Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - The secret link between patience, spending and wealth with Max Phelps

Starting point is 00:00:00 Welcome Freedom Fighters, what if I told you that financial freedom doesn't usually come from moving faster, but from slowing down? What if the real reason so many people never build wealth isn't because they don't care, it's because they keep reacting instead of deciding? Reacting to ads, reacting to emotions, reacting to stress, to convenience, reacting to all those little dopamine hits that feel good now, but quietly rob them of the life that they say they want later. So let me put it this way. Most people don't spend money. Money spends them, like a dog dragging its owner down the street with a lead in its mouth.

Starting point is 00:00:43 They think that they're in charge, but everyone watching knows who's really running the show. And that's why the second part of my conversation this week with Max Fels is such an important follow on from part one last week. Because once you've looked honestly in the mirror, once you've started to see the habits, your blind spots and the little money leaks that are holding you back, the next questions become, how do I take back control? How do I stop living financially on autopilot? How do I make my money choices match the future that I say I want? Because that's what this is about. And as part of this year's rolling get invested journey introducing you to the full property wealth clock we're now firmly in the e

Starting point is 00:01:27 for examine stage not the fun fair not the fantasy not the highlight reel but the examination room where you stop guessing and you start diagnosing your capacity your capability your behavior and your money symptoms because before you can build sustainable property wealth you need to build sustainable financial discipline. Otherwise, you're trying to stack bricks on a jellyfish. Looks ambitious, but it ends very messy. And today's world, that matters more than ever. Because everywhere you look now, someone's yelling at you, buy this, do that, scale faster, get rich quicker, follow the trend, trust the algorithm, believe the hype. But here on Get invested, we do things differently. This is not artificial intelligence. This is authentic

Starting point is 00:02:21 intelligence, real human insight, hard-won experience, common sense, and the voice of truth that you can lean on when the world gets noisy. And if you want the full step-by-step system that's behind the Property Wealth Clock that successful investors will integrate, check out the recently released Property Wealth Program in the show notes where you can get started for absolutely free. now on this episode max starts to unpack something most people miss the link between patience friction awareness and wealth and i'm telling you now if you didn't listen to part one first go back and do that now because part one shows you the trap and today's part two starts to reveal the escape route not with gimmicks not with guru glitter but with practical truths that can change

Starting point is 00:03:11 how you think, how you spend, and ultimately, how you live. And that matters. Because financial freedom isn't built in big dramatic moments. It's built quietly, at the checkout, on the app, in the pause, in the wait, in the small decisions that nobody sees, but your future life will feel. So settle in, because this one might just help you stop leaking tomorrow through today. And let's get started and let's get invested in part two of my great chat with Max Phelps. See you on the inside. Subscribe now and join me and get invested in the life that you really want. Let's get started.

Starting point is 00:04:19 Hi, Freighted 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? 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

Starting point is 00:04:53 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 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 into your book which is a exactly yeah i love the book having having sped read it uh there's

Starting point is 00:05:41 some really uh 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 were 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

Starting point is 00:06:28 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 right now you 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 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,

Starting point is 00:06:58 oh, what you do is get the offset account and put what you pay in the offset account, have a credit card, leave the offset account, get 55 days interest-free, and you're going to magically 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

Starting point is 00:07:17 because of doing that. I said, okay, how much was your mortgage? 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 um he goes anyway seven grand i said

Starting point is 00:07:53 okay if let's just imagine for a second your credit card bill is seven grand a month the only benefit from having that money sitting in the offset account is that seven thousand dollars sitting there for a year now interest rates at the time around five percent five percent of seven grand is 350 so you save 350 a year by using that strategy that did not pay off your 700 000 dollar mortgage in seven years in fact 350 a month it's 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 395 annual fee to get the bloody thing so you've saved nothing yeah you don't think the banks are idiots they're not going to give you give you the money for nothing and i go through

Starting point is 00:08:39 that exercise 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 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're just acting like baboons. Yeah, totally agree. That's a great segue into your book, Spending Fast and Slow. So to kick off on that, Max, why did you write it? What are the

Starting point is 00:09:24 key messages and who's it best suited for? Well, so why did I write it? We learn from our 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 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

Starting point is 00:10:08 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 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

Starting point is 00:10:49 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 you're laughing so silently i don't know if that comes across in the podcast but 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 i've never quite seen someone laugh laugh so hard without making a noise uh but it's making me laugh too so thank you for that but but yeah so you this is this is the dichotomy and that 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

Starting point is 00:11:31 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 oh what we maybe need to do is do this and organizing money this way 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

Starting point is 00:12:10 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 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 gonna 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

Starting point is 00:13:01 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 uh when i'm 77 uh so i haven't done a whole eight 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 uh i've got limited time to enjoy my time on the planet and try and help as many as i can along that pathway so where i love we've got similar motivations 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 explain it.

Starting point is 00:13:56 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 tiger 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 exactly right run bible 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 human beings we have the

Starting point is 00:14:41 ability to make these fast decisions and over 90 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 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 problem is is that

Starting point is 00:15:22 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 you've probably had this conversation thousands of times too you say to people excluding the rent and the mortgage how much do you spend each month and they'll go oh you know a couple thousand dollars and they and they and they've they've gone oh this is my this is my electric my gas my council rates my water rates my phone bill my insurances they add up all the things that groceries add it all up and then they go well if it's about that's about two thousand bucks we'll add a little bit on for you know entertainment call it two and a half grand and then you go that's interesting because

Starting point is 00:16:04 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 and they're worried

Starting point is 00:16:46 about their repayments and they don't see that that 12 grand a month is a problem eerie stuff so can you help us then uncover the sort of these invisible forces that shape our financial choices and the money traps that may actually be holding us back and it's not just money stress yeah so 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 about impulse shoppers. Now, the interesting thing there is we think about, oh, you're an impulse shopper.

Starting point is 00:17:26 My wife's an impulse shopper. She'll just go and buy a pair of shoes on impulse. But what about the guys that spend $4 on the takeaways? Or these days, $4 on a soft drink. yeah you think 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 whatever and and so it's those little things that add up and now unfortunately

Starting point is 00:17:59 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 something not because you didn't have the money because you have 50 bucks in your hand

Starting point is 00:18:44 because you didn't feel it was worth breaking the 50 for four dollar fries yeah 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 that we used to hide it at home hide it at home in envelopes in tins under the mattress even in a bank most people didn't have bank accounts that they use we the way you do now banks were places where you put money you didn't want to touch but on the way it's really interesting max and you've probably seen this of recent but uh the number of cases i'm now hearing where if you go into a bank bank branch and want to pull out cold hard cash uh it's pretty difficult now a lot of the banks

Starting point is 00:19:26 don't hold the cash that allow you to do that anymore so you uh the whole system is really now orientated around this intangible and nature of money which means that we don't understand appreciators value and therefore i can be spending it without even 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

Starting point is 00:20:10 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 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 it's five dollars or whatever then they did their shopping what do you think was the result of that shopping trip i can i can guess but the the ones who said they had hundreds of thousand dollars would spend a lot more because of this you can feel nothing more yeah it's not a gross three built they spent just because they were thinking of a big number everything in the supermarket felt

Starting point is 00:20:48 irrelevant and that then maybe i'll treat myself to the you know the nicest steak and you know buy myself some treats and do everything else whereas the people were thinking about that two dollar or five dollar note which is geez everything's expensive these days and cutting back and so they walked out the supermarket spending like 20 odd percent less that that mental priming is something that advertisers do extremely well now so so you know that our whole system is is really stacked up against us and it's actually getting worse as a consequence of this intangible nature that money's now take us on so tell us about the the restructuring the flow of money and the fast and slow money system that you talk about in the book yeah so so fundamentally we need

Starting point is 00:21:31 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 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,

Starting point is 00:22:13 it's, oh, everything's all the orange bank, ING. And they've got their card for this and their card for that and whatever, but 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 they go through the bank account, switch money over, and then they spend it. And then they go, oh, but I had to spend money because of this. It was because of the electric bill was due.

Starting point is 00:22:38 I had to dip into my savings because of Christmas. I had to dip into my savings because of the rego. No, you didn't. You had to dip in your savings because you spent 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.

Starting point is 00:23:01 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 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 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

Starting point is 00:23:48 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 to do grocery shopping it was one of those weeks when you had to buy all 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

Starting point is 00:24:25 one is one is just for that spending money yeah okay so yeah moving on from there are there red 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 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

Starting point is 00:25:14 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 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 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 buy gadgets and clothes and other things from time to time and we do that i

Starting point is 00:25:59 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 happening yeah december we know it's christmas or whatever you're celebrating you know january it 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

Starting point is 00:26:45 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 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 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

Starting point is 00:27:30 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 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 of their mortgage and that saves hundreds of thousands of dollars absolutely right and 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 uh 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

Starting point is 00:28:08 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 but so here's here's an interesting 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

Starting point is 00:28:53 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 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

Starting point is 00:29:34 out of that pit and spend some more money that's right so 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 the new iphone on the list and i still got this and i still got that in 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 will get more value out of and what happens is you you might have 10 things on the list and pick four and then go 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

Starting point is 00:30:11 you then go it's never going to make the list it's never going to make the 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 that you should buy it you know because i love that it's such a simple exercise that has the 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 uh is that is the part that most people don't get around to so now i've got a 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

Starting point is 00:30:59 for my list of things that make me happy and it could be going for a walk outside it could be phoning a mate or phoning a brother or sister because they're bloody low to them um but and 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 you know rang up a mate or rang up a brother or sister and say um hey look i was just you know just just thinking about you and just wanted to say hi and they go oh yeah hi how are you doing so i was just feeling a bit down actually and you know just wanted to hear your voice and i go i said oh it's nice yeah 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 value as a

Starting point is 00:31:39 friend valued as a brother or sister because you called them when you weren't feeling at your best so you've given them the opportunity to create value and feel good about themselves and they could have been just about to fall into their own little pit of um you know despair or whatever it is and you 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 so great we must do this more often we always say that we must call we must do this more regularly 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

Starting point is 00:32:22 immediately actionable strategies that can make a world of difference. Max, I now want to shift into what I affectionately refer to as the ambush fastball round, which I give you a blindfold and cigarette and ask you the the quick questions that everyone wants to uh glean your words of wisdom on now the first of those and you've shared a number of these with us over the the last two episodes but what's your favorite quote and why i i see one of my favorites is is the enough quote which i gave you before but there's another quote that i i love like i don't remember who get who said it but i remember hearing it and it was um everyone is always right from their perspective now once you embrace that it makes you want to understand what their perspective is

Starting point is 00:33:08 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 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 said that there's three sides to every story there's your side my side and the truth and uh it's how we perceive things that creates a difference so what beautifully said um back in the literary field apart from your awesome book and a couple of books that you mentioned during our chat what's the top book that you'd recommend we read and why you see i was going to go with

Starting point is 00:33:48 thinking faster slow is a good book but it's quite thick it's quite it's it's quite hard work there's no doubt i'd have to go with um uh robert kiyosaki's uh rich dad poor dad just because it's such an easy read and the analogy is beautifully done it is yeah and and it's as applicable today as it was when i read it back in the 1990s so it's uh absolutely timeless pearls in there uh 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 yeah so the worst investment advice i received so i saw 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

Starting point is 00:34:34 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'm going to sign 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 eighty thousand dollars and i sold it five years later for seventy eight thousand dollars 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 they've got on-site managers and stuff and that was 100 and something dollars a week so that was the worst advice i received and the best

Starting point is 00:35:18 what about the flip side oh well it'd 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 when 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 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 that i've got and

Starting point is 00:36:02 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 whim off 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 and going that that's that's enough for me I'll give you the resilience to keep going, Max. I've stuck with it.

Starting point is 00:36:37 In fact, I first started doing this on my grandson's birthday, and he has another birthday in two days' time. So I get my anniversary in two days' time. So it's just one of those things that you just go, no, I'm going to do it. I'm going to do it. And the thing is, the message it sends to your brain is like, if you say you're going to do something, you do it. And so just getting on doing it.

Starting point is 00:36:59 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 at the beautiful blue water. Then I get in the cold shower. And then you've already accomplished a lot for the day 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 and the self-belief that that reinforces, as well as the raft of health benefits in terms of increasing your immune responses, there's a whole bunch of health benefits that go with that.

Starting point is 00:37:36 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. um is actually the best way to get in yeah okay good good tonight it mimics diving into cold water which we we 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 uh

Starting point is 00:38:10 most of us in this uh 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 uh been an awesome awesome chat max is there anything else that we haven't covered that you want to say before we close out yeah i i want to i want to say um and it's something i learned from my mother is that money is a taboo subject in australian and should not be is that please please please have a conversation with someone about money if you if you only feel comfortable talking about 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

Starting point is 00:38:54 through they understand it and never be frightened of talking to kids about money because it ignorance is is no excuse and that's what they'll be 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 advice so don't forget to come back to uh you know the the book spending fast and slow this is recorded on video as well so if you see the video i'll put it on camera here we're definitely going to give another plug in a minute so if we put a bow around our two conversations over the last two episodes what are the key takeaways uh uh that that really bring it all together yeah you firstly get get your fundamentals sorted out once you've once you've

Starting point is 00:39:43 So once you've fixed your spending, and I mean, not fixed at a low level, but 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. If you don't take action, you're just a bystander. And so please, please take action. I know that you were talking just then about, you know, comfort bubble. I was in there. I bought my first investment property at age 39. you know there was so many years decades wasted that i could have been investing but nevertheless

Starting point is 00:40:17 if i started at 39 and at 55 i'm in a good position it's it's possible you know 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 money just do something take action 100% agree and I've always said Max it's it's never too late to stay but it's dark but it's always too late to wait spot on the 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

Starting point is 00:41:08 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. 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 00:41:50 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 and I look forward to seeing you next time

Property Hub - Investment Insights & Inspiration - Get Invested: Part 2 - The secret link between patience, spending and wealth with Max Phelps

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