76. Creating Personal Wealth Outside Your Building Company With Todd Polke

The strategy that most investors apply is what's called buy and hope. They go and buy a property or buy some shares and they hope like hell it goes up. And to me, that's not a strategy. That's not investing. That's gambling. And investors don't gamble. There's a lot of people sitting on the sidelines at this point in time, sitting in a space of fear because of the rising interest rates and the cost of money and the rising inflation and the talk of recession. And so this next 10 years in the real estate marketplace, I think it's critical for investors, absolutely, absolutely critical to be building your portfolio. Because wealth creation isn't about luck. Those who build wealth and create success in any arena of life, I don't believe that they get there by luck. There are some elements of luck that might be involved, but for most, they've just got a different system.

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We've got another exciting episode from the Professional Builder Secrets podcast. Joining us today is Todd Palkian, wealth strategist and international education and trainer in the wealth creating and building side of things. Todd, welcome.

Thank you so much. Really good to be here.

Well, Todd, let's start off with something very simple. Tell us a little bit about yourself and how did you get about doing what?

Yeah, great question. And my background. So I've been, I've been a wealth strategist and a professional investor for about 20 years now. And my background before I got involved in this world was as a burnout personal trainer. So I was running a personal training business. Getting up at 4am in the morning, a lot of builders would be sitting here going, yep, that's me too. I get up at 4 or 5 in the morning with the early starts, going through to about 10 or 11 o' clock in the morning with clients starting in about 4 o' clock in the afternoon, getting more clients till about 7 or 8 o' clock at night. But then of course, running a small business or any business, your day never stops when the number of clients you have in the day stops or whatever it is. And so my day would wind up finishing up by about midnight after I finished all the admin and all the book work and all the paperwork and the marketing and all the different things you got to think about when you're running a business. And I would do that six days a week, and I'd do that 50 weeks of the year. Because my whole rule of creating success at that time of my life was just simply while the harder I work, then the more successful I'll become. And I know a lot of people listening in have probably tried that strategy before. And I basically broke myself. I broke my relationship at the time. I broke my health at the time, wound up in hospital, my bank account was still broke no matter how many hours. And I was kind of putting in at the same time. And I started to realize, wow, there's got to be a better way than this, you know, this whole default life system that I feel that we're taught, which is to exchange time for money and that type of stuff and work until you're 65. There's got to be a better way. And through a series of learning some new stuff and attending some events and getting some mentors, wound up buying my first property about six months after this experience of breaking and winding up in hospital and made more profit from that one property deal than my entire year's income. Working 17 hours a day, 50 weeks of the year and doing that for a few odd years. And all of a sudden the light bulb went on and I went like, I was done. I was out of personal training. I was in the army at the time as well. I was just out of everything in a short period of time. And I just fell in love with investing because of the freedom and the choices that it can give you in life. And so come 20 years later, I've been teaching, speaking, and training, had the privilege to travel around the world doing this big background in property, but also in cryptos and metals and business investments and shares and trading and a whole range of different elements. And have the privilege to be able to work with thousands of people over the years as well.

Well, I'm looking forward to getting deeper into this conversation because most investors I know are nuts. And so I'm going to gauge how crazy you are through this interview.

But, yeah, pretty crazy. Yeah.

But before we get into the investment side and the times and everything else, let's start off with something really simple. So you told me a little bit about your background. You could have picked all kinds of different things. You talked about the army, you talked about fitness. You talked about having different areas. How did you discover that this was going to be your purpose in life? Was it the thrill of investing was the return when did you know that this was what you wanted to do when you grow up?

Such a good question. Look, I'm a teacher at heart, you know, as much as I love, you know, health and well being is one of still one of my biggest passions today. And I'm a teacher at heart. That's who I am. So I love to educate, I love to teach. To me, apart from the health side of things, right, the thing which had the biggest impact on my journey and when I talk about the biggest impact, the thing that gave me my time back, the thing that taught me so much, the thing that taught me about the principles of leverage, and all of a sudden realize started realize that I could help so many people doing it. So they realized that the level of financial, I guess, understanding and knowledge and intelligence that most people have, unfortunately is really low. Just because we're never taught anything about money or wealth of investing. And I really realized that, wow, goodness, a lot of people need to know this stuff. This can help a lot of people. And so if I was here to serve my mission on the planet, to be able to help free people, because that's really what it is about for me, then this is my pathway. And so as much as health and well being, absolute passion of mine today still is, this was just the place where I had the privilege to fall into, so to speak, and just had some great results and realized that the impact it can have on people's world because what I, when I looked around, I started to realize that most people's experience of life is limited by how much money they earn. And I just knew that life is about so much more than working to pay the bills. And I wanted to help other people do that as well.

And it's so interesting you say this because they don't really teach life skills in school anymore. In fact, they never did. Right?

They never did. It's the right answer.

Yeah. And that's why builders as well, like, you know, a lot of the builders I've interviewed end up learning so much about the business through podcasts, through other builders as well. So I was really excited to have you on for this podcast. Now I've got a question for you. I did a lot of research on you and you talk a lot about the importance of strategy when it comes to investments. You know, I moved from Canada to Australia a few years ago, and when I started looking at real estate, it was like I had a plan. You know, this was my plan. Buy low and sell high. But why is a strategy so important? I'm a strategist. So I'm curious to know what your answer is. Why is a strategy so important when it comes to investments? And why do you preach about it so much? In everything you do, you always say, start with a strategy.

It really is. And any of my clients will get sick of me saying it, and I hope they do, because I'll ingrain it as far as I possibly can with them. Here's my experience of most investors. The strategy that most investors apply is what's called buying hope. They go and buy a property or buy some shares or buy crypto or something like that, and then they hope like hell it goes up. And to me, that's not a strategy. That's not investing, that's gambling. And investors don't gamble, right? Investors move with in a tactical way, with intention and with purpose. So when I think about strategy when it comes to investing, you know, people invest. It hasn't got anything to do with the money. That's not why people invest. Right? Money is just a unit of choice. Right? And that's all it is. It's just a tool for us in life. Most people invest not because they just want to make more money. They want to make more money so they can have more freedom, they can have more time with their families, they can give back to the planet a little bit more in a greater level. They're doing now, they want the opportunity to be able to experience life at a, at a more holistic style level. And so when we talk about strategy, we start with strategy. It's always about beginning with the end in mind. Okay, well, what's the experience of life that I want to have? How much is that experience of life going to cost me? Okay, well, reverse engineer, where am I right now? And strategy is what bridges that gap. So when we are moving, operating in terms of strategy, every element that we buy and everything that where we put our money, it has a plan and has a purpose. And we're being very intentional with our money to get our money out there, working hard for us because frankly, everyone deserves it. Right? I believe that freedom is our birthright because of education systems and various taxation systems and economy and a whole lot of rabbit holes I could dive into right now. I believe that freedom has been taken away from us and we have to take it back. Because again, life's about so much more.

For the skeptic builder in the room because they're listening to this and they're going, okay, so you're telling me that I need to have a strategy. You're telling me that I need to look at other ways to diversify my investments. Most builders that you and I know are time poor.

Yeah.

So how do they get to spend their time wisely when they're already working those crazy hours and sometimes on the weekends as well for some builders out there. So, you know, how do you get them to spend their time wisely? Because it sounds like time is also a big currency when we're dealing with this. So how do they leverage their time if you want them to create other avenues of wealth outside of their building business?

Yeah. There's a big myth when it comes to wealth creation and investing that in order to invest and be, you know, create wealth in your life, you have to put a lot of time into it. And it's not true. It's not actually accurate.

Right.

When it comes to creating success in any arena in life, including in business. And, and a lot of what your team will. And I'm sure you talk about a lot when it comes to the people that you interview and you speak about is the power of leverage. Now, it may not be in terms, but it might be the importance of having a team around your, importance of learning from people who have come before you. You know, so there's, to me, there's a multiple different styles of leverage. Right. And so if all of our lives and our results are based on just how much time we have and how much money we have and how much experience we have and how much energy we have in a day, then our results are always going to be limited. All the builders you interview, like, I work with a lot of them, like as my clients and long hours and working with using hands all time for a lot of people and the business aspects that have to be run afterwards. And so if everything's just based on you as an individual, then you become the bottleneck in your own results, and you become the bottleneck because we only have so much time in a day. Right. So to me, it's never about needing a lot of time. It's all about using your time effectively. And this is where we need to tap into systems. Right. So because wealth creation isn't about luck, those who build wealth and create success in any arena of life, I don't believe that they get there by luck. There are some elements of luck that might be, but for most, they've just got a different system. Whether that's a business system, whether that's a construction system, whether that's a system to build a house or build a duplex or build A block of units, for example, or any of those different type of things. Wealth is the same. And when you can follow an investment system and have the right team around you, it's not about you having to put up a lot of time. It's all about having a strategy and a plan and leveraging off the team and the system that can actually go and execute on that plan with you. So you can focus on your business, you can focus on your family, you can focus on enjoying your life more. So rather than thinking that you need to spend like 10 hours a week trying to build a portfolio at the same time, it's absolutely not necessary. And vast majority of my clients, probably 95%, they don't want to be hands on in their investing journey. They want to be able to focus on what they need to focus on, but be able to kind of build their wealth in while in their spare time.

So what you're really saying is success leaves clues. Follow the success templates and systems in place and don't try to reinvent the wheel. Just go where success already exists.

Yeah, and I'm sure you've probably experienced that when, you know, you've been, we were talking before and you've been running this for seven seasons now. I imagine that you've been hearing some of the same stories, the same habitual ways of thinking, the same patterns of behavior that the successful people actually apply in the building game, in the construction game. And that's been leaving clues for a lot of your listeners as well. That'd be true, I imagine, wouldn't it?

Yeah, I mean, look, most builders have a struggle or a common struggle or have a story behind them. And my role, or any role of any guest, podcast host or something like that should really be about uncovering their story and telling their story. Right. Because at the end of the day, that's what our listeners love, is hearing, you know, people's stories and backgrounds and what brings them to where they are today. So you bring a good point. You know, you've really squashed a myth here about time, you know, and it's, you know, I really resonate with the word leverage there. But, but let's look at the flip side of this question. You know, what are the, some of the common blind spots when it comes to new investors? What are some of the things that they might not be aware of that they should be aware of? Especially builders.

Yeah, yeah. And when we say builders, we may even say craftsmen or craftswomen, right?

Yeah, yeah, yeah.

All in love with their craft or.

Builders who own companies and are trying to figure out the business side of things, but their passion is their craft, you know?

Yeah, 100%. One big thing I see often is that they wind up investing based on emotion. And it's one of the biggest blind spots I see on a regular basis. And my key rule is that, you know, investing plus emotions means you're going to lose money. Right? Because what a lot of investors make the mistake of doing is that they, they're buying based on emotions. They're not buying based on facts and figures and effective due diligence. Right. And when we can remove our emotions from decisions, all of a sudden we can look at it from a very black and white standpoint and we can run each deal through a system like diligence system to go, yes, this serves the purpose that I needed to for my portfolio. Or no, it does not. And we like because again, investing is just about successful. Investing is about being a successful decision maker. And the same with business. Being a great business person is about being able to become a better, better quality decision maker. And the better quality decisions that we can make in all these different arenas in our life, it just means that we can actually move step by step by step towards the outcome that we want to wind up creating. And I think that what I found with a lot of the builders, because they're so intricate in their craft and they potentially love what they do, they can fall in love with the build as opposed to fall in love with the outcome about it and wind up over capitalizing or not making the effective decision that's needed for their portfolio. That's definitely been one of the common things that I've seen on a very regular basis. And I would say there's one more is that a lot of people think that investing has to be big, crazy, and outrageous, and it doesn't. No matter what situation someone is starting in, everybody can start investing. We come up with these programs and these ideas in our mind that it's got to be the perfect time, you know, that we've got to wait for the perfect moment, the perfect economy, the perfect lending environment, when my partner becomes more supportive, when the government does this. And yet they're waiting for this perfect time to get started, right? Or when I have more time, then I'll start investing. When I have more money, then I'll start investing. But I want investing. Investing should be as normal to every person as paying a bill. And when we can normalize investing in financial freedom and realize that it's about the small, consistent, strategic Steps that is really going to stack up and stack up to until avalanche zing is called success, all of a sudden becomes more doable. And it's just about small baby steps done consistently. And when people can apply that and get on that road to financial freedom, the compound effect of that kicks into gear in a big, big way.

Yeah, yeah, no, that makes, that makes a lot of sense. So what are some of these popular investment strategies that or tactics that you're seeing right now? You said they don't have to be large investments, they can even be small ones, but more leveraged for the building market out there. For builder that might be a bit skeptical or might just say, I don't really want to go crazy right now. What are some of the investments that you're seeing in the market today?

Yeah, yeah, look, right now like we're in a bit of a. There's a lot of fear in the market, right? There's a lot of this conversation, the media around recessions, the interest rates have gone up, inflation has gone up. And, and we're in this marketplace and the media is hyping it up like crazy, which is what they tend to do very, very well, of course. And there's a lot of fear in the market right now. Now Warren Buffett has this great quote and he talks about, when others show fear, I show courage. When others show courage, I show fear. And what he's really talking about is this idea of being countercyclical right now. No matter what is going on in the economy or what is going on in the marketplace, there's always opportunity, but the opportunity just changes depending on the environment that we're in at that point in time. So to me, when I think about investing, I always think about, as I said before, about strategy first. And what is the purpose that where we're placing our money, the asset class that we're placing our money is there to serve in the portfolio. That's going to help us go from one deal to the next deal to the next and move through the five different phases of wealth creation journey. So when I'm looking at right now, I think you go out, okay, well, based on that strategy that you might have in your situation, there are a few key things that's really interesting to me right now. Number one is I think property has become a little bit further on sale. And the media has been talking about massive drops in the Australian property market, which has not occurred. We've seen some drops, but the media is course, you know, talking about huge, huge drops. But what's underpinning the Australian property market is this massive undersupply. And so what we've seen now is an opportunity where interest rates have gone up substantially, which has pulled out the heat out of the marketplace. So people are stopped to do. They stopped doing stupid things and paying hundreds of thousand dollars more for a piece of real estate than what it's fundamentally worth. Yeah. And because the media has been sprouting so much fear around interest rates and the cost of money has gone up, a lot of people have pulled out of the marketplace and this is representing some incredible opportunity. Now when you've got a long term perspective in mind, you know, property isn't a six month strategy and so we can't treat it like that. Right, right. So if we're sitting there looking at the property market right now and going okay, well can I find some good opportunities in this marketplace right now while everyone else is kind of running for the hills and hiding under the proverbial doona just hoping everything's going to work out and I'm willing to ride this, you know, hold this property for a long period of time. There's some incredible opportunities that's in there right now. I've just bought a property just recently for literally about to settle it for about $800,000. Undervaluation. And because of certain aspects in the market. Right, right. And what I think's going to kick in in a couple of years is that as interest rates start to drop back down again and the cost of money evens back out and the fear falls out of the market and inflation settles back down, we're going to have this environment where the under supply is going to kick in at a huge, huge level. And all the builders out there know the supply chain issues that has been occurring over the last during the COVID situation we've just been in, we've got this massive under supply sitting in the marketplace and with a government which is promoting huge immigration and a population growing at a rate of knots. And so I think in a couple of years, this next few years buying some strategic real estate is for hold it for the long term is incredible opportunity. And I also think in 10 years time most people won't be able to get into property as an investment because I think it's going to be too expensive. Right. And some other trends around that. So to me, property absolutely. I'm a big fan of the cryptocurrency marketplace. With the decentralization world, of course, it's a roller coaster. So you have to be ready to roll to ride that pathway.

Now with the crypto though, is there regulation coming in?

Yeah, there will be, yeah, no doubt about was always coming. You know, there's the central bank digital currency which is on the way, which is going to be popping in much sooner than we think. In the next year or two that will be coming into the marketplace, regulation is going to be popping in and I think we're going to see two markets. We're going to see the decentralized version of blockchain and cryptocurrency and we're going to see the centralized version which is, you know, often it's going to be run by governments. But in this next kind of few year period, a lot of people are talking about we're going to see that 100k Bitcoin price point. But everyone's got an opinion and my crystal ball is broken. So if anyone's got a working one, I'm happy to buy it off and that'd be great.

All right, so you said crypto, I'm assuming you're going to say minerals as well at some point because they usually associated as a different type of currency. Would you go as far as validating silver and gold as well in today's market?

Yeah, I'm definitely investing in silver. Silver's probably my pick, especially because it's use cases with the renewable energy sector as well. I think there's a lot of use cases that it's there for. So when I look in this marketplace property, I'm looking at crypto like dollar cost averaging in a strategic crypto portfolio. I'm looking at hedging into silver is my primarily metals. And then look, I'm not in the share market again yet. Give me six months and I'll probably be looking at it again. Then I'm doing other business investments and things like that as well. So that's kind of my mix of my portfol at this stage.

And I guess the advantage for a builder is, you know, if they had land, building would be a lot cost more cost effective if they use their own company to build those houses. Which then goes into the what are some of the spec bills for flipping and build to rent strategies that you're seeing right now for builders?

Yeah, really interesting. The build to rent stuff is something we should definitely talk about because it's changing. It's going to change the whole real estate market in a big way in this next decade. So I'm keen to have a conversation around that. But when we're talking about flip strategies to be honest, it all just comes down to the numbers to me. Right. You know, so to me it's not one particular, like one particular pathway and one particular strategy. To me it's all about the numbers. Because a flip, it's not a long term hold, it's getting in and out of the market, which is all about we'll do the numbers stack up, that's going to generate the outcome that I want to move into the property and move out of the property within a reasonable time frame and make a reasonable return on investment based on the effort and the risk and the opportunity cost of not just kind of selling it to the local market. And so I've got a bunch of builders that what they do is that they have a rhythm that every year they might do two flips themselves from their own kind of backyard, so to speak, while they're building their strategic investment portfolio in different locations as well. Because we don't want to have everything tied up in their own backyard because then we're, we're hedging all our bets on this one marketplace and that's very risky. Diversification is a key element in any investing and how we do that is by using different locations in an array around Australia to take advantage of different growth cycles. So it always got our money out there moving harder for us in the market. So I'm not going to talk about is there one particular flip which is working than another? Because the reality is a lot of them work. It's just do the numbers stack up and in what location with what demographic are we actually referring to at this point?

Yeah, no, that, and that makes sense. So around the flipping, I mean, I guess the traditional sense of cost low and then flip high still exist in today's market. Regardless of what you're looking at, I would say that the concept and the principle is still the same.

Correct? Yeah, exactly. Yeah.

Okay.

Arbitrage.

Yeah. So how does equities play a role in successful wealth building as well? Because obviously even though we have this speculation and even me living where I am now, the housing market seems to be still increasing in value. And what you bought 12 months ago, what you, you know, I've been visiting Australia before, I moved here for about seven years and every year the proper pricing goes up. So obviously there's equity.

Yeah. When you're talking about equities, are you just, just so I'm clear, are you referring to equity in property market now? Are you talking about equities as in shares and funds and managed.

Throw it at me. I'M interested hearing your side on either side. You can throw it at me in any direction.

All right, cool. Let's talk about both. So we'll touch on the, the equity side of things like the shares and the funds and things like that. Just because it may be a little bit of an easier conversation. Then we talk about equity when it comes to and because what I want to touc the equity when it comes to property is the serviceability issues we're going to come and some of this may link us back into this next 10 years in the property market with the build to rent side of things and property investors of the future and first home buyers of the future. Because it could be a curious conversation and that a lot of people in the building game may be thinking about or maybe questioning or maybe interested to hear about as well. Equities. To me, when we talk about the foundation of my wealth portfolio and a lot of my investment strategies comes down to profit property and the builders will, you know, everyone listening will understand why it's something real. We can, we can feel it, we can touch it, we can look at it, we construct it, we can add value to it. Everybody needs it. Everybody needs a roof over their head. But in the share market, no one needs that. Right. No one needs that. It's just a, it's a store of value attached to a company. That's really what it is all about.

Yeah.

So when you're investing in equities and shares and things like that, what you're really attaching yourself to is is this company or farm that I'm investing in, in is it going to perform well into the future? And over time a lot of them have been. And over time the returns on shares per annum without the leverage component that we get when it comes to property have done just as well as property investing. However, it can be a lot more volatile type of market and it can be manipulated a lot more in various different ways. And so when I think about investing in shares and investing in equity again, I'm thinking about well, what purpose is it there to serve my portfolio? Is it a long term buy and hold purpose where I'm primarily about creating capital growth to create a sustainable income stream over time? Or am I flipping? Am I getting in and out for a short term gain or am I targeting yield place? So again when I come back to what am I investing in the equities market, I sit there, I'm out of it right now just because of the. There's been a. It was way too heavy. I Knew it was going to be dropping and so I pulled out of it. Right now I'm going to be shopping for some value buying in the next kind of three to six odd months. But like when I'm looking for that, what I'm going to invest in? Well, okay, what do I need in my portfolio? Am I looking for the long term play? Am I looking for the yields? Am I looking for the flips? Well, based on what purpose it's there to serve in the portfolio is going to depend on what type of equities and what I look for. For most people, however, you're better off just buying a good fund like a Vanguard or something like that and just doing a dollar cost average strategy into that. Because it's been for most, even traders or share market investors, they have never been able to outperform just a standard managed fund, the index of the fund. And so you talk about hands off investing. Well, that's a really easy way to do it for and that anyone can get involved in. You can even do it $5 a week if you want to. So the barriers of entry are really, really low. So I think that's a great way to do it for most people, unless you're in the game all the time.

On now, what are some of the trends that you're seeing right now? Obviously the interest hike rates have been the one that's in the news a lot more. But are you seeing investors right now being conservative? Are you seeing more people getting into the market because of the speculation? What are some of the trends that you're seeing in the market right now?

Yeah, look, most investors I would say are probably more out of the market. They're all waiting. There's a lot of people sitting on the sidelines at this point in time and very much a lot sitting in a space of fear because of the rising interest rates and the cost of money and the rising inflation and the talk of recession. Right. So that's a very, that's a really common thing which is happening right now. And so a lot of smart investors right now are looking for opportunities, right? And so they're looking for opportunities in this marketplace where there can be some value buying. They've got some long term pathways, they've got some capital set aside waiting for some really cool deals to kind of pop up along the way. But while, as I said, while a lot of, of a lot of people have moved out of the marketplace, it's bringing up opportunities, right?

Yeah, yeah.

And so it's in the downtimes where True wealth is made. And so you think, if you think.

About the 2008 recession, Airbnb came out, a lot of these innovation companies, you know, sort of came out. I, I built my agency at that year too. Here's a question for you though. I was in Canada when the last recession hit in 2008 and the Canadian banking system was a lot more conservative to the American banking system. So it was a different kind of recession for us. And I'm sure it was different for Australia and New Zealand.

Correct.

If we were to get a recession in the next few years, is that going to be a global ripple effect? Is it going to be the most identical type of recession or will it be different in different countries?

It's definitely going to be different in different countries. Now there will be some flow on effect from different countries into how we operate just because of our reliance on trade and different and you know, globalization and things like that. But it is definitely going to be different in different countries. You know, the banking system, as you just pointed out, you know, the, the banking system in the US is radically different than what it is in Australia and what it is in Canada and other, other countries and, and their global debt is insanity. Like it's, it's insane. I think it's, I can't remember top of my head, but it was something like their interest repayments, something like $8 trillion a year or something stupid. Is that what it is?

Yeah, it's probably larger now.

Yeah, it might be larger now. I can't remember off the top of my head. Maybe it's 8 billion. It could be a trillion. It's a lot of money anyway.

Yeah, I think it was in the trillions the last time I checked. Yes.

Yeah, it was a madness, isn't it? It's madness. And so in Australia we've got a of lot, lot more stable and stronger and regulated banking system which is, it's very, very different. So even if we were to fall into this recession and Australians are very anti recession, so to speak, right. We don't tend to have recessions is what supposedly. Right. But because we don't tend to have recessions, we make a big deal out of it at the same time where on a global level, different countries have been through recessions at different times and it's a natural part of an economic cycle. And so we need to be mind and not to get fearful about it and we just have to look at what's in front of us and go, what are the potential risks? What impact might that have on Me, my family, my business. And how can I start setting myself up now to be able to weather any storms that come up? And so that's all about being proactive rather than reactive in your wealth and in your business and what you're setting yourself up for. Because there's, there's going to be lumps and bumps along the way. There always is just part of life, you know, it's not, we're not skipping down the rainbow path of unicorns flying around them. We've got to prepare for what comes up.

So what are your thoughts on these rising interest rates now? Will that impact builder investments? Will it change the builder landscape when it comes to creating wealth building? Or do you think because of these high interest rates, builders will probably have the competitive edge to take advantage and leverage what they have?

Yeah, look, there's so much wrapped up in that question, honestly, with a lot of the trends and things that are happening right now. And I might go a little bit out of scope what you asked on, if that's okay.

Yeah, that's fine.

So when we're talking about interest rates, right, right now we just saw some more interest rates happen and they're talking in 2023, maybe we're going to see another couple of bumps. But I think we are nearing the peak of the interest rate cycle and Reserve bank is talking about we're nearing the peak of the inflation cycle. Final quarter of 22, we hit 7.8% and like they're talking about that, we're nearing the peak of that now. What I expect to happen is that we may see steady interest rates for a while until obviously inflation figures just kind of settle themselves down a little bit and then may see some drops back off in the marketplace. Now we're not going down to 2% again and a lot of people have really short term memories. We may, we may pop down to like 5% or 6%. But we have to understand that that's normal. Five years ago, before COVID like interest rates were 5% and that's normal. We're in a normal interest rate cycle right now. We're not in a high interest rate cycle. It's a little bit higher than usual, but it's a normal interest rate cycle. And so we got to get over it a little bit, right, to be quite frank. Yeah, but it's just spooked a lot of people and they moved out of the market. Now what I think is going to happen is that as we start to come back down a little bit and the talks of recession May dissipate a little bit. Talks of inflation dissipate a little bit. People are going to settle down a bit or they're going to settle into a space of normalcy as opposed to a space of fear where they sitting at right now. And when we see that, we're going to see the activity in the marketplace start to pop back into the mix again. So that's why I see that right now, now there's this window of opportunity. Right? But that's when we talk of where a lot of people are out of the marketplace. But at the same time, while a lot of people are out of the marketplace, builders, and I'm sure you've heard this word a lot, but the supply chain, like I'm super curious here what you've got to say about this and what your builders have said about this, but the supply chain has been massively disrupted over the last few years and isn't getting any better anytime soon is.

What my builders have had to, to play a smart game, maybe bulk order or store or order in advance. I mean, we've had so many different builders that had different answers to supply chain. But a lot of it is just trying to think, play smarter because of the unknown timelines and huge delays.

And so we've seen a lot of builders that have had to delay projects by 6 months, 12 months, 18 months, just because quite frankly they couldn't get the materials. And the cost of materials went up substantially and we saw building prices have to go up and up and up over this kind of period of time as well. And it's left Australia. And when I say Australia, I hate using the word the Australian property market, because that doesn't exist. Right. There's no such thing as the Australian property market. It's made up of submarkets within submarkets and submarkets. But it's left a lot of arenas in Australia in this huge undersupply of real estate.

And it's not just Australia. We've got builders from New Zealand, the us, Canada, our listeners are all over and they're all, all saying the same thing about supply, just different things as far as items.

Yeah, yeah. And, and so the question then is how long is that going to stay for and is it a forever thing or are we going to see that the building, the ability to be able to put more supply in the marketplace is going to be able to increase at some point? I can't see that happening in Australia very easily with the, under supply, the, the supply issues, the, the population growth which is moving. And so I think what's going to happen is that the type of product is going to change and the type of end user is going to change. And this is why we're seeing this build to rent system come into and being massively supported by the government in a huge way and, and big corporations, big funds. This build to rent is, is a huge push because the government's realized that property in Australia is, this is in Australia. But a lot of countries are already doing this right. That people are conditioned to a lifetime of renting. And that's what's coming in Australia too, too. And this next 10 years, I think first home buyer is going to be something you see in a museum. I just don't. They're not going to exist. They can't afford. My daughter's 11 years old. I sit there and go, wow, when she's 20, what's property going to be like?

I went to Vancouver for holiday after three years and if you didn't have 200,000 to get in and you're in your 30s, you wouldn't be able to buy a property because a basic house in, in North America starts off at a million, 2 million. And a lot of people in their 30s and 40s don't have the 20% deposit, was it?

Absolutely not. And especially in countries where we're taxed, you know, almost 50% of our money goes towards that. And, and the, all the taxes we're. We're subjected to just going through day to day life. The system isn't set up for us to be financially free. It's set up so we become functioning cogs in the economic wheel of society and good boys and girls do what's told and pay our taxes. Right. And so that's my conspiracy theory. Won't dive into that too much.

That'll be another podcast.

Yeah, that's another podcast. But this next 10 years I want to touch on this. This next 10 years. Years.

Yeah.

The landscape of real estate is changing drastically and property investors in 10 years is going to be very different than it is right now. There is a huge wealth divide which is happening in the marketplace right now. And I think it's going to get worse and property is going to be one of the crux of that. The government is leaving clues around where they expect things to go. The build to rent, the longer leases for the more rights in the in, in terms of leaning towards tenants to have a home. We're moving towards a lifetime of rent renting. And so this next 10 years in the Real estate marketplace. I think it's critical for investors, absolutely critical to be building your portfolio.

So we talked about properties. I'm going to tackle this one question on both the crypto and the precious metals. Precious metals. Silver has been constantly high. Gold has gone. You know, I've never seen a time when silver and gold has dipped for a very long time. A lot of friends that are in the silver space that are holding on to silver because they expect that to be the next boom. Yeah. So question for you, for the builders out there.

Yeah.

For the builders that may want to sit on properties and not jump into it. Cryptos and metals, are these the safe bets for the future?

Yeah, look, I'm, I'm, as I said, I'm a massive fan of it. Like with the, with the silver market, I think that's a, it's a very safe bet. And gold as well, and different rare earth metals and things. I think it is a safe bet for the future. Right. Especially with where we're seeing the digital currencies come into play and some of the global disruptions in terms of the currency markets and a few different things. I think having a hedge in silver and gold is a great thing. And the ability for, I know some builders get some cash in hand which doesn't quite go through the system the right way. Being able to walk down to the local silver shop or the gold shop to be able to buy some, to be able to invest in that is a great thing to be able to do. I'm a massive fan, fan of it.

Todd, I have no idea what you're talking about. No, no, no.

This doesn't happen. I know it doesn't happen.

Yeah. All right, so you talk about leverage, right? And building companies have access to so many different things if they decide to go to the property side of the investment side. What's the first thing that comes to your mind for a building company owner? When it comes to the building company, how do they leverage it if they play the property game?

Ah, good question. And you know, this is going to depend on, on, on where you're. So, so here's the thing. Most business owners, most business owners, your primary source of attention should be on your business because that's your greatest source of leverage. Right. You taking your time and your energy and resources away to go and redirect it somewhere else with an extensive amount of time and things like that. It's not your greatest source of leverage if your business is doing well and for business, I've been in business for, you know, 18 odd years. Now if your business is doing well, well that's where you should be directing a lot of your attention because it's the highest return on investment in terms of your time, your capital, your brain space and your energy. Right? So what the challenges I see though is a lot of business owners, they put everything into their business and that's where all their wealth is. And it can be a black hole. It can take all your time, it can take all your money, it can take all your energy, it can take all like everything. And so what. One of the things which I, which scares me and makes me sad quite frankly, is that so many business owners who put all the risks they've taken, the blood, sweat and tears that they put into their business and all their money is tied up in this business and yet they have no personal wealth. Right? And so business is a gladiator sport. And so much could go wrong and so much to subject to so many things that can be outside of our control. And a lot of business owners have this dream that they're going to be able to sell this business for the big sellout and it's all going to be magical and unicorns and, and some do, but a lot don't, unfortunately. Unfortunately. Yet if they were to use their business as an ATM where they can actually transfer their business profits into personal wealth on a systematic strategic way, they can create an exit strategy from their business in their personal situation. Because quite frankly, you deserve it, pure and simple with what you put in. So to me, when I think about it is that for most business owners, you don't want to be moving a lot of your attention away from there because that's your greatest source of leverage. But you then want to leverage off a team and a system to be able to systematically transfer some of your business profits and use it as an ATM to build your personal wealth. Now if as part of what you do, you want to go and start turning over some real estate because you've got some teams and some skill sets and some time and, and some business capacity, be able to do that to start flipping some houses or start build your portfolio that way, then that's incredible. Credible, right? That's great. You can build some leverage very nicely in there. But I would say that it has everything to do with where the stage of your business at and where the highest and best use of your, your primary resources are time, energy, capital. Right.

So with the building companies, do, do you recommend they also look at other, other businesses perhaps within that same business? Obviously, because builders Are time poor, might be a little bit shot in the dark to go, hey, let's build a fruit truck or another business out there. But you know, we do have builders sometimes that will go, hey, we do different types of building but now we also do renos and we do design and home design and we offer different services within that building business. I've got a mate of mine who built a, a global famous junk removal company and then he ended up moving. You know, a moving company, a painting company, a house service company, gutter cleaning company, and they use the same call center for all of those systems. So you know, for a builder that is looking to diversify, do you recommend they look at other services within that.

Building sort of facet if it makes sense. Like just because you can doesn't mean you should.

Right.

So in the end the business, like if you're, if you're gonna fan out, then that's what we call it. Right. We start with our construction, then we might fan out. Like a good example in the property market, you might start like real estate agents start out by buying, you know, selling real estate. But then the, the property management might be fanning and the lending might be fanning out. And so if we look at industry and services in the same niche, which we can then kind of go, what's one degree that I can add on to this using, utilizing my existing business systems and where I don't have to load up whole new infrastructure and whole new things and go and increase my profit nicely then. Beautiful. Absolutely. You're creating a diversified business system which now isn't just relying upon one, one leg of this tool. You're creating a more stronger base and a stronger structure that you can actually build a better salable and more stable asset off for the future. So I think it's incredible thing, but don't just do it for the sake of doing it.

Do it if you can do it and you have the ability to do it, but also not take any hits while you're doing it at the same time. Right?

Yeah, yeah, absolutely. And, but again, just because you can doesn't mean you should or you have to. Again, it comes down to the numbers. And I've said this a few times, but to me it just comes very black and white. Right. When it comes to business or investing. I go, yes, I get an emotional about it because this is a purpose and this is a legacy thing. And I know it is for a lot of people, like the idea of providing homes and housing and that legacy for the future is something that's important to a lot of people, and it is for me as well. But when I'm making decisions around how I operate within that business environment or that investment environment, I'm, I'm looking at the numbers. That's what I'm interested in. Yeah, I've got a lot of business owners in, in construction and things like that as well who are investing in different types of businesses because they love the business world. They're not building another business. They're just investing in other smart, intelligent business owners who are driven and, and, and have their own system. And so they get to ride the coattails of other, you know, smart entrepreneurs.

You talk about legacy and, and, you know, legacy comes in a lot of the interviews that I do. When I talk to builders, you know, they talk about what they, they want to, you know, get out of this business or what their exit play is. And, you know, there's succession, there's sales, there's acquisitions, all of that stuff. And I would assume that even investment strategies need a legacy as well. You know, what, who are you becoming? Where are you going? And that sort of determines some of that investment strategy. I've been paying attention. I've been, I've been doing my research on some of the things you talk about, but I'm going to flip the question. You know, you do this for a living. You help people. And obviously, clearly the system's broken. And a lot of people just like, you know, builders learn a lot from the association of Professional Builders. You know, the WIPA calculator was one of the first things I learned interviewing the different guests out there. And there's so much knowledge that comes from the association of Professional Builders. Why do you do what you do and what's that legacy that you want to leave behind? Behind?

Yeah, look, I've mentioned legacy in this conversation a few times now, as you've been listening, which has been. It's been good. And, and it doesn't surprise me. It pops up in a lot of the interviews that you do. Right? Doesn't surprise me at all. I believe legacy comes down to two different things. Right? I, I believe in the legacy. Intergenerational wealth is a type of legacy. I sit there and I think about my daughter and her kids and their kids, and I sit there and go, what's life going to be like in 100 years? Time. Time, right. And I want what I do now to matter, to actually benefit them in multiple generations. I want to be that, that dead guy who still controlling the wealth from the grave. That's helping people to be able to live a better quality life. My family live a better quality life in multi generation. So one is intergenerational wealth, but the other type of legacy is all about impact. And so I'm a big believer in building wealth which outlives you. And so when I think about impact and the impact, you know, I want to have on the planet, you know, I, I don't, I've retired twice before and I got bored out of my mind right after a couple of weeks. And a lot of business owners and entrepreneurs will have the same experience. It may sound beautiful, but you sit on a beach for a few weeks and you're going to get bored. There's no doubt about it. You got to be doing something. You're going to be thinking about ways that you can make a better umbrella or to build something over here or do something you just, we just can't help ourselves. It's a, it's a disease and it's an illness and I'm very happy about it. Right. So when I think about legacy, most people I meet want to leave the world in a better place in one way, shape or form. To me, what I found in legacy comes down to two things for me personally. One has everything to do with the system of control that I see. And this is the education system which indoctrinates people into a lifetime of financial slavery. Because this is what we're in. We're in a modern, modern financial slavery is what it's in. And I fundamentally believe that freedom is our birthright and I believe it has been taken away and that everyone has a right to take it back. And I'm here to, to help millions of people do that, no doubt about it. And so that's the reason I do what I do is to help people create that freedom in their life. But I also believe in giving back to the planet and leaving the world in a better place in different ways. And you know, as human beings, unfortunately, we've done a good job of stuffing up the planet in certain ways and, and, and polluting the planet and things. And I love, I've had the privilege to do a lot of travel and see a lot of gorgeous places and I've also seen a lot of the destruction as well as well. And I'm just not okay with it. I'm just not. And so for me to be able to actually use my resources and use my wealth and use some of my knowledge to actually do land conservation and be able to do, you know, do ocean, I'M a mad scuba diver. So, like going diving in Bali and seeing all the plastic bags just flying past my face and all the stuff like that and, and, and turtles with things wrapped around them and sharks with fishing lines and plastic bags wrapped around them, I. I just makes me cry. It just. I just can't stand it. And so most people I meet want to be able to give back to the world in a bigger way than what they're doing right now, but they don't have the time, they don't have the freedom that I have the resources or the brain space to be able to do that. And when I can help people free themselves financially so that they can lift their head above the financial waterline, so to speak, and see beyond that, there's so many people that have so much to give back to the planet, and if I can help them, start them on that path, to be able to have the energy and time and freedom to be able to do that, then, yeah, I've done my job.

God, it's been really inspiration talking to you, my man. Lots of common commonalities in our way of thinking. My final question to you would be, you know, how can builders learn from you outside of this podcast interview, what are some of the resources? Do you do any events? How can they find you online?

Yeah, look, you know, I run a lot of free events and things like that that people come and be a part of. Right. Probably the number one place for people to start is that I run Facebook group called the Wealth Dojo. If anyone finds me on any type of social media, I run a free Facebook group. It's full of investors who are just learning how to grow their wealth. And, you know, some are just starting out, some are very experienced with tens of millions of dollars in assets, but it's just those, those people learning how to grow their wealth and start to invest strategically. And so, yeah, finding me on social media is the place to do it. Todd Polke is the name. The Wealth Dojo is a Facebook group, a free Facebook group that I run where I'm just sharing different trainings and resources and tools that people can come to be a part of.

Thanks so much for having for joining us today. We'd love having you here and I'm sure we'll see you again in the future, my man.

Love to thank you so much. Appreciate you.

Thank you for listening. Remember to subscribe to Professional Builder Secrets on your favorite podcast platform and leave a review to learn more about how the systems at the association of Professional Builders can help you grow your your building company. Visit associationofprofessionalbuilders. Com. See you next time.