The path to property investment can seem endless and almost impossible. But there are two wildly different routes investors can take to get there sooner.

Nathan Birch and David Thompson are both 29 and have achieved their dream of making money from owning investment property. However, both men have taken markedlydifferent savings approaches to get there.

One has saved hard and fast, while the other has opted to spend his meagre savings and dive straight in.

Living frugally and working two jobs helped Birch purchase his first investment property at 18.

“I was the epitome of the miser,” he says.

“I would collect coupons to eat. But I was smart about it and turned it into a game of how much I could save.” Birch’s extreme savings plan started at 13 when he realised he didn’t want to work half his life away.

“I came from a blue-collar family and everyone worked hard for their money,” he says.

“When I was 13 I realised I wanted to be like rich people. Between 18 and 23, I worked two full-time jobs and really pushed myself. I sacrificed my youth, but now I’m building my mansion on the better part of half an acre.”

By day the Sydneysider worked day jobs in real estate and advertising, while pulling beers at a pub in the evenings. His goal was to earn $50,000 rental income by the time he turned 30. Although Birch is yet to reach that milestone, he now earns $400,000 a year thanks to his 160 investment properties.

Admittedly he has $10 million of debt, but says the total value of his properties is $30 million and before expenses his rental income is $2 million.

“The properties I bought a decade ago for $150,000 are now worth $400,000,” Birch says.

After ditching his day job at 24, Birch says he threw away his resume. But he found all his mates were still working, so with little company and not much to do, he began to suffer anxiety.

Making YouTube videos tutoring others on property investment proved to be an effective outlet and it morphed into leading property investment group B Invested.

Plan B

By contrast, Thompson skipped the hardcore savings plan and jumped headfirst into property investment two years ago.

The Adelaide building designer realised he did not have enough cash to go it alone, so he joined a group of five investors who pooled their money to buy a property.

“Everyone was different, I put in $20,000 and a couple put in $100,000,” he says. “There was no way I could afford to do it on my own.”

The group subdivided the land and built four houses before selling. Thompson made a 25 per cent return on investment and it spurred him on to buy and sell a second investment property.

“Working in the industry, I knew the calculated risks,” he says.

“Even if I lost money, I was still young enough to get back on my feet. You can wait and wait, but unless you give it a crack you’re never going to know.”

Thompson, who owns property design consultancy InProperty Design, is now on the lookout for another joint venture partner. Even though there are risks involved in merging funds with someone else, Thompson says it’s a speedier route to capital gain.

“Of course there are risks, but they are worth taking in my opinion,” he says.

“There’s no way I would have earned that capital by myself in that amount of time, so it was like fast-tracking.”

There are pros and cons to both approaches, says Miriam Sandkuhler, property investment author and founder of buyer’s advocacy group Property Mavens.

“It really comes down to individual circumstances, such as income and cashflow management,” she says.

“People have to be prudent and do their homework.”

One thing’s for sure, both Birch and Thompson have got a leg-up on investors twice their age. Sandkuhler says the earlier property investment is made, the greater the reward.

“Definitely start as soon as possible,” she says.

“Save as much as you can, which means you have to make sacrifices to get started out.

“The earlier you start, the greater opportunity for compound growth and ability to create wealth over time.”

However, she warns eager investors lulled into a sense of security by low interest rates to factor in potential rate rises of up to 3 per cent. Save or spend?

The cash-splasher


  • Faster investment equals longer compound growth
  • Avoid years of tight-fisted saving


  • Likely to invest with lower deposit
  • Greater risk for mortgage stress

The penny-pincher


  • Amass a healthy deposit
  • Be more prepared for interest rate hikes and unexpected expenses


  • Slower to invest means less time to create wealth
  • Sacrifice spending to save hard

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Posted by Kate Jones – The Age on 23rd January, 2015