Online Expert Matt Raad spends time with CEO Stuart Zadel at the Harry Dent Live event in Brisbane recently and shares his views on Harry’s presentation, plus why he believes that learning how to build and acquire money-making websites should be an important part of every investors portfolio.
Stuart: Well, hi guys and welcome, this is Stuart from Zadel Property Education and I’m joined with website wizard, Matt Raad. Matt, how you going?
Matt: G’day, everyone.
Stuart: We’re in Brisbane, actually in a seminar room. We just spent the day at the Harry Dent live event. For those of you who don’t know, Harry Dent is a famous demographer, predictor, if you will, of trends and has become a sort of semi-famous property doomsdayer around the world. That was pretty interesting.
Matt: It was interesting.
Stuart: He’s very, very definite in his opinion.
Matt: Yup, very definite.
Stuart: He has been wrong many, many – sorry. He’s been right many, many times in history and he’s been wrong many, many times in property saying that most of these what he calls a “property bubble” has been fueled by artificial stimulus from governments and property money around the world, which we would all agree with. We wouldn’t disagree with that. And he says I think the biggest worry he’s saying is really China, the financial systems.
Matt: For us Aussies in particular, yeah.
Stuart: Well, yeah. He’s saying there’s 50 million Chinese dwellings that are bought and paid for that are empty right now and they’re doing that hoping that the things keep going up. He’s saying that will not continue. The Chinese government cannot save it and the big risk to Australians is that they’re our major trading partner.
Matt: That’s right.
Stuart: So he’s saying Australia will not be immune from that. Anyway, Matt, just wanted to quickly get your thoughts. What did you get out of the day? Does it change your views on anything moving forward? And what’s your best way strategy moving forward for creating wealth and preserving wealth? You got two minutes.
Matt: Okay. It definitely reinforces my views on how awesome websites are. Of course, I mean now I’m going to be biased and say that, but Harry was – we invest in shares and real estate as well. The thing about your real estate investments, Harry’s very bearish on real estate here in Australia as well. Good news is, Australia long-term, interestingly, he said we’ve got the best demographics out of the civilized world, so really good news. If there is a recession then it will come up a nice and strong year.
Stuart: But Harry’s definition of the “civilized world” is interesting.
Matt: Yes.
Stuart: You still got main countries like US, Canada, UK, that kind of stuff.
Matt: Yeah. But for me sitting there, I was thinking, thank goodness I’m in websites because I do honestly think they can help us carry through anything. Obviously, all asset class is going to be affected if there is a recession.
Stuart: Of course. But just with the websites, no debt?
Matt: No debt.
Stuart: No leverage in terms of borrowings?
Matt: Absolutely. And really high cash flows though. That was the really interesting thing, is because with websites, yeah, they might be slightly but generally in recessions in the last 2009 recession the America website businesses like the ones we’re buying, they still went up in revenues because people still buy little amounts. So for us, they’re just little mini cash cows that keep pumping out no matter whether it’s recessionary or inflationary recessions because Harry was talking about that.
Stuart: Deflation.
Matt: Yeah, he said we’re headed for a deflationary recession. So websites will, you know, can’t make guarantees but in my opinion, sitting there, that’s what you’re asking obviously, but yup, it is pretty cool and I actually want to go and buy some more websites and not real estate.
Stuart: And look, for example, if you had bought Sydney real estate six months ago, at the time of this filming Sydney real estate is down at least 7 percent across the board, Harry’s saying 15 to 20 percent in prestege suburbs, so you’re talking a million dollars plus. So those people are down $100,000 – $200,000 already. All right? You could buy a lot of cheeky-websites and produce cashflow for that money.
Matt: Absolutely. Actually, that was one of the other things I picked up that he did point out when recessions do hit, it’s always the top end of the market that gets hit first, not just in real estate but in stocks, you know. Look at, you know, certain stocks, they’re way overpriced and they always get hit first in certain businesses and things. So the good thing, I think now is a really good time to buy nice solid little websites. We don’t need to be spending megabucks on web. Although I’ll say this to Liz – Liz and I had just recently been looking at some very big websites to buy. I might tone that down a little now based on what Harry said today. We’re looking at big 7-figure websites ourselves but we might go back to our sweet spot which is the 100 grand.
Stuart: All right. Thanks for your insights there, Matt. I’m going to jump back in for the property people and tell you what Harry did say is this: where you make your money in real estate is rental. He said monopoly, high rents.
Matt: Yes! Yeah, that was interesting.
Stuart: And all-year rates in general; we’ve been talking, Airbnb, we’ve been talking multiple occupancies and maybe quick short rentals depending on property under circumstances. So again, great thing to do particularly if you don’t own a property and you can make free cash off it, wonderful thing to do. Anyway, I hope you’ve enjoyed this great…
Matt: Can I add one final advice? You know, you just made me think of the bonus tip and it was from what Adam Hudson said when he got up as well. He teaches a similar trade to us. Learn how to build money-making websites. You cannot lose them because you’re not risking any money at all. Learn how to build your own website businesses. I think that would rock as well.
Stuart: Cash flow websites, cash flow products, cash flow property.
Matt: Property, yup.
Stuart: Heard it from us first. Cheers, mate!