WHAT CAN SOLVE THE PROBLEM OF AN ‘UNCOMFORTABLE RETIREMENT’?

This week I was logged into my personal HMRC account so I could download previous year’s SA302’s for an HMO refinance. The portal had changed since I was last logged in and I was presented with a new dashboard showing options to look at ‘Income’, ‘Benefits’ and ‘Pensions’. I spotted a link to a ‘View your state pension forecast” so I clicked in for a bit of fun. …..the reality is far from fun however.

This screenshot attached shows exactly what I, and many others, would have to look forward to at the state pension age of 68 (which is what it will rise to for the late 70’s/early 80’s babies, and who knows how much it will increase for younger generations.)

What this forecast is telling me is this – for a man born on or after 6 April 1951 and
a woman born on or after 6 April 1953, if you’ve had at least 10 years working where you paid National Insurance contributions, you’ll be eligible for a state pension of £8,797.31 per year.

So, if I had spent everything I earned by age 68 and not invested in property or private pension, my income would be £168.60 per week, which is £733.11 per month. We all know you can’t do much with that, it doesn’t even rent you a 2 bedroom property in the East of Scotland. Thankfully that will not be my reality, nor will it be for anyone else who has figured out a way to significantly change their future for the better. For me the solution came from self education, specifically in the area of property investing, more on that in a moment.

In the same week I heard a talk from Tony Robbins and Dean Gaziosi on how there is a massive problem to be solved in the world- the problem being that the ‘traditional education’ system is broken. Whilst definitely not a catch all statement, in broad terms, the real world of commerce and industry has advanced beyond the ideals of traditional education. In other words, the plan of yesteryear to study hard at school, progress through higher education, get a good job and retire with a pension is outdated.

The talk I was listening to cited a statistic that only 27% of graduates get a job related to their degree and of those people 52% hate their job. While these are US figures I would imagine that would likely reflect a similar picture in the UK.

[Just to be clear, I’m not saying that university is bad choice, I loved the experience and I hope my kids will too, what’s changed however is that traditional education can no longer be the ONLY option as it’s no longer delivering, and many authors, speakers and mentors are saying the same thing. In fact, Robert Kiyosaki has been telling us that message ever since he published Rich Dad Poor Dad back in 1997 (ironically around the time I was about to go to university).]

Tony and Dean went on to share that the ‘problem is solved through self education’. And I really do agree, as do many others. Jim Rohn is famed for saying,

“Formal education will make you a living; self-education will make you a fortune.”

The knowledge industry is currently estimated to be worth about $355m/day and Forbes Magazine predicts that in 15 years it will be worth $1billion per day. These figures in themselves validate the point that the smart people in today’s economy would rather pay for specialist knowledge (delivered by someone doing the thing) where they can action it immediately to get a return vs learning from professional teachers teaching things that are out of date. The smart people are choosing to cut their learning curve in half and accelerate their results by investing in specialist knowledge shared by people who have the results they want.

CIRCLING BACK TO THE PENSION CHAT
According to research by insurer Royal London in May 2018 called ‘Will we ever summit the Pension Mountain?’, you’d need a pension pot of £260,000 if you want to avoid an uncomfortable retirement. This sum would provide a pension income of just over £9,000 a year in addition to the new state pension of £8,797 a year.

Would £18K income a year support the kind of lifestyle you want to lead in retirement? I’m guessing you’re all thinking a resounding ‘definitely not!’. Research shows that amount would only really cover basic living costs, no nice holidays, no extra needs covered. So what about provisions for elderly care, where would that come from?

It’s alarming to read that the average pension pot of UK workers is around £35,000! Clearly there is a massive shortfall for the average worker in hitting that threshold to avoid ‘uncomfortable retirement’. Hopefully not the case for you smart cookies in these property communities though, many of you have and are investing in self education.

My journey with self education started around 2004 with a book, followed by courses, followed by mentorships and masterminds, and the investment in all of these continues. I’ll be eternally grateful for all of the books, courses and mentorship that have contributed to the different stages of my property businesses, past, present and future. And whilst I have no intention of ever ‘retiring’ in the traditional sense of the word, I have peace of mind in knowing the actions I’ve taken to date, and will continue to take, mean that that come state pension age life will be more than comfortable.

What self education will help you create the life you want to live now, and in retirement?

EMPHASISING THE IMPORTANCE OF DEAL FLOW THROUGH A MILLIONAIRE MAKER UPDATE

Several weeks ago I wrote about the importance of deal flow for property investors, which proved to be a popular post. It feels right to revisit the message of that post because this week played out a hand that saw us experiencing some of the typical highs and lows of property investing. But you know what, it’s all manageable, in most part thanks to the mindset we have taken the time to work on and develop over the years. So much of this property game is mindset, and that can often be forgotten. 

 

I’m going to touch on three of our deals below that have been part of our recent Millionaire Maker journey, to draw out a few of the emotional/mindset aspects they might benefit others working on their own property deals. 

 

DEAL #1- A LONG AWAITED PURCHASE COMPLETION

On Tuesday we experienced the feeling of joy and success with the completion of a purchase for a simple little 2 bedroom BTL. The property is simple, but the purchase process was anything but. We had an offer accepted back in early May and here we are completing almost 3 and a half months later. You’re no doubt wondering why did such a simple deal take so long to go through the conveyancing? Well it came to light during the legal searches that there was a restriction on the title – in other words an RX1- meaning that the property couldn’t be sold without the consent from a particular party. 

 

What is required legally is a signed RX4 form that withdraws the restriction, and this is what took so long. After 3 and a half months we finally own the property and can progress our plans to refurbish, refinance and let. 

 

DEAL #2- PLANNING A REFURB OF AN HMO FOR USE AS SERVICED ACCOMMODATION

On Wednesday, Chris and I walked round an HMO I’ve owned with a JV partner for many years to finalise a top to bottom refurb so we can drop it into our SA management business. Although we successfully got an HMO license on the property a few years ago (we got that to widen our tenant pool and cash potential) we have never actually had to formally use it since the property has been long term tenanted by a family through the Local Council. When I say a family, I mean 3 generations and maybe 8-10 people at any one time living in a 4 bedroom semi. 

 

We have been trying to regain possession for almost a year but had had to be patient with the council and the tenants to let them go through the process of finding an alternative house. Needless to say, years of heavy wear and tear, smoking, multiple kids, virtually no garden maintenance has left the place looking extremely tired. I’ve attached a walk round video explaining what we are doing to the place over the coming weeks.

 

So with the feeling of relief, the excitement of a fresh start and a new SA property, comes the sinking reality of a refurb budget much higher than you would like. 

DEAL #3- OFFER REJECTED ON A COMMERCIAL BUILDING WE REALLY WANTED

Chris and I viewed a building at the end of June that showed real promise, if purchased at the right price of course. To arrive at what that right price would be took many conversations and hours of analysis because we were looking at optimising 2 commercial units and anywhere from 4-6 flats above for either SA or single lets. We even got things to a point where we had meaningful conversations live with a prospective commercial tenant. 

 

Back from a holiday this week I picked up with the agent to learn there had been a flurry of interest in the last week and that we’d need to submit our best offer asap if we want to be considered. Within 24 hours, Chris and I, along with our JV partner, formulated what we felt was a fair offer. When you submit an offer like that for a pretty big building, even if you are competing against other investors, you can’t help but harbour a quiet excitement in the back of your mind all day long…thinking ‘what would it be like if we do secure this, how cool would that be?’

 

I got the call at 4.30pm on Friday with the news that our offer was rejected. I let myself feel properly p@ssed off and disappointed for a few minutes before reminding myself that we have some other strong potential deals in the pipeline. This one that we wanted and offered on may come back to us, but for now we need to turn our focus next week to progressing our analysis and thinking on two other great mixed use deals, one of which even has the potential to bring in a pizza chain. 

 

Without the knowledge of more shortlisted potential deals moving into our front line focus (ie our deal flow) we would be dwelling on our rejected offer for way longer. Experiences like this really emphasise the importance of deal flow. We know that being in a mental state dwelling on rejection, frustration and disappointment, we are not at our best and most resourceful to help move our business forward. 

CONCLUSION

If anyone reading this has heard me speak you may well have heard me reference the Kelley & Connor emotional cycle of change model (see the diagram attached). Knowing the reality of this emotional rollercoaster that property entrepreneurs have to cycle through weekly, monthly, yearly – this is why mindset is such a big part of the property game. You can’t one up the universe and avoid these highs and lows, but you can develop a mindset to work through the dips as quickly as possible.  

I encourage you to keep watching the progress of the remaining Millionaire Makers on the Touchstone Education Youtube Channel (new episodes are broadcast every Sunday). A massive thank you to anyone who has voted to keep Chris and I in the competition, we hope to be in it for as long as possible so we can continue to share our learnings. 

 

WHY ACCOUNTABILITY IN PROPERTY IS ALL OR NOTHING

If your property business is not getting the results you want, the problem may be lack of accountability. I’m not just referring to the individuals in the business, there are multiple layers and players in this. Take a moment and think about the key parties involved in the end to end process of a property deal- this could include you, an agent, a vendor, a lender, a solicitor, a builder, an architect, the council……the list goes on depending on the type of deal. Everything needs to fall into place for a successful deal to happen to the desired timeline and budget, and for that it requires everyone being accountable to their word.

We all know how painful it is when someone in the chain doesn’t keep their word. The challenge sits on the shoulders of you as the investor and deal maker to be the one who expertly manages all the moving parts so that everyone stays accountable.

So how can property investors and business owners improve this? Would it surprise you if I said there is no silver bullet? Instead, it is a mindset, a culture. We’ll circle back to that culture and it’s importance in a moment, first a couple of definitions.

A few years ago I discovered Greg Bustin’s book “Accountability: The Key to Driving a High Performance Culture”. Greg Bustin is a business and leadership consultant, an international speaker, and a Master Chair for Vistage International. In the book he explains this powerful trait in easy-to-understand components and as you will shortly see, there are important lessons for property investors of all levels.

What does accountability really mean?

Greg Bustin writes about accountability from the perspective of creating a high performance culture in your organisation. This in itself is extremely powerful however I feel that property investors can, and need to, take it further by looking at how accountability can also be carried outside of your immediate company and applied to the other key parties in your power team and in the end to end deal.

Let’s start with Bustin’s explanation of accountability, which captures it brilliantly:

“Doing what you said you would do within the time frame you agreed to do it.

Practiced effectively, accountability is a way of thinking and acting all the time and ultimately trumps any financial, intellectual, structural, or technological ability. The reason is simple: Accountability is not based on circumstance but rather on an attitude of accomplishing a task or achieving an objective despite circumstance.”

Bustin’s final paragraph is my favourite,

“Accountability is critical to anyone leading a group of people, because, after all, every business is a people business. Accountability is how people get things done—or don’t get things done.”

This is so relevant because anyone in property knows that it really is a people business.

 

The Seven Pillars of Accountability

In the pursuit of understanding what separates high performing companies from the rest, Greg Bustin undertook more than 5000 interviews with successful CEOs worldwide. What he discovered was a mindset grounded in seven distinct characteristics.

Using the memorable acronym C.U.L.T.U.R.E, he calls these characteristics the Seven Pillars of Accountability. From all of his in-depth research, Bustin concluded that culture is a significant predictor of your future performance.

As you read through these seven pillars ask yourself the challenging questions that each point raises. Whether your property investing business is a company of one or a company of many with partners or staff, this is all relevant. Is yours a culture that is created and nurtured intentionally, or is yours a culture that occurs by happenstance?

Here’s the Seven Pillars:

Character: An organisation’s character is shaped by its values, and these values are clearly defined and communicated. The organisation does what is right for its customers, employees, suppliers, and investors, even when it’s difficult to do so.

Unity: Every employee understands and supports the organisation’s mission, vision, values, and strategy, and knows his or her role in helping to achieve them.

Learning: The organisation is committed to continuous learning and invests in ongoing training and development.

Tracking: The organisation has reliable, established systems to measure the things that are most important.

Urgency: The organisation makes decisions and acts on them with a sense of purpose, commitment, and immediacy.

Reputation: The organisation rewards achievement and addresses underperformance, earning the organisation and its leaders a reputation, both internally and externally, as a place where behaviour matches values.

Evolving: The organisation continuously adapts and changes the organisation’s practices to grow its marketplace leadership position.

“Just as you cultivate a garden, you must cultivate a workplace environment where high performance is the expectation.”

Conclusion

In his book, Bustin talks about accountability being an ‘all or nothing standard’. Does the idea of accountability being consistently present sound too idealistic? Well, he makes makes a very strong case for it by pointing out that “wee problems”, which can seem inconsequential, can create much bigger issues.

It doesn’t need much imagination to think of the ‘wee problems’ that can arise and compound along a property deal, potentially causing it to fail….ie the deal you jumped into without fully completing your due diligence, the vendor failing to disclose critical information that delays conveyancing, the local market research for SA demand that you didn’t do, the botched job that a poorly selected tradesperson does and has to be re-done. There can be so many, and these are the kind of dropped balls that can cause the deal to fall over, or at least not go as smoothly as hoped.

Going back to Bustin’s point about culture, accountability really has to become part of our property business DNA. When this happens the investor will set each deal up for optimal chances of success by setting the foundations for accountability with all key parties from the beginning, and then managing that high standard throughout the process.

The way I see it, what starts in your business as a culture underpinned by the 7 pillars, must then extend beyond the organisation as the ‘culture’ of every property deal.

 

Being accountable to yourself and having the integrity to do what you said you would do will likely be the most powerful trait you can practice, and also seek out in those you choose to work with.

Here are some questions to help challenge your thinking about accountability in a constructive way:

-What “wee problems” are taking root and damaging your business’s results and/or culture?

-What would the typical ‘culture’ of your property deals look like?

-What would an impartial visitor to your business see, hear, and experience?

-How would the observed behaviour align with the behaviour you say you want? 

In closing, what are your thoughts on accountability in property?

The Massive Results Workshop

When you see a headline like this, ‘HOW TO GET GUARANTEED RESULTS IN ANYTHING’  it catches your attention, doesn’t it? This is the title of a Peter Voogd podcast I listened to this week – it was like a mini workshop talking through an exercise you can complete to help stay consistent and to maximise the results in your life and business. 

These are simple questions that you really want to have clear answers to and have those answers at the forefront of your mind. 

Anytime you’re feeling stressed or not getting the results you want, you can take time to go back through this workshop.

This is a bit of longer post but well worth working through the 7 questions in the exercise I’m sharing from Peter V below. 

I took a little time to complete this exercise and I encourage you to do the same, if you’re interested in really achieving the results you want. 

 

Here are the 7 essential questions to ask yourself:

#1 WHAT’S YOUR BIG FIVE? – ie what are the five things you want to accomplish in the next 30-60 days (the things that if you accomplished these you’d be excited, fulfilled, proud, confident, happy…)

Maybe it’s systemising a part of your SA business, or hiring an assistant, or sourcing a new property deal…

A great quote I noted down from Peter is this, “Remember, nothing works unless you do. And if you don’t work, work through your team. The people who really do the work and move with clarity are the ones that get the results and build the businesses.”

So what are the your top five things you want to accomplish in the next 30-60 days?

Here are some of mine:

-secure 2 more mixed use commercial deals

-find a buyer for one of our packaged SA properties

-complete the first draft of a book

 

#2 WHAT ARE YOUR TOP FIVE VALUES? 

In other words what are the things you value the most and are you in alignment with those? Are you working with intention, purpose and clarity?

Everyone will have their own unique combination, it may be freedom and flexibility, or money, or family, or….(you fill in the blanks).  If you’re not entirely sure there’s a simple questionnaire you can use on Dr John Demartini’s website to help you determine your values.

My top 3 are becoming the best version of me in each area of life, wealth creation, and creating rich experiences with my family. 

Once you are aware of your highest values you need to make sure everything you are doing is connected to what’s most important to you. 

Being clear on your values gives you a very powerful filter to assess all the requests and opportunities that come your way, and decide what’s for you or not for you. So when a request pops into your inbox you can be asking yourself – ‘is this going to contribute to my values or contaminate?’

By using your own personal filter like this you’ll feel more empowered to say no to certain things that aren’t connected to your values and therefore live more on purpose. 

#3 WHAT ARE YOUR TOP FIVE PRODUCTIVITY PRACTICES – that you know when you are executing these you’re at the peak of your productivity.

Here are my top 5, in no particular order

-review the week that was and plan the next wee on a Sunday by identifying my top 3 proactive actions for the week

-start my day with my morning routine (which includes exercise, healthy breakfast, a short meditation and reading to learn/develop)

-complete a 90 minute focused session progressing one of my top 3 projects with no distractions (ie no email, phones or any notifications)

-practice effective transition between each task (I use a simple little technique I learned from Brendon Burchard)

-set an intention and visualise the completion point of a task before I start working on it

When you’re at your best what are you thinking? What are you doing? How are you starting your day?

#4 WHAT FIVE NEW BELIEFS NEED TO BE INSTALLED IN YOUR MIND?

Your behaviours are a reflection of your beliefs, so if you’re not where you want to be, what do you need to believe in order to become the next version of you? For example, if you are thinking about venturing out to secure your first R2R property but your beliefs are that getting a R2R is hard and no one will want to do a deal like that with me, then that needs to be replaced with an empowering belief. For example, getting a R2R is easy and there are lots of people who want to do a deal like that with me. 

Maybe it’s about finding great people for your power team or JV partners – so you’d be installing something like ‘I attract great people to my team”.

Think about your limitations, where they may have stemmed from and what new beliefs need to be installed to replace the limiting ones. Whatever we play over and over in our heads becomes a reality so be very conscious about what you’re telling yourself. 

 

#5 WHAT’S YOUR ONE GAME-CHANGING MOVE?

What’s one big thing that will help you accomplish your other goals?

Is it reaching out to someone? Is it creating a keystone habit that will have a positive ripple effect into other areas of your life?

For Chris and I it would be securing an end user (ie tenant or buyer) in advance for one of the shortlisted deals we are working on.

 

#6 WHAT ARE YOUR TOP THREE TO FIVE LIFE LESSONS THAT YOU’VE BEEN TAUGHT THE PAST TWELVE MONTHS?

What this is referring to are the perspective shifts, breakthroughs and lessons that life has taught you over the last 12 months?

A stand out one for me which might resonate with some of you is to focus more on how we show up than on how fast we are advancing.

#7 WHAT ARE YOUR TOP FIVE NON NEGOTIABLES?

What are you going to do every week that will be non-negotiable, things you have done before that have proven to give you results?

It could be daily exercise, committing to x amount of business development calls, or connecting with a certain amount and type of person. For me these include the things I mentioned above like the morning routine, the productivity practices, I also block out every Wednesday night for a date night with my wife.

What will your non negotiables be?

 

Once you have answers to all these questions then wrap the exercise up by completing this sentence, “I know I’m successful when….”

 

…ie when I’m living life on my terms

…when I’m positively impacting others

…when I’m staying true to my values

…when I bring joy to my family

 

This will only take about 15 minutes to complete. If you do work through this I’d love to hear just one of your answers to the questions.