Uncensored Money Season Three: Property and Interest Rates in 2023

Melissa Browne: Ex-Accountant, Ex-Financial Advisor, Ex-Working Till I Drop, Now Serial Entrepreneur & Author, Financial Wellness Advocate, Living a Life by Design | 14/12/2022

Show Notes

The media is full of clickbait headlines about property values, inflation and interest rates for the coming year. So in this episode, Mel and Lawsie sit down and share 8 practical tips that you can do to prepare financially for the year ahead.

Resources mentioned in this episode:

• Investing in Property Masterclass
• 50+ Way to Find $10k in 12 Months 

If you know you need more help with your finances make sure you join the waitlist for the next round of the My Financial Adulting Plan. 

If you're not already, come play over at insta at MelBrowne.Money and make sure you are signed up to Mel's Money Musings and Monday Money Moments (yep, we love us some alliteration) for more tips, tricks and ideas on how to best work with your money.

Finally, if you love this episode please make sure you subscribe and leave us a review.

Transcript

Mel: The Block finale results send a worrying message to Aussies. Aussie house prices now down 7.1% and falling at a 14.6% annual pace. House prices have dropped, but they are not more affordable. Is the Australian property market going to crash? House prices record the steepest drop in four decades. Wait, there's more. Home loan rates to peak at 6.6% next year. Interest rate hikes and rising inflation force Australians to seek new ways to make ends meet. Inflation peak within sight, but RBA warns more rate pain likely. Distressed housing sales rise as owners succumb to Australia's rising interest rates. Interest rate pressure on home owners leading to greater demand for food donations. Relief for borrowers. When will Australian interest rates stop rising? These are newspaper headlines for the week ending 14th of November, 2022 which is when I ran a masterclass on investing in property. The truth is I could have picked very similar headlines anytime this year once interest rates started rising, and that's because, as we all know, the media loves a clickbait headline.

And with so many people either owning their home, owning an investment property, or wanting to own their own home, these are the headlines that many of us will click on. But here are some of the headlines you won't see in most papers. Annual economic growth is strong. Retail spend spending is at record levels still. Domestic tourism jumped 14% or 2.6 billion in the March quarter of 2022. Unemployment is low. Interest rates are climbing, but that's just one factor. Our economy is still growing. International immigration is picking up. Wages are starting to grow. There are strong household balance sheets. Many borrowers are ahead in their mortgage repayments. We have a strong banking system that has been strict in its lending criteria, meaning there are very few non-performing loans. There are government incentives to encourage first-home buyers with more on the way. There are government incentives to encourage non-first home buyers. Construction costs are rising, meaning the replacement cost of properties will be affected, and home prices are falling at the top end. But prices have risen for lower valued properties, due to investors and first home buyer demand.

Now that's because positive news doesn't sell advertising. But you all know that, right? And that's why here Lawsie and I want to have a frank, honest and most importantly, independent conversations about property rates, interest rises, and the year ahead, and most importantly, what you might start doing now to prepare yourself. And maybe even tick the box of what you are already doing. Sure, you might not love all we have to say. You might love us to say no, no interest rates are going to stop rising. I'm not going to say that. But the thing is, knowledge is power. Once you understand the effects on your finances and the action steps that would be helpful to take, you have choice. Hopefully one of those choices isn't to pop your head under the pillow, but to take action so that you feel like you've got it when the interest rates continue to rise next year. And notice I said when, not if. You are not gonna love it, but you feel comfortable going yes, I expect this and I'm set up.

So Lawsie, I wanna talk today, and we're not gonna spend heaps and heaps of time talking about it, but I want to talk today about both the things that are driving interest rate rises and some of the myths that we believe, particularly in Australia. But I also wanna head over to the practical and talk about what you can be doing today to prepare yourself. Cause it's one thing to have knowledge and now I love the Malcolm Gladwell quote that too many of us have knowledge but not understanding. So it's having knowledge around what's happening and then having understanding around what you can do as a result of that knowledge.

So, Lawsie, You are a little younger than me. Have you ever seen a dip in a property market? Like, do you remember dips?

Lawsie: No, not really. The GFC was when we bought, so I think it kind of just stayed the same for a bit, I think there was that kind of same uncertainty in the market as what people are seeing now and for different reasons, but it was definitely uncertainty with that. And so yeah, I don't think I really saw it. Sure, you might have seen or heard different things or the mining boom busting, those kind of things. And we had clients obviously that were affected.

Mel: And that's a good example of a dip.

Lawsie: But as a broad stroke of all across Australia, definitely not.

And I think even looking at where we live, it hasn't really, and of course, now we're starting to see a softening, I don't think it's a dip per se. But yeah, generally I think the only one that I could think of would be mining towns when they shut the mines. There's no business there, or very little business left there, I would say.

Mel: Yeah, I mean I've definitely seen it with clients. So I have seen mining towns, I have seen regional dips, where there's been a boom in a particular area and then that has softened and prices have gone backwards. I've absolutely seen it. But as you said, it's not necessarily on an Australia-wide basis.

If we look back to the 1970s, that was probably the last big retraction. During the GFC, there definitely was a retraction. And interestingly, I bought during the GFC as well. I bought the home that I'm in cause I think we bought it at a similar time and it did not move in value for about, I wanna say, seven to 10 years. And if you look at the data, that's exactly what happened. So 2004 to 2011, there was seven years of no real growth. If we go before that, from 1989 to 1999, there was 10 years of no real growth. And I can keep going and give example upon example, but there is this myth in Australia that one, property doubles every seven to ten years.

Lawsie: Yep.

Mel: It is not the frigging case. That's two recent examples, but also that it never dips and it absolutely does. What happens though is that it's not necessarily for in Australia because we've got such a strong banking system, and because the banks are quite rigorous, we don't see that like they might have in the UK. So the UK was a really different experience. So during the GFC they saw a huge smashing of property prices, but part of the reason was in the UK you could borrow more than a hundred per cent of your property. You didn't need a deposit, you could borrow the property price. Plus stamp duty, plus legals, plus a reno that when there was a retraction or when interest rates went up, suddenly people were in a real trouble. Whereas in Australia, most of us borrow 80%. So we don't have the same capacity issues that we had there. So it's just really interesting. I know that people can look across ditches sometimes. It's making sure we are comparing apples and apples and not apples and oranges. But please know, it is a myth that property never dips. But also in the last two years, we don't have growth of 40% within a two-year period. That is so freaking unusual. So unusual, and I think it's really important to hammer that point because people have watched their house prices increase in some cases by more than 40%, in some cases around 20%.

And that is so unusual. So what we are seeing now is a retraction of that. So your house shouldn't have gone up by that much. So it's simply coming back to what it should have performed during the time and not even it actually should drop.

Lawsie: No

Mel: So what we are getting is back to normal rather than a crash. For someone that's looking to purchase or has purchased during that two years, if you are holding that for the long term, it simply doesn't matter. And yes, if you are wanna refinance and your equity goes under 20%, it might be a little problematic. If you're in a fixed or interest rate, and that's less than 20%, it might be problematic, and we're gonna talk about all of that today, but if you're gonna hold it for the long term, it really doesn't matter cause we don't have crystal balls. And we've talked a lot here about the fact that everyone was saying at the beginning of Covid, property's going to smash. I know I had a conversation with my husband, I said, let's keep an eye on Noosa. If that drops, we are buying because we love Noosa. And Noosa, I think almost like it went up by 50 per cent. I went, oh, well that was a nice idea.

Lawsie: No Noosa property for you.

Mel: But it was that thing where I was thinking there might be some deals to be taken advantage of, and it was quite the opposite. Property prices sprinted ahead. So it's understanding that there has been an unusual period of the last two years, and then what we are experiencing now is a retraction to where it really should be and not even.

Lawsie: Yeah. And I think where that's also important is I've spoken to some clients recently where they've gone, oh, but my property was worth this. And that's lovely. Because it's that same thing where they saw houses and apartments and everything else selling around them going, oh gee, that's what mine is worth. And it might have been 12 months ago or 18 months ago when the Covid buying frenzy was on and everything was going up in value. But think the thing to be cautious of now is people are banking on being able to get that old property and then wanting to rely on that to set themselves up for the next property purchase or the next thing that they're wanting to do.

And now they're stuck essentially because they can't let go of the figures that they saw people getting for similar properties. It is an unfortunate sort of side effect of what it is, but it's also that it's a dangerous thing then to just go, oh, I'm not gonna do anything cause I'm gonna wait until the property goes back. Cause there is no certainty. You don't know if it’s that it's gonna go back to that and it very well may do, but it could take a long time. And so just to be aware of that, and just doing things based on what the current market.

Mel: And two things with that. One is that if your property's worth less, the property you are going to get into, chances are that's worth less as well. So that's a really important thing to understand. But the second thing is the psychological principle of loss aversion. So this is as true for pricing as it is for investing and it is for home ownership. So if I said to you, if you had 50 bucks and you lost 25 bucks, how are you gonna feel?

Lawsie: I'll be sad.

Mel: You go, sucks but if over, so just say that was a 48 hour window, and yet over the 48 hours, if I kept giving you cash so that you ended up with 25 bucks, how are you gonna feel after?

Lawsie: Excited.

Mel: Yes, this we're left with the same amount of money, but in one we're drip fed it and or it doesn't matter if it's in one lump sum if we're drip fed it, but we haven't lost anything. Whereas the second one I lost. So therefore, all I can focus on is how much I've lost, not what I still have.

Lawsie: Definitely..

Mel: And it's really important to understand that this is a psychological principle, both for pricing, but also for investing, that we are very it's called loss aversion. And I mean we could put that with pain. A lot of people would rather flee from pain than run towards pleasure. You know, it's the same thing. It's that same principle. But what we don't wanna do is we don't wanna not act because there's a slight possibility that we might have loss.

And I'm seeing too many people as well at the moment going, I'm just gonna hold off for a while and see that. And whereas for me, if you intend to invest for the long term, if that is your goal, and unless you have a crystal ball or unless you have some insider info that no one else has, then for most people it would be making a decision and starting to act. So I guess the other things to consider is if we looked at the growth that we've just had, if we extrapolate median house values to 2043, so to another 20 odd years

Lawsie: 20 years time. Yep.

Mel: The Sydney house price would be 6.3 million, and a unit would be three and a half million. Wages aren't rising that fast, none of us could afford that. And that's the thing. The growth that we have had is simply unsustainable. I'll give you that example for every capital city, but the big issues we are facing as well at the moment are inflation and wage rise pressures. So let's park the house prices and look across to interest rates. Inflation and wage rise pressures is two things that are massive at the moment. Inflation is what we've seen house prices jump up with, but both of these two things are why interest rates are going up. Now the Reserve Bank has cited these two things as the number one primary drivers of interest rates, and yet guess what's happening right now? We are in the silly season.

Lawsie: Do tell.

Mel: We are spending like drunken sailors. And if you look, there was one month when it retracted our spending. I think it was August or October. It was August, I think. Since then, every month it's almost like we're we are trying to beat the record. Someone's going, no, come on, you can do it. We are spending like drunken sailors and this will be a record Christmas cause there is no lockdowns. I don't know. You and I have both been into the Sydney CBD a lot over the last couple of weeks. The number of people in shops is astounding, so I know that the inflation rates in December are not where they're going to want to be.

And guess what's gonna happen in January? Sales and are, oh my gosh, we're on holidays. Let's just enjoy the beginning of the new year, which means guess what we're gonna get in February?

Lawsie: Let me guess. Interest rate rise.

Mel: That is my prediction for Feb. So the interest rates were inflation's running between six and 7% at the moment. RBA wanted at two to 3%. So that means for 2023 more increases. Now, yes, the Reserve Bank Governor did say during Covid that interest rates would stay low till 2024. And I know a lot of people banked on that. But the thing is, and I know we hate this term, but we were in unprecedented times and the Reserve Bank Governor doesn't have a crystal ball. He couldn't tell that inflation was cracking on. That property prices were cracking on. If you are a first home buyer, or even if you are wanting to buy an an investment property, you should be glad about his decision to start increasing interest rate rises or property prices would've continued to increase, and that would've been such bad news for being able to enter the market. So rant over. But what we do know that a Roy Morgan study said that as of October, 14.4% of mortgage borrowers were considered extremely at risk of mortgage stress. Now I found this language really interesting cause language is important. You are considered extremely at risk of mortgage stress. You are not in mortgage stress. This means that probably less than five, I will obviously less than 14% of people are suffering from mortgage stress. Like that's low. And that's the likelihood of you suffering stress, not that you are. So I wanna say that it's probably less than 5% of people. And there is a difference between, I have less free cash flow at the moment, therefore I'm stressed. Versus suffering real mortgage stress. And mortgage stress is generally the percentage of your income that you're putting towards housing, which is considered to be around 40%. If it's up there, then that's considered mortgage stress. Most of us aren't there yet.

Lawsie: No, especially if you are doing that from choice, not because that's your minimum repayment as well.

Mel: Exactly. So Lawsie, what I want you and I to do now is now that we have that knowledge around, it is a myth that property doesn't drop. Growth isn't linear. Yes, there could be 10 years of stagnation, of no growth. If we extrapolate houses to 2043, it was unsustainable. So there has to be some sort of stagnation. We are suffering huge inflationary pressures, which means we will be getting more interest rate rises next year. They might not be the big jumps. They might be 0.15 or 0.2 versus 0.25 and 0.5. But they're coming and I believe that we'll see the first one in Feb. So knowing all that, what can we do today to do something about it?

And we are gonna give eight different tips for things that you can do and give you a couple of resources as well.

Lawsie: Yes, definitely. And the first one - we already alluded to it before, but just don't overspend this silly season. We've been speaking to a lot of people that have picked up bargains and doing things during the Black Friday sales, and I know like you're a big one for wanting to shop the sales in January for sheets and towels and all the exciting homeware things which is strategic spending, I guess in some ways in terms of you, you're still actually saving money, buying the things that you actually need.

Mel: Yeah.

Lawsie: but just be conscious around not overdoing it this season and not just, putting everything on the credit card, pushing the problem down the road and that kind of thing.

Just be really conscious around what is the maximum amount that you wanna spend on Christmas. And then stick to it and don't spend a bit more here and there, and then it's suddenly that big snowball and you've spent way more, because then that obviously feeds into all the spending and keeping inflation higher.

Mel: And I wanna extend that to, I think the silly season goes from first to December through to Australia Day.

Lawsie: Yeah.

Mel: Because there is definitely a summer holiday vibe where we’re like, we're on holidays. This is okay. I can spend more. It's that relaxed. No. I just wanna start the year with something fun. But it's just being super smart about it. Not putting yourself in a position where you are gonna be under mortgage stress or that you are deferring that decision to buy a home if that's something that you want.

Lawsie: Yeah. Or if you're doing what you're saying and living your best life, make sure it's because you've saved and you've prepared for it. It is, yes, I've got that money sitting in my holiday account, so I'm happy to blow that money on the cocktails by the pool, but you're not spending away your house deposit savings or other savings and buffers that you've got in place to help see you through more interest rate.

Mel: Exactly. This leads me to the second point, which is don't have bad debt. You can't afford it now more than ever. So no credit cards, no Afterpays, no personal loan to buy assets that are gonna depreciate in value. As for a car, not everyone can afford just to buy a car outright. But if you're gonna use debt to buy a car, make sure the interest rate is as low as it can be and the car value is as low as it can be. Don't buy something bougie just cause you think that's what you should be driving. Look at second-hand cars, all that sort of things.

Lawsie: Ex-demos.

Mel: but don't have bad debt. A), you'll overspend on it. But B) when interest rates go up, that's another thing that you're just gonna have to find money for. We don't wanna have to be stressed about that in Feb when our statements arrive and the interest rate rise arrives as well.

Lawsie: And if you are looking at wanting to get into the property market as well, it's being aware that having things like credit card debt will affect significantly your borrowing capacity as well. So that's why we're like no, please don't have that.

Mel: Absolutely. Third tip, Lawsie.

Lawsie: Is to reassess your spending. I know we're so Grinch and this isn't to say, that you've gotta strip everything back to the bare minimums, but just to consider looking at what things that you can stop. Like how many Netflix, Stan, Disney, Apple, I don't even know what other channels exist.

Mel: Binge. Don't know.

Lawsie: But how many TV subscription services do you need? You do a review of those, stop them. How many of you have got Audible going? All of these things that they all seem like small incidental amounts but if you are not using them all, get rid of them. Have one or two that you decide to keep.

And then when you go, oh, there's not really anything to watch on there, stop that one and start a different one. But you don't need to have all 700 of them going at once. And same with looking at other things. It’s so easy to have all these direct debits coming out of your account, but are you using everything?

If you're gonna be away for two months and you've got your gym, pause it. Like why pay for it when you're not gonna be able to use it? And then if there are things that you're just not using, just cancel them. Yes, some of it's gonna be annoying. Yes, they're gonna generally try and make it as hard as possible for you to stop and to cancel those things, but persevere. Your bank account will thank you. Your future self will thank you. And then you're just not having money unnecessarily go out the door.

Mel: And with that it might be that you also look at so part of reassessing your spending might be around with New Year about how you're preparing meals and how you're cooking. And you might look at, I want less processed foods because I know it's something you’ve looked into a lot recently around and realised just how bad different things were and who owns a lot of those process companies and how it's actually cheaper to cook in most occasions. We just don't have time for it. Or maybe you'll look at the kids at what your kids are doing and go, what? I've heard so many families say to me how happy they were as families during Covid because everyone was less busy. And yet what I know over the last 12 months is that we've heightened that back up again. Maybe it's reassessing to say, can you afford to do all that and should they be doing everything that they are?

Lawsie: Yeah.

Mel: Cause it’s one thing to say, I'd like them to, and another thing to say we don't have a money tree in the backyard, so how about we reassess it. Tone and I as well, so there are a few shows we wanna watch, and we are waiting until Boxing Day. I think it was a UK BBC one of those streaming things. We've had a look, you get 30 days free. So we are gonna put a thing in our diary on day 28. We are gonna start watching it during holidays and we're just gonna cancel it. So it's just being smart with the systems that they've built as well to say, right, how can we use it to our advantage?

And the fourth one is to have a buffer account. If you don't have a buffer account already, this should be one of your number one things for next year.

So a buffer account means that if life happens, you've got that money sitting there. We talk about it a lot. It's three to six months worth of your fixed expenses. So your rent or your mortgage repayments, or your loan repayments. So the things that you are spending regularly on electricity, all of those sort of things. So if something was to happen, you could just grab it. We've had conversations with people inside the My Financial Adulting Plan where, and one particularly, she had to bolt overseas and she looked at it and went I've paid off my credit cards. I don't have a buffer yet, but hey, I still have choice. But she was in that position of, oh, I'm almost there, she researched and found a zero interest card and that to go over. So even if you don't have a buffer account or as you are building your buffer account, if life happens, know that there's still choice. And I was so proud of her for doing that research, finding the zero interest card. Cutting it up, like never using it and already automating the payments so that she didn't get herself into financial trouble from that decision. But that's what a buffer account should be for. It's for when life happens.

Lawsie: Definitely. And then actually using it if life happens. Because it takes a long time to build up, and to have that substantial amount of cash sitting there. And then I think some people go, oh, but I don't wanna touch it. And then something will happen.

They go, oh, I'll just put it on a credit card and end up paying interest, which is nuts cause you're gonna pay what, 20% interest. As opposed to just dipping into your buffer, which is what it is actually there for. So it's just being disciplined enough to build it up so you've got that level of protection, but then also being able to go, all right, this has happened. I need to do it. And then just making that plan again, just to build it back up to that comfortable level. But yes, please use it if required. And no high heels to go out on a date is not an emergency.

Mel: True. So true. At the next one, LawDog.

Lawsie: Is to pay if you do have a mortgage, to pay an extra 1% into your offset account. And what we mean by that is 1% on your interest rates. So if you currently have an interest rate and it’s sitting at 5%, then go on to a mortgage calculator and see what the repayments would be if you were to apply an interest rate of 6% and therefore just pay that extra difference into your offset account. And the reason for that is cause again, you're just building in that safety net or that buffer so you're not caught unaware when interest rates continue to rise next year. And if you've done that based on just your minimum repayments or something, and then you don't want to be stuck suddenly the next interest rate rise to hit in Feb as predicted by Mel. You don’t want to be caught off guard and be like, oh, now where am I gonna find that money? By just automatically having it set up where you're paying that extra into your offset account you're protected and you're gonna be protected for a bit with the future rises. So definitely to consider doing that.

Mel: And the next one is to ask for a better rate. We have a whole property module inside the My Financial Adulting Plan, which is the eight week course that I run that in Jan next year. The doors are open, Jan 2023. So we'll put a wait list link in the show notes. But if you have more than 20% equity, if you've held your loan for more than 12 months, you need to ask for a better rate. And as I said, we give you scripts and everything in there and support you to do it and kind of coach you at via the close group if you either get a knockback or if there's been lots of different scenarios, but the average rate reduction is 0.5%, which is equal to the last two rate increases. That's where you can offset some of this. So make sure if you haven't done that and then you wanna diarse that to do every year, this is not a one and done. This is something that you wanna ask for regularly.

Lawsie: Absolutely because no one wants to be paying more than they need to. And to know that you can still get rate reductions even though interest rates have been going up, cause I think people are, oh, it's just gone up again. But no, you, there's still room and flexibility to move, so that's definitely a good one to make sure that you do that.

Mel: Definitely next one.

Lawsie: So this is for those that have got like a fixed interest rate loan or an interest-only loan. And it is, and if you've got less than 20% equity, then you wanna start talking to your mortgage broker. Now just to work out and make sure that you are prepared for what's gonna happen when that interest-only period finishes or you come off that fixed rate. Cause I think it's March, 2023, that they're expecting people to really get to the point where more people are actually gonna experience not mortgage stress, but suddenly feel the pain.

If that's you, then start talking to the mortgage broker now or the bank and just to make sure that you're in the best position and you're gonna get the best loan that's gonna suit your circumstances, but be aware that you'll be paying more.

Mel: Yeah, I am concerned. There is a tsunami of these mortgages that were gonna be problematic for people, because if you are starting to creep into that less than 20% equity, but also if you come off that interest-only loan, you may need to reapply. To go if you, so if you wanna go on to interest only again, so if you wanna roll that over, you essentially need to prove that you can afford to do that. So it's really important that you talk to your mortgage broker now and have a plan cause just say they look at your situation and go, know what? You are going to need to show 20,000 or 30,000 in income. You can go, cool. I either need to ask for pay rises, I need to get a second job. I need to increase that in my business.

I've got choice then. Or they might say, yeah, your capacity is not there. You need to get rid of credit cards. Like actually, close them down. Afterpay. The bank’s also gonna wanna look at your spending. And we had a mortgage broker speak to our Financial Adulting Plan alumni recently who said, so if your circumstances have changed, just say you didn't have children before, and you now have children, your ability to pay has reduced as far as the bank's concerned. And the bank will look at your statements. So this mortgage broker gave two examples. One was a Sportsbet transaction. So that's a red flag for a bank. So you don't wanna have gambling coming out of your bank account for three months prior to getting the loan. But also they'd bought something from a baby shop and the bank issued a 'please explain'. And the couple were horrified because they hadn't told anyone yet. They'd lost babies before. And they had to then come out to the bank to say actually we are. It's so you need to be aware that this is the landscape that we're in. And to make sure you might think, oh no, I'm all good. But yes, you might have been two years ago with lower interest rates and higher values, et cetera. You may be in different circumstances now, and this is not to fear munger. It's just so that you have knowledge. And I'm such a fan of talking to a mortgage broker before you're ready. Both whether that's going for a loan for the future or if that's coming off. And I'll think a lot of people, Lawsie, they say to us a lot, but I don't wanna bother them. Like, I don't want to waste their time. You're not wasting their time. They're getting paid a commission by the bank, not you. So they're getting paid

Lawsie: Yeah.

Mel: So you are not wasting their time. They are acting how they should.

Lawsie: Yes.

Mel: Good mortgage broker should be coming back to you each 12 months just to check-in. So if they're not doing that, you are essentially doing their job.

But the last one is don't put off decisions but make sure they're for the long term. So I'm seeing a lot of people at the moment say, oh, I think I'm just gonna wait and see. And that can be a really dangerous game to play cause none of us have a crystal ball. Investing in property is not a short-term decision, it's a long-term decision. So if property prices, even if they retract 10%, you might look at it, go, that's painful. But over 20 years, 30 years, you're not gonna care. That's not gonna be meaningful at all. So it's just don't make decisions based on short-term clickbait headlines, but make sure they're for the long term. And most importantly, make sure you can afford them for the long term. And I'm still a fan of making sure you can afford to borrow at 8%. Before you go, oh, but Mel, surely interest rates won't get to there. Banks are assessing you at 8% now anyway because they assess you as if there's a 3% buffer. So that's a good rule of thumb for you to do, and then make sure your spending doesn't go up along with that, which is why if you're paying that extra 1%, if you are investing, if you're having buffers, you're not allowing that spending to go up. So it's kind of manufacturing a financial environment so that your spending is limited, and then you can spend that limited amount totally guilt-free knowing that you're looking after the rest of your situation.

Lawsie: Beautiful. Very well said.

Mel: So if you want more resources, if you're like I'd love to find more ways to find cash to put towards buffers, et cetera we'll put a link to a free webinar that I ran called 50 Plus Ways to Find 10 K in 12 months. So we'll put that there for you. Plus I ran an investing and buying property masterclass about a month ago, in November 22. It talked about different ways to buy property, and gave tips and tricks, but I also gave three very different scenarios. One, if you bought and just paid it off quickly. Two, if you bought and then started to invest and still paid it off a little quicker, but invested.

Lawsie: Paid your home off.

Mel: And then three same scenarios too. But after 10 years, you bought an investment property. That scenario is the invest that whole masterclass alone. So make sure we'll put the link in there as well. But most importantly, please don't just have knowledge and nod your head and think, oh, that, yeah, that all seems sensible. Don't put your head in the sand. Make sure you take action.

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