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