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Property investment has long been one of the most popular wealth-creation tools, but what does it actually mean to be a ‘wealthy investor’? After creating a nine-property portfolio in two years, find out why one investor believes that he still has a long way to go before achieving his goals.
Buyer’s agent and property investor Arjun Paliwal has been investing in property since he was only 22 years old. After a few years of research and thorough preparations, he has successfully built an impressive portfolio with eight residential properties and one commercial property spread across four Australian states.
Admittedly, he started with ‘no focus’ in mind. “I was just buying my first property because everyone was doing it and I happened to be in Sydney, where everyone was buying at the time,” the investor said.
His mindset only changed—from property buyer to property investor—when he realised the unique ability of a property portfolio to generate income.
“When I saw others start to build a portfolio that generated income and wealth, that was really something that appealed to me. Most importantly was what you could do with that income.”
“For some, it was being able to have money for the rainy days and be able to support their portfolio through ups and downs for long-term growth, and for the others, it was to be able to live off it. Just seeing those different factors, I realised that my strategy came down to building an income stream while still building wealth,” Mr Paliwal highlighted.
After a little over two years since his first purchase, at 26 years old, the property investor continues to chase his personal and financial goals.
Mr Paliwal’s property investment journey started with BHAGs or ‘Big Hairy Audacious Goals’. Aside from thinking about what he would do with the income he could earn, the investor also thought about what he could do for others once he succeeds in the venture.
Looking at the people who are able to provide a comfortable life for themselves and their family, all while supporting large charitable causes, he realised that he needed wealth that is significant and, more importantly, sustainable.
Early on in his journey, he has made it his mission to balance income and growth in order to be able to hold and grow his asset base for the long-term despite market fluctuations.
In order to lay out a plan for the long-term, Mr Paliwal sought inspiration from the different types of investors that he meets as a bank employee.
According to him: “Firstly, my goal-setting comes from seeing the other side or looking up to people who have achieved what I aim to achieve on a high level, which could be looking after themselves, looking after the family and looking after charitable causes. When you see the other side—what someone can do—that's where you start with your goal-setting.”
“Then, I just take that top-level goal, bring it down, find three to five people who are not yet on the top level but are working towards their goals. From there, you can start to map out that line in between. Finding that top and going back down the levels, that’s what helped me in my goal-setting.”
Still, out of 10, the property investor would rate himself only 4 or 5 based on how close he is to achieving his goals.
“From where I originally set out to be a few years ago, I think I'm on track to an 8 out of 10. But when I set my new goals ahead in life, I'm right back to a 4 or 5. I feel like it's going to be a balancing journey and I’m just ticking something new off the list as time goes on,” he said.
At the end of the day, wealth simply means freedom of choice, according to Mr Paliwal, and right now, he has yet to consider himself among the wealthy ones as he continues to ‘re-target’ on goals and strategies.
As his portfolio grows, the property investor aims to take on more sophisticated strategies in order to improve his income and ultimately maximise his wealth-creation potential. His passion for property investment and giving back to his family and the community fuels his desire to achieve bigger goals as time goes by.
“When I first started, wealth to me was getting that first property. Then, it didn't look like wealth after a while, so the meaning of wealth kept changing, I don't think I'll ever look at my portfolio and say, ‘I'm wealthy.’ It'll just be an ongoing re-target goal-setting all the time,” according to him.
While he does enjoy celebrating his successes from time to time, Mr Paliwal makes it a point to reflect on how he can achieve more over time.
“To be honest, I'm someone who does enjoy rewards from time to time, like the extra trip, the nice car and these sort of things, but I look at it differently. I don't look at it as power but as milestones and celebration. It’s either you work with your head down and not enjoy what you're working for or being able to look back, reflect, celebrate and move on to the next goal.”
Moving forward, the property investor plans to continue growing his portfolio in order to achieve sustainable wealth.
“Having a larger portfolio means you don't rely on the need to have a huge amount of growth. A $4 million-portfolio growing 10 per cent hits to $400,000, whereas if you get one or two negative growth properties totaling $1.5million, you're looking at needing 27 per cent to get the same game and you're losing money while you're doing it,” he explained.
Mr Paliwal credits a huge part of his current success to his decision to emulate the successful investors that inspired him to start his wealth-creation journey—that is, to set big goals, focus on his own journey without comparing his pace to other investors and ultimately celebrating his successes throughout.
According to him, the most successful investors he met were looking to other investors not for comparison but for inspiration. This mindset has allowed them to understand their journey on a personal level and ultimately identify the best investment strategies based on their goals, capabilities and limitations.
After all, no two investment journeys will ever be the same. Some people buy fast while some people like to take it slow. As such, some people are more willing to take risks while others remain on the conservative side.
“You shouldn't compare the races around you because you are always running your own,” Mr Paliwal concluded.