Ask an Advisor: Glen Hare – The most common questions Aussies are asking advisors

Bryce: [00:00:29] Welcome back to Equity Mates Investing. The podcast where we explore what's possible in the world of investing. If you've just joined us a huge welcome. My name is Bryce. And today we're back with another Ask an Advisor with none other than Glen Hare to chat through. As always, is my equity buddy, Ren. How are you? 

Alec: [00:00:47] I'm very good Bryce. Very excited for this episode. We love doing these Ask an Advisor episodes. We know that accessing financial advice is difficult for a lot of people. This is our way of trying to make that a little bit easier. Send us your questions and we will put them to some of Australia's best financial advisors. 

Bryce: [00:01:06] That's right. And as I said, we are lucky enough to be joined by Glen Hare. Returning to the studio off the back of a very successful episode last year, one of the most engaged, most downloaded asking advisors of 2023. So he's back again for 2024. And we have so many questions to cover. 

Alec: [00:01:25] But that's not all. No. Not because he was the most downloaded episode of 2023, but it didn't hurt. But we've asked Glen to join us for our first live event of 2024. We're taking this asking advisor concept, and we're taking it on the road. It's been great to get your questions and ask advisors. We think it will be even better to cut us out as the middleman and let you ask the advisors directly.

Bryce: [00:01:51] . IIt's gonna be such an easy night for us. 

Alec: [00:01:55] And so that's what we'll be doing on the 10th of April at the Chevelle Cinema in Sydney. If you're free and you want and you have a question that you want to ask, come and join us. It'll be a great night. It'll be a lot of fun. We're all gonna learn a lot. And, Glen's going to be exhausted by the end of it because he'll be doing all the talking. 

Bryce: [00:02:13] That's it. Glen specialises in, providing advice for accumulators. Or, in other words, those that are in that stage of a life of trying to build wealth. So, you know, 25 through 45 or whatever that period may be. Glen and his team specialise in that. So super relevant. You'll find through this conversation today that he brings a lot of case studies in real life examples of the work that he's doing as well. So, yeah. Can't wait. It's going to be awesome. equitymates.com/events. Grab your ticket. They are selling fast. It's only a matter of days away. 

Alec: [00:02:44] All right. Well, with that said let's get to our conversation with Glen Hare, the co-founder of Fox and Hare. 

Bryce: [00:02:54] Glen, welcome back to Equity Mates.

Glen: [00:02:55] Thank you. Good to be here.

Bryce: [00:02:57] So, Glen, today we have a number of questions that have come in from the community and we've bucketed them in terms of some of the big challenges that you often hear, coming through from all of your clients when they come and see you. Can you just, I guess, give us a bit of insight on what those challenges are? 

Glen: [00:03:13] I mean, in terms of the three broad themes. The first is I want financial freedom. And how do we get there? The second is, you know, I'm on the property ladder, and I want to understand, how do I kind of upgrade from an apartment to a house or even taking a step back from that? How do I get on the property ladder when property is so expensive across all major cities, around Australia. And the third is really to do with that investment pace. One, I want to stop, but I don't know where to start or where I've started. Am I doing the right thing?

Alec: [00:03:47] Well, all three of those buckets resonate, so I'm excited to get into this. Let's start with the financial freedom bucket. The ultimate goal for everyone, I guess. We got this question. They want to be financially free by 50 and currently in their late 20s, so they do have a bit of time. Can you discuss some strategies for creating multiple income streams and building passive income to reach this goal? 

Glen: [00:04:10] Yeah. Great question. And one that one definitely comes up a lot. And and just reflecting on our member base like 80% of our members would be in their 20s 30s. So that sense of financial freedom is one that I acknowledge is maybe not not going to happen in the short term. But what I love about this question is they've given themselves some time to really drive towards that. So they've given themselves a good, you know, 20, 25 years to drive towards that. And if you're someone in your 20s, someone in your 30s, the sooner you start on that journey to financial freedom, the, you know, the greater the chance that you're going to have of actually getting there. In terms of building multiple income streams, you know, building a passive income, generating an investment income before we actually address that particular point, it's really important that we think about what financial freedom actually means for you. And the reason I say that is because financial freedom is very broad, you know, does that mean having no debt? So paying off, paying off the home loan, does that mean working less? Does that mean potentially working the same amount but earning less in more purpose driven work? So financial freedom is really, really different. So before embarking on any investment journey, it's important we have a good understanding in terms of what it is we're actually driving towards. And I'd argue that the passive income or the income stream, the multiple income streams is just an enabler to give us that sense of freedom. But if we don't know what it is we're actually driving towards, it's going to be very hard to gauge whether we're on or off track. Some ways that I've seen, I've certainly had, I've seen a number of our members drive towards financial freedom and in areas that we've assisted them with. The first is turning skills into a side hustle. So for those that, you know, potentially writers, content creators, photographers, etcetera, they might have the, you know, the day job, but go out there and a little bit of extra cash on the side. You know, through freelancing or consulting type work. And that can be a really powerful way to build wealth beyond the day job. And often it's work that people tend to typically enjoy more than the day job. Think about the sharing economy. So an example of that would be an AirBnb or car share. If you're living in in a in a city and you've got a car and you're not using it Monday to Friday, rent it out like you, you know, there's there's plenty of platforms out there that will enable you to get, you know, additional passive income through when you're not even yet and you're not even being inconvenienced by it. The Airbnb one is something that I personally use. So my partner and I, a number of years ago now, live in Coogee, in the eastern suburbs of Sydney. We had a two bedroom apartment, and we rented out the spare bedroom. Did we want randoms living in our bedroom? Not not really, but for 300 bucks a night, I was willing to put up with it. So, you know, if you've got some space that you can rent out $300 a night, renting out two, three nights a week quite quickly adds up to tens of thousands of dollars over the course of the year. So, you know, really thinking about how we can take advantage of the sharing economy, which we're all very, you know, very familiar with, is very, very comfortable with. And then this, I was going to say the more traditional, but a bit, but I guess another way to free phrase that is the areas that we specifically help our members with and that's, you know, building out a, you know, really healthy stock portfolio so that we're seeing growth in those investments. We're also seeing dividends or distributions off the back of those portfolios, acknowledging that with a stock portfolio you might be thinking, oh, that sounds, you know, really big and audacious. You know, one of the biggest drawcards, certainly for me and working with our members in the stock market is you can start small, right? Like if you're in your 20s and you're putting away a couple of hundred bucks a week or a couple of hundred bucks a month, the compounding impact driving towards that financial freedom in your 50s is going to be massive. And then the one that often comes to mind when people think about investment or passive income is property. So buying an investment property, paying down their mortgage and inevitably being able to utilise that relative rental income to potentially work less, or do more purpose aligned work. So which may come at a pick up. 

Alec: [00:08:45] Now reading this question and just thinking about this scenario and it definitely resonates with me, late 20s. Well, I'm now on early 30s, right. But I was in my late 20s, when I started investing and thinking about financial freedom and building choice and all of those things. I think it's a very common scenario for people to feel, you know, their they're just enough into their working life that they realise they don't want to do it forever, but they're also not at the point where life really happens. Kids happens, potentially school phase happen, you know, parents get sick or all of that stuff that sort of interrupts the best laid plans. So when you're talking to a client who's in their late 20s or early 30s and hasn't had all these sort of, left and right turns and speed bumps, and they're talking about being financially free in their 50s. How do you get them to start thinking about, I guess, the resiliency of that plan? And, you know, making sure that that plan accounts for, like, all the uncertainty of life in those coming decades. 

Glen: [00:09:47] With our members. It's around projections. So we're looking at the current state of play before kids, potentially before wedding, before the, you know, the significant mortgage, before the potential for, you know, private school phase, things like that. If you're in your late, late 20s, early 30s and some of those be kind of, I guess, life milestones, for want of a better word, how to have an eventuated, then arguably you should be capitalising on this opportunity because your disposable income in the coming years is going to diminish potentially. So, you know, let's make hay while the sun shines, for want of a better word, and make sure that we're putting that disposable income which may dry up for a period, you know, childcare is not cheap, etc., so that we're really focussed on that long term phase. And what I have found is putting and it literally had this conversation this morning with, with a young couple who've just had their first kid in the last 12 months painting a picture in terms of what the next ten, 20 years looks like, putting in all of those assumptions around family and property and things like that, and then looking at what does your picture look like in 50 years? All things being equal, this is what your portfolio would be worth. This is what your property would be worth. This is how much debt you will have outstanding. This is what your super fund balance will be. And what was really interesting, what came out of that conversation was, this other mother who is the primary caregiver in this particular scenario, her intent was to remain on, part time work. And she was looking at her super balance going, that's not as healthy as I thought it was going to be when I'm 50. For these couple that were looking to sell their existing property and, you know, upgrade to, I guess, a family home for want of a better word, which came with a significantly higher price tag. And I were looking at that scenario when they turned 50, going, wow, that's still quite a bit of debt to still have outstanding debt at that age. That was in looking at their stock portfolio. And although they'd been quite diligent in their 20s, they acknowledged with child care, with part time work, they weren't going to have the disposable income to contribute to that as well as pay down the mortgage. So they're like, we've been so diligent with that portfolio and it looks like, you know, we're going to have to let it sit there and kind of do its own thing, reinvest dividends. But we're not going to have the opportunity to make any additional funds for that. So what that enabled them to do is essentially go back to the drawing board, go, okay, we can do it. But that's not really what I thought. You know, they had this vision of financial freedom at 50. And when we ran the projections that were like, that's not really my debt, that like, this is really how I think of financial freedom. And one of the, one of the key, one of the key lead is that we had, which was significant for these couple was in they are in a position where, they want. To travel every year, like a lot of our members do, which was great, and that was really important to them. One of the biggest levers that they had was just their weekly disposable income, like how much they just spent on stuff and a couple of hundred dollars per week. If we were able to reduce that by a couple of hundred dollars per week, they would go from still having about $1 million debt outstanding. And this was at age 55, to nothing because they still had that 25 year runway. So it was really powerful for them to go. Okay, so a couple of hundred bucks a week does have a huge impact on how we define financial freedom. And Ren, just probably taking one step back. You know, where we're talking about people in their late 20s, early 30s. You know, a lot of those. And certainly the advice industry turned their backs on people in their early 20s. If you're in your early 20s and you're working full time and you're earning $70, 80, $90,000 a year and you're living at home, it's a massive opportunity to make some really smart decisions. 

Alec: [00:13:55] Yeah, massive. 

Bryce: [00:13:57] Love that. Well, that's a good segue for us to plug equitymates.com/advice. If you would love to chat to Glen and his team. I should preface not, just Glen. He's obviously not just a one man band. If you would love to speak to anyone at Fox and Hare, head to that web form and we'll be able to connect you. Before we move on, Glen, you speak about projections and with projections, you need to make assumptions about the costs of things. How much do you put against the cost of raising kids in a capital city?

Alec: [00:14:28] How much does it cost? How much does one kid in Sydney cost? 

Bryce: [00:14:31] Zero to 18. I don't know. 

Glen: [00:14:36] So a lot. Children are so cute and skilled children are so cute. And they come to most of our meetings. There's usually a baby on the shoulder. But there is a significant cost. So, how do we work through that? So the first is typically the household going down to one income. That's the biggest cost for most people when they think about starting a family. You've got a guy this is, you know, broad general comment, but you have two people working full time. And then you, the primary caregiver, typically takes 12 months off for work just using kind of broad, broad, assumptions. They the challenge with that is we then need to navigate 12 months of expenses and potentially increase the expenses with the little one and only one household income. So it's really important where we're looking to stop for a plant that we're looking to start planning for a family. We're really clear in terms of what our bills are going to be. So what are the non-negotiables? What are our likely kind of day to day expenses? And as a general comment, we usually look to factory about, you know, usually between $8 and $15,000 of baby costs. You know, whether that be anything from specialists, you know, doctors, to, you know, the latest budget, the pram to, to, you know, the, the car seat that goes in the back of the car. And it's really interesting. I mean, we talk about babies a lot with our members, and there's this concept of the first baby economy. So whatever our members, you know, they have their first child. They're like, right, I need the best car seat. I need the best pram. I need the best, you know, bag to carry the nappies. Second baby rolls round, they're like, oh really? Not that. Don't actually care.

Bryce: [00:16:29] I know about going through that right now. 

Glen: [00:16:31] I don't really care about any of this stuff. So just just be conscious of that. And interestingly, one of our members has just exactly the same members that I met with this morning. She's looking to start a side hustle and actually looking to start a business almost like a marketplace for baby goods. So because they grow out of them so fast, and some of these things that are so relevant for the first year are not for the second, creating a marketplace to then be able to own, sell that kind of like Facebook Marketplace, I suppose, but just for baby goods. 

Bryce: [00:17:05] I love it. 

Glen: [00:17:07] That's her side hustle. But in terms of beyond the, you know, the, the initial, you know, the initial 12 months, it's then considering what, what life would like a bit look like post that 12 months. So they'd be having really good understanding in terms of what the parental leave policy is. For, for, for both parents, having an understanding in terms of when, the primary caregiver does go back to work, is it part time? Is it full time? Childcare, even with rebates, is really expensive. So understanding the trade off between actually going to work and then buying childcare and what, what the implications of that are going to be. And we see over the, you know, the first three, 4 or 5 years of starting a family is cash flow is usually pretty tight as as the household kind of grace, you know, settles down into the new norm. And then the little one, if going to public school, goes out of childcare to, to public school five days a week, and then we see the disposable income skyrocket back, back up again. And then there's a conversation to be had. What are we doing with the ten, 20, $30,000 every single year that will pumping into childcare? What what do we now do with that? And then high school comes along. And then we have a similar conversation around private school versus those public. And you know, the costs, are high, particularly around high high school as well. Some of our members, we actually have investment strategies set up for them before they even conceive their first child. So if they're adamant that they want to send their kid to, you know, the private school that they went to, or they want at least the option to be able to do that, we're putting often into market linked investment. So in the stock market, given, you know, if we're starting, pre-baby to, to high school, we've got a good ten, 12 year runway. We're looking at those high growth strategies to give us the best possible chance to pay the school fees when they eventuate, as opposed to getting to that point going, this is a lot of money. And then just drawing on the mortgage that we've just been so diligently paying down for the last ten years. 

Alec: [00:19:26] Yeah. 

Bryce: [00:19:27] Nice. 

Alec: [00:19:27] Well yeah that's probably a good time to turn to investment and portfolio questions because we got a few of them. And this first one I quite liked. So the question was they say 30% of my salary is roughly what should be spent on housing. Generally speaking, what percentage of my income should I be aiming to save and invest per month? 

Glen: [00:19:54] Can I be a bit cheeky? Why did you like this question? 

Alec: [00:19:58] Well, I think. 

Bryce: [00:19:59] As a rule of thumb. 

Alec: [00:20:00] Yeah, there's so much, spoken about this 30% for housing, which, you know, living in Sydney I think is just bull. Like no one sticks to that. But so we don't we don't really speak about, any of the other, I guess, percentage weightings in, model personal finance budget. And I know it's because it's, how long's a piece of string? And, you know, everyone gets paid different things. And what you save and invest is really a function of all the other buckets and how much you have to spend on necessities. But, you know, the 30% is a goal. Should there be a goal for this bucket as well? 

Glen: [00:20:34] I'm not into percentages. I think percentages are just super generic. Percentages are a, you know, I guess, you know, to elaborate percentages on a bad place to start. You know, it's very broad. Yep. 30%, a 30 year income. That's okay. That feels right. I don't I don't really know why, but that feels okay. But I'm more interested in what we are actually trying to achieve? So, what I mean by that is some of our members have aspirations to, you know, you know, buy an apartment if we're talking about Sydney or even Melbourne, you know, we're going to have to draw up six, seven, 8 million. You know, $800 million on an apartment. And that may be home for a period. But then maybe they want to travel the world for the next five years. So, you know, it's more around understanding what is what is the goal, what is what is the objective. So if you know, if it's for some of our members, the goal is to have a family home in Sydney. And if they want to have two, three kids with land like the reality is they're going to have to put far more than 30% of that is part of their salary into this one investment. And if that's what they want to do, and that's what's really important to them, and that's what they should do. But if they're if, if we're looking at a different scenario and someone wants a greater degree of flexibility, they don't want to be, you know, you know, yet they want to have a home base, but it doesn't. They don't want it to be, you know, everything. They want to still be able to, you know, travel and, you know, maybe they'll rent it out for a period and move around. Then arguably, you know, maybe that 30% is much more appropriate. So they've got more of their salary to do other things with. And that's not just spending on travel, as nice as that might be, but that may be putting it into, more, I guess, liquid style investments or more, you know, such as investing in the stock market, such as putting it into, you know, a high interest savings account. So it's cold and there's that greater degree of flexibility, because if I come back to that scenario. And I think of that, you know, the 20 year old talking about, you know, the late 20s talking about financial freedom, they probably are not driving towards their forever home. Certainly, If, again, we're looking at some of the major cities, it's going to be a stepping stone. And they probably want to do that because they wanted a degree of flexibility when going into that strategy. They don't want to put all of their eggs in one basket and they never be able to, you know, have a European summer again. 

Bryce: [00:23:21] So, Glen, the next question that's come through is around super. It says our super is falling behind the benchmark for where it should be for our age group. Should we salary sacrifice until we make it back to that benchmark, after which point we'd stop salary sacrificing to focus on other debts like mortgage. Until we have spare cash, we want to put voluntary, we want to voluntarily put it into super again. This is also assuming investments we make outside of super are not specific for retirement. 

Alec: [00:23:50] So just before we get into the strategies there, Glen, maybe if you can just comment on the concept of benchmarking super for a particular age group, is that something that you believe in and where do you find them? 

Glen: [00:24:04] Interesting. I went to the exact same item, all of the words, and it's quite a big question. Benchmark is the one that I stuck on because I was quite interested to probably understand what they are actually benchmarking against. And you're right, like for different age groups it's going to mean different things to different people. But if we look at some of the the numbers and these are some really high level numbers, but for someone to retire at 65 and give them what is classed as, I suppose, a comfortable retirement, they need about 600 grand in retirement savings for some for, for a couple is probably about $700,000, for, for a comfortable retirement. And what do I mean by comfortable retirement. So it's, it's, it's a, it's a modest retirement. So it's, it's really, you know, an annual domestic trip. Probably, An annual domestic trip to kind of say family and friends. And this particular definition is one overseas trip every seven years. Right. So again, thinking about our member base, they're doing a lot more than one overseas trip every, every, every seven years. And that's a huge goal. And it's really important to them. So, you know, if we're looking at our supers and we're not on track to hit 600 or 700, then by age 65, it's going to be, I guess, more modest than that. And this is also assuming you own your own home. Right. So this is where I bought a property with pay off for debt. And we're not not paying rent. The other thing that stood out to me when you were talking through the question is, why is their super falling behind? So, you know, and there's a couple of reasons for that. So potentially lower income. You know, tight, tight work time overseas is, is a big one that I see certainly through to our member base. If they, if they're overseas for two, three, four, five years. Well contributing to super that can have a fairly significant compounding impact. Time out of work for any reason. So being made redundant or time off to start a family is another one. The other is simply performance. Like you know, what is your fund? How is your fund actually performing and what fees are they, are they charging you? We're going to go to the effort of salary sacrificing by putting more money into super to try and catch up. It's really important that we understand what we're putting our money in and what we're investing in, and what fees we're going to be charged when we put that additional money in, like salary sacrificing super, you know, super tax efficient. You know, I love the fact that, you know, this this individual's thinking about that. But don't just put money in a fund blindly, even if it is, you know, you better. You wouldn't do that if it was in your personal name. So don't do it if it's your super fund as well. 

Bryce: [00:27:06] So to answer the question on the benchmarking piece, you know, it's a clickbait article that I reckon News.com do every six months, like. 

Alec: [00:27:14] Here's how much super.

Bryce: [00:27:15] Here's how much super you should have at your age group. I just googled it, and ABC has come up with one, and the way that they're presenting it is in line with what you've said around comfortable retirement. They're saying if you want to have a kind of comfortable retirement and that 600,000 in your superannuation by the age of 60 or whatever, here are the sort of balances you need at every sort of five year hurdle. So saying 35, I'm almost approaching that age. I should have about 1200 in my super to be on track. I guess from your point of view, Glen A is it worth looking at these numbers and say if I have 60,000 in my super instead of 120,000, should I be freaking out and going, I'm not on track. I need to bulk this up as fast as possible going into my 35. Do you know what I mean? 

Glen: [00:28:05] Yeah. Yeah, totally. And. And so should you be looking at these numbers? Yes. But, you know, even, you know, in line with the 30% on property, think about what a comfortable retirement means to you. So if the target is $600,000 to have a comfortable retirement, which is defined by an annual domestic trip and an overseas trip every seven years, and that's your definition, and your house and home is completely paid off. And that's your definition of a comfortable retirement. Then that fee is going to mean a lot more than someone once that once to Europe every second year. Yeah. And the other thing is should you be freaking out? No. If you're 35, you've got so much time on your side, but don't do what most people do and wait until they're 5 to 10 years from retirement. And then and this is the fundamental reason why most people seek financial advice. In Australia, the average age of an advised client is 50 because they get to 58 and then they freak out. And you probably know, I'm not saying a break. Yeah that's definitely not the intention. But the runway to that comfortable retirement is a lot shorter than when you're sitting here at 35. So be diligent about it. Don't freak out. But think about okay, well how can we make some small incremental changes in our life today to give us a greater chance of achieving what we believe is comfortable? But again, I circle back to my comment: don't just blindly sacrifice salary because an article told you it can be really tax effective and save you lots of money in tax. It can be tax effective. I'm not saying it can't is a very tax effective strategy. But it's you when you're putting that money in your still investing it. So understand what you're investing in. 

Alec: [00:30:03] Well Glen I think that's a good point to remind people that if they want to speak to you all your time, and get some, professional advice, they should go to equitymates.com/advice, fill out the form, and we can put you in touch with the team at Fox and Hare. We're going to take a quick break here. And then on the other side we've got a number of questions. We've got it. We've got a hit property. You know you can't do an episode of a finance podcast without hitting property. We're also going to hit travel and, how you help your clients, fulfil some of their travel desires while also building for their financial future. So we'll be back in a second. Welcome back to equity mates. We're speaking with Glen Hare. Glen, we've covered a lot so far. We've always got more questions than we have time to cover. So I want to move to one on, travel and how we can still sort of build for our financial future. So we got one question. All of my friends are going to London for 2 to 3 years. I want to do the same, but I also want to own a home in Australia. Can you discuss strategies for balancing these aspirations financially? 

Glen: [00:31:10] Great question. And actually I was having a chat with a journo at the AFR a couple of weeks ago about this specific scenario. So in short, you can do both, but you've got to have a plan. So what I mean by that is what I have observed is people go over to London or the States or Hong Kong or whatever it may be. They do 2 or 3 years overseas. They come back and they're in the same financial position they were when they left. So they're leaving in their late 20s, coming back in the early 30s, like, okay, I'm still where I was. When you're overseas, what's really important is to have a really good time. Like you're in the you know, you're in London and you're the gateway to Europe. Get it out of your system. I'm sure I've actually got it completely out of my system. But anyway, that's another conversation. You know, head to a beta, get to Orchha. Make sure you swing by Mykonos. But don't forget about when you come hard. Right. So if you're if you're planning on this, this is three years time, and you want to come back and you want to buy your first home in Australia, and you reckon it's going to cost you about a million bucks and you think you're going to need, you know, 100,000 to $200,000. And I'm just using really broad numbers as a deposit. Make sure when you're over there, you've got a strategy to send money back home so that when you come back that deposit is there. So don't lose that discipline around that regular savings pace. And also sending money back on a regular basis has two chronic impacts. First, it quarantines the money to some extent. So you bring it back. It's out of sight. It's out of mind. We're saving, you know, two, $3,000, whatever it may be on a, on a monthly basis to, to drive towards that goal. The second is from an effects perspective. So you're almost hedging, hedging their bets to some extent. So if you're over in London saving pounds and then in three years time you bring back, you know, $100,000, you're transferring your £50,000 to $100,000. You're doing that in one fell swoop. Whereas if you're consistently bringing those funds back, you'll get that dollar cost averaging concept really, but that you doing so when thinking about the foreign exchange implications. So it comes back to the goal. What what do you envisage your life looking like when you come home. That can be really hard to think about when you're about to head over to London. But don't lose sight of the future you will thank you.

Bryce: [00:33:43] Yeah, yeah, a lot of that. Even the smallest things. You will. Thank you. So for now, Glen, as Ren said, we can't, get through an episode without touching on property. And there are a couple of questions around affordability and feeling stress about not getting not being able to get into the market as first home owners, particularly in capital cities. So what are some things that you generally need to put in place? You know, if you do have the goal of owning a home? And I guess, what are the financial considerations to think about when buying your first property, particularly in, you know, expensive capital cities? 

Glen: [00:34:20] Yeah. So pro property naturally comes up a lot in our conversations always. So if it supercharged one of our members I've been working with for probably about two and a half years, she reached out to us, with about $40,000 of bad debt, credit card, personal loans, things like that. And a couple of weeks ago, she settled on her first property, two bedroom, a two bedroom apartment in bond. I said, no small, no small. Okay. What she had was a plan, and she had a really clear goal. And we took away all of the noise, and I'm not in denial about the fact that buying property in any capital city, and working with people all across Australia is really bloody hard. It's really hard. But I don't want people to be, I guess put off by all of the clickbait and the headlines that you say around, you can't do it. You can. We may need to taper expectations. It might not be the forever home. You know, right off the bat it could be, you know, it could be an investment property as a starting point to kind of build that momentum. It might be a small apartment, which in five years we then, you know, have aspirations to, to, to upgrade it to a bigger property. You can do it. You just need to be really clear on what those goalposts look like and then work backwards from that. So going into this question and going I want to buy my first property, the first thing I work through is what does that look like. So is an apartment? is a house? Is it an investment? Is a one you're living in? What is the rough guide around what you're looking to spend and then get really clear on cash flow. So what I mean by that is if you're looking to purchase, I'm just using a guide round number is $1 million property. And we want to work towards a 10% deposit. So we're comfortable that we might have to pay a little bit of lender's mortgage insurance. And I won't go down that rabbit hole. But we need 100 grand. Then if we're putting away $2,000 every single month consistently, then in four years time we'll be buying that $1 million apartment. Okay. So be clear on what the goal is and then work backwards from that. If you're just saving whatever's left over at the end of each month in an account that's called the house deposit, which you often then dip into if, 100% you save a year and vacation and things like that, then that's going to put that gold back. If you quarantine that money, you put the $2,000 in and you leave that aside and you've got a separate account for that lifestyle. You know, our big ticket item, discretionary spend that's going to give you that, that, that, that understanding in terms of when you're going to be there.

Bryce: [00:37:16] Yeah, I think I set up my house deposit fund, savings account in my first week of uni. Way too ambitious. 

Alec: [00:37:26] Well, that's probably part of the challenge. It's like you set it up, but if you don't believe it's realistic, it's just like. 

Bryce: [00:37:33] That's exactly what it was like. I. It was such a far fetched dream. That I was like, any money going in here, I know I'm going to need something else.

Alec: [00:37:42] And you. It only took you. It took you 15 years from you setting up that account. 

Bryce: [00:37:47] Okay, so here we go. It is possible.

Glen: [00:37:50] It's really. I see it time and time again and again. I want to preface this. It's hard. Right? Like there's going to be trade offs. It might not be a year off every year. It might be Bali. Every second you do, you need to know what I mean? But you can do it. So don't you know, there's a lot of, you know, the media does really put out a lot of clickbait and make it, you know, really, I suppose, feel unachievable. But if you don't know what it is you're trying to achieve, then how do you know whether it's achievable? 

Bryce: [00:38:20] Yeah. Yeah. It's so funny you say that example. Last year, Harriet, my wife and I went to Europe for five weeks in July, bought a house at the end of last year. This year we got to Bali. 

Glen: [00:38:32] Not so bad. There are a couple that. 

Alec: [00:38:34] Must be nice. Looking forward to it. 

Bryce: [00:38:36] I'm looking forward to it. 

Alec: [00:38:37] All right, well, Bryce explains how out of touch is, Glen. I think that's probably the point where we're going to have to leave it. But a massive thank you for joining us today and sharing your knowledge. As we've said throughout this interview, if people want to speak to Glen or his team, head to equitymates.com/advice. And if you have any questions that you'd like to submit, to any of our advisors, Glen will be back on before you know it. Head to Equitymates.com/contact and submit your questions there. But Glen, a massive thank you for joining us today. 

Glen: [00:39:07] Thanks, gentlemen. Appreciate it.