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We sat down with Dominique Grubisa of the DG Institute, a educational force looking to help the average Australian take control of their household debt.
Dominique Grubisa learned about debt and going broke the hard way. These days, the former barrister is using her extensive knowledge of the law and finance systems to help others protect their assets and grow their wealth.
TBS: Dominique, you run a wealth management education service. What do you teach people? And who do you teach?
My mission is to empower everyday Australians to both gain control of their finances and to grow their wealth. For people experiencing hardship or financial problems, I might help them to stop wracking up more debt and to stabilise their financial position. Then, once they’re on their feet, I teach them how to grow their wealth in a faster way. Some people assume that they need a finance degree or to be some kind of guru to take control of their own finances. It’s not true. While experts like financial planners have their place, I’m all about teaching people to be in control of their own financial lives and to build their own wealth.
You were previously a barrister and you’re a practising solicitor with more than two decades of experience in property investment and development. Why the move to teaching?
I learned about debt and hardship first-hand when I went broke myself during the GFC. I almost lost everything – I had a seven-figure debt and three children under five to provide for. It was a very humbling experience, and I had to rebuild my own finances in a much shorter time span than I had the first time around. One of the things I did was to channel my personal experiences and legal background into a self-help book for others wanting to get out of debt.The book struck a chord with thousands of people and I realised that the knowledge that I had was valuable for people in similar situations. This led to me writing a number of books on different topics, including turning your finances around and achieving wealth in the property market, and these have become the foundations of my teaching.
Please take us through the services that you offer.
In essence, the DG Institute provides a focal point for a community of motivated individuals who want to grow their wealth and become more financially secure.We offer training and education across four key areas. Master Wealth Control is an asset protection system that aims to provide people with the ability to protect their assets no matter what financial hardships they encounter as they go through life. It’s kind of like an invisible force field for your assets. Real Estate Rescue teaches people the skills and knowledge they need to identify and buy undervalued property from motivated vendors at potentially 10 to 40 percent below market value. The Property Uplift Program introduces people to the skills they need to become property developers and earn income through small, low-risk property developments. And our Elite Mentoring Program is an intensive personal mentoring program for graduates of our other strands who want to learn everything there is to know about buying distressed property in Australia.
These services are delivered through a variety of national events, workshops and online seminars, and I am proud to say that we have helped over 40,000 Australians get out of debt and grow their wealth.
The property education industry has some snake-oil salesmen and too-good-to-be-true seminars that people should steer clear of. How can people know what is good advice and what is a scam?
If you’re at a seminar where the people running it get a commission and you are encouraged to buy a particular real estate product, then you should beware.Another thing to be cautious of is property seminars that place a heavy emphasis on how you can ‘get rich quick’. The promoters might be selling projects or selling off the plan and sometimes they’re getting a kickback from a developer or a promoter. Do your due diligence before any seminar and check out the organisers through external sources.
You should also make sure the people you’re dealing with are licensed. Investment schemes these days all have to be approved. Mind you, just because they are licensed by the Australian Securities and Investments Commission (ASIC), it doesn’t mean that ASIC underwrites them or has vetted them. It just means they have to have adequate insurance and dispute resolution and that sort of thing.
What would you say are the best ways to buy low and sell high when it comes to property?
The best thing you can do is to know the market and have the right information and tools. Do your research and due diligence. It goes without saying that negotiation skills are critical.The person who does best in a negotiation is typically the one who knows more, so know the history of the property and why the vendors are selling and you’re half way to negotiating a win-win deal.
Your legal background must benefit your property expertise. What are some overlooked legal tricks and safeguards that buyers and investors should know about?
One great tip is to place special conditions in contracts to give you maximum benefit. To take advantage of the value of having money in you own account, you can negotiate to put down a minimal deposit and to have a longer settlement. You can also add contingency clauses into the contract so that, as a buyer, you can get out if you need to. You should also be aware of the tax implications of investment properties and look at tax minimisation. For example, there’s an ATO-approved tax-effective lending product called Loan Controller. Essentially it allows you to minimise the interest rate on your home loan mortgage by increasing the rate on your investment property mortgage. This is beneficial because the repayments on the investment property are tax deductible, while those on your mortgage are not.
What is the property market doing at the moment? What’s next?
The property market has cooled off at the moment in the hot areas of Sydney and Melbourne. This is largely because of moves by the Australian Prudential Regulatory Authority (APRA) – the body that regulates banks and lending – to make it harder for people to get finance. It’s no longer as easy to get a loan and that flows on and cools the property market. Meanwhile, interest rates are on hold at record low levels and there’s no sign of immediate change, so it’s harder for banks to get money to lend to people. It all adds up to a handbrake on the property market, so prices are likely to go sideways in the short to medium term.
Australia holds the title of the world’s highest household debt, so what can we do to get our individual finances in control? And what does this mean for the property market?
A lot of people have taken out loans with interest-only periods, and APRA is now making these much harder to obtain. After five years these loans typically switch over to principal and interest. So, over the next few years lots of mortgage holders are going to be forced to start paying principal and interest, meaning they will be paying down debt. This is likely to have a cooling effect on the property market.
If you have serious credit card debt, you can do several things to try and improve the situation. You can approach your financial provider and ask to vary your loan, transfer the debt to another card provider offering a 12-month interest-free period, or negotiate a payment plan with your provider to pay off the debt faster.
Dominique Grubisa BA (Hons) LLB, LLM is the CEO and founder of the DG Institute, a wealth management education service specialising in making property investment possible for all Australians http://www.dginstitute.com.au/
As a former barrister and practising solicitor, Dominique has an extensive legal background with more than two decades of experience as a property investor and developer. She also holds an ASIC credit licence and a real estate agent’s licence. Dominique is the ‘go-to expert’ when it comes to developing property in order to increase its value, along with buying distressed properties and acquiring and developing residential properties deep below market value.