Plus, he unpacks the impactful, less-than-glamorous consequences of not knowing the rules of the property game he found himself playing for the very first time.

Timestamps:
00:01:21 | Property Investing, Writing, Podcasting
00:02:30 | There and Back Again
00:03:28 | On Books and Best-sellers
00:05:06 | Observing and Learning
00:08:31 | First Property Purchase
00:12:51 | A Game Big Boys Played
00:16:57 | Rules of the Game
00:20:14 | Psychology of Success
00:22:29 | Over the Years
00:25:36 | What's Your Aim?

 |

00:01:17 | Empowering Beliefs v. Disempowering Beliefs
00:06:08 | On Rich Habits and Mentors
00:07:16 | An Ode to Legacy
00:08:42 | On Friendships and Passions
00:10:02 | 'Negotiate, Influence, Persuade'
00:13:10 | The Brain and What Science Says
00:17:37 | On Great Negotiators
00:19:30 | Luck and Opportunity
00:21:15 | Growth and Daily Gratitude

Resources and Links:

Interestingly, [I] bought it back... my wife and I bought it back for my mother back [about] 20 years ago for $250,000. And we've since pulled it down and built two townhouses. And so [with] my first property, I'm back to owning again. And it's probably worth close to $4 million, the two townhouses in Caulfield, which started off at $18,000. That was the beginning of a substantial long property journey.

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 we’re speaking with Michael Yardney, founder of Metropole Property Group and voted as one of the 50 most influential thought leaders in Australia. With over 50 years of property investing experience, he eagerly imparts the wisdom he has gained along the way—from writing best-selling books to turning a $18,000 property to a multi-million investment!

Tyrone Shum:   

Even though he is already in his early 70s, this leading property investment advisor never fails to engage and encourage. With an inspiring boyish voice and his enthusiastic demeanor, he gets straight to introducing himself and sharing how he has been spending his time lately.

I've been investing for close to over five decades. And I am the founder of 'Metropole Property Group', and we help our clients safely grow, protect, and pass on their wealth to future generations. 

But interestingly, Tyrone, earlier this year, I actually relinquished my role as CEO of Metropole [Property] Group. 

Now I concentrate my time on writing, on podcasting, and speaking to the media, and giving strategic advice and direction to my team. (We just did a training now.) 

So rather than being actively involved in the business, I spend my day looking after a small group of high-net worth clients and my own property portfolio, and actually spending a bit more time with my kids, [and] my grandkids, and—now that COVID is over—travelling. But I still love talking about dealing with property [and] having fun in the property game. 

Tyrone Shum:   

With an obvious interest for travelling and a hunger for adventure and learning new things, Yardney gladly delves into his travel plans.

Well, the next trip is in August, actually September, where Pam and I are going to Venice and catching a train from Venice to Switzerland. So a train trip through the Alps, and then spending some time in Switzerland. After COVID, being living in Melbourne and having been restricted, I found some amazing parts of Australia and Victoria that we didn't know about. But we've been lucky enough to have two trips a year overseas over the last decade or so. And there's still lots of places we want to go to.

Fantastic. And how long were you planning to travel for?

Well, I usually take a longer trip at the end of the six weeks or so. And this time around, it's only going to be a two-week trip in September.

Tyrone Shum:   

As an investor equally passionate about helping others succeed in their finances and their own property journeys as he is with writing, Yardney goes into detail of what he has been jotting down on paper lately and how his future might possibly look like.

Interestingly, this morning, I spent time updating what every property investor needs to know about finance tax and the law. And the last edition of that—that was the third edition—was three years ago. And boy, has a lot changed in the last couple of years, partly with tax, but particularly in the world of finance. So my publishers keep on wanting me to come up with something else. But I've published— I've had nine books published. 

The most successful one,interestingly, 'Rich Habits, Poor Habits' has been translated into five languages. Chinese is actually the biggest selling version of it. In Taiwan, Vietnamese, even in Polish. So for somebody who barely passed high school English—and I really didn't and who actually doesn't... I've never, I haven't read a full non-reference book for years (I don't read fiction)—, I spend all my day writing. It's fun.

Well, I've had some fun lately also, Tyrone, playing with artificial intelligence, but it doesn't write as well as I do. And it doesn't mean it's not as clever as I am. It's actually much cleverer than me, but I try to write down to simplify complex things. And that's what I have fun putting together.

Tyrone Shum:   

Indeed, age is simply a number for Yardney —his vitality and passion for life remain evident as he speaks. With an impressive background and track record as a successful figure in the investing space, he looks back and shares how his interest in property was sparked at an early age. 

Well, I came to Australia at age of 3. I was born in Israel, and I came here many, many years ago. I've turned 70 now. We came to Melbourne, and I've been to Melbourne all my life; [I] went to school here. And my parents were hardworking. They were workers. And interestingly, my friend's parents were wealthier. They continued to run businesses. My father was never... He was always too nervous to get into business. 

So my friend's parents, who, I guess, were my parents friends', were wealthy. They had a car; we didn't have a car for many, many years. They went on holidays, and we didn't. And I saw they were interested, they had properties, they had businesses. 

And so at a very early age, I was always keen in property as well. My parents eventually did buy their first home. I think I was 9 [years old] or something like that then. And in those days, the estate agents had big cars. That was before European cars, the Mercedes, and the BMWs, were the luxury cars, there were the big American cars that we used to call 'Yank Tanks'. 

And so I thought, 'Gee, these guys are rich, these guys are well-off. They're driving big cars. They're dealing with big amounts of money'. So early in life, I firstly got interested in property. And number two, I actually wanted to be in property. So while other people wanted to grow up to be a fireman or an astronaut, I wanted to be an estate agent of all things.

That is wonderful. And did you end up becoming an estate agent? 

I am a licensed real estate agent now, but I went about it in a convoluted way. But instead, I ended up going to university and getting a real job for a while. 

But bottom line was, I started saving. I was driven early in life by seeing others who'd been successful. And, look, my parents taught me a lot of good habits. But money and investing really wasn't one of them. So I started having a number of part-time jobs still while I was in school, and then in uni, to save a deposit to invest time. 

Tyrone, I remember when I was young, every Saturday morning, my father would sit at the kitchen table, and he'd work on some numbers and figures; he'd write down some things, and he had these black coffee—Nescafé, I remember—and smoking cigarettes, and I asked him what he did. And he was doing in his head playing the game of what he would do if he won the lottery that night. 

So every year, every week, he'd buy lottery tickets. That was before the TattsLotto. You'd go to the news agent, and you'd buy these tickets. And then the next week, you'd see, before [the] internet and things like that, you'd have to go along and see if you want and need always one, just enough to buy a couple more tickets, but never the big prizes. And so his way—the only way he could see out of the rat race—was to win the lottery. But I decided I'd be doing things differently to them.

Tyrone Shum:   

Watching his parents and learning from them early on, Yardney smartly determined and decided to forge a different path for himself in life. Still, he naturally applied the good habits he acquired —especially when the time to purchase his first property. 

I actually worked in the stock room at Portmans ladies' fashion store—that's still around—part-time and some other part-time jobs. And I saved up a deposit. And I actually went halves with my parents. 

We bought a property at $18,000, I think it was, [at] Large Street, South Caulfield. 

We paid $18,000— 15 Large Street, it doesn't matter. 

We paid $18,000. We put down $2,000. I ended up with $1,000. They did. And we took a $16,000 loan for 30 years. We had no idea how we were going to pay it off. I think I got $10-a-week rent, and I was excited. 

But I bought close to where I lived. I was two streets away from my school; it was just behind where my mum went shopping. I bought in my own backyard, because I knew no different. There wasn't the internet. There wasn't YouTube; there obviously weren't podcasts. But I knew that the wealthy people own property. And that was in [the] early '70s. 

And interestingly, the Labour Government came into power—Gough Whitlam. And inflation went up high. And look, there wasn't the reports; there wasn't core logic or things like that. So you had no idea what was happening to property prices unless you went out looking for other properties. 

But the value of their property went up that much that I could actually a few years later borrow against it and buy a second property. And I thought, 'Hey, why hasn't anyone told me about this? This is easy'. Of course, then I got married a few years later, and I sold both properties. No one told me that you could just sort of refinance. 

Interestingly, that first property that I paid $18,000 for or half-share. I sold my half-share to my parents for [$30,000 or] $32,000 —and that was the benefit of inflation. Good lesson for people who are currently bit worried about inflation. It's the friend of people who have good debt and own good assets. 

So I sold it for $32,000. 

Interestingly, [I] bought it back... my wife and I bought it back for my mother back [about] 20 years ago for $250,000. And we've since pulled it down and built two townhouses. 

And so [with] my first property, I'm back to owning again. And it's probably worth close to $4 million, the two townhouses in Caulfield, which started off at $18,000. That was the beginning of a substantial long property journey.

[It was in the] 1970s, so 50 years ago. 

Wow. 

I'm not exactly sure when, but yes, 50 years ago.

Wow. And that particular property— did it still have its original condition when you purchased it back again? 

Oh yes, it was an old weatherboard home. But I was already in, then over the years, doing property development. And so therefore, [I] pulled down the old house and built two townhouses on it. And they're, well, leased out. And the area has gentrified and grown and all the other old, rundown houses in the street have been replaced with modern accommodation.

Tyrone Shum:   

With a commendable start in buying his first property, Yardney nevertheless goes on to say that it hasn't been a road paved with roses. On the question of whether or not he needed to continue to work while he continued his investing in the early days, he shares his insight.

Oh, definitely. And the answer is, one has to. 

You need income and you needed income then. People say it's hard to get a loan today. And it is, Tyrone. But my recollection was it's always been hard to get a loan. 

In the old days, it was really much more dependent upon the local bank manager, and you had to have a savings record. And in the '70s, they only... they didn't take your wife's income into account. My wife was a teacher—my first wife. And then you had to turn up and present your case of why you want to borrow and how you're going to repay things. 

So it's never been easy. And sure, there are challenges at the moment. But I got very brave, and I got involved in development. 

But also too early in the piece, I made a mistake of getting involved in commercial property, Tyrone. You see, I saw that's what the big people did. And I know some of my parents' friends who, in some ways were my mentors,— they owned factories. So I bought two factories in I can even remember the address... 21 & 23 Dandenong Street, Dandenong, which was a lower class but a big industrial suburb in Melbourne.

And I did that because I thought that's what the big boys did. I didn't realise I had to build an asset base for a commercial property, which is popular at the moment, sometimes for the wrong reasons was... —I was playing the wrong game. 

I was playing the game the big boys were playing, but I was still a small boy. And on that basis, I was not getting much capital growth, but I was getting appreciation... so sorry, [I mean] [are] rental returns. But so a couple of years later, I sold those properties. 

And over the years I've got involved in —it was in the '80s, in particular— quite a lot of property development. I had a number of joint venture partners. And this still was a booming market. We had a couple of little downturns. 

But there was a big property boom in the '80s that carried me around, carried me through. And if I would make the same mistakes today that I made then, I would have gone bankrupt very quickly. A bit of property boom covered up a lot of those mistakes. 

Then we ended up with a recession we had to have in the early '90s. And I got through that. But [a] number of my friends and business partners and other developers went broke. So it made me a much more cautious developer. So now there's lots more information about cycles, Tyrone; there wasn't as much before. 

So I believe you've really got to invest through a couple of cycles to become a much more proficient investor and understand what's really going on. 

Absolutely. 

Interestingly, one of the things that hasn't changed over the 50 years I've invested is that most investors get it wrong. 

Tyrone, I'm sure you've read the same things as me that the tax office shows that 50% of people who get into property investment sell up over the first 5 years, and 92% of investors never get past their second property, their one or two properties. 

Only 1% of investors—there's 23,000 investors in Australia—who own six or more properties. That's not much. 

And despite the blogs, the podcast, the YouTube videos, [and] the books, that statistic hasn't changed much over time. 

So I think one of the lessons I learnt along the ways [is that] probably investment may be simple, but it's not easy. It is not a play on words. I've learnt to make good decisions. But boy, have I made some bad decisions along the way, but property is pretty forgiving.

Tyrone Shum:   

On that note of bad decisions and lessons learnt in his five decades of investing, Yardney shares his own experience and unpacks the impactful, less-than-glamorous consequences of not knowing the rules of the property game he was playing.

Well, really what happened was I got excited and got involved in property development. And I didn't really know too much about what I was doing. It started with residential development. I bought a property, pulled it down built two townhouses—actually in the suburb of Brighton— and sold it and made money. 

Great. 

In fact, a boom went on. And if I would have done none of that, and just bought the land and sold it three years later [or] two years later, I would have made just as much. But I learnt lessons along the way about what to do, how to do things. 

Similarly, we got involved in a couple of ways in the syndicate. I was [indiscernible] for partners of us involved in industrial subdivision. We bought an old farm. 

I didn't know how to build roads, but I was brave. And we made a commitment to buyers, got an engineer to plan the streets—Newcastle Road, Bayswater. It's still there. And we pulled down the our... they've dug the roads through the farm, and pre-sold all the land to developers; it was an amazing boom. 

And then this crash came of 1987 [or] 1988. And, unfortunately, it's not our fault. The people who bought it were building factories and couldn't move them. 

I learnt about the property cycles. And I learnt about owning industrial and commercial property, which again, I got into, again, a bit too early, how when interest rates go up, the value of the properties goes down. 

The lesson was: Be careful, don't play... again, I didn't know the game I was playing. I was playing commercial property with the lessons I'd learnt from residential real estate. And commercial property cycles are very different. So when interest rates went up, I started that period with a 78% loan to value ratio, very comfortable and good cash flows. Interest rates went up, and the value of commercial properties goes down with that. 

And the bank said, 'Sell'. And I said, 'Who to? No one's buying. We're having a recession here in the early '90s'. But because they weren't tenanted and I had the cashflow, I got through. So the lessons were understand the property cycle and—again, I've said it a few times— understand what game you're playing. 

Because, Tyrone, the game I'm playing today is very different to the game I played many years ago. The sort of investments that are appropriate for me today are not necessarily those... are not... weren't the sort of properties I would have started off with. 

And so, when we at Metropole [Property Group] help our clients, we first start off by putting a strategic plan together for them and understanding where they are [and] where they want to get to. And then we make suggestions based on what their needs or their risk profiles or their budgets are. 

While, I guess, one's got to be very careful out there—there's lots of people who, will, got a stock list and say, 'Hey, this is the right investment for you'. But that may not be your game.

Tyrone Shum:   

Indeed, Yardney soon discovered the importance of having the right mindset, learning the rules, and adapting his perspective. It was no surprise then that this discovery led him straight to the path of studying the psychology of success.

I remember not long ago, somebody asked me, 'What's the difference between all those successful investors you see in the average investor?', and in my mind it's not the knowledge because it's out there. And it's not always how much money they've got. But it has a lot to do with their mindset. 

And so, I started getting interested in the psychology of success in the '90s. And in those days, there were some great American people who came out here to teach us— including Tony Robbins, and I even did his 'Firewalk' I should say, and Chris Howard, and other mentors I learnt from. 

What I started to understand is how your thoughts lead to your feelings. Your feelings lead to your actions. And your actions lead to your results. 

So the results you get outside will have a lot to do with what's happening in your inner world, in your head. It didn't make a lot of sense to me initially, because I thought I'd always be there... I was actually not a bit, I was pretty arrogant in those days and I thought I knew it all. But I then started to understand how the things I heard, the things I saw, the things I experienced as a child drove me, in some ways, in a good way. 

But I also learnt that we all drive around with one foot on the accelerator and one on the brake. So we have some empowering beliefs and some disempowering beliefs. 

And one of my beliefs was I had to work hard because that's what my father instilled in me. And I had to grow my wealth. And I was, to be honest, too driven by it. 

And it's one of the reasons I ruined my first marriage —by being too driven to achieve things too quickly, and comparing my results with other people. 

But over the years, I've learnt a lot about myself and mellowed, and I now spend quite a bit of time writing about, talking about, podcasting about the psychology of success to help others. 

Tyrone Shum:   

Yardney talks about a renovation he did that took a turn for the worse, but which also taught him a valuable lesson.

That was overconfidence, and that was, again, not understanding the game I should[n't] have been playing. But what I did was... again, just by... The first one was renovations. And I didn't know much about it. 

And in fact, I remember it was a property in Bond Street, Caulfield. I even painted it myself to renovate it and make some, save some money and try and do it. No one told me actually you had to open the windows to let the ventilation through. 

And I made myself very sick one day by sitting around with it, with all the paint. And I was, I think, like the concept of adding value and trading, I have since learnt that along the way, the estate agents and the tax man and stamp duty take the money. 

So my strategy initially... because again, no one taught me, I saw builders and developers making money, I thought, 'Hey, that's what I should do'. But I've since realised that no, it actually is a great way to manufacture capital growth and to increase your rents, but holding on. 

So over the years—from the trading I've actually ended up now and I'm still—we're involved in a two-home development in Brisbane at the moment; we just finished a two-townhouse development in Melbourne a couple of months ago. So I'm still doing them, but to keep. 

And in fact, that's one of the things we started doing, even in the '90s took with clients, to one of my friends said to me, 'Michael, if you show others how you become wealthy, if you help others do the same, you can become even more wealthy'. 

So we started [a] development project management in the '90s. And currently, my son Bryce—Bryce Yardney— who went to tech here, to uni, and learn project management, and then came work for us [and] realised all he learnt, theoretically, didn't work in the real world. He has for 11 years been with us and runs our project management division. 

I think we've got about 48 or so projects under project management in Melbourne and 23 in Brisbane. 

So we find the sites for the clients, put the development approval together, then move the tenant out, put the building, pull down the old house, build a new property. 

But again, when many people come to us at Metropole and want to end up doing a development [or] becoming a developer and selling, we show them it doesn't work anywhere near as well as doing that, to hold on to and keep in the long term as an investment. 

And that works well for our clients. And then we look after it [in] property management. And so we keep a close eye on it. And we've seen the results. 

Interestingly, a recent survey of the results of our clients showed that they're 7.3x more likely to end up in the top 1% of investors. They're 7.3x more likely than the average investor to own six or more properties. So there is a system, and to follow it makes sense.

Tyrone Shum:   

For both the beginner and the veteran in property investments and developments, Yardney underscores the necessity of having a clear vision and knowing what one's main objective or goal is in the property game.

Well, I guess the answer is what do you... what's the aim of it? So when we see clients submit a poll, the first thing we look at is where are you now? Where do you want to be in the future? And we put a strategic plan together for them. 

Because buying a property is not a plan. It's not a strategy. And searching for property is not research so people go off and buy a property.

Really interesting, a couple of days ago—actually, I got the email this morning. But two weeks ago, I saw somebody, a couple, who came to our wealth retreat, a high-end seminar, and they were then going to come and sit with one of our property strategists to plan their future. 

Interestingly, the two of them was they have both been divorced; they'd been through what I like calling the 'acid relocation program'. And they'd come together, and they had got some dud properties, and one brought more money into the partnership than the other. She had money. And he didn't have [it]. That's fine. 

But they had [a] blended family. So there was some planning to be done. There was some estate planning to be done; there was [a need] to decide how they're going to buy the next property because one is bringing the money in and the other isn't. And what happens to the kids in the future when...? Because they both wanted to leave things to the kids. 

I got an email from them this morning [saying], 'Sorry, we haven't booked in for the strategy plan. We actually bought a house on the weekend, and we're about to sell our home'. And so, emotion got in the way. A lovely couple who were shown a different way of doing things. But we're human; we actually don't act rationally. And these are two very sensible people. 

But a house that they fell in love with and she saw a while ago suddenly dropped in value. 

Again, what I am saying is that, even though we believe you should start with a plan—and is property in development part of that plan?— no, you've got to understand what you want to achieve. 

And so the first stage is to educate yourself. The next stage is to save enough for people to get into the property market. And then there's an asset growth stage. 

Residential real estate, Tyrone, in my opinion, is a high-growth, relatively low-yield investment. So it's not a cashflow play, but many people get into property because they want cash flow. They haven't got enough cash flow. 

You know, I remember years ago, when I used to sit with clients that come along and say, 'Hey, Michael, I'd like to buy a property so it'll pay for my school fees', or 'I'd like to buy an investment property so I can pay for my holidays'. That's not the way it works. 

You've got to let your asset base grow. And once you've got a sufficient asset base, then over time, you slowly lower your loan-to-value ratios. And then you can live off your property. 

But it's actually much, much harder today than it was before. With the world of finance, it's not easy to borrow against increasing equity. 

So we recommend to our clients that they should not only have property. They need something that gives a level of cash flow—could be commercial property, or maybe shares, or manage funds or their super—because very few people build a sufficiently large asset base to live off the cash flow of their properties, Tyrone.

Tyrone Shum:   

Collaborating with author and fellow investor Thomas Corley on their best-selling book, Yardney has been able to relay his observations on his successful clients' thought processes. Now, with an eager approach, he goes into the thick of it and sumarises how our thoughts, feelings, and habits lead to their inevitable results in our lives.

Because it's a universal concern that people want to get richer, they know others have...They know there is some... Well, they think it's a secret to wealth, and they want to become wealthy themselves. So it's a collaboration between Tom Corley who has become a good friend who lives in New Jersey, and me. 

Tom did a study of the rich and poor of his clients in his CPA practice. So for five years, followed them asked lots of questions tabulated. 

Over the years, I studied many of our clients and ran a mentorship program for many years, where I saw many successful and not as successful clients. 

And what we did was we found successful people didn't have other things to invest in. They had shares, they had properties, they had business. But they did things in a different way because they thought in a different way. They have rich habits. And the average Australian has poor habits. They have empowering beliefs, and they have disempowering beliefs. 

And as I studied this, I realised a lot of these beliefs we have about money started when we were young—things we heard our parents say or not say. Things we saw our parents do. The things we experienced. Because our mentors, I guess, as you grow up, are your parents; the apple doesn't fall far from the tree. 

So my parents were very conservative. And my sister became very much like them, very debt-averse. But sometimes you become like your parents. And other times you do the opposite. 

I was angry. I was crossed. To be blunt, I didn't enjoy my childhood. I didn't have a pleasant childhood. So I rebelled. And while it worked in some areas, it wasn't good in other areas of my life. So one doesn't always become like one of his parents. But parents influence you very much by things they say, things you saw them do, and experiences you had. 

So these ideas, these thoughts—these ways of thinking, because your thoughts lead your feelings, your feelings lead your habits, your habits lead to your results—these things were formed as a child when you didn't really understand much about money. And it is at a subconscious level. But they carry through to even adult[hood].... right through your life. 

And [in our] workshop wealth retreat, well, [what] we do is, even though this is a room of very, very successful entrepreneurs, business people, investors, we work through how they can work out [and] understand what their limiting beliefs are, and then remove them and replace them with positive beliefs. 

But amongst these very successful people, there were a couple of themes that came through. One of them, interestingly, Tyrone, was the feeling of not being good enough. That was an interesting theme of amongst almost all the successful people. Now what they did, though, was they use that as a motivation to drive them, while other people would say, 'Oh, I'm not good enough. I'm not even going to bother to [try]'. 

Yes. 

And so what we did in 'Rich Habits, Poor Habits' was unpack a lot of these things so people could actually see what they did, what others do, and replace some of their disempowering beliefs and some of the poor habits —because their beliefs become habits because [they] repeat them. 

A really good example is —one of the rich habits successful people have is—reading regularly, but reading to learn, not reading for amusement. So successful people are avid readers. 

Now, that was in the initial study, but today, I'd extend that to learners on podcasts and learners on YouTube. The bottom line though is you [have] got to be careful who you listen to, because everyone's got an opinion about property at the moment. So you've got to be careful who you listen to. You know what they say about opinions: They're like belly buttons— everyone's got one, but that doesn't mean it's got a good purpose or a good use.

Tyrone Shum:   

Acknowledging the fact that team effort is a key factor in any development or investment endeavour, Yardney continues to delve into the rich habits that can be powerful allies in one's pursuit to property success.

One of the rich habits is to recognise that you can't do it on your own. You need to be as part of a team. So I still have mentors. I've got a couple of masterminds I'm part of, and they're different. 

I've had business coaches for, well, the last 20-something years. And over the years, as I've outgrown one business coach, I've had another. 

In fact, my business coach for the last decade or so, Mark Creedon—[he] became [a] good friend—[and I], we've put together 'Business Accelerator Mastermind', which is a program that coaches other business people. But as well as, Tyrone, he's now become the CEO of my company. As I said, I've stepped back so I've actually allowed others to run it. 

But I've realised long time ago on my own, I could run faster. But as a team, we can run further. And now that I'm 70, I can't run [indiscernible]...

Tyrone Shum:   

Indeed, Yardney has always been a champion for having the right mindset in property investing. As he has evidently cultivated a long-term perspective over the years, he now talks about the legacy that fuels his continued effort to grow his wealth.

Over the years, I initially wanted to grow wealth. 

And if that's your aim, you'll never have enough. And so I had to find a better purpose for it. And one of them is to leave a legacy. 

For example, we're running another charity ball shortly. If anyone's interested in supporting 'Hummingbird House', which is a hospice for terminal kids in Brisbane. It's a terrible issue if you know your child's not going to survive long. 

(Hummingbird has charity-ball.com.au.) 

Pam, my wife, is running our fourth charity ball. We would tap back over COVID. But we've done three in Melbourne to give back to the community. 

We also have children and now 11 grandchildren in my blended family. I'm not investing for me anymore. I'm investing for them. We pay our grandkids' school fees. I'm not shy about talking about helping our kids into the sort of accommodation I would have liked to have. 

It's not what you leave your kids, it's what you leave in them. So I think it's also important to show the right examples.

Tyrone Shum:   

Looking back on how his collaboration with Corley came about, Yardney tells the story of how they met —that was rooted in a shared passion—, thus bringing about a partnership that yielded a best-seller.

Well, it's really interesting. I actually met Tom Corley on Twitter. I liked his tweets, and I read his blogs. And I said, 'Can I republish them in Property Update?' Because it's a newsletter that goes out every morning with eight articles. 

And then I invited him to come to Australia as a guest speaker at our wealth retreat, and a friendship developed. And I could see we thought about things in common. So therefore we... genuinely, once you get to a particular level, we both wanted to help other people. 

You don't make much money out of books. 

You may, look... I can make more out of the Amazon royalties than I do from hardcopy royalties. But you spend hours and hours, days, weeks, weekends doing it. So I enjoy doing it. 

But one of the most exciting things is when I get an email from somebody who sent me an email and said, 'Hey, I picked up your book at the airport. And it's really changed my life'. Because it makes people recognise... they read it and see themselves and say, 'Oh, that's one of the things I'm doing'. 

Tyrone Shum:   

Yardney highlights yet another book that he hopes would continue to help people be better negotiators —whether they are in the property game or not.

The other book that's made a big difference and done very well overseas is called 'Negotiate, Influence, Persuade'. And that's particularly interesting for property investors. But it's also been picked up by one of the very large real estate chains, who bought hundreds of them to give to their salespeople. 

My publisher said, 'Michael, you've been involved in billions, billions, of dollars worth of property deals; you should write about negotiation'. 

And then as I started to write about that, I realised that in the world, you're either negotiating all the time—whether with your partner about who takes out the rubbish bins or [who keeps] the bed, and when do you clean the room before you come at cetera—so we all want to win. 

I mean, if you're buying an ice cream, that's not a negotiation, you don't want to win. But everyone talks about how this win-win [situation]. But most of us though, to be honest, don't want to have a just a win-win. We wouldn't want to win. What we want to do is do it safely. 

So that book was written to help people get the best deal every time whether they're buying or selling. So it ended up being much more than negotiation. But it was persuasion, understanding, how to speak to people, how to read people, and speak to them in the right way to get them to believe you, to get them to understand you. Because there's so many messages at the moment from all areas, particularly on social media. 

And so, that's another book I'm very proud of as well. I mean, I've done a lot of property books, but these are ones that are more general and have worked really very well.

Tyrone Shum:   

Unpacking the driving force behind people's decisions and what separates the financially well-off from others, Yardney now explains the psychology of how it works based on what science has to say about the brain.

I think in today's society, most of us are keen to rush in and do things quickly. Like the example I gave of that couple from regional Victoria, who bought the house on the weekend. 

People don't do things wrong on purpose. They do things because they think they're right. And they've gotten... They haven't got the right paradigm to think correctly. And that's where, I guess, the 'Negotiate, Influence, Persuade' book is useful as well, because it actually goes into the psychology of it. 

I learnt that if you're a good negotiator, you can do okay. But if you're a great negotiator, you can do very well whether you are buying or selling.

So while there were lots of books about sales techniques and closing techniques and negotiation. And this one, as you said, was more about the psychology of why it works, understanding the sort of people that you're dealing with—the analytical people taking information very differently to big-picture people. The people who are more feelers and socializers will be attracted to different things than a big-picture and analytical person. 

So there's a science behind why some people are wealthy rather than others. And a lot of it really has to do with what you're thinking and how you've been programmed. 

You see there's something in the mind called, in the brain I should say, called the 'reticular activating system'. And that's a bit of a GPS. Your reticular activating system is the bit that stops all the information coming in. Because we get all this input all the time from all areas, things you hear, things you feel, things you sit on. 

While we're saying [all this and] I sit on this, I'm thinking about it. Now I'm realising I'm sitting on a chair. I didn't feel the chair underneath me before because the reticular activating system blocked it out. 

I was speaking to somebody recently who had a baby, and he sleeps through— his wife had a baby— and he sleeps through the night. But as soon as the baby's due, she wakes up because her reticular activating system is aimed at that. 

So your reticular activating system is... 

 

I remember, when I was teaching my son Harrison to drive, we were driving down to Penn Highway and he said, 'Hey, Dad, look at all the Toyotas look at all the Corollas'. And I said, 'Well, Harrison, look at all the Mercedes' as what he was aimed at looking at. So our reticular activating system is looking for opportunities. But it's programmed by you and will only filter in things that already fit in with your pre-conceived, pre-programmed ideas. 

And so, therefore, we are... that's why we're driving around with one foot on the brake, because it's blocking out a whole lot of other opportunities. 

So studying the psychology of this is useful. So it's in one way a filter; it filters information. So it will filter your name—if you're at a busy airport and all of a sudden you hear your name despite all the noises, you'll pay attention to that. But similarly, it'll look for opportunities. 

And if you believe investing isn't good, then it'll find all the reasons why it isn't. That's why some people in this economy today see great opportunities, and a lot of people, under the same circumstances, see only bad things ahead. That's why if you believe, at work, people don't like you, you'll find all sorts of reasons why people don't like you. If you believe people like you, you'll find the good things. 

So the reticular activating system is actually filtering things out. But it's also a GPS. You tell it where you want to go, what you want to achieve, it will find the way then, and you don't necessarily need to know exactly how. Just like with the GPS in your car, you put in the final address, and it will give you a couple of routes to get there, and it will go down. Then if you go off route, it'll take you back again. 

So there is a huge... 

There is a science behind this. And there is a way of reprogramming the way you think, because—I've said it a few times—your thoughts lead to your feelings, your feelings lead to your actions, and your actions lead to your results. 

So that's the sort of things I like learning about, reading about, writing about, and teaching people about. 

Tyrone Shum:   

Continuing on the subject of negotiators, Yardney discusses what sets the good and great negotiators apart from the 'just okay' negotiators.

Well, I think great negotiators know how to read the other party, and they know [or] realise that negotiation is a game. 

Now it depends upon what you're talking about. So as I said a moment ago, if you buy an ice cream, it's no big deal. But if you're buying a property, or if you're buying a big-ticket item, then you've got to know the beginning, the middle, and the end of the game. You've got to be involved, but not too much. 

Great negotiators know that there are a couple of things that keep the power in their favour. The power is helped by people's knowledge; the more information you have, the more power you have or perceived to have. 

Options is another great one. If you've got more than one option, then you're at an advantage. If you have to buy that home because that suits your family inside your lucid dream home and there's nothing else like it in that suburb, then the negotiating power is with the other side, because you're desperate for it. 

And time is the other one. If you've got to finish that deal in a certain time because your pre-approval runs out, or you've got to buy that whatever it is, it's not necessarily probably because of time. So because if time runs out, then again, the negotiating power's on the other side. 

So good negotiators start the game of negotiating, knowing what they want in the end, and understand what they can do to get more power and realise they should be involved, but not too much. In other words, don't get too disappointed if it doesn't work.

Tyrone Shum:   

True to his calling of giving back and helping out with family and assisting his clients, Yardney speaks boldly about his own set of beliefs. Thus, with raw honesty and measured words, he reveals his thoughts on luck, opportunity, and intelligence.

Luck, in my mind, is very important. 

But like, there's two sorts of luck. There's random luck, like winning the lottery. And then there's the luck that you create for yourself, Tyrone, by educating yourself, knowing what's going on, being in the right position, and creating the opportunity and then recognising it when it's there. 

So am I smarter than other people? You know, I've never taken an IQ test. And I know there's a lot more intelligent people than me who actually haven't been as financially successful as me. So I don't think it has anything to do with intelligence. 

To be honest, some of my most successful clients are dumb. I hope they're not listening to this. 

Rather than... when I used to do seminars, I used to say, 'Hands up, the intelligent people in the room', and most people were a bit shy to do it. [And I also say,] 'Hands up, the analytical people in the room', and more people put up their hands. And I say, 'You guys are in trouble'. 

Most successful people, many successful investors say, 'Hey, there's a multi-multi-millionaire who's educated, more successful property investors than anyone else. I'll just listen to him. I'll do what he says'. 

So I've surrounded myself with good people. And I've put myself in the position. Then when opportunities arose, I took advantage of them. 

Outsiders would say, 'He was lucky'. I'm not sure that I was. I got myself there through hard work.

Tyrone Shum:   

This successful investor and best-selling author continues to live his life to the fullest. With happiness in his voice, Yardney opens the curtains to what he enjoys and what keeps him grounded in gratitude.

I'm having fun doing what I'm doing. I enjoy it. I've got a small group of clients I deal with. I've got a team of about 80-something people that I still—even though I'm not the CEO—I'm spending time [with]. I did a long training session with them just a short while ago. 

I'm still learning and growing. As I said, I've got my own mentors. And every night before I go to bed, I actually—I'm not a metaphysical person— but I actually think about what was the highlight of my day? I want to go to sleep with something good in my mind. 

And last night, interestingly, it was because my granddaughter Eden gave me a lovely hug as I left her in the afternoon there. In the [indiscernible], I visited one set of grandkids one day and another one another day. So things like that are very, more important than money. 

And then each morning, I actually wake up— and again, I'm not a metaphysical person. I want to start with something good, something I'm grateful for. And today for my podcast, the Michael Yardney podcast this morning, I got up early to interview somebody from Canada, who was a Paralympian champion. 

He's in one of my mastermind groups, and Kevin [Rempel], then at 23 broke his back. And he was a Paralympic champion, playing a sport called 'sledge hockey'. 

Never knew there was such a thing. I looked at it online. It's like, I guess, people are playing basketball or tennis from a wheelchair. They were playing hockey, knocking each other in these little sleds. Because they couldn't walk. And I thought, 'All my problems are irrelevant when you see what other people have done and what they've achieved'. 

[00:23:51] Yeah. 

So, I'm enjoying simple things. I still enjoy the lovely house I live in and the beautiful cars I drive. But I've learned to appreciate other things in life.

Thank you to Michael Yardney, our guest on this episode of Property Investory.