Latest / Money Grows on Trees / #344 -Is It Still Possible To Build Wealth In Australia?

Transcript

#344 -Is It Still Possible To Build Wealth In Australia? · Money Grows on Trees

• 0:00
  If building wealth in Australia feels harder than it used to be, it's because it is. The government
• 0:05
  gutted negative gearing, replaced CGT discounts, attacked trusts and it is coming after the
• 0:10
  private sector's money. It has spent too much money. Rates are going up, inflation is heavy and
• 0:17
  a beer and a chicken schnitzel at your local pub is crazy out of control because of these things.
• 0:22
  But not all hope is lost. I'm Lloyd J Ross, seven figure investor and entrepreneur, and I've helped
• 0:27
  thousands of everyday Australians, Americans, New Zealanders and Kenyans get out of debt and build
• 0:30
  real wealth. And in this video, I'm going to show you the honest state of play. The four doors still
• 0:35
  open to build wealth in this country, and the eight step plan to walk through them starting
• 0:40
  this week. Okay, firstly, the case that it's over, let's have a look at this. We've got a lot of
• 0:45
  wealth concentration right. Australia's 48 billionaires. Australia's 48 billionaires which
• 0:51
  are here hold more wealth than the bottom 40% of the entire country. So that's the first thing. Home
• 0:58
  ownership. There's a big collapse in the ability for people to own homes in the year 2000 was
• 1:05
  about 50%. Now it's a lot less, it's 39%, it's falling. And the age at which people are buying
• 1:11
  homes is is rising as well. Okay. The deposit wall, it takes 11 years to save it.
• 1:18
  20% deposit and only 14% of median household incomes can actually afford the median home.
• 1:25
  And of course, it's becoming a little bit rigged. All right. With increasingly favourable policy for
• 1:32
  older people at the expense of younger Australians, to actually start building wealth
• 1:37
  because of the tax incentives and the transfer inheritance, etc.. So the other
• 1:44
  thing that's made it very difficult is the stagflation risk, where inflation is high at, say,
• 1:50
  three and a half to 4% and GDP is crawling along at 1.3. So wages are
• 1:56
  losing purchasing power in real time. And of course There's
• 2:04
  lack of development of households. There's less propensity for local population growth.
• 2:11
  There's less incentive to build businesses. There's more regulation
• 2:18
  around businesses and around innovation. The budget has shifted how they're incentivising
• 2:23
  those things. There's also a lot of red tape. And so if you factor in all those things without
• 2:29
  question, without question, it is harder, much harder to build wealth in Australia.
• 2:37
  Way harder than ever before. It's most difficult for people under 35 because they're coming into
• 2:43
  an environment where there's not a lot of wage growth. AI is making job
• 2:50
  acquisition a lot harder. Huge housing costs, which is probably the leading factor. But of course
• 2:56
  runaway inflation. So even if they get a job, the jobs that they could have got ten years ago. Pound
• 3:01
  for pound are not giving the same amount of purchasing power as what they could have had
• 3:04
  before. So it's really hard for young people. It's it's very challenging from what their money
• 3:11
  buys them. Okay. But it didn't. The wealth game and the wealth building game didn't end. It didn't
• 3:16
  just stop because of those things. It's just moved, right? So the old door got gated, but the new doors
• 3:23
  are opening up. And that's what I want to talk to you about. You can now effectively
• 3:30
  launch businesses from your phone with the internet and AI. In fact, I was just talking to my
• 3:37
  nephew about it the other day because he and I talk. He's how old is he now? 14. 13. And he is
• 3:43
  asking me, how do I make money? He's starting to want to make money, right? Which is cool. So he's
• 3:47
  got the ability now to literally this is this is what this is the opportunity I'm talking about
• 3:52
  now. So yes, it's harder to build wealth, no question. But what are the opportunities like what
• 3:55
  what what technology is available that we didn't have when we were younger? He can pick up his
• 4:00
  phone. He can go through the Yellow Pages online. The Googles got his own Yellow Pages business
• 4:05
  directory. It can go and look at all the business websites that are available. Mechanics. You know,
• 4:10
  blue collar businesses and businesses that are run by, you know, 50 year olds plus. And he can
• 4:16
  literally which I'm going to show when I sit with him and do it next weekend. He can literally call
• 4:21
  them up and pitch them and say, listen, I notice your website sucks. You're probably losing a lot
• 4:27
  of bookings because it sucks. I've already built one for you. And if you would you be open to
• 4:31
  jumping on a call? And in which case, if you are oscillatory for 500 bucks, if you don't like it,
• 4:37
  you don't have to buy it. But I've already built it and I'm going to. And they'll be like, oh hell
• 4:42
  yeah, I'd love to get on a call and see what it's because people there. Their ability to enhance
• 4:46
  their technology and their businesses sucks because they're not focussed on that. But you get
• 4:49
  a young person who understands AI and by the way, you can build included. You can build a website in
• 4:53
  one second done, one second done. So I'm going to like there's ability for young people like that
• 4:57
  to just go and literally pitch 500 bucks, a thousand bucks and just build instant websites
• 5:01
  with Claude. It's nothing like it's so available. So that's just one example. There are so many
• 5:05
  others. You go TikTok shop, find that hashtag TikTok made me buy it. Find them best selling
• 5:11
  products. Then you can go to AliExpress, click Build Me a Store and Shopify and it will build it
• 5:15
  for your build, build knowledge restore and then put the products in there and they just run some
• 5:18
  small add ads to it and start to get people to start buying. It's crazy. So these are the things
• 5:23
  that are available to to younger people that weren't available to us when we
• 5:30
  were younger. So yes, it's more challenging to build wealth, but at the same time, there's
• 5:34
  actually more opportunities and possibilities to build wealth. Now, the other thing that's available
• 5:39
  to young people that wasn't before is their ability to start putting their money to work in
• 5:44
  shares, because literally for, you know, a click of a button, you can open a share brokerage account
• 5:48
  here. It's never been more accessible. And they can start putting their money to work. That's not
• 5:52
  property. And that's probably the first time that that's been able to occur. So you've seen this
• 5:57
  massive stampede. In fact, there's like $13 billion flowed into ASX shares alone into ETFs in the
• 6:02
  last 12 months. Massive, right. So young Australians are already voting with their money as to how
• 6:07
  they're going to intend to grow their wealth. Right. Which is why a lot of people buy our book.
• 6:10
  Money Buys Happiness so they can learn, because some cool bonuses and courses, and then they can
• 6:14
  learn how shares work, right? Because it's becoming more prevalent. Because all of a sudden it's like,
• 6:19
  don't want to buy million Dollar house and get into all the debt. What do I do? So the doom
• 6:24
  headlines are the opportunity for others as well. So it's like doom for some opportunity for others.
• 6:29
  Okay, so it's a yin and yang. There's inequality. But at the same time there's massive opportunity.
• 6:36
  It's just the mindset of how you approach it. Okay. So what still works. There's four doors still open
• 6:41
  to build wealth. One, incidentally, happens to be some level of superannuation because you're
• 6:45
  getting a 15% discount on the money you put into there. Plus you're getting tax free capital growth
• 6:50
  in there up to a balance of $3 million. Plus, some folks have employers assist them and help them. If
• 6:55
  you work for some sort of government organisation like the military, you get substantial benefits in
• 7:00
  your superannuation. So that's available, right. And you can also go back if you're a business owner,
• 7:04
  you know, five years and accumulate superannuation contributions not paid and get a tax deduction on
• 7:09
  that too. So that's available right door. Two indexing R and investing in shares that are
• 7:15
  outside the norm of what we do in this country. But you can access global markets from your phone.
• 7:20
  And you can start to invest in American companies in ETFs very quickly instantly. In fact. And so you
• 7:27
  can actually broaden your investment horizon to assets outside Australia. And of course, if you
• 7:31
  look at some of those companies in America, they are the pre-eminent companies to ever exist of
• 7:37
  all time. And you get to actually participate in that. So if you look at the actual returns of the
• 7:42
  S&P 500, for example, in the last, I guess it was the last, I want to say 12 years, maybe longer. It
• 7:48
  went up for X for X and the Australian share market went up about, you know, one and a half x. So
• 7:55
  it does outperform generally historically Australian shares because it's the epicentre of
• 8:01
  capitalism in the world. And they've got the best companies. The the third door that's available is
• 8:06
  obviously um is the ability to not just start those businesses that I mentioned.
• 8:13
  What I'm talking about with my nephew, but actually start to really ingrain yourself in not
• 8:20
  just one, but multiple businesses with earnings power or pricing power to hedge inflation. So, for
• 8:25
  example, we started a network marketing business many years ago as a side hustle. It grew. We put
• 8:30
  that into shares. We got some dividends back. Some of those enabled us to put a deposit down and
• 8:35
  borrow money for a laundromat that's now almost paid itself off, that's got pricing power, that's
• 8:39
  run semi passively. And then that it also helped us build an education business and then get a
• 8:46
  bestselling book, and we get royalties from that and then start a channel. And then so there's this
• 8:49
  knock on effect of a flywheel or flywheel effect of your businesses. So you don't just start one.
• 8:53
  You can start multiple on top of each other with the capital you're creating and that's available
• 8:58
  to you. Right. And door four is property but with new rules. So like you wouldn't be running out to
• 9:04
  get the 5% deposit scheme because you'd be in negative equity probably by now, but just being
• 9:09
  able to access things like real estate to access, um, forums
• 9:16
  about, well, can I buy a mortgagee in possession property? So just, I guess, having more information
• 9:21
  than ever before about how you're going to acquire property. Plus there's different
• 9:26
  approaches and strategies on like, well, maybe I can rent best and that those opportunities
• 9:30
  weren't really talked about before, but they are now by younger people. So there is an ability to,
• 9:36
  you know, buy and and add a granny flat. There's an ability to actually buy, live in one and split the
• 9:43
  other. There's an ability to actually buy a commercial property, live upstairs, run a business
• 9:46
  downstairs. You can be very creative when it comes to buying real estate as well. Do I think the
• 9:51
  ability to build wealth is completely disappeared? No. I really feel that if you wanting to build
• 9:56
  wealth, it's still possible, but it requires effort. Do I still think there's ability to sell and
• 10:02
  build businesses online? Yep. Like never before. Because now social media is widely adopted as the
• 10:07
  place to do business. So as I said, we've started a network marketing business. We've started an
• 10:10
  education business. We bought a laundromat business. We have shares in an accounting business.
• 10:14
  And we have. We have. We have probably 10 to 12 different incomes coming through, including the
• 10:20
  dividends and I. I look back and I don't recall I ever really made a lot of money extra when I was
• 10:25
  in the property business that I was in. It was like, you know, it was six figures, but it wasn't
• 10:28
  like ridiculous. There's a lot of people out there making reasonably good money in their age. It's
• 10:33
  just the ability to look for opportunities and to take a swing, you know, to take a risk. Um, so I, I'm,
• 10:40
  I'm a big believer in if you can buy a small business for a couple hundred grand. One of my
• 10:45
  students bought a gym Anytime Fitness franchise for about 400 K, and he did that while he was
• 10:50
  doing his job, and he just paid it off. Just he's paying it off now and it's doing well. Service
• 10:53
  based businesses you can get into. A buddy of mine just bought a building certification business for
• 10:57
  about 1.7 million, and I know that's a big number for a lot of people, but, you know, put 4 or 500 K
• 11:03
  down in cash because he sold a property and he borrowed the balance. And yeah, by all accounts
• 11:08
  he's bought that on three times earnings. He'll pay it off in three years. Pretty cool stuff. There
• 11:11
  are lots of there are lots of opportunities out there if you're if you're looking for them and if
• 11:17
  you don't have the money, remember, you can form partnerships. In fact, in the Become Time Rich book,
• 11:21
  I talk about forming partnerships and how all five of our businesses are partnership deals. So I
• 11:26
  really feel that if you don't feel like you have opportunity, what do what can you bring? What can
• 11:31
  you bring to the partnership? Can you bring skills? Can you bring time? Can you bring energy? Can you
• 11:36
  bring money? What is the other partner not have that you want? And if you can come together like
• 11:40
  that, you can form a partnership where you don't have to put a lot of money down. But you might
• 11:43
  give the legwork and the grunt work and the energy and the time. Right? Just quickly, if you're
• 11:47
  ready to take control of your finances but feel stuck on where to start, I have a solution. My book,
• 11:52
  Money Biased Happiness simplifies Investing and Wealth Building with practical steps to help you
• 11:57
  achieve financial peace. Get your copy via the link in the show notes and let's get your money
• 12:02
  working for you. Now back to the episode. Similarly, with our original network marketing business, we
• 12:07
  were able to start from scratch, from nothing, from our phone, and literally with sweat equity, start
• 12:13
  to build that over time by learning the skills. And we did and we did it all organically. And it's
• 12:19
  still to this day. Well, we just came back from Thailand on a trip that was a free trip. We went
• 12:23
  and did some leadership training over there for the company. We're just now in the top lead, like
• 12:27
  we've been dominating that business for 12 years. Well, probably 11 because it took us a year to
• 12:33
  figure it out. But we've made over $2 million in 2 million in profits that we've put into, um,
• 12:40
  our share portfolio, 30 international, which I don't remember the last time I paid for trouble.
• 12:45
  Is that opportunity still available? 100%, 100%? I run webinars about it all the time. In fact, I had
• 12:50
  65 people on the webinar the other night. It's still available. All these things I'm talking
• 12:54
  about and, you know, an online consulting or coaching or education business that's available
• 12:59
  for you to build. It's even easier now with AI network marketing still available for you to
• 13:03
  build. That's very, very low risk. You can buy a small business if you're looking out of one of my
• 13:10
  students who just settled on a Snap Fitness gym. Loveliest guy, awesome guy. He bought this gym, he
• 13:15
  said, what should I do with the extra money I got left over? I'm like, I'll just sit on it, you know,
• 13:17
  have to spend it. And he said, okay. And he said, oh, interestingly, my business partner wants out and
• 13:21
  I'm going to buy him out. It's a perfectly good, good use of the money. Small business is good
• 13:26
  partnerships. There is opportunity, but there's only opportunity for those who are prepared for
• 13:30
  it. So I think part of the process of Kenya still build with wealth in Australia. Yes. If you're
• 13:36
  willing to do the work, if you're willing to make the sacrifice, you're willing to work weekends. If
• 13:40
  you're willing to put the effort in and get close to a mentor and follow them and help them. Like, I
• 13:46
  think that in this day and age, rather than going off to university, it'd be like, well, what's the
• 13:50
  type of business? What do I love? What do I enjoy, who's doing it well, and can I pay them to settle
• 13:54
  up next to them and just model what they're doing? That's a far better way, I believe, to be getting
• 13:59
  involved in things than ever before. Right, young guy Alex behind the camera. Right now. He's filming
• 14:05
  this. He's in here. And I know he came from another flipping country, and and he started working
• 14:12
  with a mentor in his business, which he still does to this day. And he's become so good at it that
• 14:17
  he's developed incredible skills, and he gets to sit here and listen to me talk about wealth all
• 14:20
  day long. So he's getting an education at the same time. You know, he just told me he came back
• 14:24
  flipping wakeboarding in Thailand and come back like, what a cool life. That's a that's a way
• 14:29
  better. Uh, that's a way better idea than university because he's he's learning. He's
• 14:34
  learning. He's skilling up and he has some level of flexibility. And he loves what he does. I mean,
• 14:38
  that's that's what. And he's only young. He's in he's flipping 20s. He's I mean sad that he's so
• 14:44
  young and he gets all this success. But this is what for those who are hungry, there's a huge
• 14:48
  availability of opportunity. Okay. So to finish up here's what I want to do. I want to give you some
• 14:54
  steps to take to make sure you can build wealth in today's economy, in this country, the first
• 14:59
  thing to do straight up is to fix any leaks you got in your money that's falling out. Because
• 15:03
  anytime money falls out of your account, there's less money to deploy to be able to create
• 15:06
  opportunity yourself. And I'm talking about look after the pennies and the pounds of flow. Do that
• 15:09
  first. Second. There's no guaranteed win, right? You've got to look for as close to that as you
• 15:15
  can get. Like Warren Buffett says he likes to step over small little bars and hurdles, not jump over
• 15:21
  big ones. So what are the what are the absolute wins? You can see immediately. So like, for example,
• 15:26
  can you get a quick pay rise at work. Can you start a portfolio and just begin that process? Can
• 15:31
  you take a second job? Can you like what can you do quickly and instantly reward yourself with
• 15:35
  more income? Third thing, automate stuff. Automate your savings and investing. You can use simple
• 15:40
  apps like raise does that in Australia, and that's really effective to set up and start going just
• 15:44
  to get it going. Number four, if you can salary sacrifice in a job and super it's not a bad idea.
• 15:49
  But what can you get tax deductions for. That's the beauty of having a home based business. You
• 15:53
  can get tax deductions for things like that you don't have now. That's why I think it's important
• 15:57
  to start a home based online business with an ABN. Number five attack income like it's an asset. Go
• 16:03
  after it. Right. Just it's action takers and money-makers. So it's all about just developing
• 16:09
  cash flow. Start one. Number six is start one income asset this year. Right. And reinvest
• 16:16
  and avoid decisions that are going to put you in drastic amounts of consumer debt. And most
• 16:22
  importantly, I think not necessarily running out to buy property and tacking yourself onto a
• 16:26
  massive mortgage, but looking for alternative ways to earn income, develop your skills and get cash
• 16:31
  flow. That's how you really get ahead. Okay, not certifications, but actual skills, right? And of
• 16:37
  course, the last one is to protect the downside. There's going to be stagflation. There's going to
• 16:41
  be inflation. There's going to be things that are working against you. Just look for the things that
• 16:46
  are going to tear wealth away from you and avoid them like the plague. Okay, so there's some steps
• 16:50
  you can take today to start getting ahead and starting build because you build wealth $100 at a
• 16:57
  time. Is this what can 800, 100, and 100? It's just those little steps, those little steps, those
• 17:01
  little steps. That's how it's done. And be aware and understand that you're going to have to step
• 17:08
  out of your comfort zone. You are. That's where the growth comes. And most people are too afraid to do
• 17:14
  that. That's why they stay in their job and just let stagflation and technology go past them. And
• 17:19
  then by the time they're 55, they're cooked. Now, is it too late at 55? Absolutely not. You've got
• 17:24
  another 50 years ahead of you. What are you going to do about it? I hope that makes sense and helps
• 17:30
  you understand. You can still build wealth if you're looking for it. Right. The old saying by
• 17:35
  Henry Ford, if you think you can and you think you can't. You're right. So you're never too old to
• 17:40
  begin. And you're never too young to begin to build wealth. Wealth is a habit. Wealth of
• 17:44
  lifestyle. Wealth is an embodiment, and it's a way of life. So you either get on board with that and
• 17:50
  start building wealth despite the challenges, or you give up and say, it's too hard. I know which
• 17:55
  camp I'd want to be in and I hope you're the same. So hit the subscribe button. Share this with a
• 17:58
  friend. Come back in the comments and I'll see you in the next episode. Thanks for listening. To Money
• 18:02
  Grows on Trees. If you enjoyed the episode, leave a five star review on Apple Podcasts and Spotify,
• 18:07
  and subscribe to us on YouTube so you never miss an episode. And if you're serious about building
• 18:12
  wealth, make sure to check out the links in the show notes and follow me on all social media
• 18:16
  platforms at Lloyd James Ross for more. See you in the next episode.