Without time, there wouldn't be any investors. Investors are basically people who make money through time by securing good assets. So how do we value our time as investors?

Let's say you purchase an investment property, assuming that you borrow 100% (this can be done using the equity from your existing properties such as your home) and we use an average $300k investment property as an example:

• you will have 10% growth plus 4% yield, so the first year you will gain 14%;
• your costs are 1% expenses plus 7% interest, so the first year you will lose 8%

If you put the two together, you will have a net gain of 6% the first year, which translates to $18,000. Using a 38 hour week, this gives you an hourly rate of $9.

Using that simple calculation, even if you borrow the lot, your hourly rate is at least:

• $45 (annualized to $90k), if you have $1.5M worth of real estate;
• $90 (annualized to $180k), if you have $3M worth of real estate;
• $180 (annualized to 360k), if you have $6M worth of real estate;

You get the idea. This hourly rate gets better every year as your properties grow in value.

So if you have $1.5M worth of real estate, which is roughly 5 properties at the value of $300k, you're making an extra $90k a year. Currently less than 2% of the workforce earns more than $90k a year which puts you into the top 2% of the workforce and the good thing is that you didn't have to work for it…your properties do all the work for you.

Statistics shows that only 3% of the population gets more than $50k a year after their retirement. If you get yourself into the top 2% now, you'll be doing fine when you retire. That's why one of our missions at Investors Direct is to help every client get to 5 properties ($300k each in the current market) as quickly & safely as possible. Obviously people who have got 5 properties rarely stop there, but by then having more properties becomes a choice rather than a necessity.

Most of us would know that it's a huge jump from $45k to $90k in annual salary, many may never be able to achieve that unless you step into a management role or become some kind of specialist. But it's a lot easier with investment; you just need to purchase a few more good investment properties.

Another way to look at time as an investor is if your net gain is $18k a year after you purchase a property, every month it's giving you $1,500. If you are procrastinating, you're practically giving away $1,500 per month. Just imagine that you have to give away $1,500 a month to your next door neighbour for no particular reason month in month out, would you be happy to do that?

People ask, "How do I know for sure that now is a good time to buy?" The fact is nobody knows. Most experienced investors will tell you that it's pointless to try to pick the bottom of a property cycle, as you buy cheap when the market is down and pay more when the market is up. That's why, "Buy real estate when you can and wait" is probably the rule most successful investors follow. People who follow the opposite rule - "Wait and buy real estate at the right time" are the ones that are always late.

In the investment world, there are two types of people: the Critics and the Doers.

A real doer has no time for criticizing others, they are too busy doing. They have no time for the noise, they know now is the only time that is really available to us to do anything. You can't buy properties tomorrow; you can only buy properties today, as tomorrow is only in our imagination.

After all these years, I have come to a very simple conclusion: if you're not doing it, you don't really know it.

For people who are always thinking but not doing, it's true that you can't make a mistake in your head, but you can't make a dollar in your head either!

So the action here is how to get your property portfolio to the size you desire the quickest and safest possible way.

I've seen a couple of strategies people use:

• Some investors will leverage to the highest LVR possible and have no issues paying mortgage insurance or sometimes higher interest rates, so that they can preserve their equity for the next purchase. This way they get to a larger property portfolio quicker, as long as they leave enough cash to cover the contingency, they're traveling just fine;
• Some investors don't have a lot of equity initially, they find ways to tap into other people's equity, through second mortgages or equity partnerships, this also works well for the ones who know what they're doing;
• Some of our clients have started helping their children purchase investment properties using their equity from existing properties. As long as the children want to do this and get proper advice, the parents can give their kids a head start.

Some people may worry about how they will be able to meet interest repayments if they borrow so much. The fact that you may be able to refinance to release more equity next year, thereby using debt to service debt, gives you the possibility of using future money to pay for future interest repayments.

Most people work for a whole year without getting a $5K increase in their pay. In buying an investment property even with 100% finance you will, on average, gain $18k initially and even more each year after that.

It doesn't matter how busy you are, if you spend that much time working every day for the $5k increase, I am sure you can find a bit of time to think about how you can get at least $18k increase year in and year out, but most of us just aren't doing it. How can we change that?

It's very simple, to make anything a priority in your life, you just need to schedule it, once it's scheduled, it's real.

A strategy many successful business people and investors use is to schedule a fixed time regularly, e.g. 8pm each Sunday (or the first Sunday of the month) is set aside for the family to discuss their family wealth creation progress.

Nothing is real until you schedule it in, if you have problems sticking to the time yourself, you should probably schedule an appointment with one of our consultants, to make sure that you put aside the time to think about how you may increase your wealth on a regular basis.

Let's see if you can take action here:

• Pencil a time in your diary for your next family meeting, or
• Pick up the phone to call us on 1300 663 836 or email us at mail@investorsdirect.com.au to schedule an appointment to discuss your options.

This is the only guaranteed way that you will spend time working on your wealth instead of waiting for it to happen.

By the way, if you agree with what I said and did nothing until you read this line, you're a procrastinator! :) Go back and do it now!

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