Interview with Chris Gray, CEO of Your Empire on Lifestyle Goals, Being Emotionless Around Investing and Financial Freedom

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On this week’s episode, I interview Chris Gray, Host of Sky News Business’ ‘Your Property Empire’, Financial Judge on Channel Ten’s ‘The Renovators’ and was previously a property expert on Channel Nine’s My Home TV. Not only is he on the TV circuit, he’s also written two books and has been featured on countless radio programs, property magazines and he’s a regularly on the speaking circuit. Beyond this, Chris is the CEO of Empire, an independent consultancy that builds property portfolios for time-poor investors.
Connect with Chris:

Website: http://www.investmentpropertyexpert.com.au
LinkedIn: https://www.linkedin.com/in/investmentpropertyexpert
Twitter: https://twitter.com/ChrisGrayEmpire

Show Notes:

00:00 – Introduction to the Show

01:40 – Chris’ Background and Mission

03:57 – Taking emotions out of investments

06:57 – The cost of living the “easy life”

09:48 – Imparting lessons to your children

12:23 – Chris’ plans toward his future

15:00 – Not compromising your lifestyle for financial freedom

19:53 – Taking it slow and steady

21:22 – Outro

How did Chris start his investment journey?

  • Accountant by trade
  •  Started investing in the UK at 22, worked out it was cheaper to buy a 3br house instead of a 1 bedroom unit
  •  Even though he had a mortgage 7x his income, he practically lived for free and duplicated that a few times and got himself a free Porsche
  • Came to Australia and by the age of 31, he was making $600k passively from property while making $60k after tax from Deloitte
  • Quit his job shortly afterwards and became an extra on a TV Show before getting a breakthrough as a host on My Home TV on channel nine
  • Led to a hosting position at Sky Business for 10 years to help educate people
  • Wealthy individuals don’t want to learn and just want him to do it for him. So he launched his own buyer’s agency called Your Empire to help them build property portfolios since 2008

What lessons did you get from your parents regarding wealth?

  • Dad was a heart physician and mum was a nurse, well enough but not mega rich – they were conservative and weren’t flashy spenders
  • Brought up with the fact that rent money is dead money
  • Went home hunting and knew nothing about property
  • Lucked into property (saw 100 properties) and found a beautiful one that he wanted and figured out how to make it work
  • His skill base is around logic, numbers and no emotion
  • Logically good with basic numbers and thought that to buy a 1 br unit, that this wouldn’t work
  • Instead, for a 3 br house, he could rent it out (12% rental yield at the time) and live for free
  • Didn’t know what a yield was until his 30s
  • Just knew how to calculate money going in and money going out
  •  Unemotional about the numbers, it’s just a means to an end

How do you respond to people saying “you have it easy”?

  • Chris aware that he’s known as being one of the lifestyle kings – goes overseas 10
  • 15 times a year but because he runs his business on American express and he gets to use frequent flyer points
  • Lives in a $5m home within $10 – $15m neighbourhood but they rent the property
  • Sold his Lamborghini for a profit recently
  • Point is – he has a knack of being able to make money
  • His lifestyle is pretty free – nothing scheduled in if he doesn’t want to
  • He doesn’t do 40 – 60 hours of work but the weight of debt is what he carries with him ($10 – $11m in debt)
  • If interest rates go up, it costs him an extra $100k a year
  • He’s comfortable with the burden of debt rather than carrying 60 hour working weeks instead
  • Built it that way but it comes with a price tag – stress
  • It’s all manageable and by choice – he doesn’t need to leverage this high up
  • Currently, he’s not gearing much because he doesn’t need more debt or more property
  • Key point: he’d rather leverage money rather than his time

How Do You Teach Your Kids about Money & Wealth?

  • He spent a few years going to ultra-high net worth conferences
  • He found that the biggest issue in Australia for these individuals is how to avoid turning your kids into spoilt brats
  • No one has the answer yet
  • “Mommy are we rich?” – book recommendation
  • From a money perspective for his kids, it’s hard to teach them about money when they’re surrounded by fancy boats, 360 degree views of Sydney and flashy cars
  • They’re strict on them and trying to teach them through games and discussions such as Monopoly
  • Hopes that they’ll get educated but it’s a very difficult thing
  • Done classic charity work – hopefully they start seeing more and more of that as they get older to give perspective

You’ve geared aggressively and been aggressive with building your own wealth. What’s the next 3 – 5 years look like for you?

 

  • Main thing was to build an asset base
  • So when Chris got out of working, he had $3.5m in property with 6 properties growing at $100k a year during a boom
  • When you don’t work, you’re spending 24/7
  • Property market doesn’t go up forever
  • Realised he needed to get his asset base beyond $3.5m and aimed for $10m
  • Then his next aim was de-leveraging by waiting for the property market to increase and then you’re better geared when this increase occurs
  • Current portfolio is about $17 – $18m and aiming to gear to 70 – 80%
  • If you have $5 – $6m in offset accounts to live off
  • If everything went wrong, you’ve got $500k a year for 10 years
  • Only buys blue chip second hand properties which stable. Those will almost never go down and he’s happy to play the long game
  • Have a bigger cash buffer in offset or in different entities or banks to diversify

What does financial freedom mean to you?

  • A lot of people on the speaking circuit in property who show the flashy lifestyle for the sake of it
  • For Chris, he genuinely loves fast and flashy cars and doesn’t do it for the sake of showing off. However, this can give off a negative first impression
  • He’s not material for the sake of being material
  • The ultimate thing is freedom of choice: he doesn’t want to work and commute to the city. He’s out most evenings and doesn’t have to be there if he doesn’t want to
  • He never wants to get up thinking he’s got to do something for the sake of it
  • He’s created a life of just doing the stuff he loves – loves TV, speaking, inspiring people
  • Starve their lifestyle advice – it really is balance. Every week he hears about someone dying, negative media coverage, so many people were saying “if only I did this”
  • People say what’s on his bucket list – he says there’s nothing on his bucket list because he’s doing everything that’s on it
  • Biggest fault is that he’s invested too hard but also lived very hard
  • As he’s almost 50 – he’s only got 5 – 10 years left to do active kind of things such as skiing. So he books more trips
  • Whenever there’s a tragedy, he books another trip because there’s no guarantees that there’s a tomorrow
  • The only reason he can do it is because he’s built a big asset base when he was young

For those who are listening, where do you see the greatest opportunity for those who want to create wealth over the next decade?

  • Slow and steady wins the race
  • All of his assets are blue chip
  • Never tried to time the market
  • None doubled overnight
  • Buying the decade game
  • 90 – 95% are all in solid blue chip investment classes
  • Diversify into cash and other asset classes
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