ABOUT BILL HARISIS & TONIA PAFLIS
- Bill: Market Manager (automotive & refinery industry)
- Tonia: Secondary school teacher
- Age: 44 & 42
- Family: Ephea, 5
- Began investing in residential property (year): 2000
- Property portfolio value (including principal place of residence): $6 million
- Number of houses you own (including principal place of residence): 11
Bill Harisis and Tonia Paflis own their own home and have built a portfolio of ten houses over the past 10 years. They plan to have 20 investment properties by the time they retire.
Bill and Tonia knew they could never save their way to prosperity and a comfortable retirement so they were always looking for ways to make money. They dabbled in the stock market and tried numerous managed funds with various financial advisors and groups, but none of them were what Bill describes as ‘our cup of tea’.
They continued their search for a good investment vehicle. After learning about investment property and seeing the capital growth in their first home, Bill and Tonia decided to try property investment. Their first investment was a unit in a large development which they bought off the plan in 1998.
Bill and Tonia came across Custodian through one of Bill’s colleagues who lent him her copy of John Fitzgerald’s Seven Steps to Wealth. “We thought John’s model was fantastic. It made a lot of sense and it was easy to understand,” remembers Bill. After reading the book, Bill and Tonia realised that units weren’t the best way to invest so they sold their unit, holding it for only 12 months.
In 2002, they purchased two investment properties through Custodian and they were able to duplicate approximately 18 months later, buying another two. Bill says, “We probably could have done so earlier but we were a little ‘slack’ back then!” The third and fourth properties spurred them on to buy another house through Custodian in 2005, build a new home in a beachside suburb of Melbourne, keep their first home as an investment property, and purchase another four properties through their own property development.
The best moment in Bill and Tonia’s wealth building journey was when they purchased their second lot of properties with Custodian. It was only then that they realised how great an investment property can be and how much capital growth they had actually achieved.
Bill and Tonia like residential property as an asset class because it is ‘solid’.
Bill says, “It’s something you can touch, feel, and see. It doubles in value every 7–10 years, so you can’t really go wrong.”
MANAGING CASH FLOW
Bill says, “Cash flow is critical to your survival. You need to get your cash flow right so that you’re not eating into your own savings. The tax deductions that come with ownership of an investment property must be accessed through a PAYG income tax variation form, especially if you have multiple investment properties.” Bill and Tonia have learnt the importance of having a line of credit and their own savings to fall back on when they need it. While Bill says he understands it’s not realistic for everyone to have a comfortable amount of savings put aside, you at least need the safety net of a line of credit.
Bill says, “We’re not only on a financial journey but also a personal one so things aren’t set in stone – personal growth and development are just as important as making money. It’s important to continue to learn in all aspect of our lives, so we attend a range of seminars and conferences and we read as much as possible.” Maintaining the right mindset is critical in order to achieve those goals.
Bill and Tonia admit is hasn’t always been easy but by attending seminars, keeping up-to-date with their reading and having mentors helps them stay on track. At first, John Fitzgerald was indirectly their mentor and later on he became their advisor. They have also met mentors through their involvement with other investment and personal development programs.
Those programs have helped Bill and Tonia identify their core values and what is important to them as well provide focus and structure on how to achieve their goals.
Bill and Tonia have a very different outlook on life compared to when they began their property investment journey.
Much of what they hope to achieve now is about others rather than themselves. Their lives and outlook changed after adopting their daughter, Ephea, from India in 2006.
Bill explains, “We’d been a couple for 15 years and we only had to worry about ourselves. Having a daughter has obviously changed our lives but after visiting the orphanage and seeing how others lived, it hit home about how important it is to give back.
It really opened our eyes. Yes we want to help Ephea but she’s our daughter and she’ll be all right now. What we really want to do is help those kids who don’t have anyone.”
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*extract from Custodian Millionaire Case Studies magazine printed in 2012.