Exploring The Financial Freedom Foundation Strategy


Hi Guys, Ryan here from on-property Dotcom
Donohue and today I have with me none other than Ben Everingham. We are in the same room
at the moment, which rarely happens. Usually we’re just talking over the phone, but we
wanted to meet up to talk about this new financial freedom foundation or two property strategy
or we haven’t quite worked out the name yet, but basically this is all fairly new for us,
so because I just wanted to capture the conversation, we’ve had a quick convo about it but not a
huge one and so we thought do something more casual today, kind of capture the essence
of this idea because we really do think that this is quite revolutionary and could help
a lot of people. Yeah. So Ryan, run me the other day, be safe
for some of you that have been following us for a while. We’ve got the four properties
strategy that we’ve been talking about. Um, but I’m on my way home and Ryan’s like, I’ve
got something amazing to talk to you about. Yeah, I like texting him. I was like, had
this feeling in the morning. I was like, I’m going to have a good idea today. Something
bad’s gonna happen. So I’m like, I’m going to go for a surf because that helps my creativity
in the surf. Like the idea hits me. I like run home from the setup. I like text Ben Unlike
call me. I’m like, if you’ve got something on Kansas, can you call? And then like three
hours later he texts me. He’s like, dude, just go. You message. Unfortunately, or fortunately
I have clients that I have to talk to as well, but Brian is building up, um, that. So Ryan’s texts me and then we’ve
talked in the up on the way home and I’ve literally got goosebumps about this concept
because it means that every single person that we get to work with that follows the
strategy will end up financially independent. Cashflow was, it just will take a little bit
longer for some people and a little bit shorter for others. But we’ve been thinking about
these figures in, in years now, me personally, and I’ve always been looking for a way that
the average person like me can achieve financial independence in a relatively reasonable period
of time without taking on too much risk or debt. And uh, Ryan’s finally figured that
out. Yeah. Well, and I’m big on the idea of simplicity.
Like so many people talk about the logical way to make the most money through property
and capital growth and flipping properties and complex strategies and things like that.
But I also know a lot about people and how people get very overwhelmed about how we don’t.
Like, I am proof that people don’t live on logic alone. Like I’m a very emotional person
and we’ll work off emotion and so something that you can line up with people’s circumstances
and people’s emotions and changing lifestyles and stuff like that as well. Because even
a lot of the strategies like capital growth where you negative gearing. Like what happens
if you wake up tomorrow and you, you hate your job or you get made redundant or you
get fired and now you’re negatively geared to the hill and you’ve got an income coming
in. So I’m always like on the idea of flexibility, simplicity and actually like playing to our
strengths as people who have the notion rather than like trying to be vulcans will live long
and prosper rather than Trinity Volkans and just live with logic only and infested with
logic only try and find something that works with our emotions rather than against it. And I realized that someone who’s bought some
property for myself and a lot of property for other people that I’ve talked to, a lot
of different investors and gone through all the ebbs and flows personally, that, you know,
logic and emotion to things. But then there’s also all the theater. It creeps up. There’s
all of the different influences in our environment. And so what I liked most about this concept
is if I hadn’t found out about it, um, you know, possibly 10 years ago or eight years
ago when I was just getting started on my, I’ve done things very, very differently. I’m
a mortgage broker that works out of our office and who’s a good friend of mine, Adam and
I was faking you about this after I explained it to him the next day. And he said, well,
I’ve actually got a friend who’s 25, he’s got a couple of kids. And Him and his wife had been traveling around
Australia for the last three years, nonstop because they realize this to property strategy.
Three years ago he was working in the minds away when I bought these two properties. He
know that longterm now that he’s going to be financially independent, he’s like, just
happy to cruise while that independence comes to him without him doing too much. So it’s
not an easy strategy. You’ve still got to take action. And obviously no one wants to
wait forever for financial independence. But you know, once you’ve locked it in, you can
reverse engineered and speed up the journey of, you know, that’s the second stage of it
really. So for those of you who like have like four
minutes in and have no idea what we’re talking about, the strategy, which I call it the financial
freedom foundation, but maybe renamed in the band name is similar to that. I don’t know,
that’s not three words, but the idea is that you buy a few or a couple foundational properties
that have good income. So two properties that we build granny flats on. So you get four
incomes and basically they’re positive cashflow neutral, good, and they’ll go on to pay themselves
off over 25 years. So you work hard and you buy them. And then the properties will basically
take care of themselves and pay themselves off over 25 years. And at that 25 year point
when they pay themselves off, rather than paying off the mortgage, that money now goes
into your pocket and you’re financially free. So the idea is that you accumulate a couple
of properties in a shortish period of time. And then that will go on to give you financial
freedom in the future by themselves. And so then where you’ve already set that up and
now it’s just up to you to decide, well, do I try and accelerate that? Do I try and grow
that or do I just leave it and do I go on and live my life? And so if you missed the
video, go on property.com dot EU for session five. Oh three if you want to watch them or
detailed summary over there. Um, but that’s the basic concept that we just didn’t have
the framework for, like we had all these ideas like kicking around and elements of all of
this sort of stuff, but it just never came together in a cohesive unit. And for those of you that are a little bit more like me
that likes the detail and the data to roll these out, it’s very simple. If you’re a first
time and getting started in theK and have some cash in the bank or if you’re more established
and you have a couple of investments already or your own home with some good equity in
it and you’re earning 60 to 100 grand a year combined, this is a strategy that you can
actually execute. It doesn’t take hundreds of thousands of dollars of savings or income,
which is why I love it. So the detail is really buy the first property. Maybe it’s a $400,000
home that rents for 400 to 420 bucks a week and then go out and buy the second time. Again,
400 k that rents for 420 grand off 120 bucks a week. And then after you bought the two
properties, go and add a granny flat on each of those. That might cost you $110,000. Not all that
of your own pocket. The bank will finance 80 percent of that and then that $110,000,
granny flat get you another $280 a week in rent minimum. So you do that twice one on
each of the properties. So now you’ve got 400 k home plus 110 grand granny flat, so
$510,000 worth of investment and you’re getting, you know, what do we told them? $600 bucks
a week, 700 bucks a week in rent. So you’re getting a seven percent yield. You’re also
buying quality areas. We’re not talking about buying regional properties in the middle of
nowhere. You can execute this strategy in Brisbane, which we all know over the last
50 years has performed as well or better than Sydney and Melbourne from a capital growth
perspective. So we’re not trading growth for cash flow, but we are definitely looking for
that cashflow elements so that you know, $700 a week in 15 to 25 years time turns into a
pretty good amount of passive income if you don’t have any other debts. Yeah, you want in a good area because if you’re
talking 25 years down the track, who knows what’s going to happen in the next 25 years,
right? And so you want that area to still be good in 25 years. You want. We want rental
increases over that time as well. Capital growth, if we can get it. Sure. But I think
what I love about this strategy as well is that a lot of people like it takes a lot of
the complexity out of it. A lot of people also, when you’re looking at a multiple property
strategy where you’re talking five, six, 10 properties, then you start to hear it all
sort of lending limits and difficulties with lending that you don’t really hit when you
have like a two property strategy and so it kind of removes that complexity as well. It
also removes the complexity of this incessant focus that people have on capital growth and
like every. Like I walked past, I was in woolies today and then walking past looking at the
property mags and they’ve always got something on the front about like the hotspots and stuff
like that. Like it’s all about capital growth. Everyone talks about capital growth and we’re
all about capital direct. Like we want that for sure. We just kind of control roll it. And that’s the problem with traditional
property strategies is capital growth was fine when property is doubling every seven
to 10 years. But what if they only double every 20 years moving forward? Or what if
a certain times of the cycle you go through corrections, then cashflow is king and in
America if you talk to 90 percent of investors, they invest for cashflow. It’s really an Australian
centric thing to be capital growth focused and that’s because you’ve probably had almost
50 years of consistently outward growth or 100 years of consistent growth. So it’s in
our psychology, but that is being driven by things that are outside of our control in
some ways. And you know, when the population tap, you know, turns off or when we go to
war, then capital growth can stop. But what is constantly is paypal and a place to learn
place to live and they need a pace to play rent to and when money’s tight to get in hard
times people, there’s more renters, so incomes rise and it’s one of those strategies that
you never ever gonna regret getting passive income for the rest of your life. And that
that’s why I like it so much and I’ve moved significantly towards this and it took me. Well the funny thing is like you’re already
doing this, like for yourself in the buyer’s agency as well, like we’re already like have
been moving towards this strategy. Even the forefront for properties to financial freedom
like is this strategy but just more complex as the set. So we’ve been moving towards this
anyway. Even we had a combo, what it have been six months or a year ago. One of the
conversations went, ben called me freaking out and acting as a psychologist happens more
modern and the after a big weekend under beers. But yeah, just this idea of that you’re not
at the point of financial freedom that you’d like to be, but if you just left your portfolio
then it would get there anyway. Like that idea. We had that idea months ago, but it
just hasn’t come through into a way that we can express it to other people out there.
Can you guaranteed future income or you have to
do is pay principal and interest for 25 years on the line and it’s there. Anything you do
in that period of time after you bought those two properties, then becomes your choice because
you’ve guaranteed your financial future. Then you can speed it up or you can just cruise
like some of us don’t want to work our asses off for the next 25 years. Some of us are
working jobs. Like when I was working before I started this business, I really didn’t enjoy
parts of my jobs or parts of the employees that I was working for and there’s hates of
people that could lock these types of strategy down in one to four years and then take the
pressure off themselves. Changed careers. Take a cheaper job, low paying job until they
rebuild the skills, have a crack in a business or start a business on the side, cut down
to four days a week or start taking some more holidays, you know, go away for awhile. Like
my mates theater. It just gives you options without that constant thing hanging over your
head of how am I actually going to be fine in the future, which unfortunately is Western
as we’ve all been programmed to think outside that we obviously keep working and that’s
how the system works well. And even with all the other strategies
about capital growth, I think really feed on. Agreed. And I agreed that well you can
make $100,000 or you could make a million dollars and like the books or sell it, you
know, a million dollars in property in x amount of years. Or like I’m no sleeping nine. Had
a zero to a million dollars in property in 12 months. Like all those sort of numbers
like feed on our grade. But I think when I achieved financial freedom through property,
but through my online business, um, and I know you kind of went through a similar thing
as well, you kind of get to the end and you’re like, okay, adding extra money doesn’t make
you happier. Like in fact money doesn’t make you happy. Like you get to that point of financial
freedom, like shorts, great. I don’t have to work in a job I don’t like anymore, but
you don’t have automatic happiness. And so I’ve really stepped away from the greed
and from the money and from the fancy cars and stuff, which I never really cared about
it. That’s definitely not. Um, but yeah, just towards that sort of lifestyle thing. And
I feel like you’ve moved towards that as well, which is that this strategy works well for
people who are like us and who can get on the same bandwagon and they’re like, I want
choices in my life. I want lifestyle friends and family. And spending time with them is
important to me. Looking really good too. The neighbors driving the best BMW or Tesla
or whatever it is at the time. You know, having a mansion on the water, if that’s your thing,
if that’s what is important to you, then the strategy might not work because it’s more
longterm. It’s more like deep rooted in who you are and what’s gonna make you happy. That’s
what we work with a lot of things. Clients as well that do that. Like we’re still.
We still like. It’s not like we’re not saying no to capital growth. I know to high quality
properties at least at pumped on property. All we’re doing is trying to give choices
so that people go, it doesn’t have to be a or B, it could be a, B or c depending on where
is it your coming from and having achieved some things and having life Brian in my life
and some other people that I connect with in the same way that are living a different
path because of their choices. It’s made me re evaluate what’s important. I’m deaf. The
music’s not over inmate like I still feel like at 32 I’m so excited about the future
new businesses doing stuff, but it’s also like living in the present moment. Enjoying
like where we are and there’s a lot of people that I think can relate to that, like just
having choices around time is a huge thing. Well that’s the power that we felt right.
Since we have that choice ourselves of what we want to work on or whether we want to work
or not. Then it really unlocked something in you that you’re like, okay, now I want
to. You get really passionate about work and like you said, the music’s not in you. You
get passionate about it and I hope that this strategy will help people lock away their
financial future and then have that freedom to feel passionate about something like we
do and like as you were saying like I was probably being a bit polarizing is that you
can like this strategy, we do still target capital growth and you can also multiply.
The strategy doesn’t have to be two properties, it can be four, it can be a can we 16. Like
you can go as far as you want and two properties would like we’ve worked out, the numbers would
roughly net you around 100 grand a year in today’s money. Once they’re completely paid off and obviously
you rough figures, not financial advice, but yeah, like if that’s not enough for you, then
you could go more. You could double that or triple that or whatever. You could get up
to the point where, you know, you could do a million dollars a year and that, this is
the cool thing. Like I was talking to my broker about this concept and he said as a person
sort of getting started in investing, um, you know, whether you’ve got your own home
and you’re investing or you’ve got one investment property and you’ve got a home or you’re just
completely getting started. No Bank ever sent you any too much cash flow come back next
year. You know what I mean? Like when I bought my first property, they were negatively geared
properties before tax and you know, that’s why my service ability got caught and now
you know, big periods of time. Pretty much all of my journey personally have
been periods where I can’t borrow it and I’m sure a lot of people watching this or listening
to this can relate to that, but if you’ve got properties that net or gross gratiot about
six to seven percent rental returns, then you begin to look more favorable for the people
that you need to. If you want to take it further. And also having that confidence that you’ve
locked in your future, as Ryan said before, like enables you to feel more creative and
go off in different directions based on passion or you know, this is part of my strategy for
my portfolio. I still definitely buy the highest quality capital growth oriented properties
as well, you know, but there’s cashflow ones for me enabled me to buy those ones with confidence
and not get caught out from a cashflow perspective. If you know, it doesn’t end up the way that
I expect it to. Or you know, something happens in the marketplace that we don’t expect and
there’s so much flexibility in it as well. Like you can lock in those properties and
then you could go ham investing in whatever way you want, like however complicated you
want, and that investment strategy could be to flip properties for a profit or it could
be to renovate or it could be all of these different things that you don’t have to just
invest one way, but I’m not. I think knowing that you’ve got that locked down or even knowing
that you could accelerate that if you want. So we say 25 years, so you could do a principal
and interest loan at 25 years. You could do 30, you know, or you could then once you lock
in those properties and you’ve got them, you build the granny flats, then you can take
ownership and work on cutting that 25 years down to 20 or 15 depending on your age. Depending
on how motivated you are. You can like we can. You can put extra money on your learning
if you want. You can pay it off faster. You don’t have to wait 25 years. That’s what I
like to do. That’s like worst case. You arrived there
and that’s the best part of it because we know 85 percent of all other rosie’s wine.
In fact, I read something yesterday that five percent of Australians are actually financially
free in retirement. Twenty five percent, one in 20, one in 20 of us, 20 percent can live
and survive using their own money and then 80 percent of us in our generation are expected
to end up in the pension which crushes me. Which is why this strategy is awesome. But
as soon as Ryan told me about it, I went, I’m not a white for 25 years topic. I neither
are you clearly. So what? How would I do this? Based on the different stages of my life that
I’ve gone through and as Ryan said, starting something on the side, working a second job,
which I did for years and years and years, saving a bit more, getting a higher paying
job, developing the skills to enroll money and your job. Starting a business, buying
one other property, holding that property for 10 years and then selling it and if you
buy the right property and do the right things to that property, you know you might be able
to make a nice chunk of cash and and wipe off debt that way like this. You could do that. Let’s get a chunk of cash
or even buying another property that has good cashflow. Even spinning off positive cash
flow, you could use that to pay down the financial foundation properties. This is what foundation
probably needs to change, but yeah, you can use the cash flow to pay down the loans on
those two properties and then once they’re paid off, you can live off those properties,
but you still got extra generating cashflow and then you focus can shift to paying them
off so you’re financially free on maybe 100 k a year or whatever it ends up being. But
then you’ve got other properties in the wings that you’re paying off and so in another five
years, your income is going to jump once those are paid off. And so there’s so many opportunities
to either accelerate it, so to lower the timeframe from 25 years down or to grow it and to increase
the income from like a lower level to a high level. What I love most about this concept
is there’s a lot of things in company which have an life in Australia, in western
countries where we always focus on the future. I’ll be happy when I’ll be financially free
when these concepts of living in the future. What I love about this concept, because it
doesn’t rely on capital growth and things you cannot control, is it immediately puts
the emphasis back on me as an individual, which I like personally because I like to
take responsibility for myself and as investors that enables us to start thinking about solutions
rather than the challenge of waiting or doing tricky strategies to get to the result that
anything that makes you start thinking creatively on solutions eats awesome. Because we’re smart.
We figure stuff out. You know what I mean? And the way that you tried your of how to
get there faster is up to you. And that’ll work for
you. And it’ll be different for the hundred other people, you know what I mean? So I think
if you give yourself interesting questions for your mind to think about, you come up
with interesting solutions and so if you’ve locked in your future and now your question
becomes, how can I accelerate this? How can I do it faster? You’re going to come up with
weight. It’s like you don’t need us to tell you ways to do it. You’ll find ways to do
it. It’d be passionate about it. Now I really, really, really excited about this and exploring
about it, exploring it in bit more detail and obviously checking out the beer that you
did, which works through the nitty gritty a little bit more than this as well. And so
if you guys have any names, suggestions though, better than financial freedom foundation,
um, which kind of sounds like a charity financial freedom foundation. So if you have any other names for that, please
leave them in the comment section down below. Or if this sounds like your keen on this idea,
but you feel like you couldn’t execute it yourself. And it’s too complicated than Ben
and his team over here at pumped on property, do a lot of these kinds of purchases and a
lot of these grants that builds and stuff as well. And so if you think that this could
line up with you, you want to invest, but you can’t do it yourself and you need some
help, then Ben and his team are offering free strategy sessions to listeners of today’s
episode. So head over to on property dot Kondo, you for such session. If that sounds like
you, you can read about that over there and you can pick a time in your schedule that
works for you. We can have that strategy session. So yeah, thanks so much for tuning in to this
more casual episode where we’re kind of like, it’s darling, but now that we’re putting out
the vibes and the thoughts are just free flowing. So we hope that you guys liked this different
episode and until next time, stay positive.

2 thoughts on “Exploring The Financial Freedom Foundation Strategy

  • HI guys great video, I was wondering if you guys have read Early Retirement Extreme? I think its a great book for getting into the mindset of saving to reach financial independence and i was wondering if you had any thoughts on it.

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