When we first meet many of our Clients, they tell us that the idea of financial freedom feels elusive. With the cost of living as high as it’s been for decades, many people struggle to look at the bigger picture and understand how to make their hard-earned money work well for them.

At Capital Properties, we’re big fans of the ‘Rich Life’ concept inspired by Ramit Sethi. Sethi is known globally as a financial guru whose net worth surpasses $25 million. His best-selling book “I will teach you to be rich” and follow-up Netflix show “How to get rich” offer a refreshing perspective on how to achieve long-term prosperity and happiness. The Rich Life concept emphasises conscious spending, smart investing, and personal fulfillment. In this blog post, we’ll discuss the key principles of the concept and how to apply them to your life as an Australian Defence Force member.

The team at Capital Properties help Australian Defence Force (ADF) members apply the Rich Life concept to invest your disposable income in property, so that you can secure your financial future and create the life you want to live. Book our FREE Capital Properties Discovery Session to get started.

If you’re already on board, why not take advantage of our Property Investment Tools & Apps and essential resources from our Capital Properties Pinnacle Support Program.

On the go? Here’s 30 seconds of take outs:

• Ramit Sethi is the author of bestselling “I will teach you to be rich” and follow-up Netflix show “How to get rich”.
• Sethi coined the Rich Life concept to emphasise conscious spending, smart investing, and personal fulfillment.
• Sethi’s 8 rules for a Rich Life are:
  • Your Rich Life is unique to you
  • You need to take control
  • Don’t wait to become an expert
  • It’s OK to muck up
  • Play offense, not defence
  • Don’t wait until retirement
  • Focus on the big wins
  • Give back
• Capital Properties can help you apply the Rich Life concept by:
  • Providing personalised investment strategies
  • Education and ongoing support
  • Expert mentoring
  • Automation and efficiency

Keep reading >>

How the Rich Life concept come about

Sethi’s success story began with him creating a blog “I will teach you to be rich” in 2004 (while studying technology and psychology at Stanford). His next project, a humble $4.95 eBook, sold over a million copies, catapulting his business into a multi-million-dollar empire and inspiring millions of people with his straightforward approach to personal finance. His advice goes beyond traditional financial advice as he urges his followers to create a life that aligns with personal values.

Our Capital Properties Goal Setting tools and workshops encourage a similar approach to finance. We’ve discussed the importance of goal setting in many of our previous blog posts, such as “Review your goals & financial vision – what drives you?”, “Dream big to live life large through goal setting” and “How are you tracking toward your lifestyle goals?” Our aim at Capital Properties is to equally inspire you with the knowledge and tools for strategic financial planning and intentional living to create your Rich Life.

Understanding the Rich Life concept

The Rich Life concept is based on using your money to help you live a more fulfilling life. The key is to identify what truly makes you happiest in life – what fills your bucket? For some people, it means having the freedom to travel and see the world. For others it’s having the ability to enjoy quality time with the people that mean the most to you.  And for others, it might mean splashing out on designer clothes or fast cars.  It’s completely different for every person.

Then, once you’ve figured out what makes you truly happy, you direct your resources, i.e. your time, energy, and money towards those passions, and give little attention to the things that don’t bring the same level of joy to your life.

Key principles of the Rich Life concept

In his website ”I will teach you to be rich”, Sethi lays out his “rules” to create a Rich Life. Here’s a quick summary of these 8 rules:

1. Your Rich Life is unique to you

Everyone’s version of a ‘rich’ life is different. As we just said, for some, it might mean traveling the world, while for others, it could be owning a dream home or driving a luxury car. The key is to define what a Rich Life means to you and pursue it without apology. As Sethi notes, “Your Rich Life is yours—not mine, not your friends’, and not your parents’.”

2. YOU need to take control of your Rich Life

Financial independence is about taking charge of your own destiny and not leaving things to chance or allowing someone else to lead the way. Sethi tells us that he turned down lucrative venture capital offers that came with management restrictions so that he could maintain total control of his business.

He encourages people to take ownership over their financial future by setting goals, examining their spending habits and creating systems to manage their finances. Thus, making sure their money works for them in ways that align with their passions and goals. He recommends prioritising spending on the things you love, so you can save on the stuff you don’t. If this sounds like a daunting exercise, our Capital Properties Goal Setting Guide is a great place to start.

And yes, that means that you also need to create a budget! Our online Capital Properties Budget Planner makes this process much easier.

3. Don’t wait to become an expert – start now

Many people think they need to wait until everything is perfect before they take action. We hear it all the time. “I’ll invest when I’ve got that promotion, or when I’ve done more research, or when I’ve finally organised a savings plan”!  Waiting until circumstances seem “perfect” before you take action is debilitating. Sethi’s “85% Solution” advocates for getting things nearly right rather than waiting for the perfect moment.

This principle is fundamental for new property investors. Starting with a well-thought-out investment plan, even if it’s not flawless, is far better than doing nothing at all. Similarly, he suggests following a simple fitness program, so that he gets some exercise every day, rather than making grand plans and not sticking to them.

4. It’s OK if you muck up

Creating your Rich Life isn’t always going to be easy.  It’s inevitable that you’ll make mistakes, with money and relationships. And your goals for your Rich Life might change over time. But that’s all part of the learning. Don’t let it stop you from getting started or forging ahead to reach your goals. When things get tricky, reach out to mentors who can help you get back on track.

5. “Play offense, not defence”

In Sethi’s own words, rule number 5 is to “play offense, not defence”. What he means is that it’s important to take determined action to achieve your goals. That means creating a budget and sticking to it. Make sure you’re getting the best deals financially, e.g. questioning bank and service charges etc. Work with experts to stay informed of potential investment opportunities and be fully aware of what your financial status is so that you’re ready to act. Sethi suggests setting up automated banking so that you can allocate a certain amount of your income (e.g. 20%) to savings and investments. This saves time and ensures consistency and discipline in financial management.

6: Don’t wait until retirement to live a Rich Life

So many people get caught up in planning for the future, they neglect to live their Rich Life every day. We all know the future is not guaranteed, so although you do need to have a plan for retirement, it’s important to make the most of

now. And Sethi agrees, it’s vital to invest in personal growth, experiences, and relationships.

Again, your everyday Rich Life could look quite different from others. It might mean enjoying that avocado on toast without considering the cost, taking your partner away for a spontaneous weekend, or buying that car that makes you drool every time you think about it! The idea is to make your money work for you so that you can indulge every now and then without worrying about jeopardising your future. As Sethi says “No one wants to be a rich 95-year-old with regrets”.

7: Focus on the big wins

Sethi says to focus on the big wins, in other words, stop sweating the small stuff and really focus on the areas in life that you’ll make the most gains. For example, working in a rewarding career and taking advantage of further training and study opportunities that’ll help advance your career and your salary. Prioritise your physical health and maintain the important relationships in your life. Start investing early and build relationships with experts who can guide you along the way. And don’t spend any time or money on the stuff you don’t care about.

8: Create a ‘generous’ life

Sethi is an advocate for creating a generous life – one that follows the old adage “It’s better to give than to receive”. Once you’re living your Rich Life it’s important to share your time, money, resources, and/or talents with the world. Whether that means being able to volunteer at your kids footy, donate to friend’s fundraisers, or support a charity you care about. Giving back is good for the soul.

Applying the Rich Life concept with Capital Properties

At Capital Properties, we understand the unique challenges and opportunities faced by ADF members. Our goal is to help you leverage your disposable income to build a secure and prosperous future through strategic property investment. Here’s how we can help you apply the Rich Life concept:

• Personalised investment strategies – We tailor investment plans to suit your individual goals and financial situation, ensuring that your journey to financial freedom is as unique as your vision of a rich life.
• Comprehensive education and ongoing support – From understanding market trends to navigating the intricacies of property investment, we provide the knowledge and strategies you need to make informed decisions. And the support doesn’t stop with your first investment, we designed our Pinnacle Support Program to ensure you have ongoing guidance.
• Expert mentoring – The Capital Properties team is made up of investment experts, financial planners, buyer’s agents, real estate agents, mortgage brokers, property tax account specialists, quantity surveyors, conveyancers, property managers and more. If you need expert help, we’ve got you covered.
• Automation and efficiency – Our Property Investment Tools and Apps are specifically designed with you in mind. We can help you set up systems to automate savings and investments, ensuring that your financial growth is consistent and hassle-free.

By partnering with Capital Properties and adopting the principles of the Rich Life concept, ADF members can achieve financial freedom and live richly in every sense of the word. Book your FREE Capital Properties Discovery Session today and let us help you make your Rich Life a reality.

Our Capital Properties Switched-On Strategy Series and Capital Properties Pinnacle Support Program will make sure you’re able to successfully navigate these changes in the Australian property market.

About this project

I’d been keeping an eye on these Industrial Warehouses for a while as we’d often drive past on the way to school drop off.

My idea was to do an office conversion!

Below are the stages of the build, if you have any questions about this project email [email protected]

We are super stoked with the result! Its great to be working from here!

See a copy of the original concept plans Capital Headquarters.

Stage 1.

Concrete polish & installation of ‘Corflute’ (The white stuff on the deck) to protect the concrete polish.

Stage 2.

Delivery of the flooring supports & Frames.

Stage 3.

Mezzanine floor construction.

Stage 4.

Frame construction.

Stage 5.

Air Conditioning install.

Stage 6.

Air Conditioning frame & Ground Floor ceiling frame & ceiling battens.

 

Stage 7.

Insulation Install.

Stage 8.

Plaster Board install.

Stage 9.

Plastering stage.

Stage 9. 

Painting & Electrical fit off.

Stage 10.

Stair case & glass doors, windows, & mezzanine flooring install.

I opted to run with a different look for the stairs, rather than going with the typical steel stringer & timber treads, a frame was constructed which was rapped with a James Hardy product cement cladding with an expressed joint look.

Stage 11. (Final Stage)

Glass balustrade.

As soon as the glass balustrade was installed, it really set the look & feel of the space. It looked amazing.

Finished photos

Interested in a project like this? Contact Us

Everything you need to know about property investment in a nutshell

It’s been proven time and time again that property investment is a sure-fire method of making the most of your Australian Defence Force (ADF) wages for future financial success. With informed decision-making, a solid understanding of the basics, and a proven investment strategy, property investment can provide an additional income and long-term wealth.

In this Property Investment 101 blog post, the experts at Capital Properties will cover all the basics you need to know about property investment in Australia. We’ll discuss why you need a savings plan, what your minimum savings amount should be and how and why you need to get pre-approval. As well as why you should engage a Buyers Agent, and lots of other vital information you’ll need before you can move forward with property investment.

Come along to a FREE Capital Properties Discovery Session that’ll take you through Property Investment 101 in the most efficient way. Our team works with ADF members who are just starting out, all the way through to helping our clients manage multi-million-dollar portfolios. The best time to start is now.

On the go? Here’s 30 seconds of take outs:

• Start a savings plan by looking at your income & expenses, then set up a regular direct debit into a property investment fund.
• Capital Properties recommends a minimum saving of 10% of the purchase price of the property.
• Check out eligible Australian Defence Force (ADF) financial benefits.
• Getting loan pre-approval is essential as it saves time, money & heartache.
• Work with a Buyers Agent who understands the ADF lifestyle & someone who specialises in regional and local area investments.
• Research: location, property type, rental yield, capital growth, building inspections & financing options.
• Work out cash flow and investigate tax implications.
• Continue to monitor and adapt your property investment strategy for future growth.

Keep reading >>

Why do you need a savings plan?

It’s essential to have a well-structured savings plan in place before you can even begin to think about where and when to invest.

As an ADF member, using your steady income to build your savings with the goal to invest is key to creating the future of your dreams. A savings plan helps you set realistic financial goals so you can know when you’ll have enough for a house deposit.

How to start a savings plan?

• Read our ‘5 Top Tips to start your savings plan’ blog post.
• Work out your current expenses, including rent/mortgage, energy bills, telephone & internet, medical & dental, groceries, car/transport costs, insurances etc. Capital Properties Budget Planner will help.
• Once you’ve figured out your expenses, look at the surplus, or figure out where you can save some extra dollars, then set a savings goal for each fortnight (or week/ month).
• Open a separate savings account to manage your property investment fund.
• Set up a direct debit so that the money goes into that account before it gets spent.
• Become familiar with your incomings/outgoings so you’ll learn how to manage potential investment costs.

How much of a deposit do you need for property investment?

As a general rule, banks will only lend first-time property investors money if they have between 5% to 20% of the purchase price of the home in genuine savings.

At Capital Properties, we recommend that potential investors save a minimum of 10% of the purchase price of the property to get started. 5% to cover the minimum deposit required to secure the home loan and the remaining 5% should cover the additional fees, such as legal fees, property inspections and potential renovations.

The more savings you have to invest, the better. One, it means you’ll pay less interest over time. And two, with a deposit of 20% or more, you won’t have to pay lenders mortgage insurance (LMI).

Australian Defence Force (ADF) financial benefits for property investment

Australian Defence Force (ADF) members are often eligible for financial benefits that can be used towards property investment. For example, the Home Purchase Assistance Scheme (HPAS), Home Purchase or Sale Expenses Allowance (HPSEA) and the Defence Home Ownership Assistance Scheme (DHOAS).

These benefits/incentives can help you secure a loan with lower interest rates and fewer fees. We’ve discussed these in more depth in the blog post: “Buying a house while in the Defence Force”.

Why you need pre-approval

We’ve written a whole blog post on pre-approval before: “Why being finance ready pays dividends”. In summary, pre-approval is confirmation from a lender that you’re eligible for a certain loan amount based on your financial situation, credit history, and ability to repay the loan. Getting pre-approval for the loan before you start searching for your ideal investment property will save you time, money and heartache.

The benefits of pre-approval

• Pre-approval gives you a clear understanding of your budget, allowing you to narrow down your property search.
• You have a much stronger negotiation position with pre-approval. Sellers often take pre-approved buyers more seriously as they’ve demonstrated their ability to secure financing.
• With pre-approval, you can move quickly when you find the right property, reducing the risk of missing out on a good opportunity.

How to get pre-approval

• Complete a finance application with your lender.
• Provide supporting documents. That’s usually:

• Proof of identification (driver’s licence, passport, birth cert. etc.)
• Proof of employment/income (payslips, tax return, bank statements etc.)
• Proof of genuine savings (deposits made over several years)
• Overview of living expenses and any debts.

• The lender will process your application. All going well you’ll be issued with a pre-approval letter within a couple of weeks (sometimes faster).
• Pre-approvals typically last 3 – 6 months.

Working with a Buyers Agent

Navigating world of property investment can be overwhelming, especially for first-time investors and time-poor investors. This is where a Buyers Agent can provide invaluable help. Finding a Buyers Agent who understands your unique challenges as an ADF member and someone who specialises in investments (in regional and local area markets) are worth their weight in gold.

Why working with a Buyers Agent is a smart move:

• Searching for the right property, attending inspections, and carrying out due diligence takes time that many ADF members don’t have. A Buyers Agent will navigate this for you.
• Buyers Agents have in-depth knowledge of the local property market, including property values, trends, and growth potential. They’ll guide you to make informed property investment decisions.
• Get access to off-market properties with superior investment potential.
• Buyers Agents are skilled negotiators who can secure the best deal for you.
• TheCapital Properties Buyers Agent service will help you find your ideal property and negotiate the lowest price and settlement with ease.

Research: Location & property.

Thorough research is the cornerstone of successful property investment. Before making any decisions, take the time to research various locations, property types, and market trends. Factors to consider include:

• Location

Look for areas with strong rental demand, infrastructure development, and potential for capital growth. Proximity to amenities, public transport, schools, and employment hubs can significantly impact a property’s desirability. Think about trends driving the market, for example the recent push towards “Lifestyle and the property decision making process”.

 

• Property type

Consider the type of property that will appeal to your ideal tenant. Houses, units and townhouses all offer different advantages and potential challenges.   Think about the number of rooms required and look for properties with features like air conditioning, off-street parking, and modern appliances that’ll appeal to those tenants. The ADF property buyer checklist will help with some of these decisions.

• Rental yield

Calculate the potential rental income in comparison to the property’s purchase price. A higher rental yield = a more financially viable investment.

• Capital growth

Research the capital growth of the area to determine its investment potential. While past performance won’t predict future results, it can provide insights into the market’s behaviour. Access the Capital Properties Australian Property Market Report for up-to-date property statistics.

• Building inspection

Before you make an offer on an established property, make sure you get a building inspection. It’ll give you a clear idea of the property’s condition and leverage for negotiation if there’s any issues. Our blog post “Why use a building inspector when constructing” is a great place to start.

Property investment financing options

It’s essential to have a good understanding of your financing options. Different loan types can impact your cash flow, tax deductions, and overall financial position. Some common loan structures include:

• Principal and interest loans (P&I)

In a P&I loan, you make regular payments that cover both the principal amount and interest, gradually reducing your outstanding debt over time.

• Interest only loans

With an interest-only loan, you just pay the interest on the loan for a specified period (usually 1-5 years). This can free up cash flow for other investments but won’t reduce the principal amount.

• Fixed vs variable interest rates

Fixed rate loans offer more certainty around repayments, while variable rates can fluctuate with market conditions.

• Offset account

An offset account is a savings or transaction account linked to your home loan. The balance in the account offsets the loan principal, reducing the interest payable on the loan.

Property Investment cash flow and tax implications

As with any source of income, property investment comes with legal and tax implications that you need to be across. During a Capital Properties Strategy Session, we cover everything you need to know about managing cash flow and tax implications, including:

• Income
• Rental appraisal
• Interest rates
• Loan amount
• Holding costs

Tax considerations:

• Cash flow/gearing:

Where the rental return is less, the same as, or more than your expenses and its effect on your annual tax return. Read more in the post “Property cash flow or gearing, negative, neutral or positive”

• Stamp duty:

A state-based tax on property transactions which depends on the property’s value and location.

• Capital gains tax (CGT):

CGT is payable on the profit made from selling an investment property. The rate depends on your income and the length of time you’ve owned the property.

Ongoing Property Investment strategy

It’s essential to monitor and adapt your property investment strategy on a regular basis. You must be aware of tenants’ requirements, property maintenance, market trends, and keep on top of all incomings/outgoings associated with the property

As your financial situation evolves, you can start leveraging your existing property portfolio to expand your investments. This could involve refinancing to access equity or diversifying your portfolio with different property types or other locations.

If you’re still wondering where to start with property investment, the Capital Properties team can help you navigate the entire investment process. Start by booking into our free Discovery Sessions. This property investment 101 will help you make informed financial decisions, so that you can confidently navigate the property market and make the most of your investment opportunities.

Check out our FREE Property Investor Tools and Apps and download a copy of our book, Property Investment SOP  – essential reading for all property investors and first home buyers.