Latest / Renovate & Real Estate / I drive a 22-year-old car, and it doesn't bother me. How my money values focus on the big picture.

Transcript

I drive a 22-year-old car, and it doesn't bother me. How my money values focus on the big picture. · Renovate & Real Estate

• 0:00
  Welcome to More than renovating, a Renovate and Real Estate podcast.
• 0:04
  Our founder, Belinda Smith, talks to industry experts to provide you
• 0:08
  with the knowledge and information
• 0:10
  you need to make renovating for love and profit your reality.
• 0:14
  Belinda will also chat to some of her Renovation Mastery members,
• 0:18
  who are just everyday people doing extraordinary things,
• 0:21
  following their passions in the renovation and property space.
• 0:24
  So let's jump straight into the episode.
• 0:27
  Enjoy! Yeah.
• 0:28
  Hi everyone!
• 0:29
  I am Belinda Smith from Renovate and Real Estate.
• 0:32
  For those who don't know me already and I thought I would share
• 0:37
  my feelings today on new cars.
• 0:41
  Alright, so on the cars that we drive.
• 0:44
  I drive a car that is 22 years old and has done
• 0:48
  218,000km, and I don't care.
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  So I announced that at our workshop,
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  a couple of months ago, and I challenged everybody in the room to put their hand up
• 1:03
  if they actually drove a car that was older than mine,
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  and one lady's hand went up, her name was Penny.
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  God bless you, Penny.
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  We live quite close to each other, and I said that one day we'll park
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  next to each other in the Cronulla car park and go to the beach.
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  So there you go.
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  Only Penny in the room out of 150 people
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  drove a car that is older than mine.
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  And I said, I don't care that I drive an old car.
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  And you know, she didn't care either.
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  And I really love that about Penny.
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  So it's just so interesting, our public perception of what
• 1:40
  we must have to be considered normal in today's world.
• 1:45
  So in short,
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  this this little
• 1:49
  episode was really triggered by a lady called Carolyn.
• 1:53
  And Carolyn has been following along for a while,
• 1:56
  and she's always sick of, like,
• 1:59
  really stretching it from week to week just to make it, just to pay her mortgage.
• 2:03
  She owns a house but has a mortgage on it.
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  So who owns the house?
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  She owns some of it. The bank owns the rest.
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  She has a husband and some kids.
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  So Carolyn is just like most people I speak to
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  and yes, she's not broke, but she's just really living from paycheck
• 2:19
  to paycheck and really quite frustrated about
• 2:22
  about that, about her living standards
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  and about feeling like she's never quite got enough and that if something
• 2:29
  crucial or urgent came up, she wouldn't be able to meet the bills.
• 2:33
  And or she'd love a really nice, good quality holiday
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  and can't afford to do that either.
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  So she's just kind of working to keep on top of things.
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  But here's what I discovered about Carolyn.
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  And this is common.
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  So she's sick of living paycheck to paycheck.
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  She has choice.
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  She's looking at doing renovating, flipping for profit.
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  She has a good job. She has a house.
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  So to everyone in the
• 3:02
  outside world, Carolyn and her kids and her hubby,
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  they all look like they're doing mighty fine to everyone in the outside world.
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  Looking at me driving my 22 year old car,
• 3:13
  they might might be thinking all wonder is Belinda got any money?
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  I actually don't care what they think.
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  I let that go a long time ago.
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  I actually don't care what people think.
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  And I find when I meet some really cool property developers
• 3:26
  and others that have got some money, they also don't care what people think.
• 3:30
  It's really interesting.
• 3:32
  So, I've found also some people really love to impress
• 3:37
  and flash their cash
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  in the way of a car that they may or may not be able to afford.
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  And, you know, maybe they've got a loan on that car, maybe they don't even own it.
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  Maybe their business is not going so well, but they're really happy.
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  So long as everybody in the world around them thinks that they are doing well.
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  Whereas I actually don't care what people think about my financial position.
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  And in fact, it's no one's business.
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  But anyway, here's Carolyn.
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  Good job. Nice kids.
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  She was going to use our financial partners
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  to get started on her renovation journey with Renovation Mastery.
• 4:11
  Our financial partners are awesome.
• 4:14
  They will get you started inside Renovation Mastery
• 4:17
  for around about $160 per month.
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  She figured that she could completely change her cash problems inside 12 months
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  based on doing two renovations completing two renovation flips.
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  Is that possible? Yes.
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  I was really confident she could do that.
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  She, is very committed to the cause.
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  And I see in Renovate and Real Estate people doing that
• 4:41
  or many more in their first year.
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  So I know it's achievable from running the program
• 4:46
  since 2019 and watching what people are able to do.
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  So I got really excited for Carolyn
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  and then she said, oh, I actually can't
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  go through with the finance getting the finance option.
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  Because my husband
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  is really committed to replacing a car that he wants
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  with a car, the same brand car that he's had for 14 years.
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  And so they've sold him the local car sales yard, have up
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  sold him into a new car, same, same brand, you know what I mean?
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  I won't, say what it is because I'll be giving this away for her.
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  She's reading it.
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  I don't want her husband to be offended, but typical, you know, like being drawn
• 5:31
  into having to spend, having to have,
• 5:35
  having to be,
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  being proud of a car.
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  And technically, I've seen some studies on how the dopamine of owning a new car,
• 5:44
  you know, when the excitement fades and they say it fades after a period
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  of about 18 months.
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  So. But her husband's very insistent on getting this new car.
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  The purchase is up near $100,000.
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  So he's going forward with applying for finance for the car,
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  which means Carolyn said she can't afford or can't, actually see there
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  being a possibility of her getting finance to go forward with Renovation Mastery.
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  So let's compare the pair.
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  Let's compare the results.
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  If she were to complete two profitable renovations inside 12 months,
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  she's likely to earn somewhere between 50
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  and $250,000 per renovation times two, minus tax guys.
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  Not including tax. So we just talking gross.
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  We are talking after all, property expenses are paid.
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  Buying and selling expenses.
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  But we're definitely not talking.
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  Her tax position, which can be so different
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  depending upon the trust or the entity that she buys the property in
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  or whether it's in her personal name.
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  All of those things can have a massive impact on tax outcomes.
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  So we're not talking about tax.
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  But you know, let's let's look at the best case scenario
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  based on what my students have been up to do in the past.
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  So if she were to be able to gross
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  4 to $500,000 inside 12 months, how exciting would that be?
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  Would that change her current position?
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  Even if she was taxed heavily?
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  Yes it would.
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  Would it make a difference to her being able to pay a bill?
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  Yes it would.
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  At this point, she can't even pay for Renovation Mastery up front.
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  And we are half the market price of other property education programs.
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  So, I'm thinking, wow, she might look
• 7:25
  like she's got it all together in the outside world.
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  To anyone watching her and her family,
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  they think that they're living a nice life.
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  And particularly when her hubby turns up in his new car in about six weeks,
• 7:37
  people are going to be thinking they're doing really, really well.
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  But I know differently and I know differently
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  because I've spoken to Carolyn and I know the cash position,
• 7:48
  and I'm not going to share that here on this little video.
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  But I also have spoken to so many people
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  just like Carolyn, and it starts to make me anxious.
• 7:59
  So she's putting off flipping a home which has the capacity to completely
• 8:03
  change her financial position to go into even more debt
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  on, and I'll call it an asset.
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  So accumulating a new car, more debt on a new car
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  now in ten years time, what is this
• 8:19
  $100,000 car going to be worth?
• 8:23
  I don't know, maybe $20,000, maybe 15?
• 8:26
  I don't even know.
• 8:27
  It depends on what type of life that car has
• 8:30
  and how that particular brand of car holds its value.
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  But it's not going up in value.
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  If she would spend $100,000 and borrow $100,000
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  to put a deposit down on a property and just hold a second mortgage
• 8:43
  on something and rent that out, that property
• 8:47
  is going to be going up every year but cars just go down.
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  They just go down in value. You see it all the time.
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  You buy a new car and you drive it out of that showroom
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  and it drops substantially in value.
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  So guys, you know, so many people choose
• 9:03
  having things over property, having short
• 9:08
  term dopamine hits over property.
• 9:14
  They won't delay
• 9:16
  feeling good to feel much better later on.
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  They'll use things like new cars, new clothes, fancy handbags,
• 9:26
  toys, boats as a little bit of.
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  I'll call it sedation.
• 9:32
  I'll call it numbing the feeling for now.
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  So numbing the feeling of I don't know where I'm heading
• 9:38
  financially or I might not be able to retire financially.
• 9:42
  Well, in 15 years time for the feel good things right here in this moment.
• 9:48
  So guys, you know, I don't want you guys to struggle, but
• 9:52
  I do want you to be fiscally responsible.
• 9:57
  I want you I mean, whether you join my program
• 10:00
  or not, that's just completely separate to this.
• 10:02
  I want you to look at your budget.
• 10:04
  I want you to live within your budget.
• 10:07
  I want you to let go of what other people think of you,
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  or what you feel like they're thinking of you.
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  Because really, in Mel Robbins's words, it's really none of our business.
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  What other people think of us.
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  You don't.
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  You're not inside their head. And it really doesn't matter.
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  We are, and probably most people aren't thinking much at all.
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  So I don't know.
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  I don't even know what to say.
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  But it just made me sad
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  because I thought, all right, Carolyn's leading the charge for her family,
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  and she's really keen to get going and to change things
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  so that the bigger picture looks bigger and brighter.
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  But at the same time, she's got a partner who's essentially crushing over
• 10:48
  hopes and dreams, and she's really hoping that she can have both.
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  And I hope she can have both too. So,
• 10:55
  apparently hubby is going to buy this car.
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  No matter what.
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  So what?
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  He might be listening to this video.
• 11:00
  Not really care what Belinda Smith has to say.
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  But yeah, you know, in short,
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  don't judge people by the car they drive.
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  I actually had a Mercedes at one point, a little black Mercedes.
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  And people did judge me differently by me,
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  you know, jumping in and out of that car.
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  If I saw the car, they assumed that I was really well off.
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  I just let it go. It had no meaning to me.
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  Driving a nice car like that absolutely didn't make a difference to me.
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  My life, my own self-esteem, how I felt about me and my family,
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  the health of me, my parents, like none of that mattered.
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  According to what car I drove.
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  So I let that car go.
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  And the reason I let that car go is because I just thought, this is stupid.
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  Going for services on a new car where even the most basic of tweaks
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  with a little, I don't know, wrench or whatever you use or the car God tells
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  the smallest repair was $1,400 or more and I just thought this is stupid.
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  $1,400.
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  That's I could do a lot more than, with more than more with $1,400
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  and have a car serviced or repaired or tweaked
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  or tinkered with or, to meet, you know, the warranty compliance.
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  So I just thought it was all just a waste of time and money.
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  So there you go.
• 12:17
  So I've got myself an old Lexus. I'm happy.
• 12:20
  If you looked at my car right now, it's in decent condition.
• 12:24
  I'm not driving around.
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  Don't worry about me. I'm fine.
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  I'm not driving around in an absolute s..tbox.
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  It's totally fine.
• 12:31
  It's nice and clean.
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  I put people in and out of my car.
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  It's got old leather seats in good condition.
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  I can open up the back.
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  It's full of tiles and samples of Polytec
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  benches and cupboards and all that kind of stuff.
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  My car is my life, my little SUV on forever.
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  Going from place to place, putting furniture
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  and bits and pieces in the back, going to Bunnings and filling it up.
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  So my car serves me
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  and my lifestyle really well, and I think that's what matters.
• 12:58
  Like.
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  And also if it was written off tomorrow, I think it's insured
• 13:02
  for more than it's worth.
• 13:03
  So happy days. It's it's a win all around.
• 13:07
  So guys don't let outside influences affect the decisions that you make.
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  Be really aware that all of the choices that we make along our
• 13:16
  lives, along our timelines,
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  where we are right now is a
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  direct result of those choices of those decisions.
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  So no point saying in 15 months time.
• 13:29
  Oh my goodness, I have to live really tight.
• 13:32
  I can barely, afford my mortgage or my car repayments.
• 13:36
  If you've actually chosen to put yourself in that position guys.
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  So there you go.
• 13:42
  I hope that's not too negative.
• 13:44
  I hope it's actually positive.
• 13:45
  If you're driving an old car, be proud of the car you drive.
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  It's only going to get us from A to B.
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  Who cares? Don't let anyone get inside your head.
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  Don't feel judged. None of it matters.
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  The only thing that matters is that you know
• 13:58
  that you're acting financially responsible,
• 14:00
  and that whatever you're doing now, and whatever choices you're making now,
• 14:03
  are for the greater good of your family moving forward.
• 14:08
  Cheers, guys.
• 14:22
  I.