SINCE 1997
Know Your Why: Investment Goal Setting
7 min read

Know Your Why: Investment Goal Setting

Now more than ever we can see how important it is to protect ourselves so that even if we are out of work for a period of time, we can still be receiving an income from properties that grow in value every year. Don't wait. Firm up your lifestyle goals now and create a long term portfolio that can provide you and your family with a stable future.

Everyone gets into property for a different reason but for many, particularly investors, it’s to build wealth to set themselves up financially so they can live a lifestyle of their own choosing which is not limited by working in a full-time job.

For some new investors, they wonder why they are struggling to reach their goals and obtain the lifestyle they dreamed of. However, the reason they don’t achieve their goal is that they didn’t start off their investing journey answering this one very simple question…

What is your why?

Until you know the reason why you are buying property, you’ll never be able to define what it is that you are actually trying to achieve and more importantly, you can’t work out how exactly you are able to get there.

Investing in property is not as simple as going out to buy just any property and you will make money in the long term. Without knowing where you’re headed, you won’t achieve anything. If you haven’t got a goal and you haven’t got a plan, then odds are you’re never going to achieve any form of real wealth (financial and lifestyle freedom) through property as an investment tool.

Leading Sydney Buyers Agent and author of Positively Geared, Lloyd Edge started his career as a freelance music teacher earning less than $50,000 per year. After buying his first property on a casual wage and holding it through a severe downturn, the GFC, Lloyd saw no growth for five years. At that point in time, he knew something had to change or he’d never be able to get ahead financially.

Fast forward 10 years, Lloyd now controls a $12 million property portfolio and lives his dream lifestyle.

The main reason Lloyd was able to achieve this was because he ‘knew his why.’ Lloyd knew why he was investing and what he wanted to achieve from property. He was able to set in place a strategy to his investing that would create a portfolio that would take him there.

Lloyd says, “Initially I started to set myself up after the GFC so I could mitigate against major world downturns and protect myself financially. I wish more people would do the same and prioritise their long term financial stability.”

Lloyd’s “why” was to create a passive income that would allow him to ultimately quit his teaching job, all the while building up his long-term wealth. To begin with, there were many nights spent studying and knowing the property markets whilst still working two jobs. The result was Lloyd was able to retire from teaching five years later at age 40 with a positively geared portfolio that replaced his income, and was able to provide the lifestyle flexibility he wanted.

Know your goals and stick to them!

These days Lloyd helps other investors build their wealth through property and the first thing he always does is understand what a new investor is aiming to achieve in the long term.

“For every client who walks through my door, the process starts with goal-setting. This is a vital first step to creating their property investment strategy.

"At the end of the day you need to know the reason why you’re investing, and you need to have a direction that’s motivating you to stick to your strategy. Property is only the vehicle to get there. So, have you thought about where you would like to be in 10, or 15 years’ time?

"It is also important to remember that doing something is always better than doing nothing. “Standing still will always get you nowhere,” says Lloyd.

Setting goals is really about working backward – are you investing to leave your job, earn a passive income, buy your dream home, or so you can help finance your lifestyle? Once you know that, you can work out how much money you need and build a plan to get that money, as profit, equity, growth and income from your property investment portfolio.

Whatever your goal is, Lloyd encourages you to build a strategy and work towards it because he is living proof that financial freedom through property investing is actually achievable.

Getting the wrong advice

One of the main reasons property investors never get past that first investment property, or don’t get started at all, is that they have been given poor advice from the start.

This starts from when they were at school.

Lloyd says, “I believe that a lot of what you’re taught in school is flawed. They don’t teach you enough about the real world. They don’t teach about budgets, investing, or how to set yourself up with financial goals. Instead, they teach you that the only way to get ahead is to get good marks, finish school and go to university so that you can have a job for your whole career. They teach you that having a good job will lead to buying a house and paying off a mortgage for 30 years.”

“I did what I was ‘supposed to do’ – and by the age of 30, I was working for a boss six days a week, for no real reward and no real recognition, and with someone else taking the glory. I realised I didn’t want to be in that situation; I wanted to create my own destiny. ”

When Lloyd started out investing, he too was using a strategy that wasn’t going to allow him to achieve his long-term goals, so he set about changing it to one that could free him up from his full-time job.

“At that time I was also buying properties in the way that everyone has historically bought properties, and negatively gearing them. I quickly realised that’s a flawed strategy and will only limit what you are able to achieve. If you negatively gear your properties, that keeps you in a job forever. The whole idea of investing is to get yourself out of the job so you can retire. The only way to do this is through positive gearing.”

“Most people are too scared to leave a secure job to do what they dream of. But the real message from what we’ve seen recently is that the reality is that no job is actually secure. If you build up property investments that are positively geared, and that look after themselves, then you’re not reliant on your job because the investments are paying you an income.”

Thanks to setting the right goals and asking himself, ‘why?’, Lloyd was able to change the course of his life and achieve real security in a short space of time. To the point that he is now truly financially free.

“That’s what I did, and now I have a business to help others do it too. Those two income streams offer me more security than being in a full-time job because, at any point in time, your boss can easily say, ’We don't need you anymore’.”

Since achieving his goals, Lloyd now wants to help others achieve it too, through sharing his own experiences and the same kind of property investment advice he gives to his clients, in his new book, Positively Geared.

Lloyd says “the real message is that financial stability is actually achievable if that’s what you want and put your mind to it.”

Lloyd’s goal-setting guide

What kind of work/life balance do you want? Would you like to:

  • have your home paid off?
  • be able to retire on a comfortable income?
  • semi-retire?
  • work part-time?
  • change jobs?
  • work for yourself?

If you have a family, do you want to be able to:

  • put your kids into private schools?
  • live comfortably on one income?
  • go on family holidays?
  • build a property portfolio to secure your family’s long-term future?

What else is on your wish list? Would you like to:

  • buy a dream home?
  • take a round-the-world cruise?
  • buy a yacht?
  • help those in underprivileged communities?
  • Lloyd suggests you start with your end goal in mind because once you know your goal, then you can turn that dream into a concrete number and begin working on strategy and finance.

He strongly suggests that building up a property portfolio is the best way to achieve that ultimate long-term goal – and acquire financial freedom at the same time.

But, if your current strategy is to settle for second-best and buy a home you don’t really want to live in for the long-term but can afford, and to pay it off from your nine-to-five salary for decades, you should stop you right there and think about it. I know you’re going to want to hear more about Lloyd’s equity-creation strategies and think about what might work better for you.

Where to start

It’s all about Strategy and goal setting, and Lloyd will be sharing more on that with API readers in the coming weeks.

Lloyd has also written a book about his strategies and process called Positively Geared, which you can order on his site auspropertyprofessionals.com.au. You’ll also receive a free eBook download: Duplex 101 - getting your development done within one year.

Purchase Lloyd’s new book Positively Geared https://www.auspropertyprofessionals.com.au/positivelygeared/ and you’ll also receive a free eBook on creating equity through Duplex Development.

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