know january might be something else but but when we we then know that that money is for that purpose and therefore we best not spend it on the other stuff and if there's nothing else happening go to town blow it get takeaway seven nights for that week if that's what you want if that's what makes you happy but do things that make you happy and make a conscious decision to do things that make you happy once a month that's all and then and then and then the weekly money takes care of itself yeah i love that so so once you've got those foundations in place what what are your suggestions on where to from there so the book itself really only takes us to to doing that

Starting point is 00:23:43 because if we can just do that and do it properly and understand why nearly that is not that and and because a lot of people say oh yeah i i you know because i used to teach this before to people and then they'd come back to me and they go oh i did what you said and i went no you didn't do what i said at all you compromised it to suit what you were doing before so the book goes through the intricacies of why we need to do precisely what's recommended and how to vary it where the variations work and how they work whatever but after that i've got another my first book is all about property investing i'm a i love property investing putting money into property is brilliant i'd do it more of it but if you if you want to put more money into super put more money in super

Starting point is 00:24:24 want to put more money shares put more money in shares you want to pay the house off the average person who's gone through this program has knocked 10 years off the house off their mortgage and that saved hundreds of thousands of dollars absolutely right and it's and it's not that difficult you don't you don't notice any difference day to day that's that's that's the key bit here and now something i'd love your thoughts on max because where there's something that's troubled me for a long time is that you know in this age of instant short-termism how do we motivate others to actually embrace delayed gratification so that they're actually investing themselves now for their long-term benefit any thoughts on that so here's here's an interesting

Starting point is 00:25:01 psychological um uh point here is that we often often life's a bit crap and we look for something to give us a lift and we know that buying something will give us that lift but they've also done studies about writing a list so the benefits of having a monthly spending pot is you've now got money landing but it's landing you know what it's landing it's landing on the first my wife she started doing this by herself and i've later worked out that it's a brilliant thing to do and i've seen the studies that back that up is that she writes herself a list and she says oh i've seen that new thing i want i'm going to put on the list now guess what your brain does when you write something like that on the list it gives you that dopamine hit exactly the same as if you

Starting point is 00:25:47 just bought it but with no buyer's remorse afterwards so typically what happens when you buy something you get this surge in dopamine when you buy it and then afterwards you start to go oh god well what's my partner going to say about that or should i have done that or do i really need it and what if it doesn't fit and what if i don't wear it or what if it's not right and you get that and so you get this deep dive into like you know the pit and then you end up feeling worse and of course how do you get yourself out of that pit don't spend some more money that's right so one of the best things that you'll ever do is writing a list of things that you're thinking about buying. And then when the first of the month rolls around, you go, oh, well, I've still got a

Starting point is 00:26:29 new iPhone on the list and I've still got this and I've still got that and the other. Which one of those am I going to choose? And that now is engaging system two. We're now thinking, which one do we want? Which one do we think we'll get more value out of? And what happens is you might have 10 things on the list and pick four. And then go, well, I might leave the six on the list or I might knock one or two off. But if you leave something on the list for two to three months, you then go, it's never going to make the list. It's never going to make the cut.

Starting point is 00:26:57 It's never going to get to the top. I'm not going to buy it. Why am I kidding myself? Cross it off. Love it. It's so much better to cross something off a list that you didn't buy than to put something, than just to buy it, you know, because it's pretty good.

Starting point is 00:27:11 It's fine. I love that. It's such a simple exercise that has, as you say, the immediate benefits from the dopamine hit, as if you bought the thing anyway, but it's building in that system to thinking that is the part that most people don't get around to. I have a second list, so my list is different to my wife's list. She has a to-buy list. I have my own list, which is things that make me happy list. And so when I'm feeling down, I look for my list of things that make me happy, and it could be going for a walk outside.

Starting point is 00:27:45 It could be phoning a mate or phoning a brother or sister because they're a bloody load to them. But often when you're feeling a bit down, you don't feel like reaching out to someone. But at the same time, nine times out of ten, if you just rang up a mate or rang up a brother or sister and say, hey, look, I was just thinking about you and just wanted to say hi, And they go, oh, yeah, hi, how are you doing?

Starting point is 00:28:10 Oh, I've just been a bit down, actually, and, you know, just wanted to hear your voice. And I go, I said, oh, no, I'm glad you called, and I wanted to catch up with you this. And all of a sudden, within a few minutes, they feel valued as a friend, valued as a brother or sister, because you called them when you weren't feeling at your best. And so you've given them the opportunity to create value

Starting point is 00:28:30 and feel good about themselves. And they could have been just about to fall into their own little pit of, despair or whatever it is, and you've just lifted them from it because they feel good about themselves because they made you feel good. And then at the end of the call, wrap it up and say, I'm so glad I called you. It's so great. We must do this more often. We always say that. We must do this more regularly. We must do this more often. And so I have my list of things that make me happy that don't cost money because I'm a tight ass. I love it. I love it. There's a great couple of awesome, very usable and immediately actionable strategies that can make a world of

Starting point is 00:29:07 difference. Max, I now want to shift into what I affectionately refer to as the ambush fastball round, where I give you a blindfold and cigarette and ask you the quick questions that everyone wants to glean your words of wisdom on. The first of those, and you've shared a number of these with us over the last two episodes, but what's your favorite quote and why? See, one of my favourites is the enough quote, which I gave you before. But there's another quote that I love. I don't remember who said it, but I remember hearing it. And it was, everyone is always right from their perspective. now once you embrace that it makes you want to understand what their perspective is rather than trying to force your perspective on them because they believe they're right they don't believe that they're wrong they're not saying it because they they're an idiot they're not saying

Starting point is 00:29:59 because they they think they're just looking at the world differently to you are and so asking and understanding their perspective is a very valuable thing to do yeah i love that i always has said that there's three sides to every story. There's your side, my side, and the truth. And it's how we perceive things that creates a difference. So beautifully said. Back in the literary field, apart from your awesome book and a couple of books that you mentioned during our chat,

Starting point is 00:30:23 what's the top book that you'd recommend we read and why? You see, I was going to go with... Thinking Fast and Slow is a good book, but it's quite thick. It's quite hard work. The Bible, there's no doubt. But I'd have to go with Robert Kiyosaki's Rich Dad, Poor Dad just because it's such an easy read and the analogy is beautifully done. It is, yeah, and it's as applicable today as it was when I read it back in the 1990s, so it's a lot of timeless pearls in there. Now, switching back in the investment arena for a moment, what's the best and the worst piece of investment advice that you've ever received?

Starting point is 00:31:01 Yeah. So the worst investment advice I received. So we sold the family home to go buy property in America, right? But when I did that, I had to break a fixed rate loan. And so I tried to transfer the fixed rate loan onto another property. And someone said, oh, these over 55s up in Eagleby in Brizzy, mate, the yield on those is phenomenal. You want to get one of these? So I went, yeah, great. And I went and signed a contract to buy one, only to find, firstly, I couldn't get a mortgage on it and they wouldn't transfer the mortgage, so I paid the break fees anyway. Secondly, I owned that property for five years and I sold it at a loss. I bought it for $80,000 and I sold it five years later for $78,000. And that high yield he was talking about was before fees. And he's in an over 55s complex and you have to pay the over 55s management fee because

Starting point is 00:31:52 they've got on-site managers and stuff. and that was a hundred and something dollars a week so that was the worst advice i received and the best what about the flip side oh would it have to be go buy property in america i mean that was just amazing to what you know to go and buy property you know when we did 2011 i bought 2010 i picked up the advice but i acted on it which a lot of people didn't bother doing um uh that was that was amazing advice um yeah i love it now we talked a lot about habits during our conversation breaking bad ones and creating new ones so what's a a personal happy habit or daily discipline that you employ that's contributed most to your success max i don't know whether it's

Starting point is 00:32:32 contributed most to my success but what i find works for me really well starts my day off really well is um opening up the blinds first thing in the morning and looking out at the water views i've got and but just seeing the sunlight so seeing bright sunlight and then taking a cold shower once you do that you can face anything for the rest of the day and you feel good you can't help it you feel good i've been trying to do that uh and i've been really hit and miss i'll be perfectly up front i've done a lot of the wim hof breathing uh stuff that really oxygenating and energizing the body but uh there's certainly times in the winter where that uh you know 10 to 15 seconds into the cold shower i'm going nah that's that's enough for me i give you the

Starting point is 00:33:17 billions to keep going max i've stuck with it i in fact i first started doing this on my grandson's birthday and and he turned he has another birthday in two days time so i get my anniversary in two days time so it's it's just one of those things that you just go no i'm gonna do it i'm gonna do it and the thing is what it's the message it sends to your brain is like if you say you're going to do something you do it and and so just getting on doing it of course make the bed is the other one that's the other part of the routine i forgot to mention get out of the bed make the bed when i tuck in my wife's side of the bed i open up the blinds look outside of the beautiful blue water then i get in the cold shower and then you've already accomplished a lot for the day

Starting point is 00:33:57 and and you haven't even started yeah i love that because the resilience that that creates by just such a simple act in the cold shower uh in in the self-belief of that reinforces as well There's a raft of health benefits in terms of increasing your immune responses. There's a whole bunch of health benefits that go with that. So I haven't given up on the cold showers, but I certainly have been a bit hit in that regard. So I'm going to get you to keep me honest on that one, Max. By the way, it also told three splashes on the face is actually the best way to get in. Yeah, okay.

Starting point is 00:34:32 Good to know. It mimics diving into cold water, which we're designed to do as human beings. so with a couple of hands three splashes and then you can wash the rest of yourself because your body's now kind of like ready and it's harder to back out of it then as well yeah beautifully said and it breaks through the comfort crisis that most of us in this current world are a bit like frogs in a boiling pot where we've got so comfortable that anything outside becomes a headache and therefore those resilience and commitment muscles start with on the vine but It's been an awesome, awesome chat, Max.

Starting point is 00:35:08 Is there anything else that we haven't covered that you want to say before we close out? Yeah, I want to say, and it's something I learned from my mother, is that money is a taboo subject in Australia and it should not be. Is that please, please, please have a conversation with someone about money. If you only feel comfortable talking about it with a broker or someone, that's fine. But talk to friends, talk to family, because they are facing what you're facing. They're going through what you're going through. They understand it. And never be frightened of talking to kids about money because ignorance is no excuse.

Starting point is 00:35:45 And that's what you're giving your kids if you let them get to the age of 18 or 20 without ever speaking about money. So please talk about money. Talk about it. Yeah, I love it. Really sage at moss. And don't forget to come back to the book Spending Fast and Slow. So this is recorded on video as well. So if you see the video, I've got it on camera here.

Starting point is 00:36:07 We're definitely going to give it another plug in a minute. If we put a bow around our two conversations over the last two episodes, what are the key takeaways that really bring it all together? Firstly, get your fundamentals sorted out. Once you've fixed your spending, and I mean not fixed at a low level, but it's fixed at a level you're comfortable with. Then you've got a chance to save and invest the difference. But investing is all about taking action.

Starting point is 00:36:38 If you don't take action, you're just a bystander. And so please, please take action. I know that I can. You were talking just then about, you know, comfort bubble. I was in that. I bought my first investment property at age 39. You know, it was so many years, decades wasted that I could have been investing. But nevertheless, if I started at 39 and at 55, I'm in a good position, it's possible.

Starting point is 00:37:05 You don't realize how much time you've got left. Even someone who's 55, you've got another decade to go of earning money. A decade's a long time in property. It's a long time in shares. It's a long time to make money. Just do something. Take action. 100% agree.

Starting point is 00:37:21 And I've always said, Max, it's never too late to start, but it's always too late to wait. spot on final question before we do the wrap if i asked you to get invested what does that mean to you yeah well it's it's take some action take some action and do something that's going to be go towards your future ultimately though set some goals there's no reason to be invested if you don't have some goals goals for your life and know that you're not going to work forever you are going to have to retire at some point and what does life look like then so please being invested is about setting yourself some goals and then working towards doing them and investing is just a tool to get there like anything else or a vehicle to get it totally what uh for those

Starting point is 00:38:12 that have really resonated with your message like i have max uh how can we get a copy of your book mate uh so it's available on booktopia on out on amazon it's also in uh most of the big bookstores although I've been told it's not in some of the regional bookstores which is a bit annoying but it is in most bookstores and of course you can also hit our website oldgoldenecks.info and there's a link in there as well

Starting point is 00:38:39 Perfectly done We'll put a link in the show notes and I just want to mention now that as a special reward for Get Invested listeners you're very generously giving away a copy of your great book Spending Fast and Slow Mate, I'll give a bunch of copies away Okay. Very generous indeed. But we want those that are interested to actually take some action as we've talked about consistently during our chat. And to do that, I want you to email me at hello, that's H-E-O-O at knowhowproperty.com.au. And I want you to put spending fast and slow on the subject header. And then I want you to answer the question, what's your top takeaway from today on Max's discussion on spending fast and slow?

Starting point is 00:39:20 And I'll share that with Max and then Max can send you a bunch of copies of that fantastic book. So thanks again for your very generous time today, Max, and very keen to keep the conversation going. Mate, thanks so much for having me. It's been an absolute blast. I've really enjoyed it. Thank you. Thanks for tuning in to Get Invested on the Property Hub podcast channel, your home for property investment insights and inspiration. And don't leave yet until you've taken the next step towards living by design.

Starting point is 00:39:49 by getting my award-winning book, Get Invested, absolutely free when you sign up at knowhowproperty.com.au or bushymartin.com.au. And finally, make sure you subscribe to Property Hub to get your weekly dose of Get Invested inspiration along with every episode of Realty Talk, Australia's leading property show for red-hot property investing news and insights direct from industry leaders and influencers. Remember to always get invested in your knowledge

Starting point is 00:40:19 and I look forward to seeing you next time.

Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - Max Phelps on Spending, Fast and Slow

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