In this episode, Lamp explores why healthcare professionals are often prone to being taken advantage of when it comes to their finances. Now determined to help those who help others, he’s set his sights on freeing his colleagues from 100 hour work weeks and guiding them along the path he’s taking. He also shares the close call he had early on in his journey, where he’s setting his sights next, and spills a little tea about how uch doctors really get paid.

Timestamps:
00:41 | Healthy Equity
04:42 | To DIY or Not to DIY?
05:26 | In Hindsight…
09:03 | Helping in More Ways Than One
10:50 | You Do You
13:16 | Around the Grounds
17:23 | Worthy Advice
21:20 | Looking Ahead

Resources and Links:

[00:07:47] And also, not just the whole economy, I think, it's also your personal economy. Like, is it the right time for you? It might be before children or before huge expenses or your own home, but then you still want to be increasing your personal investments and financial freedom goals. 

This is Property Investory where we talk to successful property investors to find out more about their stories, mindset and strategies.

I’m Tyrone Shum and in this episode we’re back with Daniel Lamp, a doctor and avid property investor. Having found a niche where his two interests intersect, he’s on a mission to help other healthcare professionals in their investment journeys by sharing his experiences and tips. When it comes to financial health, Lamp is the doctor to call. 

Tyrone Shum:   

Lamp’s second property was easier for him to acquire than the first, a phenomenon many investors are familiar with. The first property is typically the most challenging to get in the first place, with the second simply falling into place. For Lamp, however, it wasn’t quite as straightforward.

Daniel Lamp:   

[00:00:41] In that 2019 [period], lending was was very, very tight. I think, at the time, I can't remember exact reasons. But talking to my broker, and with a good savings rate, I actually ended up tipping in cash for the second property. 

 

[00:00:56] But moving forward, I [have] got some healthy equity now. And I'll have a chat with my broker to explore moving forward. 

  

[00:01:06] I guess going back to that property lessons, one lesson I learnt was that it's very important to do the research and the due diligence. But then equally, it's also important to take action. And I guess another one was that land value's important. The second property I bought was on a bigger and nicer piece of land.

Tyrone Shum:   

He credits his stellar saving skills partly to the way he grew up and partly to who he is today.

Daniel Lamp:   

[00:01:46] Growing up in a not particularly well-off household, I guess savings habits were instilled in me. But once I did start working as a junior doctor, I guess, to be honest, there wasn't much time to take holidays anyway. And you can't really choose when to take annual leave. It's kind of dictated to you by hospital management. 

  

[00:02:11] But I did go on some small road trips, and I think 2018 [I] did go to New Zealand as well. And then, hopefully, soon [I] can [travel], with COVID settling, maybe do some more trips as well.

Tyrone Shum:   

When it comes to his worst investing moments, he’s faced a challenge or two that many other healthcare professionals know well.

Daniel Lamp:   

[00:02:58] Without going into specifics, I have had a few close calls in regards to almost buying the wrong type of property. Some so-called advisors recommend[ed] some off the plan properties, which turned out to be really poor performing assets later. Later, I found out that they stood to gain anywhere up to $50,000 commission, which they don't disclose to you. 

  

[00:03:22] So I felt really quite low, and quite taken advantage of. As doctors and busy healthcare professionals can be seen as easy targets, I think. Sometimes talking to my friends or colleagues, they're just told to outsource your decision making regarding investments, only realising afterwards that these spruikers— they could even be your financial planner or accountant or mortgage broker— that they didn't have your best interests at heart. 

  

[00:03:54] And I've seen some colleagues, unfortunately, buy the wrong property and be burnt, ending up with negative equity. So basically, the property's going backwards.

Tyrone Shum:   

In our market it can be difficult to know who to trust, and delegating decisions isn’t always the best way forward. However, outsourcing has its time and place.

Daniel Lamp:   

[00:04:42] I think it's still good to kind of outsource certain things, like, I'm not going to manage my own properties. But I think as you said, you can't outsource the overall decision making or the strategy, that you have to do yourself. 

 

[00:04:58] And then in terms of opportunity costs, I guess my personal worst investing moment would be the missed opportunity costs. Property's not a very liquid asset where you can get in and out due to the high transaction costs. So buying that wrong property can be very costly. So my first property still has gone up. But looking back, [I] could have done better if I'd bought a larger block of land.

Tyrone Shum:   

[00:05:26] Can I just explore that a little bit further? Looking in hindsight, that property seems to have done them really well, on on the back of it. What were some of the things, besides the block of land, that you could have done differently, do you think? 

Daniel Lamp:   

[00:05:48] It wasn't particularly disastrous, my first property. But at the time, I guess I could have bought an existing house or an older house on a larger block of land for the same budget, which would have probably got slightly less rent. I guess it depends on your personal strategy. But for me, if I went back in time, I probably would have bought an existing older house on a larger block of land.  

Tyrone Shum:   

[00:06:54] Strategy wise, since we're sort of touching on this topic, what is your strategy at this point in time?

Daniel Lamp:   

[00:07:01] Early on in my career and investing career, my goal at the moment is to build up an asset base. So that's why [I'm] going for higher capital growth properties, to be able to leverage that equity into purchasing more is the goal. 

  

[00:07:21] And I guess, still reasonable cash flow, especially with interest rates going up. But I think rather than just listening to the negative media headlines, to try and step back to actually crunch the numbers. Like, what does it mean? Can I still service the loans? And what is the overall fundamentals about the particular property market you're buying in? 

  

[00:07:47] And also, not just the whole economy, I think, it's also your personal economy. Like, is it the right time for you? It might be before children or before huge expenses or your own home, but then you still want to be increasing your personal investments and financial freedom goals. 

  

[00:08:11] And I guess, the bigger picture for me, I guess I don't have a particular number in mind. But I guess, once [I] have that asset base, and then maybe potentially later [I'll] look into more cash flow assets, whether it be shares or index funds, or commercial property, maybe. Or even some alternative property investments. But at the moment, I guess, is to try and build up that asset base and to keep learning as well.

Tyrone Shum:   

Lamp wants to be able to choose to work as he’s passionate about what he does. While he wants to continue that, his goal is to have the choice of freedom— and to help others realise they can do the same.

Daniel Lamp:   

[00:09:03] That is kind of the reason why I've started a podcast, Passive Income Doctor, is to try and increase the financial literacy of doctors and healthcare professionals. Because we're not taught this in medical school [or] university. And as I mentioned earlier, I see so many doctors earning good incomes, but then working 80 [or] 100 hour weeks, barely seeing their families. 

  

[00:09:33] A lot of the time [they're] a little bit frustrated from the work. I can see that they're still passionate about the work, but I think if you just work so much, you might be at risk of burnout, which is not good for yourself, and then also not good for your families and also not good for your patients as well. 

  

[00:09:50] So I think if a doctor is able to have that financial freedom and not have to worry about that side of things, and they might be able to leave a particularly bad or stressful job or role, maybe even go part time or take that leap of faith and maybe go into another area or role or hospital environment where it's a bit better for lifestyle. So I think it'd be better overall for everyone.

Coming up after the break, we delve deeper into his aha moment…

Daniel Lamp:   

[00:11:10] [There was] lots of uncertainty, everyone's saying, 'Is it the right time to buy?', 

The importance of surrounding yourself with a reliable team…

[00:14:43] And also putting together a team, a good mortgage broker, accountant. And talking to many of them has helped me become a better investor. 

He recalls the struggles from his uni days and considers how they could have gone differently.

Daniel Lamp:   

[00:20:18] Looking back, often it's pretty challenging, being a uni student to try and purchase property.

And that’s next. I’m Tyrone Shum and you’re listening to Property Investory.

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Tyrone Shum:   

His learning lessons have also been positive, even if they were accompanied by anxiety and skepticism. 

Daniel Lamp:   

[00:10:50] I guess my personal aha moment would be that second investment property where I did my own research, and due diligence and took the action. Flying up after a set of seven night shifts, and going around doing the hard work. [There was] lots of uncertainty, everyone's saying, 'Is it the right time to buy?', Which,  if you've been in the market long enough, you know it comes in cycles, you know, the sentiment goes. 

  

[00:11:24] So at the time, even though market sentiment was very low, and [there was] lots of uncertainty, I still took the action [and] pulled the trigger, and I guess that's paid off, going up $400,000 or so in about three years. 

Tyrone Shum:   

Although he bought his second property without the help of a buyer’s agent, he’s not writing them off for himself or others.

Daniel Lamp:   

[00:11:59] I guess in my case, I did better by myself than with the buyer's agent. But I think I'm still open to that idea. And I think if you have the time and passion and effort to do it yourself and use all the resources, definitely, I think you can do it yourself. 

  

[00:12:19] But for some people who may be very time poor or not have the fortitude or the effort to do it themselves, then having a good buyer's agent I think would be worth it as well.

Tyrone Shum:   

[00:12:29] It's really interesting. I'm just curious, when you went up to Brisbane and you did all that looking around in the day, did you ever have a thought in your mind [and] go, 'What happens if I don't find the deal that day?' What would you do next?

Daniel Lamp:   

[00:12:44] I guess at the time, there was lots of property. And also, I did research before going up, as well. So I could already kind of have a gauge on the market. I was looking at what good value was, rental yields, and talking to some agents as well. So I already had put in the legwork. So it wasn't just that kind of one or two days as well. 

  

[00:13:07] But I guess in hindsight, if I didn't see a deal that that stacked up, I probably would have revisited at another time.

Tyrone Shum:   

[00:13:16] And are you planning to still continue to invest into the Queensland market for your next few properties? Are you looking at considering other markets as well?

Daniel Lamp:   

[00:13:26] I think moving forward I'm interested in the Perth market. And also I think even Sydney, I think. A bit contrary, but I think Sydney is starting to look a little bit interesting as well. So I think two investment [with] properties reasonable value in Brisbane, I'm happy with at the moment and I'll explore some other markets.

Tyrone Shum:   

Lamp uses many forms of mentorship, ranging from Rich Dad, Poor Dad paperbacks through to more technological sources.

Daniel Lamp:   

[00:14:31] I wouldn't say there's one particular mentor, but definitely using the online forums, and also meeting people, other fellow investors at some property meetups as well. 

  

[00:14:43] And also putting together a team, a good mortgage broker, accountant. And talking to many of them has helped me become a better investor. And in terms of challenges in regards to investing properly, I guess, like lots of other investors in recent times, one big challenge is the tightening of lending and finance. So I guess I love talking to other property investors and learning from anyone and everyone.

Tyrone Shum:   

Finding trusted advisors is never easy, as Lamp found out firsthand.

Daniel Lamp:   

[00:15:38] Personally, I found it very, very difficult and overwhelming. Lots of people will say they're good. And then it's only in hindsight whether you know [if] they're good or not. 

  

[00:15:51] And also, at the time, being 23 years old, I didn't have that many people in my peer group that were active property investors, which made a bit more challenging. So some of them, I did have to kind of take a leap of faith after doing my due diligence. 

  

[00:16:06] But nowadays, I guess, I do hang around with some other property investors, both doctors and non doctors, who, if they give me a good recommendation, that holds much more weight. And that's partly also why I've started a podcast and also doing some regular meetups as well for doctors, so that we can get together and try and share our experiences with the people we've used.  

Tyrone Shum:   

[00:17:23] I guess I'm curious, what do you think has been the best advice that you've received?

Daniel Lamp:   

[00:17:29] I guess the best piece of advice [I've been given], number one that comes to mind is [to] spend less than you earn. Lots of doctors that I've come across are earning heaps and heaps of money, but they also have very big expenses too. The idea of lifestyle creep, upgrading to the nice or the newest car every year, multiple overseas holidays, private school fees for multiple kids, buying that expensive trophy home [with] $30,000 a month mortgage repayments. And I think that was even pre the most latest interest rate increases. 

  

[00:18:07] So, if you have so much [in] expenses, you might not have that much left over to invest. And there's a perception in the public that doctors are very wealthy. And also there's some societal pressure, I guess, to appear wealthy. Not just for doctors, but for certain [other] professionals as well. 

  

[00:18:26] I guess in context is if you're doing medical school after an undergraduate degree, often you might be starting with $100,000 in debt. And then [your] first year's salary, base salary, is about $60,000. So, I guess, spend less than you earn is one piece of advice that I think's very useful and often talked about, but definitely useful. 

  

[00:18:53] I guess what I would add to that is that not just the savings, but then with the savings you have, you need to invest it. Otherwise, inflation will just eat away the cash in the bank. A lot of my colleagues and some more junior colleagues want to wait until they finish specialty training before they invest. But that could take five to 10 years, and property can go up enormously during that time. 

  

[00:19:24] And then secondly, another great piece of advice is just take action. And definitely you need to research and do your due diligence, but you need to take action.

Tyrone Shum:   

[00:20:02] If you met yourself, say, 10 years ago, what do you think you would have said to him?

Daniel Lamp:   

[00:20:12] I would have said [to] start investing earlier and know the power of compound growth. 

  

[00:20:18] Looking back, often it's pretty challenging, being a uni student to try and purchase property. But I guess perhaps I would have looked at if I was able to have a part time job, or potentially joint venturing or something like that. So I guess start investing earlier. 

  

[00:20:39] And I guess [the] second thing is [to] take care of your financial health. Nobody cares about your finances as much as you do. Of course, you should draw on the expertise of others who have done what you want to achieve. And also, have have trusted advisors and build a team around you. But definitely yourself, you need to take an interest in your finances. 

Tyrone Shum:   

[00:21:20] So, looking forward to the future. What do you think? What are you most excited about, say, your property journey in the next five years?

Daniel Lamp:   

[00:21:27] Investing wise, I'm excited to grow my portfolio. I currently see good value in Perth. And I think Sydney did go through a big boom, and then a bit of a recent correction. But I think Sydney is starting to look interesting also. 

  

[00:21:45] And other than investing, I'm hoping to spread the word about how doctors can avoid bad property mistakes, and to take an interest and take care of their finances. The difference from getting the first property wrong to having a great asset selection is huge. If you can have your first property perform, you can compound into your second and third, and so on. So yeah, I'm excited to organise more meetups and to grow my podcast as well.

Tyrone Shum:   

[00:22:47] So Daniel, I think you've achieved such a great amount of things and success in your journey at this point in time. How much of it do you think has been due to your skill, intelligence and hard work? And how much of it do you think has been due to luck?

Daniel Lamp:   

[00:23:01] Throughout my life, I've always been working hard to grow my skills. [I'm] not afraid to work the 60 to 80 hour weeks. But then also, other things that I've done is educating myself and investing when others were telling me, 'It's not the right time'. I would say that the harder you work, and the more action you take, the more luck you attract.

Thank you to Daniel Lamp, our guest on this episode of Property Investory.