Daniel Walsh is living his best life. The self-made multi-millionaire, who could retire today aged just 33, has a luxury waterfront home in one of Sydney’s most prestigious suburbs, a stylish Lamborghini, a property portfolio worth $20m, and takes his family sailing on their 50-foot Riviera motor yacht on weekends.
But this wasn’t always the case for the former tradie, who started from humble beginnings in the city’s western suburbs, didn’t go to university and started working for his dad’s auto electrician business aged 16, earning just $245 a week.
“He told me early on, ‘You’re never going to be wealthy being a tradesman. There’s no future for you here,’” Walsh told Yahoo Finance. “Looking back, I learned one very valuable lesson which was, that over time, your investments will always outperform your earned income.”
The father-of-one, whose book 6 Principles To Retire Younger & Richer was released this week, said he began saving in his mid-teens and managed to scrape together a 5 percent deposit to buy his first house at Thirlmere, near Picton, in Sydney’s west, in 2011 for $325,000.
“It was only half built,” Walsh said. “That was a property I took over from someone. They built half of it and couldn’t afford to finish it. I had to sell my car and everything. I drove a $1500 car so I could finish it off and rent it out.”
He bought his second “very run down” house – which he renovated himself – in the same suburb a year later for $310,000, and then sat out of the market for two years before starting to look interstate, eventually buying more properties on the outskirts of Brisbane and then Perth. One property in Logan, QLD, tripled in value in just five years.
“Back then, I was not earning much money and was living very tightly,” Walsh, who now lives in a multi-million dollar waterfront house in Palm Beach, told Yahoo Finance. “I’d never been on holiday overseas – I’d never done anything.”
Now he owns properties in five different states across Australia, and his net worth of $10 million increases between $1.2 million and $1.4 million a year based on 6 to 7 percent annual growth.
Walsh said he decided to “get ahead” before spending money on buying his own home and would have “really struggled in life” if he hadn’t started investing – an idea he got from his mum and dad who regularly looked at different properties and attended open houses.
As a teen, his parents took their family on holiday every year to Narrabeen, on Sydney’s northern beaches, where he saw how the ‘other half’ lived.
“My dad had a tinnie and we used to go out on Pittwater,” he said. “And I would think, ‘How do these guys do it?’ We were average middle class and I thought, ‘How do these people get these houses?’
“I was always researching and asking questions. With lot of these rich people, no one tells you how to be successful – they don’t tell you. I had to work it out myself.”
In his book, Walsh shares a step-by-step guide to investing which, for him, involved buying homes cheaply, renovating and renting them out or “flipping” – selling them for much more than the purchase price, usually for well over $1 million – and using the capital to invest again.
He tells readers how to change their “money mindset”, use leverage to create additional income, recognise the difference between good and bad debt, and how to tolerate risk and maximise your time.
While many fall for the “doom and gloom” and think they can never afford to get on the property ladder, Walsh told Yahoo Finance, people needed to just change their thinking.
“You can change the middle-class mindset,” he said. “You don’t have to be slugging it out six days a week and not get ahead. You can aspire to something better than average.
Top tip to investors: Don’t look for the Taj Mahal
“I sacrificed really early,” Walsh continued. “I had $1 million in equity by the age of 25 but I was still living in a garage converted into a granny flat. I lived there until I was 28.
“I had a four-bedroom house. I could have lived in that and paid the mortgage but I rented it out to get more income so it would not be a burden to me. I was 30 when I bought my first house (to live in) – I had already been investing for a decade.
“My advice to new generations and younger people coming through would be – it’s stepping stones. You don’t need to get that Bondi unit. Don’t go looking for the Taj Mahal. Look for a little house, an older house, something you can work on.
“You need to put the hard yards in and think about it a bit smarter.”
6 Principles to Retire Younger & Richer, published by Major Street, is out now.