Financially Set For Life

Foreign Money, where we show you how to pay your home loan off in up to half the time of a normal bank loan. Welcome to the Crown Money Podcast. I'm Jessie Edge and I'm joined, as always, by the legendary Scott Parry. How are you, buddy?

Oh, not as good as you, Jesse, but better than Roy.

That's great to hear. Well, it's been a while since we've done one of these. That's really great to finally have you in front of me. We've got a wonderful thing to talk about today, something that, you know, we have been talking on and off about for the last 20 years. Been wanting to do it, but have been waiting for the right time where we could do it well. So I'd love you to introduce for us the Financially Set for Life program that we're about to introduce.

Go for it, right? Yeah. So it's something where I sat down, I think 2002, and asked myself, what do people want? What do people want financially? And I think the easiest and smartest thing in business is just to ask people what they want and give it to them. And I was sitting down with everyone and asking, what do you want to do financially? What's important to you financially? And like nine in 10 people said, I just want to pay my house. I want to own my own home. And so I said, okay, let's create a strategy that helps people own their own home. The saddest part is that everyone is financially incentivized in the finance industry to keep people in debt for as long as possible. The longer you're in debt, the more money everyone makes except for you. And so from that perspective, I said, let's just help people get what they want, which is debt free. And we've really perfected that. I'd say we are the number one company in Australia for helping people pay off their house. I don't think anyone else has helped more people pay off their houses than us, which is an amazing achievement. I think it's every 24 days we get to call a client, say, you paid your house off today and you're free. And that's just the ultimate gift. But over the sort of end of last year, I decided to sit down again and re ask myself that same question. And that was, what do people want? And 20 years ago, they did want to be debt free. They did want to own your own home. And so things have changed. Times change. We've had so much go down over those last 20 years. All things from the GFC through to covert and everything else in between. And I just started thinking that from everyone that I've spoken to, they've all at the absolute core of it wanted to be set for life financially, but more importantly they want to make sure their kids are set for life financially. And so I said, okay, if I was going to be setting up a 21 year old full life, what would I do for that 21 year old, knowing what I know, all the tools of the trade, all the sort of the hacks, the ways to sort of improve financial performance, what would I do for this 21 year old to make sure that he or she was set for life financially? And so I sat there for a whole day and wrote about 25 pages of notes or I would do for this person. And so after that session I sort of let go for a day or two and then I went back to those notes, read the full 25 pages and was so comprehensive as to what I would do to guarantee this person would never have to worry about money again. And then I thought, you know what, we should be doing this for all of our clients, we should be doing this for all Australians. This is something that everyone wants but no one's being able to deliver because everyone does their own compartment. And so you got financial planners who do their super and insurances and a few investments if you're lucky. You've then got your mortgage brokers who sort of find you these cheap 30 year loans which you just keep resetting every three years and going back to the start last 30 marathon. Then you got your property guys who there's buyer's agents who do well, but then you got properties promoters who basically don't do it well and don't give you the best property that you should be looking for. And so there's just everyone's doing a little piece of the puzzle but no one's doing everything. And so I thought why don't we just be that one stop shop, why don't we just give them everything they've ever wanted and needed to be set for life and give them a strategy. Say we going to implement the strategy for you and with you and at the end of it you will be flush financially, you're not going to have to work to 67, you don't have to worry about the pension, you're going to be in a position where you can retire early and more importantly set your kids up for life. And so that's how this all came about.

Wow, it sounds pretty exciting. So step us through a bit more about the different components and how they fit together.

Sure. So it's really about having a plan. I think that's where most Australians go wrong. They don't have a plan. They don't know where they should be financially, where they are financially, or where they're heading financially. And so the absolute core of it is step one, home ownership plan. You need to know that you're going to be able to own your home in less than 15 years. You need to know where your cash flow is going to. You need to know your savings rate, you need to know exactly what day you're going to pay your house off, what your surplus cash flow position is. And so what we do with the homeownership plan is we give you a plan to own your home in less than 15 years. And so that's what we've been really doing for the last 23, 24 years with thousands of thousands of Australians, is giving them a home ownership plan. So that was really the core foundation. And then from there, we launched into a property plan. And so what a property plan is, is it tells you what you can borrow, when you can borrow it, based on all your cash flow, your debt reduction, the property price of your home going up and the equity growing. And it really just maps out and projects exactly what you can do and when you can do it, but more importantly, what that's going to do to your net worth and retirement. And so if you're going to be buying one property in 2029 and the other property in 2035, then we start to project out what those properties are worth when you get to 60, what their cash flow is going to be, how much equity is going to be in there. And one thing I've just learned is if you want to set your kids up for life, imagine your parents passing away and them giving you a property that they bought 40 years ago. Like, you're good.

More than good.

Yeah, than good. And so I wish my dad did that for me. He didn't. I don't know anyone's dad who's done that for him. And so the strategy really is, okay, what do we need to do to set our kids up? And as simple as it sounds, I truly believe if we buy each of our children a property relatively around today, not when they're 40, 40 or 60, if we can buy them a property, then if and when we pass away, they will have that property as an inheritance, and they're not gonna have to worry about anything. And so that really is the cornerstone of the property plan, is how many Kids do you have? And let's make sure we've got a property for each kid and on average, I believe from all the clients who retired with more money than they could ever spend before they die with us, which is an amazing thing to tell someone is you'll never be able to spend all the money you've got before you.

Challenge accepted.

I said every kind of challenge. I had a chat to a client yesterday and they, they paid their house off. And I said now the flip of the script occurs. This is the Scott you've never met. This is the guy who says you need to now accept this new challenge, which is spend every single dollar you have before you die because all goes back in the box. And so two kids, two investment properties, three kids, three investment pro. Ideally, I'm not saying it's possible for everyone, but in an ideal world. Right. And so I can assure you that those investment properties are going to be cheaper today than when you look at kids 21st birth and you're thinking trying to buy them one then and so just allowing those properties to compound out. But more importantly you get the tax benefits of those now you get the passive income stream of those properties in retirement. And so you're buying a 5,000 property today and you've got another 20 years you're working life. I my guesstimate is that 5,000 probably is going to be worth at least $1 million in 20 years. But the cash flow of that property is so positive it's going to be a supplement to your superannuation which is going to fund your retirement.

Absolutely. And I say gives you so many options then as well along the way. But you have always said it. I remember you since the day I've met you. You've always said it. If you want to be wealthy in retirement, you buy property and you hold it. Don't try and flip property, don't try and time the market. You just hold it for as long as you possibly can. And it's, it's been very accurate.

No person I've ever met has said that they were stoked they sold the first property they've ever bought.

Yeah.

Because they always look at that price like oh my God, wow. If I had to hold on to that would mean so different. And you mentioned it was really important, the holding process. And so this is difficult for a lot of people because they do in times of sort of when things are a little bit tired or something may be going on. I thought the easy option, let's just sell the investment property this is your kid's inheritance. You're not selling your kids inheritance. It's for them. It's going to provide for you along the way, but ultimately it's for them. And so that's the way to get through that psychology. Or just flip it and maybe take the proceeds and give them the deposit. No, they can use a property, it can go as a guarantor for their first home. But this is, this is not only for you, but at the end of the day when you are no longer on this planet, they're going to receive this. And the longer you can hold that, the longer that compounds. And that's where the magic happens. The first 10 years of any property investment pre shit, the cash flow is not great, doesn't have much equity, it's not sexy. The second 10 years, okay, starting to wash its own face, starting to have a bit of growth there. Things are looking pretty good that third decade. Wow. That's when the magic happens. That's when a positive, so positive cash flow that probably spinning off an income stream. There's huge amounts of equity there. And so if you can try and keep that probably for that 30 year cycle, that's when you really start to see the property and that compounding interest really takes on. I'll put that into context. You buy a 5,000 property today, let's say in 20 years, it's worth a million in. In that 20 year point, if that property or that suburb got 10% of capital growth, you made 100 grand in one year because you're getting the 10% on a million, not getting 10% on the initial purchase price of 500. And so that's where it compounds. You're getting 10% on the asset value in 20 years which would be phenomenal compared to 10% the asset value today. And that's really the art of compounding property. So that's a property plan. Phenomenally beneficial to know what you can do when, when you can do it, where you should do it. We give you a property purchasing checklist is exactly what you should look for. These are the do's and don'ts of investing. We've all talked about those, but that just maps.

Yeah, I feel like we could talk about that for forever. It's an hour long podcast at least. It's such an interesting topic.

It's got so much for it.

But yet one more section to the financially set for life.

Yeah, the ultimate the financial plan. And so we all know financial plans are so expensive and they for most Australians are unaffordable. I mean I spoke to a client this morning who's paying $6,000 a year. Refinance your plan, financial planner. And so with this financial plan, we look at all your superannuation funds, we review them. Isn't this the cheapest and best performing super fund out there? We look for all your lost super, consolidate everything with one account. Make sure we review and implement life insurances so if anything happens to either of you that the other spouse or partner gets everything debt free, make sure your income's protected. And then more importantly, we start looking at the investment portfolio like dollar cost averaging, certain amount of money every month into index funds or share portfolios, salary sacrificing, the super doing those numbers for you. And then we set you up a will. So we've got the super sorted, the insurance is sorted, the investments are sorted, the salary sacrifice is sorted and the will sorted. All part of a financial plan. So you know exactly what to do, when to do it. Then the bonuses of the financially set for life, which excite me. That's where we automate your entire financial life. Everything is on autopilot. You've got a money management system in place, all your bills are direct debited, you got roundups happening for all your purchases, that money's being invested. And then you've got what we call crown coins where we organize group buying discounts of 5% at most major shops around Australia. They Kohl's, Woolworths, Dan Murphy's, Amazon, Target, Myer, ebay, Apple, Uber, etc. And so that's how it can help you reduce your expenses to create more surplus. We order all your bills and your fixed expenses, your gas, your electricity, mobile phone, go about insurances. We switch and save those fixed costs where we can just get them an extra ten hundred dollars a month cheaper, all that up. Then from there we'll give you an app to track all your money, your whole financial life on one screen. Tracks your cash flow, tracks your property prices, your super fund or your expenses, giving you insane insights and transparency on an app on your phone. We then do annual property appraisals on your home and investments. We do annual borrowing capacity calculations, credit checks, credit scores, give you Money Management University 32 module course that Jesse and I developed, which is everything we've learned about banks and money in bite sized 5 minute videos. Then we help you increase your salary with pay rise scripts. All that is what we implement for you for the financially set for life program. And I know that we just covered so much there. I mean that's What I told you, 25 pages of stuff and somebody. Yeah, that's what I believe you need to do to never have to worry about money again. And we say to clients, like, that's the recipe.

Yep.

You want to do it yourself. Rock and roll. If you want us to implement for you, we'll charge you an implementation fee. But the most important thing is you get it done, and you get your homeownership plan in place, your property plan in place, your financial plan in place. Possible. The tracking and everything.

I think. I think what's really important about the financially Set for Life program is that all of them integrate with each other. Because so often you can go to a finance guy, you can go to property guy, and go to financial planning guy or gal, but they don't often fully understand what each other are trying to achieve. And so they're not on the same page. They never are. So when you can have them all done in one place with the one goal and everybody's on the same page, that's when you get the synergy that you need to really achieve those goals. So we're really, really excited about this program. I think this is just, you know, taking things to a whole new level. Been wanting to do it for so long, and it's. It's great that it's. It's finally here. It's finally happening.

One of the keys there is. People are busy, right? Kids, work, friends, everything. And so they just want one stop shop. They just want one person sort everything else for them. They don't want to have to tell their story five different times to the mortgage broker, then to the accountant, then to the financial planner, then to property buyer's agent. They just want one person to be managing the entire process. And so that's what we're trying to bring to the table is like that one stop shop. I know you're busy. Let us implement everything for you. We don't do it all in, like, one hit. We do one of those pillars every quarter. So the homeownership plan in one quarter, the property plan the next quarter, the financial plan, the quarter after that. So we sort of space it all out. But the end of that year, you are financially set for life. And this is the. The system, this is the strategy. And we follow the strategy, and we'll never have to worry about money anymore. And more importantly, our kids are sorted.

How exciting. Thanks so much for sharing that, Scott. I know we could talk about this for a lot longer. This is a great little taste test tester, a little bit of an introduction to what this program will be, but, yeah, we'll cover it in more detail. More podcasts to come, but thank you so much for joining me and looking forward to speaking to you again soon.

See you later. Thanks so much. Bye.