But promise number three doesn’t have to be broken.
This year could be the year you actually do it — take the first steps to financial freedom through building a property portfolio.
Sure, it’s not going to be easy, especially if you’re living and working in a city where an average house will set you back a lazy $1 million, but these money experts say building wealth can be done.
Property guru Chris Gray quit his 9-to-5 corporate gig at just 31 and although times may well have changed, he believes young people hoping to kick-start a property portfolio can still dream (and succeed).
“Anything is possible. It might look very daunting now, but when you look back in five or 10 years time it will all seem very easy. Just like climbing a mountain, you just need to concentrate on one step at a time,” he said.
Mr Gray, who is now a buyers’ agent, author, and presenter on Sky News Business’ Your Property Empire, said just the shortest hesitation could cost you so there is no time like the present to act.
“Property is typically getting more and more expensive every year, and so if you don’t make a start on it now, it will be even harder in a years time. The earlier you start the better. Work hard and sacrifice in your 20s and then you’ll be enjoying some of the better things in life in your 30s and beyond,” Mr Gray said.
Graham Cooke, insights manager, with financial comparison website finder.com.ausaid there are 10 simple tips that hopeful property investors should follow in order to get cash savvy. He said smart decisions like the obvious step of avoiding too many restaurant meals, to getting the share economy and technology to work for you should all be carefully considered.
Mr Gray said wannabe investors should start straight away by crunching numbers, not get bogged down with the “what ifs” and just start saving;
Get it down on paper
Calculate what you currently own (bank balances, superannuation) and what you owe (HECS, credit cards, car loans).
Write down what you’re spending as most people have nothing to show at the end of the month and they don’t know where it all goes.
Work out a budget and commit to saving a certain amount every month. Make a sacrifice now on easy things like expensive coffees, staying in a few nights, taking a packed lunch to work and you’ll be rewarded by extra holidays in the future.
Draw a picture-board or stick magazine pictures onto a large piece of paper as a dream board — unless you can give yourself a big enough WHY to do this it will never happen as soon as there are small hurdles along the way you’ll give up.
Once you’ve done the homework, take your financial information to a mortgage broker even if you’re not in the market to buy your first property right now. A broker will assess what you can borrow, which will give you your ultimate motivator — how much you are going to need to save to get started.
Keep the big picture in soft focus
Have your 10 to 20-year dream in your mind and roughly work out how many properties it would take to achieve the income and wealth you’ll need. But just concentrate on getting your first property. Once that has settled, then start working on the next and so on.
Because the property market doesn’t rise by a consistent amount every year so some years you might buy no property and then you might by two in the same year.
Ditch the fear of debt
It all depends on what assets, liabilities, and income you currently have, but for most young people, yes you will need to sacrifice. But for those who already own a property, the sacrifice will be in spending some time and money learning to get over your fear of debt. It’s about learning that buying more property is likely to make you more money than you’ll save by paying off your debt.
The big money in property investing is in your attitude, mindset, and knowledge — not necessarily about timing the market, finding the next boom suburb or being the best renovator.
No huge pay cheque, no worries.
Multi-generational living: The McGrath Report
So you have a less than impressive wage, but that’s no reason to give up the dream of a property portfolio.
There are plenty of examples of people with low incomes and little education making a fortune in property — it all comes down to your “why” and your motivation.
Get a part-time job at night or on the weekends, or drive for Uber on way to work to offset some of your car costs.
If you try and save 10 to 20 percent on what you spend, and earn an extra 10 to 20 percent income, it will make a difference over time and it’s not a sacrifice forever.
Graham Cooke’s advice to hopeful property moguls is to make simple changes in your day to day life to lead to a successful future;
1. Chase discounts
If you’ve got your sights on a property, you need to get serious about saving which means being frugal. From bundling products (such as your savings and transaction account) to negotiating a better deal on your home loan or credit card, to making the most of early-bird offers or searching for shopping coupon codes, there are various ways you can unlock better value for your day-to-day costs.
2. Share a Netflix or Spotify account with your housemates
While the monthly fee for a TV or music streaming account may not break the bank, the annual cost of Netflix, Stan or Spotify accounts add up over time. So it makes sense to share an account. Why pay for separate accounts when you can use the same subscription?
3. Make the most of budgeting apps
There are so many budgeting apps and resources at our disposal which can make money management easier. Whether it’s using online calculators to estimate the cost of stamp duty, or downloading apps (like Splitwise) to help manage joint bills, make the most of these resources to save smarter. Even apps like MotorMouth or Petrol Spy can help cut your fuel bill by locating nearby suburbs with the cheapest petrol price.
4. Brunch less
This doesn’t mean you can’t occasionally treat yourself to smashed avo on toast, but eating out less will be kinder to your hip pocket. Consider making a coffee in the office or nominating one to two days a week that you’ll eat out. And if you’re eating out because you just don’t want to cook, ingredient delivery services like Marley Spoon or Hello Fresh can be a great way to motivate you — cooking is good for both your waistline and hip-pocket.
5. Draw on the share economy
Plenty of young Aussies are making the most of their spare time and skills via the sharing economy. Signing up to be an Uber driver, offering your services on sites like Fiver or Airtasker, or even renting out a spare bedroom are just some ways you can create an extra income flow.
6. Aim to pay the full balance of your plastic bill
If you can’t pay the full balance, at aim to pay a bit more than the minimum payment on your credit card. Outstanding, interest-accruing debt on a credit card will always cost you a lot more than you will gain from having funds on a savings account. So getting ahead on your plastic debt will help reduce interest and ensure you build up a good credit history (which will come in handy when applying for a home loan).
7. Be smart with ride-sharing
We’re all familiar with the frustration of seeing the “1.2x surcharge” when ordering an Uber or Taxify ride, but there are ways to be smarter about it. In some cases it may be cheaper to order a taxi over an Uber. To find out which is the best value, you need to view the Uber surge ratio. According to finder.com.au analysis, once the ratio hits 1.4 (in Sydney) during the day or 1.7 at night, it’s cheaper to hail a taxi.
8. Maximise your spending with a rewards card
If you’re paying off your credit card every month, consider maximising your spend with a rewards card that lets you clock up points on every dollar spent. Some, such as American Express’ Discovery card, are available with no annual fee. For example, spending $8000 on this card over the course of a couple of months could entitle you to a flight from Sydney to Melbourne or Brisbane. But remember to pay your balance off every month, as these cards come with higher interest rates than most cards on the market.
9. Keep an eye on your energy usage
During summer, household cooling costs can really eat into your budget. To lower your energy costs (and to reduce your carbon footprint), consider using an energy-efficient air conditioner or washing machine. Also, keep an eye on the temperature setting.
10. Be a healthier you
Turn your unhealthy habits down a notch. Reducing your alcohol intake or gambling habits could allow you to reap significant financial (and lifestyle) benefits in 2018. Many insurance and credit providers are now offering discounts if you wear wearable technology such as Fitbits or if you walk a certain number of steps per day. Save money and make your new year resolution a reality — it’s two birds, with one stone!