bushy martin passive income

Bushy Martin: My passive income story

KnowHow founder and property investment expert Bushy Martin shares his passive income journey, and how he found the time to live by design, sustainably and safely.


I believe true fulfilment only comes when you give freely to others without expecting anything in return, and that you can only do this when you have the freedom of time on your hands.

In our Western world, you only have time on your hands if your income needs are being met without relying on you to generate it. In other words, time will come from ongoing passive income, not from our active work income where you are forced to trade your time for money.

But how do you actually get time back and free up time permanently? Well let me take you through my journey on freeing up time, so that you can apply the principles of my approach in a way that works best for you.

Suffering from a time-poor lifestyle

Just over 20 years ago, I was a workaholic architect for an international design firm. On the outside, I looked like I was living the dream. But on the inside, it was killing me. I was working relentlessly seven days a week, 14 hours a day with no time for anything or anyone but work. My workaholism and blind ambition ended up costing me my marriage, my family, my health and my wealth. I ended up burned out, broke and broken. After 17 years of dedication to architecture, I was left with nothing other than my old car and my cassette collection.

In my mid 30s I had to start again from nothing – I didn’t have two cents to rub together. I couldn’t believe that I ended up there and I was determined to learn from this and not make the same mistake again.

Identifying my core values

I withdrew from the world like a hermit for two years and used the excuse of doing my MBA to re-evaluate what I needed to do differently – I refer to this as my Howard Hughes years. During that time, my new partner Sonya and I spent a wintry Sunday afternoon sitting by the fire over a bottle of red wine at a cosy home style restaurant in Clarendon, and we painted a vivid word picture and vision of exactly how we wanted to live in line with our values.

My personal core values, the things that are really important to me, are all captured in the word HUMILITY. It’s the quality that I most admire but rarely see. Humility is about being unpretentious, respectful, unassuming and not seeking recognition.  I break H-U-M-I-L-I-T-Y down into the core values of Harmony, Uniqueness, Motivated, Integrity, Loyalty, Inspiration, Thoroughness, and Yes (or acceptance).

Your core values are your starting point, and these personal values will feed into our KnowHow G-O-L-D values – Generosity, Openness, Leadership and Diversity.

Of course, no right or wrong answer exists with your values. However, it is important to stop and crystallise what’s important to you. That way, you can measure your choices, decisions, and options against them so that they’re aligned with your personal integrity and positive impact your level of self-esteem and belief.

From personal experience, I can tell you that if you’re not doing things in alignment with your fundamental values and core beliefs, this continuous compromise will eat at your subconscious and hamstring your progress in all aspects of your life. Conversely, if your actions and associations are aligned, magic happens exponentially.

Embracing a positive mindset

Now, our values formed the basis and the compass for our life vision. So, I used my architectural design skills of starting with a vision of the end in mind and then working backwards to the steps we needed to take to build it. We saw ourselves living and working on a hillside homestead rural retreat with long range uninterrupted natural views surrounded by our rescue smiling samoyed dogs. We saw ourselves enjoying the time to meditate and reflect, to eat healthy, keep fit, play hockey, to sing and play the piano, to learn, read and write everyday, to travel and experience the world in new places every year. We also wanted to help others create happy homes and to help eliminate homelessness for those that have no voice and no choice.

We wrote down a diary of our perfect day, week, month and year – what we were seeing, feeling, hearing, tasting, touching. I wrote my perfect day while Sonya wrote a letter to her Mum in 10 years’ time. I then created a vision board with pictures of everything we wanted to do on it, and had multiple copies stuck up all over the house – on the bedhead, on the fridge, next to my desk, on the bathroom mirror, and in my favourite contemplation room, the toilet!

I wanted to remind myself day in, day out of how we were going to live our life. I wrote and recorded an affirmation and vision statement on my mobile and listened to it every morning as I was getting dressed. I started and finished every day meditating and imagining us living this life, and giving thanks to our awesome life as if it had already happened. I immersed myself in how good it felt, and those feelings of gratitude, love, joy and freedom warmed my heart and put a massive smile on my face, even though we had nothing and were starting again from scratch at the time. Now I didn’t realise then just how powerful this happy habit was to become but looking back this was very magnetic and transformational.

Finding my Freedom Numbers

We then monetised our mission of our ideal lifestyle and answered the question of ‘how much is enough?’. With the help of a good accountant, we worked out how much our ideal lifestyle would cost per year, and the amount of passive income we needed to create to free our time so we could enjoy this lifestyle. This is what we now call our lifestyle income, which is part of our Freedom Numbers.

Our lifestyle income was $200k a year, and we wanted to be living this way in 20 years – what we call our breakfree timeline. To achieve this passive lifestyle income, we worked out that we needed to build a portfolio of income producing assets that results in a nest egg of $4 – 5 million in 20 years. This is what we now call your nest egg number, and it’s based on getting a 4-5% income return from that nest egg.

This was a big wake up call, as we only had $150,000 in super at the time, which was only projected to grow to about $600,000 over the next 20 years to  give us a stop work income of only $27,000 a year! This reinforced that just paying off the home loan and putting money into super was going to leave us in poverty when we tried to stop working, or we’d be forced to work until the day we dropped dead.

But this meant that our nest egg was still a minimum of $3.5M short in 20 years – what we call the gap. But after subtracting inflation, it meant we were short $1.2M at the time – and this was our Freedom Number. This was approximately 2-4 properties, excluding the family home, because the family home doesn’t put income in your pocket but actually costs you money. So, we were instantly motivated to start investing.

Investing in my knowledge

Our next questions were, where do we get the money and what do we invest in to grow this nest egg and create this passive income? We immediately put in place a savings plan, where we saved 30% of everything we earned.

The next questions revolved around what we should invest in and when. Shares? Property? A business? Multi-level marketing (not likely)? All of the above? I wasn’t sure which way to go, so I started by investing in my knowledge. I started reading every investment related book I could get my hands on. Books like ‘Think and Grow Rich’ by Napoleon Hill, ‘The Intelligent Investor’ by Benjamin Graham, ‘Trade Your Way to Financial Freedom’ by Van Tharp, along with the Australian books ‘Making Money Made Simple’ by Noel Whittaker, Paul Clitheroe’s ‘Making Money’, Chris Tate’s ‘The Art of Trading’ and my all-time favourite ‘Rich Dad Poor Dad’ by Robert Kiyosaki. Today there are podcasts, YouTube videos, audio books, you name it.

Now about that time, a mate of mine Tooly Andersen scored us free tickets to go and see Robert Kiyosaki in Adelaide at a Rich Dad Poor Dad conference. It was a major light bulb moment – what I now refer to as my Kiyosaki conversion. He said that ‘the moment you make passive income a part of your life, your life will change’… and it totally resonated. We needed to get invested by creating an income that didn’t rely on us, so we had the free time to really enjoy the life we were dreaming of. Overnight I started to see the world completely differently. We immediately became what I now call passive aggressive – aggressive about passive income.

Assembling our investment gearset

Everything we invested our time, energy and money in from that moment on had to produce passive income that didn’t rely on us to produce. It had to be safe and affordable, it had to grow in value, and it had to be saleable. All of my reading confirmed that the 5% who achieve sustainable success all take 15 years plus, and the growth is an exponential uphill curve (meaning that very little growth occurs in the first 8 to 10 years). So, they separate what they do from how they earn it, they create multiple streams of income, and they focus more on the principles, process and the right people than the final product.

I realised that if my high performance investment ‘cycle’ is the vehicle that will get me to my net wealth destination in the quickest, safest and easiest fashion, I needed to assemble my investment ‘GEARSET’. So, as a time-poor career-focused professional, anything we invested in needed to be simple and easy, time-effective, low investment to start, low-cost and high growth. This is better defined by G-E-A-R-S-E-T, which stands for:

  • Growth-focused (offering high asset growth over the shortest possible time frame)
  • Easy to implement
  • Affordable (both low cost to establish and affordable to hold ongoing)
  • Risk averse (Sitting comfortably within my ‘sleep at night factor’)
  • Simple and quick to understand what I’m investing in
  • Equity low (so I use as little of my money and/or deposit as possible to secure the growth asset) and
  • Time efficient and effective (so it doesn’t require much of my time to acquire, manage or monitor, and doesn’t create a second part-time job).

So, against this GEARSET measuring stick, we realised that cash savings, super, starting a business and shares weren’t necessarily the best choice for us. Instead, it became obvious that the best growth vehicle to achieve our Freedom Numbers in Australia was residential property.

Deciding on residential property as the best investment option

There are several key reasons why we decided that residential property was our best option.

Firstly, property offers far superior leverage. The banks will still let you borrow up to 95% of the value of a property versus half of that on margin loans with shares. By using the power of leverage, the bank’s money and as little as possible of ours, we realised that we could double, or even triple, the size of our nest egg through property, even if property was growing at a lower rate. This meant that with the same level of initial investment of our own savings, we could more than double the value of the asset we could secure in property versus shares.

We also realised that residential property was a real need tangible asset, in that people always have to live somewhere. Housing is emotionally driven by the majority of owner-occupier home owners, so we just needed to slip stream on this.

We had greater control and influence on the value of property by buying well, building well or renovating to manufacture value. Property offered rental income consistency, it was low risk and stable, and was an imperfect asset, in that every property in every street in every suburb is different, so it’s impossible to compare apples with apples, unlike shares where everyone is operating on the same information instantly.

We also learned over time that new build homes in the right, tightly held areas could be structured using stamp duty savings and tax depreciation incentives to make them cash flow positive, so that they were affordable to hold long term and it didn’t bite into savings, salary or lifestyle. So, we realised that rental homes were the best available, safest and most affordable way to grow our wealth.

Becoming a passive income earner

We did have an initial challenge. As we were starting again with nothing, we just didn’t have enough of a savings deposit to secure our first property, even though we were saving furiously. Now, if you already own a home, it’s likely you won’t have this problem as there may be sleeping equity that you can access without the need for cash savings to help you secure a property. In our case, we decided that Sonya would continue to earn a salary to pay the bills, while I would start investing full time to grow our savings.

I decided to learn how to day trade shares and indexes to fast track our first property deposit. I borrowed $5,000 from my family to learn how to technically trade, and after months of paper trading and back testing a system, I short and long traded contracts for different instruments.

I ended up needing to sit in front of a computer screen for a minimum of four hours a day to do it justice. It was a psychological rollercoaster ride, as my system was based on having more losing trades than winning trades, but still being profitable.  There were times when I would lose $30,000 overnight, even with all of the available risk protections in place. But after months of blood, sweat, and tears, we were able to put together our first deposit on a rental home in Aldinga Beach that we bought for the huge sum of $84,000. We still have that property today and it was last valued at over $450,000.

Rentvesting our way to financial freedom

We were ‘rentvestors’ then before it was even a thing. We were renting a townhouse close to Adelaide city for Sonya’s work and our rental property was an hour south of the city on the beach. We stumbled upon the benefit of renting for lifestyle at the fraction of the cost of a mortgage while investing for growth in an area that we could afford. Using an ownership and financing structure meant the property was putting money in our pockets instead of taking it out, so we had the best of both worlds.

Building our property portfolio

We then decided to start our own first passive income, scalable and saleable business, and Sonya and I swapped roles. I got a job with Government as a program and project manager consultant to provide regular salaried income to pay the bills. This also allowed us to continue to borrow money, so we could add to our property portfolio and Sonya could drive our own property management business.

During this time, we renovated our first Aldinga rental home to increase its value, then borrowed against the increased equity to leverage into more properties. Our strategy was to buy, build, rent and hold real homes for real families in tightly held, high demand lifestyle locations supported by new infrastructure with strong and growing employment and incomes.

Once our property management business was profitable and creating regular stable income, we switched roles again, so that Sonya became the consistent income earner while I then started our passive income finance broking and property investment business.

This baton passing arrangement, where one life partner fuels the income while the other grows the passive investments, has been instrumental in our early success and is worth considering, as it means that at least 50% of your combined effort is dedicated to growing your wealth through a combination of investment assets and/or your own business.

Now, we’re shifting from the growth phase of our portfolio to the tax effective cash flow stage of what I refer to in my book as the capital growth to cash flow curve. This is where we move through the transition and conversion of the property nest egg into a diversified passive income mix across high yielding rental properties, dividend income shares, index funds and cash reserves. You need to go for growth then convert to cashflow, not the other way round, otherwise you’ll never get there.

Living by design, not by default

Rolling forward to today, Sonya and I both live and work together as life and business partners in beautiful rural properties in our KnowHow Property Finance business, having sold our rent roll and accumulating a sizeable property portfolio.

We now enjoy the fulfillment of helping others and have the freedom of time and choice to give back and pursue our passions, because we are time rich as a result of our multiple streams of passive income. We work when, where and because we want to, not because we have to, and I can’t begin to describe the peace of mind and sense of freedom that this simple shift creates when you no longer need to worry or sell your time for money.

Don’t get me wrong – both Sonya and I both continue to work hard and there are still times when we burn the early morning and midnight oil, but this is because we want to make a difference and leave a dent, not because we’re on the never ending, ever faster, time for money treadmill.

Our investments and our lifestyle business team allow us the luxury to give back in the form of my podcast, books and media appearances, and it’s sustainable. So as I look back on the vision board that we put together all those years ago, I realise that we’re now living all of our dreams. We’ve predicted our future by creating it. Our vision has become reality and now I’m on a mission to help you and many other hard-working Australians to do the same. Because anyone with a consistent income can do it and I know you can do it. This is the power of property and this is the power of living by design – not by default.

So I hope that sharing the details of our journey and our thinking and reasoning has helped you to start thinking about how you can begin living by design by growing your nest egg to create passive income that gives you time back to breathe and do more of what is important to you and your loved ones.

I need to reinforce here that I’m not an accountant or financial planner, so while I’m able to guide you on property and related lending matters, none of what I have shared is intended or can be considered as financial advice. I am merely sharing what we did and why we did it in a general way to give you a framework to consider. And of course, make sure you get independent advice from a licensed accountant or other professional to suit where you are at, and your risk profile.

Want to Know How you can build wealth and your life by design? Talk to the team at KnowHow, now.

For a more detailed breakdown of how you can unlock freedom with finance and property, read The Freedom Formula: Live More, Work Less And Leave A Legacy With Property.

Want to connect with Bushy? Get in touch here

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