Property investor Steve McKnight reveals secrets to building wealth

Steve McKnight, 50, whose tenants range from everyday Aussies to the likes of former US president Barack Obama, has released a new book titled Money Magnet. In it, he guides readers on how they can attract wealth themselves.

Steve, a fund manager and global real estate expert, escaped the rat race by replacing his salary with income from his property investments.

“I was working as an accountant and was suffering stress-related problems that manifested in ulcers on places you don’t want ulcers,” Steve tells news.com.au.

“The doctor told me I needed to change or I was headed for an early grave. I looked at ways to replace my salary from accounting, and stumbled across the idea of positive cashflow property.”

The idea would lead to a complete change for the Melbourne man. In 1999, he and friend David Bradley bought a three-bedroom house in Ballarat, Victoria, for $44,000.

“I bought my first property in May 1999 and was hooked. [David] and I went on to buy 130 properties in three-and-a-half years. This allowed me to retire from the need to have to work at age 32,” the now-50-year-old says.

“I continue to work, but on causes and concepts that interest me, and that add meaning and purpose to my life.”

That includes philanthropy work. Steve has donated 100 per cent of royalties from his six books – more than $1 million – to social environmental causes.

His latest project involves planting native forests on previously cleared land under a program called TreeChange.

Become attractive to wealth in order to attract wealth

“The secret to attracting more wealth is to first become more attractive,” Steve says. “Strangely, people expect to be successful before acquiring the skills needed to attain it. That’s like saying I will work on being better with money once I have more money to be better with.

“This approach will set you on a lifetime path of financial disempowerment. Becoming more financially attractive requires only two things – doing less of the things that repel wealth, and doing more of the things that attract wealth.”

Steve says that being a better money manager is a lot like becoming a better driver; a few lessons from a skilled instructor will be a lot better than many lessons with a well-meaning parent.

He recommends three areas to work on the become a money magnet:

• spend less than you earn

• invest your savings sensibly

• start as soon as possible

“People are programmed to be poor because they’ve inherited a few, or in some cases many, poor money habits and financial beliefs from their parents,” Steve says.

“This was unlikely to be deliberate; your parents passed on what they were told, and so on back through time.

“Therefore, if you want to retire sooner, or desire a better financial future than what your parents achieved, then you need to level up your financial IQ (the way you act) and your financial EQ (the way you feel) by learning from people who have achieved the outcomes you hope to.”

Steve’s top four tips to financial freedom:

• “The age pension is not an entitlement or return of past taxes paid. It is an emergency support payment for people who can’t support themselves. Presently, three-quarters of hardworking Aussies work their whole lives only to end up needing the age pension to survive. Something isn’t right. The system people use for making and managing their money isn’t working. If you want a different outcome, then you need to follow a different plan to the masses. The sooner you do so, the better off you’ll be.

• “You might be programmed to be poor without knowing it because some of your financial thoughts and beliefs that you inherited from parents could be holding you back. It wouldn’t have been deliberate, it’s just that your parents passed on to you what was passed on to them, and so on back through time. Without new ideas and strategies, the highest level of financial success you’re likely to achieve is what your parents achieved. If you want to aim for something more than that, then you’ll need to update your programming.

• “You won’t get rich by saving, but you’ll never be rich if you can’t save. Savings are a store of wealth, not a source of wealth. It is important to multiply your money by investing it, not hoarding it. That said, savings are important because they demonstrate you can live within your means, and if you can’t do that then you might attract a fortune, but it won’t stick, resulting in the appearance of wealth (materialism), but not the substance of wealth (happiness).

• “The more money you allocate to touching, moving and inspiring others, the more your money will matter, and the bigger your investment in making and leaving a lasting legacy. You will also attract more opportunity and level up the calibre of people in your circle of influence. Be sure to live how you want to be remembered.”

Paying it forward

What inspired Steve to donate 100 per cent of his royalties from his books to social and environmental causes?

“I didn’t write my books to make money,” he says. “I wrote them to help people who aspired to something other than working four or five decades only to retire with financial problems, to introduce concepts not commonly known or understood, and to share surprising strategies that have helped me attract and keep a fortune that counts.

“Using my money to fund causes that matter to me adds significance to my wealth and gives my money meaning beyond just dollars and cents,” Steve says.

“Take TreeChange.com for example. This is a movement I founded for people who want to give mother nature a hand up by replanting native forests on land that is unviable for farming. “Our pilot project is a 700-hectare site in northeast Victoria that was cleared in the early 1900s. To date we have planted more than 300,000 trees to help establish a new permanent biodiverse native forest. We’re helping to save the world one tree at a time.”

He encourages others to follow in his steps, within their means.

“The first step is to give a little from what you do have, not a lot from what you don’t have. If that’s money, great. If that’s time, fantastic! What’s important is to get involved to the extent you can.

“Many hands doing a little work is much more helpful than a few hands doing a lot. Think about a cause or issue you are passionate about. Then find an organisation already working in that space.

“Finally, get in touch with them and ask, ‘How can I help out?’ Sowing the seeds of generosity today will result in a harvest of generosity later tomorrow.”