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self-fund retirement property investment pete wargent bushy martin

Interview transcript: How to self-fund retirement with a property pension

KnowHow founder Bushy Martin recently joined top investment analyst Pete Wargent’s Property Podcast to discuss how everyday Aussies can self-fund their retirement with a property pension, and other investment insights. Read the full transcript of the interview.

Pete: G’day, welcome to Pete’s Property Podcast. This week, I’ve got an extra special guest – Mr Bushy Martin. So Bushy, first and foremost, tell us how did you even get the name Bushy? Is it as simple as it sounds or is there a different story behind that?

Bushy: The simple version is that I’m a boy from the bush. I’m a country boy at heart, always have been. So Bushy is the obvious nickname, but it’s actually the living legacy of my good father. My father was the original Bushy, Bushy senior, and he was a legend of a man. What do they say that you can’t pick your family, but you can pick your friends? Well I got very lucky with my family. My old man was an absolute living legend. He was the original Bushy and he had a massive reputation and has left us a big legacy. So out of respect for Dad, they always used to call me Bushy Junior, but I’ve sort of reverted back to Bushy. And every time you call me Bushy, I think of Dad.

Pete: So you’ve graduated to the title of Bushy? What is your actual real name, mate?

Bushy: It’s boring as – John Martin is the real name. Bushy is a much better standout and it says a lot more about me anyway – I’m fairly down to earth, I call it how it is and I’m sort of not too tangled up with PC rubbish and just enjoy a good laugh and enjoy life.

Pete: That’s very wise. Funnily enough, I went to school with a guy called John Martin, who I doubt is tuning in, but if you are, g’day John! So what did your old man do and where abouts did you grow up?

Bushy: Yes, so I was born and bred in Goroke, which when I grew up, most people would say isn’t that somewhere in New Guinea? No, it’s not. It’s actually in western Victoria and it’s a tiny two horse town. I think they just about closed up when our family left, that’s how big the town is. But my old man was actually a stock and station agent with a group called Gettys for many years, so what that meant was we tended to move around the country all over the place. Every two or three years we were off to a different country town, so I went from Goroke to Mooroopna to Shepparton to Echuca and then across to South Australia, where we spent some time at Lameroo, Bordertown, Port Noarlunga, Willunga and Aldinga Beach. So we’d moved around the country a fair bit on the tails of Dad’s work as a country stock and station agent, but his secret passion behind the scenes was always property. So, it’s sort of been in the blood.

Bushy: Yes, some fabulous Victorian towns there. I haven’t been down to Victoria for a couple of years, but as you know I do love to travel. As somebody who migrated to Australia, I was dead keen when I came to the country to not just be stuck in Sydney like all the other Poms at Bondi. I wanted to see the whole country and thus spend time in Shepparton and a lot of those places. I think we’ve just seen in the last couple of years an increasing popularity in places like Bendigo and Geelong and Ballarat which are really taking off. I think people are seeing another side to the regional towns now, as the cities have been a bit less popular through the pandemic.

Bushy’s introduction to property

Pete: So you mentioned you had some family input. So tell us a bit about your property journey and how you got into real estate.

Bushy: Yeah. Well, I guess it’s funny how these things happen by osmosis I reckon a lot of the time Pete, but I spent many a weekend as a kid sitting in the car, driving around with dad as he bought and sold blocks of land, and this was back in the early 70s. He managed to get on into a period there where you could buy a block of land, sign the contract and make good money on it before you actually settled on it. So he was buying and selling all the time and he put together quite a good sum of money to put himself in a pretty good position in those days. I was a pretty sickly kid, Pete. I was a punk-chested runt to be perfectly honest and spent a lot of time in bed with asthma and therefore always had a pen in my hand. I was always drawing and writing and designing, and that was all I could do, given I was bedridden. But my old man always used to say to me, son that’s all very nice, but at some time you’ve got to get yourself a real job. And the only sort of compromise that I could bring together with my creative side of the equation and a real job was to become an architect. So I toddled off to uni for five years and became an architect and then again with the gypsy blood I travelled all over Australia and a fair bit of Asia being an architect until my early to mid thirties.

Pete: It’s interesting because I’ve often wondered why I keep moving. I must have moved house more than anybody I know over the past 20 years. We seem to be doing it all the time. But then I remember I actually went to four different schools growing up, and I wonder if it harks back to the old saying, give me the boy of seven, I’ll show you the man. And that may be the same there – if you saw your dad buying and selling blocks of land, maybe that real estate idea was just born at an early age, and it sounds like you followed through with it. And so you ended up actually running your own architect business, didn’t you?

Bushy: Yeah, I did, mate. So I had a really interesting career as an architect and I still love architecture, it’s just a lousy business in Australia. So when I finished uni in Adelaide, there was no work happening – the only thing being built in Adelaide at the time were tombstones mate! So I ended up working for free for a period just to get some experience, and then I managed to get a job with a crocodile skin farmer in New Guinea (I call it my Indiana Jones days mate). I spent a couple of years up there in New Guinea designing townhouses, and I also did a wilderness safari lodge way out on the north east coast of New Guinea – a beautiful part of the world. So I spent some time up there, and then I gradually gravitated south. So I went from PNG to Darwin and spent about eight years in Alice Springs, then went to Bangkok for a stretch and spent some time doing some tourism work over there and then went over to Perth and did some work in Perth before actually coming back to Adelaide to spend some time with the folks, given they started to have some health conditions mate.

The transcript continues below, or you can jump into the podcast here:

How to generate a passive income through property

Bushy: I got to see a fair bit of the country as an architect, but I burnt myself out. And architecture is an all-consuming profession, and for someone who has perfectionist tendencies, it’s a bad combination for someone like me. So I had a what I call my sort of major burnout. I had an early life crisis at 33, and I sort of can divide my life into two halves. The time before that I call BC, which is before the crisis, and after that is AD, which is after the divorce. I pretty much had a ground zero moment when I was 33. Absolutely started again. And I was like most Aussies – my vision of life at that stage was to work hard, get a good career, buy a home, pay it off, put money into super and then tick off the bucket list when I retire. That model, it doesn’t work quite clearly, and that was a big wake up call for me when that turned to poo and I really did start again.

Bushy: So I sat down at that time, and a couple of years after that I met my now wife and life partner, Sonya. And the first thing we did, Pete, we actually sat down at a little restaurant in Clarendon, which a beautiful part of Adelaide in the hills, and with the old architecture skills we designed our ideal life. And because I determined not to end up in the same place that I was and we actually spent a lot of time visualising it and documenting it, we monetised it. So we worked out what that lifestyle was going to cost.

Bushy: Then about the same time, it’s funny how these things happen in twos and threes, but a mate of mine dragged me along to a Robert Kiyosaki conference in Adelaide and the whole passive income penny dropped. It really was an eye opening moment for me. And from that moment on Pete, I became what I now effectually referred to as passive aggressive. So absolutely everything we did from that point had to have a passive income opportunity, and anything that we put our energy in had to be a growth asset that was scalable and saleable. So whether it be business, whether it be our equity investments, whether that be our property investments, they all had to tick those boxes.

Bushy: At the same time, my wife and I adopted what I again retrospectively referred to as the money medicine. You know, the bicycle race where there’s two bikes going around the track and one pair is up on the side of the track having a rest while the other one’s going for broke and then they change place every couple of laps. So you’re always having someone having a rest and someone driving. Well, what Sonya and I decided to do was that one would work full time, and we would live off that income, while the other party would would do the investment. So our first entourage, because we had nothing, Sonya worked. I day traded the equities market and I was pretty aggressive in those days. I did CFD, so I wouldn’t suggest anyone rushes out and does CFDs now because it’s a very risky instrument. But that was enough to build up a deposit for our first property. And because I’d been doing a lot of writing, I read everything that opened and shut when it came to investment at that stage because I was so keen to create an environment where my income didn’t rely on me to generate.

Bushy: So, using the old money medicine, we started with day trading and we then got into property. Sonya and I, we then started our own property management business because we could see that that was a pretty good way to build up a passive income stream. Again, that was sustainable, so Sonya drove that business while I went back and did some consulting to government at that stage. So I paid the bills while Sonya built a property management aspect. Then once that was up and running, it became really clear to us that property is a game of finance, so I recognise just how important the finance is to the equation. So I then jumped back in and started a finance broking business, and we built that up. And all the way along that course we were investing in properties, as that’s a major growth asset to put us in a position where we could then convert that into a tax effective income stream and and get our time back, which is ultimately what it was all about.

Understanding that success comes with setbacks

Pete: Yes, it will come on to the idea of financing and, as I say, property being a game of finance with the houses in the middle. It’s interesting that you mentioned the Robert Kiyosaki book. It’s amazing how many people actually tell that story. They read Rich Dad, Poor Dad, and then it kind of changed the way they thought about relying on their career and their job and then thinking about ways to build up passive income streams. So as a recommendation for you, if you haven’t read it, it’s only a short book. I think it was some in the maybe in the mid 90s that it came out. So anyone hasn’t read it, check out a copy, I’m sure you can pick them up almost for free these days. So some familiar themes there, I think you don’t speak to many people these days that go through life with just one defacto relationship. But I think a lot of people have a tendency to beat themselves up about these things. But I speak at an annual event at the Gold Coast called the Wealth Retreat and one of the exercises they did there every year is to almost draw a graph of your life. And even some hugely successful people, you see there is never a straight line. Success comes and goes and you have setbacks and health issues and you lose people along the way. And it’s very common to see people at some points along the journey. So but the most important thing, of course, is how you respond to the crises.

Bushy: Yeah, I’d go as far as saying that while I call it the sort of car crash, it’s the best thing that happened to me Pete because if I wasn’t forced to stop and prop and have a really good think about what I was doing, I probably would have just continued on. So if I look back on it now, if if it wasn’t for that, there’s no way I’d currently be in the position that I am.

TLC – Time, Leverage and Compounding

Pete: I think often you hear people say that rock bottom is when things start to improve. So we’ll come on to the question that really wasn’t discussed today, and that is whether Aussies can self fund their retirement through a property pension. But I guess before we just come on to that, just give us a couple of insights into what have been your biggest mistakes in property and on the other side of the coin, what have been the best property decisions you’ve ever made?

Bushy: If we talk about the mistake side, I reckon I’ve made every mistake known to man when it comes to property because, like a lot of people, I tried to reinvent the wheel when I started because I didn’t trust anyone, and that was a big mistake. I could talk ad nauseam about that.

Bushy: In relation to the learnings. When I sat down to write my book The Freedom Formula, it forced me to have a really good look at what what I’ve done and what worked and what hadn’t worked. And I’m a fairly conservative investor. I take calculated risks, but I’m fairly conservative in it. And so the approach that I had (I like to give everything a title) was a wealth by stealth approach. So my own belief, and everyone’s got their own beliefs and there’s no one size fits all in in property, is that, sustainable success takes a minimum of 15 years, and that doesn’t just apply to property it applies to almost anything you invest in, whether it be business or you name it. So the key to last that distance is to embrace what I call TLC, which is embrace Time as your friend, not your enemy, and accept that it’s going to take at least 15 years and then enjoy the journey. Then it’s Leverage – leverage on other people’s money because you can make your money go a lot further, and property is the best vehicle in Australia to do that. And then, of course, the last in the TLC is Compounding. So embrace the impact of compounding, not just in the value of your assets, but your relationships. The more energy you put into it, they can compound on each other and things just grow. But it’s an exponential curve, so you don’t see any or very little change early on, and most of the growth tends to occur in that latter part of the journey. So that was some of the key learnings there.

Key principles for property investors

Bushy: I’ll break down the key principles that I think any investor needs to adopt if they’re going to be successful. And if you shortcut any of them, then you get yourself into strife. But I like to refer to them as the preventative wealth VITAMINS.

So if we break VITAMINS down into each letter as a component, the V is for Value. So you’ve got to achieve the highest value of asset that you can get your hands on. So that’s about equity and that’s about borrowing capacity. So the bigger asset base that you can get as quickly as you can, the better result you’re going to get over time. The second one is I, which is Interest rate growth. So that’s the the compounding component. So you’ve got to focus on the highest growth location for that particular asset and make sure it’s affordable. Time is the next ingredient. So again, if you’re trying to do it in five or 10 years, I think you’re kidding yourself. You might get lucky, but it’s at least a 15-year journey. So they’re the ‘set up’ elements.

Bushy: Then, the last five are what I call the sustainability elements. So they are A for Affordability, and affordability is something that I don’t see a lot of investors put much energy into. They go and buy the property and they don’t really break down exactly how much per week is this property going to take out or put in my pocket. So that affordability piece, if you’re going to last 15 to 20 years to get a result, you need to be structuring things really well so that it’s at least cashflow neutral, if not slightly cashflow positive, and then there’s no pressure. Mindset is the M. So that’s how you think, your self beliefs, your expectations, your attitudes. The I in vitamins is Income. I see a lot of would-be investors thinking that they’re going to become full time property developers and they jump ship and give away their job and then they can’t borrow money, so they’re snookered. So having an ongoing income stream is important to fund the growth of your portfolio. The N is for network. So I think property is an elite team sport and you need to be the dumbest person in the room and you don’t want to be a doer. You just need to be the manager of your team. So you own the team, and just manage your managers. That’s the key part there. And then the final part and the most important component is the Strategy piece. So that’s getting really clear about where you’re heading, where you’re trying to get to and therefore what sort of property approach needs to be adopted to get you there.

Bushy: So they’re the key bits, and if I sort of summed it up in terms of the strategy that we adopt, I go for growth and then convert to cash flow. In my book, I’ve actually documented the capital growth, cash flow curve. So very simply, I always hear this argument around growth versus cash flow, but it’s really simple for me, mate. If your current asset base isn’t at the level that it needs to be to throw off the income that’s going to fund your lifestyle, you’re in the growth phase. So, your major focus needs to be on affordable growth. When you get to a point when your income producing asset base is at or near the level where it needs to be, then you convert that portfolio into a tax effective income stream. So I guess one of the differences I have around the buy and hold, and I am sort of in most parts of buy and hold in terms of go for growth initially, but the velocity of buying property, paying off the debt and then living off the rent, the rents never going to be enough to actually give you the lifestyle you need. But what property is good for is a growth vehicle. So for me, it’s focussed on high growth properties initially and once that asset growth has got to the required level, then convert that into a mix of higher yielding properties, indexes in the equities front, mix of cash, bonds. So, we’re diversifying the exercise at that end and keeping some high yielding properties as a part of that mix. So they’re probably the key learnings along the way.

Investing in time and knowledge

Pete: That’s an interesting point you made there on the building wealth over a 15 year period. I think that generally holds true. I’ve observed a lot over the years, and I think it’s true that sometimes people can have a real bagatelle windfall, but often that seems to be sort of an easy come easy go situation. I think for people building sustainable lifetime wealth and equity through property, it often does seem to take two full cycles or 15 years. So you make an investment or two, draw some equity and then reinvest some of the equity elsewhere, and then it’s usually after that second cycle that suddenly people wake up and they’ve got a big pool of equity.

Bushy: I think the other point that’s parallel with that is that it’s not all about the investment in the assets, it’s also investment in your knowledge. Over those two cycles, your own maturity and your own knowledge of how it all works and how the jigsaw fits together is so much better, so that you’re better placed to make better decisions as you go forward. So I think people tend to focus on the external, but getting the headset right, getting the mindset and your knowledge and your approach right so that your expectations are there is a big contributor to the ultimate long term success rate.

Pete: Yeah, and as you know, a lot can change over 15 years in your personal life and in terms of your maturity, because we often do 10 year property plans. But you can just do this sort of scenario of thinking, well what was I doing on this day 10 years ago? And you think, oh life wass actually pretty different. So you know, your maturity and knowledge levels can change a phenomenal amount.

Self-funded retirement through a property pension

Pete: So let’s move onto this key question. So I actually caught up for a coffee with one of Australia’s most senior business journalists, and he was quite sceptical about the idea of whether everyday Aussies can actually self-fund their retirement through a property pension. But you and I both know many people who’ve done this, not just by a small margin, and have managed that very successfully. So what do you think about everyday Aussies going down that route? And if so, what kind of strategies would you recommend?

Bushy: Yeah, so the easy answer to that is – is it possible? Absolutely, it is. And I’ve done it, you’ve done it, and we’ve helped an enormous number of people do exactly the same thing. And you’ve got to consider the alternative because the traditional model on sale in Australia is to pay off your mortgage, put money into super, and then there’s a wish and a hope that that’s going to be enough to fund and maintain and sustain your lifestyle once you decide to stop work. Well if you look at the stats, and you know the stats better than I, I think it’s nearly 74% of retirees over the age of 65 who have adopted that model, are surviving on an average of just over $15k a year. And the big paradox here is that if you’ve got any less than $800k worth in your super you might as well have none, because with up to $800k for every increase in assets is dropping what you can get back in the pension, and the pension for a couple is about $35k at the moment.

Bushy: So there’s a big wake up call where for a lot of Aussies, if you think that’s the model that’s going to get you there you really need to sit down and do some hard thinking about that now. I know because I get to talk to people every day of the week on this, and I actually start off by projecting if you do nothing differently fromwhat you’re doing, where are you going to end up? And 90% of those people, they’re on good incomes, they’ve got their home and they’ve got a home loan. But if they don’t do anything differently, they will end up surviving on somewhere between $15k – $20k if they pull it in or they work until the day they drop.

Finding your Freedom Numbers

Bushy: So can it be done in property? Absolutely it can be. And I like to refer to what we’ve now developed is the freedom numbers. And the most important part there is spending the time to look at what is your ideal lifestyle income, because it’s going to be different for everyone. Some people are going to live off the smell of an oily rag, other people have very expensive tastes. But if you get clear on what your lifestyle income looks like, let’s say it’s $100k and let’s say you’ve got 20 years to put this together. Then, at a 5% net return, you need about $2 million worth of income producing assets to make that happen. Now, $2 million over a 20 year timeline is only two or three properties based on a fairly conservative growth rates. So can it be done? Absolutely. How can it be done? Really simple. If you’re still working, you’ve got some equity in the home, it’s just a matter of progressively over a five year period using the combination of equity and borrowing capacity to secure two or three good quality, high growth properties.

Bushy: And that’s about taking a borderless approach, as you mentioned earlier, rather than buying a property that you’d live in in your backyard, which most people tend to be. So it’s adopting a really national, borderless approach to this. And then most importantly, it’s spending time with a good accountant and a really good finance broker to make sure that you’re structuring things in such a way that it’s maximising your capacity while minimising your risk. Because I often say to people on the finance side of the equation, your biggest asset isn’t the rate. Most people will chase rate when it comes to finance. Your biggest asset that you need to preserve as an investor is your borrowing capacity, and there’s about a nearly 60% borrowing capacity variation across all the lenders. So that’s a difference between say a $600k property and a million dollar property based on exactly the same profile just using a bank that has a bigger appetite. So if you focus on getting that structure right and you maximise that capacity, you do two or three good quality growth properties, which most people on an average income can afford to do in this day and age, then funding that $100k to $200k a year lifestyle over that 20 year period is very achievable.

Pete: Yes so some interesting points there. I had lunch with Graham Williams, who is the founder of Real Vision, this week and he asked me sort of off the cuff how did I actually get involved in property in the first place? And on reflection, I thought well basically what happened was my wife bought her first place, we sort of hooked up and got together, I bought my first place in Bondi but it wasn’t really big enough for the both of us so we bought a place together. So we sort of had about three properties and then we thought this sort of worked well, and then from there we decided to start investing in a portfolio of properties.

Changes to property investing over time

Pete: You mentioned that some of the things have changed now. People often say to me, well yeah look it’s alright for you guys because you started in the 1990s and things were a lot easier then. But is it harder today than 20 years ago or is it just different? You did mention one thing that’s definitely different, and that’s the financing. Because I mean, there are things like 100% mortgages or even more in the UK for a period of time. But also, if you had equity in those days, you could just go again and again. These days, obviously, borrowing capacity is capped for most people and some would say rightly so. Is it harder now for people to self-fund retirement through property now?

Bushy: I would say no, that’s easy for me to say. Yes, you’re right in the context that the lending constraints are much tougher than what they used to be, and when I started out in the late 90s with our first property, I think I borrowed 97% plus mortgage insurance to get a property, which you can’t do that now. And on investment front, most banks cap out at 90%. You can still get some that will get up to 95%, so it’s still a fair chunk of the size. But the cost of the money is a lot cheaper than the original was then too, by the way. So there are sort of swings and roundabouts in all of that. The key, I think, is to get really crystal clear again on what you are personally trying to achieve and make sure you’ve got a long enough timeline. If you’re trying to shoehorn something into a five to 10 year period, and we’ve all seen the people who do nothing with their head in the sand and they go for broke on their career and they get in their early 50s and they have their ‘oh shit’ super moment. They go oh shit my super isn’t going to be enough to fund my retirement, and then they expect people like you and I to pull a rabbit out of the hat and have them retired comfortably at 60. Well, that ain’t going to happen, I don’t believe. But if you’ve got a long enough timeline, so again minimum 15 years, then for most people on an average income with decent equity at two or three properties will get you there, providing you’re structuring it right and you’re focussing on maximum growth.

The benefits of rentvesting

Bushy: When I had my car crash crisis, we rentvested initially and that was rentvesting before rentvesting was even a thing. I had a good chat to an accountant and I did the numbers and was like we’d be crazy buying this place to live in, we’d be better off investing and then renting cheaply near the city where we were working at the time in Adelaide. And so I’m a big fan of rentvesting, both at the beginning of the journey and at the end of the journey too by the way. If you’re if you’re nomadic at the end of the journey, then why would you tie yourself down to an asset that is worth money on paper but that’s not giving you an income. I think it has merits at both ends of that journey. So is it more difficult now? No, I think you’ve got to be smarter on how you do it. But we’ve got more access to information than we’ve ever had. There’s more data than we’ve ever had. There’s more experts and professionals than we’ve ever had. So I would say it’s just different. You’ve just got to be smarter and cleverer about how you make that happen.

Pete: Yeah, I think you must have read my mind on the rentvesting point, because I am somebody who is seemingly increasingly nomadic. I’m somewhat obsessed with travel, I want to see all the places in the world. So I would say, when you are renting or rentvesting, you can live anywhere and often it works out better from a financial point of view.

How to live by design and plan your retirement

Pete: So I guess when I’ve been travelling around, over the past year in particular, I’ve spent some time in Europe and more recently Sydney and now Gold Coast, I guess I meet a lot of people interested in finance and investing property and retirement. And one of the questions I’ve been asking people a lot recently, and I apologise if you’re one of them, is what’s the end game? I’m really fascinated to know where do people plan to end up? You know, what are they going to do in retirement now? I guess it’s still relatively early for me. But I’m really interested to hear what people plan to do in retirement. I know you’re interested in travel too Bushy, having recently come back from Fiji, but I guess how does one go about designing a retirement? Because I know this is something that you do very differently from a lot of the finance and property professionals out there, and you’d like to try and begin with the end in mind. But why do you even start with that?

Bushy: Yeah, I devote a whole chapter of the book to that very topic. I’ve actually broken down the steps that Sonya and I went through. There is a whole bunch of other stuff, but the starting point is the endpoint, as you said mate. So we’ve just come back from Fiji and four days of that trip were spent with our life planning review. We do it every year. We look at what’s changed. Are we still on track? What needs to change now? But we’ve got a really crystal clear view on what life looks like.

Bushy: So we’re getting to the what I would call the Significant stage of our journey, not the success stage, so this year we’re going to do a road trip up the east coast from Tasmania off the east coast to find a forever destination for us. And we’ll put some really clear shape around what a perfect day, a perfect week and the perfect year looks like. We know how much that costs and then incorporates a fair bit of travel because I real buzz out of seeing new places and meeting new people and immersing myself in new culture. So we’re going to be doing a lot more of that. The reason I got into podcasting is that I can do podcasting from anywhere at any time, and it gives me a great excuse to talk to some fantastic people like yourself. So I’ll keep doing that until the day I drop.

Bushy: But we’ve got a real, crystal clear view on what that lifestyle is, what that lifestyle cost, and therefore all we’ve done is use as little of our own money to acquire as big an asset base as quickly as possible and make it as affordable as possible, and we’ve let the tenants and the taxman do most of the heavy lifting. So as we come into that journey where we’re changing from growth to cash flow, we’ve started to rationalise our asset base and we offloaded some of our property last year because it’s a real blue patch and so that we can convert that asset base into higher yielding exercise.

Bushy: And one of the key things for me as an investor, which I haven’t mentioned, is that whatever I invest in, I want to spend as little time as I possibly have to manage that asset because time is my most important ingredient. So as we start to convert our growth portfolio and transition across into a tax effective income stream, which we’ll do over a five or six year period so that we don’t get caught with capital gains and a whole bunch of other stuff, then we can convert that portfolio into a means that’s actually going to give us the ideal lifestyle that we very clearly want. We’ve got a really clear picture of how we’re living on a hill on a rural property looking down the valley to the water. We take our dogs for a walk every day, I’m exercising, I’m playing piano, I’m podcasting, I’m writing the next book. So I’ve got a really clear picture on exactly how I want to leave. And everything that we’ve been doing over this last 20 years has been orientated around making that happen. So it’s not rocket science, as I say for anyone listening to this.

Bushy: This exercise for a lot of people, it’s like a where do I start? And it gets too hard so they don’t do it. But it’s a really fun exercise, Pete. We have a lot of fun doing this. And once you do crystallise it, it becomes both a magnet – to make sure you can negotiate the inevitable speed humps that occur along the investment journey – and also a compass in that we ask about every decision we make today if it’s taking us closer to that lifestyle or further away from it? And it’s not a fixed road map, it’s more like a GPS app that we might take slightly differently as we’re going down that pathway. But because we’re clear on where we want to end up, we always going to attack and correct back on track to accommodate all that.

Ensuring your investments do the work for you

Pete: Yeah, a couple of really interesting points you mentioned there on the point of investing in assets but the end game is that it requires little maintenance because property can be a bit of a headache at times. You mentioned indexes and ETFs, much less so as long as you’re not sitting there watching them day to day. An Aussie friend of mine, James Aiken, I remember him saying to me the assets can end up owning you rather than the other way around. So that is one really interesting point.

Bushy: I’ve always said, don’t create a job when you invest. If you have, you’ve defeated the purpose. So the key for me and what I’ve been investing now is getting really good people around you and then all you have to do is manage them. So if my investments are taking any more than an hour a month and then maybe a day around tax time, I’ve done the wrong thing.

Pete: Yeah, it’s a very good point, especially for the retirement years. And I think the other interesting thing you mentioned there was on the podcasting idea because is Graham Williams I mentioned, he largely does just long form podcasting these days. But it’s a great point because these days there are many ways to create an income with your interest, and we’re particularly seeing this through the pandemic with people working from home or remotely. There’s lots of ways to do things you are interested in and also potentially creating income with them.

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