The Stats

Crown 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've got the big dog, Scott Parry with me. How you going?

Terrific. Couldn't be better.

I thought you said horrific then instead of terrific.

Terrific.

Tell us about your ankle. What happened?

Oh, well, I thought I was big Trevor Hendy running into the surf doing high knees over the waves and hit a pothole and ankle collapsed underneath me. Ruptured a few ligaments and, yeah, just on the old two crutches. Not ideal in any. Disappointing, disappointing reliability. I'll give that guy. I am that guy. Just people got to get me dinner and coffees and food and drinks, and I'm just couch bound at the moment.

Doesn't actually sound that bad, to be honest.

It's actually pretty sweet.

Yeah. You're like, I'm pretty good.

Yankee was actually pretty good. I'm just milking it for another few weeks.

That's awesome. All right, what are we going to chat about today?

Let's talk numbers. Funny that. Let's talk about what the difference is between our clients lives before they come to us and then their clients after. They set up a money management system and have that running in place. It's been 20 years into making this system that we've created. It's something where it works and it works very, very well. And it's so embarrassingly simple. I wish it was a bit more complicated, but it's not. And I think that's why it works. And that's everyone understands it. It's clean, it's just very easy to follow. There's not five different accounts, everything, like all these different sort of moving parts. Just people want simplicity. And when you can draw on a napkin, it's very clean. So let's talk about people's life before versus after. I'm always blown away by these numbers. I actually triple cross check them to make sure they're true and correct. Because they're actually that good.

Yeah, we always question it, don't we? I always go back to our coaching team and I'm like, are you sure these numbers are correct? Are you absolutely sure? Because. And we are. This is what our clients are achieving, which is incredible. So we pulled the stats yesterday, and the average annual debt reduction across our entire client book is $32,107 a year. Like, that's unreal. So what does the average Australian just like? Not on the program. What would they be Paying off each year.

So as you know, I sit down with every client before they come to Crown and I know exactly what they've been paying off their home loan before they come to Crown. And the average client I've seen over the last 20 years in FB, in a 12 month period we'll be paying about 8 and a half thousand dollars off their mortgage.

8 and a half to 32,000.

It's a bit of a difference, 400% improvement. What blows me away is this, is people with the same income and the same debt level that they had on their old cheap 30 year offset account bank loan that they think is doing all these bells and whistles. They're paying eight and a half grand a year off it income and the same debt level. They then pay $32,000 off their mortgage the next year. I just, I can only describe what I think the reason for that is, is one is accountability. We always perform better when we've got someone else reporting our numbers to us, watching what we're doing, giving us that conscious spending which basically being off a credit card is a huge thing. And the other reason why I think it would perform so well for everyone is because, because we are very good at trapping surplus. And when you've got a set amount of money to last you a set period of time, the rest of it is out of sight and out of mind. Sitting in your home loan account, off your balance, working for you, that surplus is trapped. It's sitting off the principal, it's reducing your interest, it's doing all the things it should be doing. And so when you can quarantine surplus and as a result of that you become consciously spending as opposed to spending whatever you're earning. I think they're probably the two keys for why this worked so well.

Well, I think as well, going back to what you said before, it's about the simplicity of it as well because you know, the fact that it's simple, really easy to follow. Clients only have to think of one thing and that's what's in their spending account. And I think every single week what do I need to spend? Instead of thinking about I've got this bill coming up, what have I got to save? Am I going to make my mortgage repayment this month? None of that. It's just, it simplifies the whole thing. They can focus on one thing, it's spending the money coming into their account each week and they know everything else is being taken care of. So it's pretty unreal. We also pulled the Stat on our average client savings rate. So just to touch on that one again, savings rate is the percentage of our clients income that they're managing to save each year. And so our current average savings rate is at 24.4%.

Oh, we were. That is hectic. And when you sort of spell it out at 24%, what does that mean? What that means is if you earn $10,000 a month, you are saving $2,400 a month on average. Some months are better, some months that are not so great. But the bottom line here is you're saving 24 cents in every dollar you earn. Now the average savings rate in Australia is well under 10%. Like well under 10%. I've seen data that the average savings rate in Australia was 3%. Other data I've seen is that 8%. So when you go from 3% to 24% or even 8% to 24% once again it's 300 times greater you in a position or three times greater. Sorry, 300 times 300%. Three times lucky. I'm not in finance.

You're dealing with numbers every day.

Where this sits is, it's astronomical. And so I don't know any other company in Australia that measures their client's savings rate. What you earn is irrelevant in my eyes.

Totally relevant, absolutely.

We got lawyers on a program, we sit down with them. They're earning 440,000 a year as their salary, but they're spending 4, 60 year. I know it's tough to believe, but this is what happens is they spend what they earn. And I had a 20 grand credit card debt. And so that lawyer paid 40 grand off his mortgage in one year. And I was doing backflips and cargoes like that's amazing. Well done. Now hang on a second. That's only 10% of what you're earning. So if a client's earning 80 grand a year and they're paying 8 grand a year off the mortgage, that's like the same. So we had to reference it based on income. What do you keep of your income that's important, not what you earn? Irrelevant. And so we really focus on what you can keep of your income, what that savings rate is, and growing your savings rate month on month, year on year. So we set goals and targets for all of our clients this year. Current savings rate, we want to see up to 26% next year. And these are some tools and hacks that you can actually implement your life to increase your savings rate.

I really love this stat actually. So our Number one performing client when it comes to savings rate, they have a 77% savings rate which is just out of control. So 77% of their income, they're saving every year. These clients, their household income is only $66,000. They're saving that every single year. Which just goes to show that it's. Yeah, it's not about the income you earn, it's about how much you are not spending.

Yeah, not saying you should redo that because that's quite a very stable lifestyle. That's certainly not doing any fun stuff.

Well, these guys, these guys are there, are they almost at the end of their journey with crowd money. So their debt is so low now that they're able to. And because it's snowballed over time, there's just so much coming off their debt so quickly now.

That's a great point. So just so you understand that this mortgage repayment of yours on this system of ours actually reduces every single month. And what I mean by that is every single year, as your debt comes down, so does your interest repayment. And so the lower your debt is, the lower your interest is. So in the first year, let's say your repayment could be $800 per month. But as your debt's coming down over the years, interest is getting less and less and less. That means more of your income is sitting off your loan, coming off the principal rather than going out in interest. And so your super fund is compound interest, where you're getting interest on interest, on interest every year interest, your super contributions are growing, growing, growing. Your mortgage is compound interest in reverse. What does that mean? That means the lower your debt, the lower the interest, the more money come from the principal and the faster this goes. So the worst year is our clients. The first year of our clients is their worst year. And where we sit in the last year of our clients debt reduction program, they are in a position where their monthly interest could be $50. Imagine your mortgage being $50 a month in interest. The rest of your salary can going off the principal. And that's how they're able to save so much, because their mortgage is so little out of their budget. Most Australians have 30% of their budget chewed up by mortgage repayments. When you got 50 bucks a month going out and as a mortgage repayment, and you're banking 10 grand a month, nothing. And so last year is the fastest year.

Yeah, that's awesome. So yeah, those are some pretty cool stats. One of the other ones which I love is we pull data on our clients average Weekly spending amount. So this is, you know, how much our clients need for food, fuel, and fun. And so across the board, our average is at $500 on the dot right now. So that's just saying. Yeah. If you. So the average family, it's $500 a week, actually. Average. Anyone? Let's break that down actually, though. So couple with kids is at $545 per week. That's our average couple with no kids. Oh, $518. Single with kids, the average is $420. And single with no kids is $378. So just kind of shows you how expensive children are, really.

Yeah, exactly. I've always said, once you start getting over two kids, wow. The cost is very, very. I mean, we got staff here who've got four kids at Crown.

Four kids.

It's hectic and they need a hobby.

That's what they need.

They are just my superheroes. I've got one. And just going, how do you do this? Times another three. It's insane. So, yeah, kids are expensive. We all know that. But I've always said that the hardest things in life are the best things in life, and they certainly come under that umbrella. One of the other things I wanted to loop back on, which you made a really good point, is that food, fuel, and fun. This system is designed to basically take all the financial weight off your shoulders. You don't have to worry about bills anymore. How many times have we heard clients say that? Hundreds. Hundreds and hundreds. I don't have to worry about bills anymore. That's because we want you to focus on what your superpower is, and that is spending and earning. You do what you're good at, we'll do what we're good at, which is managing the cash flow, paying off your house in under 15 years, giving you a freedom like no other to have all your income to spend on lifestyle experiences or investments. Once you paid your house off, the game changes. And so we're in that every single month with you, trying to get you out of your debt. Everyone else in Australia is trying to keep you in debt. Banks setting up loans to keep you in debt for as long as possible because that's in their best interest. We want to get you out of debt so you got your income back where it belongs, in your little hand for you to spend or invest however you wish.

My favorite feedback from clients is when they say that we save their marriage. And, like, we get that quite a bit. And you kind of go, fundamentally, financial stress is one of the Biggest things that can tear apart a couple or can start to drive a wedge between them or just. Just is that nagging, kind of annoying thing in a relationship. And it's like if you make their financial life really simple and it's like you don't even have to think about it. Like, there's just so much space and time in your relationship to think of other things that are more.

Yeah, we become the umpire because a lot of the time spenders marry savers or savers, marriage spenders or spenders. So we become the umpire. No longer is the save of the bad guy or bad girl when their partner's like, I just want to buy this. Not, no, we've got to pull our heads in and keep it tight, etc. So from there we like, no, ask Crown, ask Crown, ask Crown. We're the bad guy. And so as a result, they're sort of accountable and you don't have to be the same. The fun police.

Yeah, yeah, Definitely takes that away.

Yeah.

So those are the stats for today. Pretty exciting stuff. It's just. It's unreal to see our clients doing so well. We're so proud of them all and. Yeah, awesome. Have you got anything else to add there, Scott?

Yeah, I just think what this all culminates in, all that data, what that really means is every 23 days, we have a client who pays off the house using this exact system. And so every single one of you will be that person we call. Could be in a year, could be in 11 years. But I can promise you it's going to be a hell faster than 30 years. So, yeah, every 23 days, just being able to pick up the phone and congratulate this person that they no longer have a mortgage repayment for the rest of their life. Wow. You're on the track. You guys are working on this system and you can see every single month there's some actual progress. And you've got something to show for all the time, effort and energy putting in and the work. And as a result of that, I think that's the most important thing, because progress equals happiness. And as long as you're seeing your financial situation and your net worth progress because you're creating equity in your home by paying off your bad debt. That is the name of the game.

Absolutely. Well said. Well, Perry, I hope your ankle feels better soon and we'll speak to you again next time.

Take it easy.