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How to Invest like a Multimillionaire

A deenitive guide to making the right decisions for wealth creation and preservation

JACQUES KHOURI CHIEF ECONOMIST

How to Invest like a Multimillionaire

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INTRODUCTION
Well done for taking the time out to download this report. What you now have in your possession is 27 years of concentrated wisdom and experience distilled from my career as an active investor, not only in property but in business too. Who am I? My name is Jacques Khouri and I was a co-founder of webjet, Australias largest online travel booking website and a multi-award winning global business. I have also invested in hundreds of properties, developed countless apartment blocks and houses, and the list goes on. So yes, I am a multi-millionaire, but this report is not about how to become filthy rich, nor how to get rich quick or other type of faddish, hype-inducing, lets face it ultimately unachievable selfhelp pamphlet aimed to sell you something impossible. My aim is to give you the ground-rules to investing. This is authentic investment advice based on my years of experience and success in the field. If theres only one piece of advice you take away from this report it MUST be this, which is why I mention it right here in the introduction:

BEING OVERLY CAUTIOUS IS A WEALTH DESTROYER

What do I mean by that? Well YES I am saying that whilst you do need to be cautious, being OVERLY cautious can result in being blinded to great opportunity. Being cautious is a good thing, but most people fail to build wealth because they are too cautious. I will give you an example: during my busiest days, I was flying to the USA every other week in preparation for the Webjet launch. One time on the way to San Francisco, I saw an advertisement for a property in far North Queensland really not that good a location at all. The bank had repossessed the property as the owner had defaulted on his payments. I saw an opportunity, because I was open to it even though it was in itself a crap property. I immediately called the number on the advertisement from the phone in our personal jet and said I was interested. A week later when flying back from San Fran I flew directly to Queensland to speak to the sellers. They wanted $3 million for it, which was far more than it was worth, but I agreed because I knew that once you see a good opportunity you should go for it without hesitation . Of course you need to have done your research before the opportunity arises, not after. I knew the area had tourism potential and I was planning to build a resort up there, but before we could even begin I had a call from a US company offering $8 million for it. I agreed and made a tidy profit of $5 million dollars as easy as that.

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Others didnt see this opportunity because they were blinded, they were too cautious. Maybe they even thought its too good to be true. What a sorry poor persons adage that is. In so doing, they missed out on a massive payday like the one I enjoyed. The trick is that you need to learn how to make informed decisions . Until you learn how to make the right decisions regarding your finances, you will simply be leaving your retirement plans to chance. If you are currently looking at your Super balance and wondering, how am I ever going to survive in retirement? but at the same time you are cautious about investing, I have practical advice that will help you change your cards. You see there is nothing wrong with being cautious, in fact it is quite normal. Thats why Ive put together this easy-to-read guide so you can make the right decisions when the time comes to review your financial decisions. In this report I am going to show you how not to be overly cautious but also how not to make STUPID DECISIONS either, like the investors in Storm Financial who lost everything. That could have been avoided, unfortunately people just did not know how to make the right decisions.

SO FROM THIS REPORT YOU WILL:

Learn how to make informed decisions. Understand that too good to be true is a poor persons quotation. Understand that rich people prepare themselves for opportunity beforehand. Understand that rich people look at the downside and compare it to the upside. Understand that you need to ask the right questions. Understand to look at the decision in two ways.

Simple enough? Great, lets get started.

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CONTENTS
Introduction Being overly cautious is a wealth destroyer So from this report you will Chapter 1 Boring old research I repeat: rich and successful people prepare themselves for opportunity beforehand.   Other people doing it   Facts and figures   Impact on lifestyle   Downside vs. upside   Established company? Chapter 2 Look at the Decision both ways What happens if I do?... What happens if I dont?... Chapter 3 Taking Action 2 2 4 5 5 6 6 6 6 7 7 7 9

Confirm the property investment opportunity is genuine through: Property economic reports 10 Valuations on the property 10 Cash flow impact reports 11 10 year forecast reports 11 Client testimonials 11 Have you ticked the points I listed in the above 3 chapters off of your checklist already? 12

Conclusion 12

Chapter 1 Boring old research

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CHAPTER 1 BORING OLD RESEARCH

I repeat: rich and successful people prepare themselves for opportunity beforehand.
Albert Einstein was undoubtedly right when he said, imagination is more important than knowledge, but then he had to have bucket-loads of knowledge to back up all that imaginative thinking, didnt he? Ill illustrate using a fanciful example from popular culture. Imagine if Taylor Swift wanted to become a famous singer yet had never prepared. What would happen then if one day she was asked to perform at a concert but shed never properly learned how to sing? How tragic the outcome would be for her career. Of course someone whos serious would simply never let this happen. If you want to succeed in any field, research and practice is one of those things you must do FIRST, not AFTER the fact. I guarantee you that Storm Financial victims didnt understand this crucial point, and it hurt them badly. The reality is you need to prepare yourself PRIOR to an opportunity because otherwise you will miss it just like the $5 million windfall I had. If Id had no previous knowledge, or had indulged in the too good to be true cautionary philosophy, I would have missed out on that pot of gold. But I knew the property was a good investment, without any procrastinating. I was already prepared with the knowledge as well as the financials. Imagine if Id not been quite ready to buy? Say I had to wait 12 weeks to see a mortgage broker and get approvals etc.? The deal would have passed me by. At the tail end, imagine if I hadnt taken the opportunity to sell when it was given to me? Again, no cigar. Similarly, if I didnt think an unknown company with no profit was still a good opportunity, I would never have invested in webjet. Remember that this was happening in the heady days of the dotcom bubble and the subsequent dot- com crash in 2000, all in a period of less than 2 years. It was an incredibly fragile time for an Internet start-up. Webjet could have crashed and burned like so many others, were it not for the facts that we, in the company, knew to be true from our research and knowledge that there was a solid gap in the market and that this opportunity was no passing phase but ripe for growth and steady profit. I bet youve missed out on at least a handful of opportunities already in your life. Are you going to do the same for the next 10 or 20 years, risking any chance at a comfortable financial future? Im betting you are shaking your head right now. Good, but you need to get your facts straight if you are ever going to change the pattern. Luck comes to the prepared.

I repeat: rich and successful people prepare themselves for opportunity beforehand.

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So, what do you actually need to research in order to spot that next successful investment opportunity?

  Other people doing it

What I mean is look at whether other people are investing in those kinds of opportunities. But then go further- look at the why, what, how, when and where of their decisions. Is it working out? Why? What can be learned from their experience? Many pitfalls can be avoided by looking where you intend to leap.

  Facts and figures

An obvious point but so often badly practiced because it is, frankly, boring. But then again is it really so boring to make a cool $5 million without doing much more than knowing the right stuff? I think not. Being prepared is about having read the financials and the data. Its also about making sure your information is correct, thorough, reliable and current, taking into account what trends are happening in the marketplace and wider community.

  Impact on lifestyle
This is a more personal point. You need to be prepared for what may happen if its a good investment decision, but also how to manage financially if things dont work out for you. This can sometimes happen despite the best-laid plans. Sometimes an act of God, terrorism or other unknown can impact the most watertight of investment opportunities. Consider the plight of U.S. airline companies following September 11.

  Downside vs. upside

Remember how I said rich people do this? What do I actually mean by the downside and upside? Simply, rich people ask all the pro and con questions and weigh up which is the lesser risk. Could I afford the worst case scenario, they ask themselves? What have I got to lose? What have I got to gain? They search for guarantees, but you must remember that not everything IS guaranteed. Ill expand on this in chapter 2 but for now lets just say its a question of looking at an opportunity and carefully stacking up the positives against the negatives. Then you can make a decision weighted towards the heavier side of the scales.

Chapter 2 Look at the Decision both ways

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ESTABLISHED COMPANY?
If you are investing in, partnering with or dealing with a company in the course of developing an investment portfolio or opportunity, have you checked that they are rock solid? Do they have experience and a documented success rate in the area you need them to perform in? Is there access to client references? You should have access to either written or video testimonials. If not, you should call at least some past clients to verify that the company has withstood the litmus test. In the case of start-ups and new opportunities, in order to do business with them do the people at the helm display the personal qualities that inspire your confidence? Are they going to stick around, are they open to communication, are they reliable, are they transparent? Business is also a culture, and you need to be speaking the same language to successfully do business together. Not every business pairing is a match made in heaven. It takes like-mindedness, open conversation and yes, sometimes chemistry! Research to establish the company you keep is right for your business aims.

CHAPTER 2 LOOK AT THE DECISION BOTH WAYS

As Michelle, a popular TV series character in Greys Anatomy quoted: Every day we make decisions that can go one of two ways, either very good, or very, very bad. The problem is, the epically great decisions and the epically bad ones look exactly the same when youre making them. Looking back its easy to see when a mistake has been made. But if we use our best judgment and listen to our hearts, were more likely to see that we chose wisely and avoid the deepest most painful regret of them all, the regret that comes from letting something amazing pass you by. But what if you had already prepared yourself for these possibly outcomes? You could clearly avoid the flashing red sign saying, Do not enter. It may seem obvious but this point is actually really important and surprisingly often overlooked by new investors. When making an investment decision you should look at the decision in two ways . By this I mean you need to ask yourself:

WHAT HAPPENS IF I DO?... WHAT HAPPENS IF I DONT?...

Then you need to compare the two under the various scenarios that could take place - the what if s if you will. Most people dont do this; they only look at the decision from one perspective and thus make a half-informed decision, which they later most likely regret. But why is this so important?

What happens if I do?... What happens if I dont?...

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Lets take the example of the property investment in far North Queensland. In assessing the opportunity I considered the downside of buying it: maybe I was being overcharged. Based on my research I felt that the property was over- priced by about $500k. And then, if I bought it, what could the worst-case scenario be? Maybe the opportunity had come far too early and I would have to hold on to it for 5 or more years before it would be worth enough to sell at a decent profit. Looking at it from the other side, the upside was that I had the finances to cover any projected downtime, and by my informed assessment I stood to make at least a few million dollars profit when I did eventually sell. On balance, my downside was minimal compared to the benefits of purchasing the property at the time the opportunity presented itself. When a person buys an investment property, the downside can often be that the market slows down for a few years and the asset doesnt increase in value. It may take a few years of patient waiting (and paying interest) for the market to pick up and the investment property to be worth more than before. The upside, though, is that if you have the financial luxury of being patient, your property value can potentially double in 7 to 10 years. Lets take another real-life example just to bring the point home, because without knowing it you are probably doing this every day in little ways, even if it is only happening in your subconscious. Say for example you set off on an overseas holiday and realise at the airport you forgot to pack your sunglasses. Its summer where youre going and youre tempted to buy a fancy new pair duty-free, but they are expensive. Now you weigh the upside a flash new pair of sunnies to replace your drab old ones, theyll protect your eyes and give added hotness value to your holiday photos. Youd possibly contrast this with the downside theyre a significant dent to your holiday spend-money and you havent even left the country yet! Also you could quite easily lose or break them, as tends to happen on holiday, but then again you were smart enough to arrange travel insurance for such an event, werent you. Contrast the two scenarios to determine which is the greater risk. Maybe in this case you dont lose out too much and the risks are acceptable, so you gleefully make your purchase, a little poorer, but richer in street-cred terms. Similarly with all investment decisions, you need to look at the potential upside and downside and contrast them to make sure you can live with the outcome. Be honest about it, because the result of your decision could have significant cash flow and lifestyle impacts. It all depends on your individual financial situation. Not every shoe fits the same foot, nor should a herd approach ever apply to investment opportunities. Of course Ill reiterate the point here that there are no guarantees in investing. But then where are there any guarantees in life? Consider - you dont get a guarantee of anything when you are born, so why expect guarantees with life decisions? Not even marriage comes with a guarantee, and thats possibly the biggest personal decision youll ever make.

Chapter 3 Taking Action

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So the best way to tackle this step methodically is to look at the varying scenarios side by side. Spend a thorough amount of time looking through your facts and figures, then compare the figures to understand the possible upside and downside scenarios you might face and contrast them to determine the risks. You should soon arrive at a financial picture that prompts you to confidently move in one or the other direction regarding the appropriateness of that particular investment opportunity.

CHAPTER 3 TAKING ACTION

Need I say it again but just to be sure, Im telling you here that you will miss out if you dont take swift action . Why? Because if it is a good opportunity the window closes fast, sometimes lightning fast. You see, everyone in the investment game wants good opportunities and the informed investor recognises one when they see it. They wont wait for you to catch up, theyll just snap up the opportunity in a blink and that door will close, with the sound of their laughter echoing down the hallway behind them. Lets mention now that one other thing that often inhibits the wary from taking action, even when theyve thoroughly followed the points in chapters 1 and 2. In a word its fear . The reality is that when you think something is too good to be true you are quoting a poor persons justification for inaction. No rich person has ever said that . Being too suspicious or too timid to take advantage of an opportunity- especially when youve verified its potential- well its like putting blinders on your racehorse. Youve lost the race before you even began it! Any successful investor will tell you that if a golden goose landed outside their door, they wouldnt stand their wondering if their eyes were playing tricks. No theyd grab it straight away before anyone else saw it, and build a proper pen to collect all those lovely golden eggs, thank you very much! If an opportunity ever is too good to be true, count your blessings and act before someone braver gets in there first. This is why I will repeat my first points - to not be overly cautious and to be informed beforehand . Preparing ahead, not after the fact, will ensure you are not too late to capitalise when that golden goose turns up at your door. If you ignore this, afterwards youll either have made the wrong decision or you wont have made any decision at all and youll have missed out on payday. However if you do follow my advice then you will certainly have greater clarity around making decisions quickly and taking action in a timely fashion. These points not only apply to financial decisions but to all decisions in life.

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For me the clear results of taking swift action are obvious. In the case of webjet, that unknown, profit-less company went on to become one of the most financially successful dot-coms to come out of Australia. Today it is the one of the most popular travel booking websites around, with ongoing expansion globally. Ditto applies for that property deal in Queensland. I made a clear fortune by not mucking about or procrastinating when it came up. Speaking of the latter, when it comes to making any property investment decision you also need to have certain information at your fingertips in order to be prepared for the right deal. I have listed each below and encourage you to recreate this list every time you are assessing a given property investment opportunity.

Confirm the property investment opportunity is genuine through: Property economic reports
These reports help ensure you are buying in the right area, with solid specs and projections based on up to date market information. They are often bite- sized roundups of the economic news and events related to your interest area, with clear analysis and insights as well as outlooks for the period ahead. They are updated on a regular basis, annually, quarterly or even more frequently depending on market performance. Its what you need to stay one step in front when making a property decision, but dont forget to also look long term.

VALUATIONS ON THE PROPERTY

Valuations are an essential part of any property purchase. There are many factors involved in reaching the correct value for a property and these are used to determine the security value of a property as well down the track. Proper evaluation of a property is an assessment of the hard evidence including: measurements of said property, details such as the number and type of rooms, presentation, fixtures, fittings and any improvements. A propertys unique attributes are also taken into account, such as the location, the structural condition of the building including any faults, outdoor space, ease of access, garaging, planning restrictions and local council zoning. These attributes are weighted against recent comparable sales in the surrounding area and the current market conditions, to produce a valuation report that the Valuer is legally bound to. Note that the asking price of a property wont necessarily equate to its determined value. Investors so often over-capitalise in real estate and are convinced to pay what is actually far above the market price.

Cash flow impact reports / 10 year forecast reports / Client testimonials

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Need I stress then that these valuations should be independent not done by the company selling you the property. You need to get a reputable, licensed 3rd party Valuer to do this so the assessment is unbiased, unemotional and truthful. To give a different analogy, despite what the salesman tells you when buying a second-hand car, the cost of an independent inspection from a professional can save you thousands in unexpected repair work down the track. This principle is magnified a hundred-fold when it comes to a building. The last thing you want about your neck is a costly lemon that hemorrhages money in structural repairs and other issues once the sale is complete.

CASH FLOW IMPACT REPORTS

This is a fancy word for clearly documenting the information you gain from your assessment in chapter 2 - the financial pros and cons of investing or not investing in the property. Having the information clearly spelled out on paper will help simplify all that data into something understandable and persuasive.

10 YEAR FORECAST REPORTS

These reports need to be made by a qualified economist and they will help you speculate on the likelihood of a good return from your investment in the short-mid term. They contain a thorough forecast analysis of of the major market variables of demand, supply, rents, yields and values, as well as indicative investment returns regarding your prospective property. Within the report there should be a clear explanation of the logic used to make these forecasts. Ideally there should also be some discussion of the implications for, and appropriate timing of, property decisions relevant to you. Forecasts within these reports are essential reading for owners, investors, developers, lenders, tenants and planners as they provide an independent view, dissociated from swings in market sentiment.

CLIENT TESTIMONIALS
When working with a developer, an investment company or any third party, its a good idea to have a private word with past clients to gauge their satisfaction. Its no good just reading the website testimonials or operating on what the company tells you. How many client testimonials cited in the official literature are ever critical or show a hint of dissatisfaction? Its simply not in the companys best interest to make these available. You have to be an investigator to get to the bottom of how they really work and you need to find those whove dealt with them before. People are an amazing fountain of knowledge, particularly when it comes to gossip!

Conclusion

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The off-the-record information you receive will have the advantage of providing candid feedback and useful insights into the fine print of any future dealings with that company. It is based on actual experience, which is worth its weight in gold. Even better, if those clients are the self-same people you work with, alongside or even in competition with down the track, you know a little more about how they think and judge performance too. Keep your friends close and your enemies closer, as they say. Or maybe the better way to end this section on the value of testimonials is with another of Einsteins famous insights Learning is experience. Everything else is just information.

Have you ticked the points I listed in the above 3 chapters off of your checklist already?
Then take Swift action and dont procrastinate. Otherwise you will miss out, and have to start the process all over again, and again lets consider the downside of this. Worst-case scenario, you could wind up without adequate wealth, aged 80 with nothing much to show for it or to ease you through your retirement years. Not an attractive vision of the future by any means.

CONCLUSION
Now that you are more prepared to make informed decisions, do your research thoroughly, throw your overly cautious nature to the wind and finally start building your wealth for real, financial success is entirely in your hands. Either you read this report and take action or you read this report and do nothing. Doing nothing will seal your fate as a struggling Aussie Battler, too fearful, too suspicious or too plain unmotivated to do the groundwork and make the informed decisions that will secure your financial future. Taking action could mean you join the ranks of the comfortable upper-middle class and enjoy the fruits of all your labour. It really could happen sooner than you think; you need only adopt my advice and be bold. How do I know? Because it happened for me, I am living proof of the results.