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Show Summary
In this conversation, the speakers delve into the quest for meaning in life, exploring existential questions and the pursuit of personal growth beyond mere survival.
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Investor Fuel Show Transcript:
Todd Polke (00:00)
Most people come into the world with just this buy and hope mentality, without a proper plan, without a proper strategy. And when we’re talking about strategy, strategy is not let’s go buy a property. That’s amateur hour, right? Everyone can be an investor. Just buy some shares, get the dividend, and congratulations you’re an investor. But that’s a very different conversation of becoming an investor who actually creates financial freedom. So I always tell my students like,Remember, we’re not buying property. We’re not investing in gold. We’re not investing in crypto. What we’re doing is that we’re building wealth systems.
Kristen (02:01)
Welcome back to the Real Estate Pros podcast. I’m Kristen and I’m here with Todd Polke, is an investor, coach, and author. He’s going to help us figure out how to build wealth systems. I’m really excited about this. Thanks for coming, Todd.Todd Polke (02:14)
No worries,thanks so much, Kristen, appreciate you having me.
Kristen (02:16)
So let’s go back to the beginning kind of how you got interested in real estate and what your career looked like.Todd Polke (02:22)
Yeah, so before I got into the world of investing and wealth creation, I was a burnout personal trainer. So I was getting up at 4 a.m. in the morning. I was going through to about 10 or 11 o’clock in the morning writing with clients, starting at about two or three in the afternoon and going through to about seven or eight o’clock in the evening with clients. But running a small business, your day never stops in the number of clients you have in the day stopped. And so you have marketing to take care of, have admin to do, you have programs to write, all the different things you’ve got to think about when you’re running a business.And so my day would wind up finishing up at about midnight. I’d do that six days a week and I’d do that 50 weeks of the year because my whole rule of creating success in life was simply this. The harder I worked, the more successful I’ll become. And that was the drama I was beating over and over and over again until I got to the point of literally by the age of 19, I broke myself. I broke my body wound up in hospital having leg surgery on both my legs. I broke my relationships.
You know, I had no personal life to think about and you know what at the end of the year despite working all these hours and Grinding it out. I was still broke financially and I got to the point at 19 Sitting on the cliffs and in a place called kangaroo point in Brisbane and sitting there going is this all there is you know I thought life was about so much more than just simply working to pay the bills
And that moment right there was that pivotal point for me. It was the thing where I stopped and go, look, I can’t just keep doing the things the same way. I’m just going to keep getting the same result. So let’s actually go and study what successful people are doing. What are, you know, what are people doing business and investing or whatever it actually is. And so along the way I made study of successful people. Just, just one of my absolute obsessions. One of my events that I went to, you know, we didn’t have podcasts 20 years ago. It was more the, you know, you went to live events and things like that.
And I met a very first mentor of mine there, his name was Jason. And he was a real estate investor and I just loved everything he was about. And I made a decision at that time that I was gonna buy a property in six months time. But I had a bit of a problem. The problem is I had no money, I had no idea what I was doing and I could barely service anything. But you know, here’s what I find is that when you make a true decision, you mean the one of those decisions where you leave your excuses behind you,
you can make magic happen. And so over the space of six months, I saved up $9,000. Not enough, know, that might seem like a lot of money to a lot of people to me at the time was a fortune and still not enough to buy a property. But got the first homeowner’s grant. got some stamp duty savings and I wound up buying my first piece of real estate, 291,000. Did a rental on it, got it revalued, wound up making 70,000 in that first property deal in the space of nine months by the time I was 20 years old.
And that moment right there was where I learnt this incredible lesson in life, that profits are better than wages. And after having that experience, there’s no way I could go back to just doing the same thing. Like, so I got out of personal training, I got out of the army, I got out of a lot of stuff I was doing at this quick university, and I just fell in love with the world of investing. And ever since then, it’s been my absolute obsession, not because of the money, but because of the choices it helps people create in life.
Kristen (06:08)
Amazing. mean, I think that’s a very common issue to have where you think you have to work really, really hard to make money. What did that look like breaking down that mindset for you and shifting into, you know, I don’t have to be like the time, the amount of time I work doesn’t translate to my value and my wealth. I’m sure that took a long time to break.Todd Polke (06:16)
right.It was because here’s what we’re taught around money. people listening in, you finished a sentence, right? Money is an exchange of, now most people are gonna answer that with time as the end. Money is an exchange of time. And the problem with that equation, because it’s an equation we’re taught, we didn’t all of a sudden, we weren’t born with that idea in our mind. It’s something we inherited from somebody else. And as soon as we start to understand that,
Kristen (06:51)
great.Todd Polke (06:53)
it’s not actually mine. I didn’t think up, I wasn’t born with that. I actually took that on from society, from the education system, from the people around us. And we just kind of take that on as our own belief. And so that’s what a lot of people do and they literally spend their entire lives doing it. And that’s why I wrote the book, Escape the Middle, because most people follow that rule and then they get stuck in this place called the middle, know, middle level of income, middle level of meaning, middle level of freedom, middle level of choice.and they spend their entire lives there. And I just think life’s about so much more than that. To me, it was that moment when that one piece of real estate made more than my entire year’s income. I just learnt this beautiful word called leverage. And I realised at that point in time that making money doesn’t always have to be hard work. It doesn’t have to take a lot of hours. It doesn’t necessarily have to take a lot of, you don’t have to give all of yourself to it in order to be able to create it.
there are ways that you can apply these principles of leverage and there’s six of them, six principles of leverage to your life. I didn’t know that at the time. I was just making things up as I go. But in order to be able to create wealth where time is a limiting factor, because as soon as time is in that equation, you’re always going to be the bottleneck to your own success. So to me, it was a singular moment and everything changed in very, you know, heartbeat, right? But that’s because I got to myself to, I was at a point where desperation, like that’s the point where I was at, like,
there has to be a better way than this. Cause I sat there and I fast forwarded my way five years ahead and said, geez, how would I feel if I was still in this situation that I’m in right now, grinding it out 70 hours a day. And it was like my nightmare had come true. So to me, it was like this. And one thing I would just say to that is that shifting your psychology and mindset around this, just like…
making money. It doesn’t have to be hard work. It doesn’t have to be a lot of time. It just comes with the decision that you need to make for yourself.
Kristen (08:41)
Absolutely, I think that’s a great mindset to have and you’re so right. We’re taught these, we’re taught how to have a relationship to money so early that we don’t even remember when we learned it. We think it’s just fact and it’s not.Todd Polke (08:49)
Right.Yeah, and I assume in the US as well, it’s the same. I mean, are there any financial education programs in school? Are there any investing education programs? Or let’s teach you how to create financial freedom. I assume it’s the same in the US as it is here in Australia.
Kristen (09:08)
Absolutely, absolutely. There’s really no education surrounding it. You kind of have to just figure it out yourself. That’s why people like you who are giving this education, it’s so valuable. So I would love for you to talk about when you started transitioning into helping other people from what you learned.Todd Polke (09:25)
So as I had that experience and I decided I was done with personal training, everything else, I decided I need to go get some experience before I can get into the world of investing. And so I went and got my real estate license. And after starting my real estate license, which in Australia took me about three weeks via distance education, it didn’t teach me a single thing about investing or real estate or anything. It just taught me how to fill out contracts. I got my first job as a real estate agent in Gold Coast in Australia.And I was in that job for a grand total of six weeks before I realized I was in the wrong place. There were 17 other agents in the office and there was only one of them who had an investment property.
Everyone else was a real estate agent because it was a job, not because it was something that they were passionate about or actually playing in. And this one guy had an investment property. You know, I thought he was about 110 at the time, right? He was, you know, 67 or something like that. I thought he was about 110 at the time. And I realized I was in the wrong place.
But while I was in that, I knew that what my outcome was, right? My outcome was to begin working with that mentor of mine. And I literally called the guy three times a week for six months until I made it clear that I was not going away. I was just going to keep annoying crap out of him until he made a job for me. And that’s how I got my first job in the real estate sector in the investment world. I started in the investment agency world where I was kind of finding deals and doing due diligence for other investors. And then…
There was a moment where Jason was talking about, let’s run some first home buyer events. And I said, all right, I’m going to do it without any public speaking experience or anything like that. Let’s make a decision and figure it out as we go. And so I ran my first home buyer event, 21 I think it was at the time, went really well. And from then on in, I just fell in love with that world. From there, I moved into working directly with clients, matching strategy with deals.
Kristen (11:40)
Mm-hmm.Todd Polke (11:45)
and then start in the world of coaching, helping investors to build the strategies around their portfolios in order to be able to build wealth. And this was by about the age of 24, 25 that I was doing that. But it’s just because I fell in love with it and I got obsessed with it, right? And by that time I was trading options successfully as well and started investing in shares and a number of different things. investing was just my world. I just fell in love with it.Kristen (12:13)
Yeah, I mean that’s so impressive that you figured all of this out at such a young age and started building this so young. ⁓ I mean that’s…Todd Polke (12:20)
When you say figured it out, I stumbled over myself several times and lost a lot of money and stuffed everything upunder the sun. So when you say figured it out, that sounds like a really gorgeous, like rainbows and unicorns type of journey. The reality of the matter is I stuffed up so many things ⁓ and figured it out as I went.
Kristen (12:36)
Right.Right, well I think that’s important to highlight because I think a lot of people do look at their mentors and really envy the life they have and they’re like, they figured it out and I’m a loser and I keep messing up. The reality is everyone messes up, especially in this industry.
Todd Polke (12:54)
Right, I had a client of mine recently and one of their deals just didn’t go well that they went into, right? They didn’t get that, they were doing a duplex build and so they bought a block of land, built a duplex. They kind of underestimated the building cost and overestimated the growth in the market and did a whole lot of stuff. They were just kind of being too sunshine and rainbows about their due diligence, they were doing.And so when they came to sell the property, they didn’t get the price they wanted. They spent three years doing it, didn’t really get a lot of money out of it. so when I started working with him, he was pretty down on himself. And I told him some of the stories. You know, I lost everything in my mid to late 20s and had to start all over again. And he said the same thing. He said, thank you so much for telling me that because I thought that everything was just perfect in that.
There was something special about people that went and created this, created a certain level of wealth or outcome in their life where the reality is it’s not. We’re just, to me, successful people are only successful is because they’re willing to move through the challenges and they’re committed to their outcome more than their excuses. It’s not because they were born under a lucky star. It’s not because often they inherit a lot of money. It’s not because they were good at math. I failed math. It’s not any of these types of things. It’s like, what is the outcome you want to create?
How committed are you to actually creating that outcome and moving through the inevitable challenges as they come?
Kristen (14:54)
Absolutely, mean inheriting a bunch of money helps, that’s for sure.Todd Polke (14:58)
Well, it does help.I wouldn’t know, but it does help.
Kristen (15:01)
I’m sure that’dbe very nice. So I’d love for you to talk about working with so many investors. What are the common, I’m sure you see common things come up over and over that a lot of people, whether it be a mindset, something that’s getting in their way, or maybe something that you see people make the same mistake over and over, what would be some of those generalities that maybe you can share with us?
Todd Polke (15:23)
Yeah,look, so there’s a few I’d love to talk about, right? One is coming back to what we were speaking about before around the beliefs that we inherit around what money is, what debt is, what investing is, what wealthy people are. And we come into this world of investing. A lot of people get started in the world of investing because they know that it has capacity to able to create some more choices in their life.
Like that’s what they do. Like they want some more freedom, wants more choices, wants more money, wants more income. That’s why they do it. But as they come into this world, they’re also dragging all this baggage behind them, right? And the baggage has to do with the rules of life that they’ve been taught, that they’ve been following for potentially decades. And they bring it, come into this world, been beating that drum for 10, 15, 20 years, then expect, you know, silver bullet to change their life overnight. And it’s not how the world works, right?
Wealth creation is a marathon, it’s not a sprint. If you’re in here for get rich quick, you’re chasing shiny objects. Get rich quick is short-term thinking. Short-term thinking sacrifices long-term outcomes. Right, so I see a lot of people, they go, they’re fed up with how they’ve been doing life because they’ve been taught a certain set of rules and they’ve been following it for decades. They get into investing and they just get rich quick and try and change things overnight. And they’ve got the wrong way of thinking, the wrong level of…
It leads to poor decisions and poor strategies, right? So I’d say that’s one of the first ones, right? We’ve got to approach our wealth creation like it’s a business and we’ve got to put our investor hat on, our CEO of our wealth business hat on, and we’ve got to look at our wealth creation, how are we going to drive this to build a different life for ourselves and our family over the next five, 10, 15, 20 years? Now it doesn’t mean it’s going to take 20 years to get results. You can create financial freedom way sooner than that.
But you want to have a long-term perspective around what you’re looking at. I reckon that’s one of the big ones. Yeah, and I don’t know if you’ve experienced that with the people that you work with as well. I see it lot in a lot of the coaching and the stuff that I kind of do. So I mean, I’m sure you’ve experienced that as well with the people you work with.
Kristen (17:13)
Yeah, I imagine so.Yeah, I mean, I think it’s incredible, like not even just in this industry. It’s just like in general. think that people, people have the expectation that growth means going from zero to a hundred and maybe going from zero to ten. They don’t see that as growth, but it is growth. It’s every day you get a little better. you know, if it takes, yeah, if it takes, know, two weeks for you to do something and then the next time it takes you a week and a half, like that’s still progress. So
Todd Polke (17:33)
Right.Yeah.
And you’ve
got to celebrate the crap out of that stuff. I I think that’s so exciting, right? Like, you know, when it comes to like taking care of personal finances, most people, you know, they have this experience in their life called evaporating money, right? I don’t know if you’ve had that experience in your life. I’ve had it in my life in the past where money comes into your life and it just magically evaporates, right? Because most people don’t have a personal finance system in their world and in their life at any point in time.
But you know, when we start to take control of our personal finances, a lot of people, like the common dogma is you should save 10 to 20 % of your income. That’s the common dogma. And I have so many people come up to me and say, well, Todd, you don’t understand, like this bread’s expensive, this is expensive. Like I can’t save 10%. And what I say to them, okay, no worries, start with 1%. And everybody can say 1%. Like if you’re gonna tell me no, I’d say, look, go tell your lies to somebody else. It’s not true. Everybody can say 1%.
And then month number two moved to 2%, month number three moved to 3%, month number four moved to 4%. And just build it up and the momentum that you create over this period of time is just phenomenal. I had a client that started with this 1 % rule and they wound up after 18 months saving 40 % of their income. Now just imagine the compound effect that that has on the rest of their life, right?
Kristen (19:07)
Alright.Todd Polke (19:10)
Saving 40 % their income then investing in real estate, you know building other income streams and growing their savings base at the same time and and they wound up changing their life within a very short period of time and so I think that wealth and success is a habit and The most beautiful thing about knowing that is that it’s all about the small things It’s not about the big crazy one-off outrageous leaps we take it’s just about the small things that we do consistently like I think it’s That’s a pivotal rule that everybody absolutely should know I’llKristen (19:37)
Yes, 100%.Todd Polke (19:40)
I’ll touch on one other common thing I see. Most people’s strategy is buy and hope. They come into the world of investing and they buy something and they hope like hell it works out. And to me, that’s just gambling. Now, whether we’re talking about real estate investing or developing, or whether we’re talking about cryptocurrencies or metals or whatever the answer might be.Kristen (19:45)
Mmm.Todd Polke (20:00)
Most people come into the world with just this buy and hope mentality, without a proper plan, without a proper strategy. And when we’re talking about strategy, strategy is not let’s go buy a property. That’s amateur hour, right? Everyone can be an investor. Just buy some shares, get the dividend, and congratulations you’re an investor. But that’s a very different conversation of becoming an investor who actually creates financial freedom. So I always tell my students like,Remember, we’re not buying property. We’re not investing in gold. We’re not investing in crypto. What we’re doing is that we’re building wealth systems.
And so I want everyone to remove the emotional attachment to a certain asset class, whether it property or shares or crypto. Like to me, I love them all. I couldn’t care less about them at the same time. What I care about is what’s the purpose that is serving in a portfolio that’s going to help you go from where you are to where you want to be going in the future. So we’ve got to think about all these elements as cogs in an overarching system. And how do we put those cogs in the right order?
and with white cash flow streams coming in, that’s gonna lead to a predictable outcome in the future. And knowing that we have to come back to that strategy, that plan, that system, and change some of those cogs out and change your order sometimes and move it along so it’s always moving you towards your outcome. key things, wealth and success is a habit. Strategy is, the buy and hope is not a strategy. It’s not about the asset, it’s about the purpose it serves.
And you’ve got to remove your emotions from the world of investing because emotions plus investing equals losing money, right? And so we want to make sure that we have these principles in place and they can be the guardrails behind building successful portfolio.
Kristen (21:22)
Thanks.I mean, the way you speak about it makes me so excited. I want to invest in things right now. So we’re nearing the end of our time. I think you’ve given such good advice to people on shifting your mindset and kind of being aware of maybe where you’re standing in your own way or where you’re making things harder for yourself. Please tell everyone where to find you, how to work with you, and what kind of people you’re looking to work with.
Todd Polke (21:33)
I love it!Yeah, cool. You know, there’s two core places people can find me or kind of get some more information and some stuff. One, I would say jump on Amazon and get a copy of my book, right? So I’ve just ⁓ published this year, Escape the Middle. It is literally a blueprint out of, you as I said, that place called the middle. And it’s this beautiful mix of the mindset of success versus the tactical, tangible strategies you need to be able to have to able to create it. So it’s on Amazon.
or can go to escapethemiddle.com and you’ll able to find some other cool really free trainings there. So that’s one great place to go. The other place I would say is that we run a free Facebook community, it’s called the Wealth Dojo. And where it is, it’s kind of like a training ground, like a dojo is, it’s a place of practice, right? In my old judo days, martial arts days, this coming out.
And so we have a free Facebook group called the Wealth Dojo where we have thousands of investors coming in, learning how to invest, learning how to take control of their money. And we give a lot of really cool free education opportunities and webinars and trainings in there. And the third place, follow me on social media. know, my name is Todd Polke. I’m the only one around. There’s not too many of us around. So connect with me. I would love to have some conversation with you guys.
Kristen (23:02)
Incredible. Well, I really encourage everyone to check Todd out and, you know, check out the book, the Facebook group. I think there’s a lot to learn here and there’s, you know, a lot that can really help out your business. Thanks for being here, Todd.Todd Polke (23:13)
Thanks Kris and appreciate your luck.Kristen (23:14)
Amazing things for everybody for listening, for watching. We hope you learned a lot and got some inspiration and we’ll see you back next time. Bye.
