My Personal Journey to Financial Freedom (and How to Create Your Own Path)

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Welcome to the Debt Financial Freedom Podcast.
Im your host Victor Lagos and the founder of Lagos Financial.
I've been in the finance and lending industry for 16 years and I've personally made financial mistakes and learned from them.
I've started this Podcast to share stories and lessons on my own journey, and to share insight that may help others on their journey,
and I interviewed people that I connected with, That share values and mission to help other create financial freedom.
My goal in this podcast is to share raw, honest, transparent, and helpful strories that you can relate too, and inspires you to take control of your finances.
And only have debt that brings you closer to financial freedom. Everything in this podcast is general in nature, and for education purposes only.
Non of your personal objectives, financial situation, or needs had been taken into consideration.
I highly recommend you seek personal, financial, legal, taxation, and credit advice before you take action on what you heard on this podcast

Victor Lagos, a seasoned financial expert with years of experience working with clients to build wealth, shares his invaluable insights and strategies to help investors avoid common pitfalls that can kill their borrowing capacity. He draws from his own vast experience in the financial industry to provide practical advice and actionable tips.

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Victor Lagos - Lagos Financial 

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What is Debt to Financial Freedom?

Welcome to the Debt Financial Freedom Podcast. Everyone loves the benefits of money, but so many of us avoid the hard truths about saving and investing. We wrongly assume we don’t have enough time, capital or knowledge to be able to get to the point of having passive income streams, savings, or investments.The things we really need to know about money aren’t taught in schools. Spending less than you earn, maximising your income, budgeting, taxes, mortgages, investments and passive income - if you didn’t learn these things from your family, then you’re probably like most people who rely on credit cards, buy now, pay later and overdrafts. And then when you want to invest or buy property you will be wondering why you can’t get approval.But there is no judgment from me here - I was in exactly the same situation! Huge debt, poor financial habits and no assets to my name. Step by step I turned my situation around and now, as a certified mortgage broker for 16 years with several investment properties in my name, I’m here to help you go from debt to financial freedom. Because if I can do it, you can too.In this podcast, I will share tips, insights and strategies from my own journey and experience, as well as my clients and guest experts, who share my values and mission to help others create financial freedom. My goal in this podcast is to share raw, honest, transparent, and helpful stories that you can relate to, and that will inspire you to take control of your finances. The only ‘good’ debt is debt that brings you closer to financial freedom and I will show you exactly how to achieve this. Everything shared by me and my guests in this podcast is general in nature, and for education purposes only. None of your personal objectives, financial situation, or needs have been taken into consideration. I highly recommend you seek personal, financial, legal, taxation, and credit advice before you take action on what you heard on this podcast.

Victor Lagos: Welcome to the
debt to financial freedom

podcast. I'm your host, Victor
lager, and the founder of

loggers financial. I've been in
the finance and lending industry

for 16 years, and I've
personally made financial

mistakes and learn from them. I
started this podcast to share

stories and lessons on my own
journey, and to share insights

that may help others on their
journey. And I interviewed

people that I've connected with
that share the same values and

mission to help others create
financial freedom. My goal this

podcast is to share raw, honest,
transparent and helpful stories

that you can relate to, and
inspires you to take control of

your finances, and only have
debt that brings you closer to

financial freedom. Everything on
this podcast is general in

nature. And for education
purposes only. None of your

personal objectives, financial
situation or needs has been

taken into consideration, I
highly recommend you seek

personal financial, legal
taxation and credit advice

before you take any action on
what has been heard on this

podcast. Welcome to Episode One
of the debt to financial freedom

podcast. I'm your host, Victor
loggers. In today's episode, I

really just want to share my
story, why I started this

podcast, what brought me to
where I am now in my own

financial journey, and how I can
really help people to learn more

about managing their money. So
that can create financial

freedom, coming from debt and
using debt to really help them

financially and not so they
don't get stuck, basically, my

story. So look, this is this is
an interesting one, because my

story is a long one. But I want
to try to make sense of it for

you guys. So that way you get
where I'm coming from. And you

can see that if there's
something that you relate to, it

might help you on your journey.

So some of this I haven't shared
publicly. So it's it's a little

bit a little bit difficult. But
I think it's important that

people who hear the truth and
transparencies, I'm going to

share that. So first and
foremost, we're not taught

taught at school, how to manage
money. Financial literacy is not

a part of our curriculum. And
there's many reasons why that

is. For me, personally, I wasn't
good with money. And my mom

wasn't good with money, she was
into debt, my dad was probably

pretty good. He was a business
owner, and he was able to save

money. So he was a saver, and my
mom was a spender. And she would

spend on credit cuts. And to
give you a bit of cultural

context, I'm half Filipina, and
I'm half Chilean or Chilean,

South American. So my mom's
side, the Filipina side, a lot

of them, you know, God bless
them. They care about the

family, they want to help. But
what happens is they end up

using credit to help their
family with the intent to pay

back later. Same as my mom. But
the problem is with credit card

debt is that it can quickly
spiral out of control. And that

happened in credit habits over
the years. At one point that I'm

aware of, she was in about
$120,000 worth of credit card

debt. And that's that's a hard
thing for for anyone to get into

that position. And along the
way, she made some other

financial mistakes along with my
my dad, which then meant that

long story short, they're now in
their 70s. They're renting, and

they're on the pension and they
have no money to their name.

Another key reason for that is I
didn't have good help. So they

didn't have actual advice from
people that genuinely cared

about helping them create that
financial freedom. And people

that I guess follow through and
what they said, and I really

want to help you guys out there
that want to create that

freedom. You want it to buy
property potentially. And you

just want to know real advice
and you want real stories,

things that are actually going
to help you to get there. So I

can share what I've learned,
because as I mentioned when I

was 18 So when I was younger, I
got into debt when I was 18. I

took out a personal loan
straightaway, the bank gave me a

$12,000 loan to buy a car and to
take a holiday. Within a few

months they refinance that it
got up to 18 It was very easy to

get personal debt and too easy.

And many people are in that same
position. I took control of that

when I as I started to work in
finance when I was 19. And I

started to pay that debt back.

But I Old habits die hard. The
debt didn't get paid back that

quickly, sorry, got paid back.

And then I accumulated it again.

So I was 18. And I had all this
debt. And as I progressed

through the financial career,
took out more money, took out

more debt, had a car loan, I
eventually bought property. But

that property I bought it was my
parents helped me buy that. And

they had to sell their home to
help me buy that. And the reason

they they had to sell the home
is because they ended up

investing in a property that
they were sold. The dream of

financial freedom. And that
dream was, you know, retiring

early. It was, you know, looking
after your family. It was, you

know, passive income, but it was
an off the plan property. And

when you buy off the plan,
there's a lot of risks involved.

And they didn't know what those
risks were. I didn't either I

was still younger, I was working
at the bank at the time. But in

hindsight, I know what happened.

Because the loan wasn't
structured correctly, it was a

property that was overinflated.

So there was, the person that
they were sold the property by

actually took advantage of them,
told them that it was the right

investment, but it was actually
overpriced. So that meant that

firstly, it wasn't going up in
value, it was actually

overpriced. And over time, it
actually went backwards. And

because it went backwards, they
ended up having to sell the

house less than what they bought
it for, and less than what was

going on the mortgage. So they
still owed $20,000 After they

sell the property. And they were
both defaulted. So they weren't

able to ever borrow again. And
to add to that they contributed

$100,000 deposit from their home
to buy it in the first place. So

as I said to you before, the now
retired, they've got no money to

their name. I'm on a mission
now. I'm on a mission to teach

this what what to do and what
not to do. So people don't end

up in that position. It's it's a
hard thing to say that, I'm very

fortunate because I've been able
to learn and get out of that

structure. In the last 12
months, my wife and I, we we've

bought two investment
properties, both of them have

done really well. And they're
doing very well. Before that, I

was able to save money, and pay
back that pay for our wedding

pay for our honeymoon. And it's
led us to where we are right now

I've got my business and that's
growing. So there's a few

fundamental pieces to that, that
I want to share. And I'll go

into detail in future episodes.

But it really just starts with,
you know, clarity, looking at

how do you spend your money? How
do you manage that money. And

there's a really, really cool
cool saying I like and that is,

there's two ways to create a
small fortune, one of them is to

spend less than you earn and
invest the difference. And the

second one is to provide
something of value that other

people are willing to pay for.

So if you can do a bit of both,
that's when you can create a

greater fortune. And then if you
just break that down a little

bit further and say, spend less
than you earn and invest the

difference. So many people spend
more than what they earn,

because they've got access to
credit cards, they've got access

to overdrafts, they've got Buy
now pay later options. So you

really just have to get to the
point where you know exactly

what you spend, so that you can
invest the difference. And then

you use the power of leverage.

And leverage is something that
you can use to buy property. And

if you're buying property
well, and you're looking in,

you're researching, you're
knowing the location that where

it's gonna grow, you're looking
at the numbers, you remove all

emotions. That's when there's so
much potential to create that

financial freedom, you're able
to then create recurring income.

So if any of you guys have ever
read the book, Rich Dad, Poor

Dad, that book was an
inspiration to me, because it

really talks about building your
assets and reducing your

liabilities. And it's about
understanding what is an asset.

So many people think that your
house, your home is an asset, to

an extent it is. But it's also a
liability because it's costing

you money, you're having to put
money aside every single month

to pay down that debt to live.

It's not tax deductible, and
it's not income generating.

Whereas when you invest into
income generating assets, like

businesses or property, you're
getting the tax deductions and

you're and you're getting the
capital growth and you're

getting the recurring income or
passive income streams. So

that's what I like about that
book really talks about

increasing your assets and
reducing your liabilities. So

liabilities is debt. This
podcast is called debt to

financial freedom for a reason.

It's about understanding debt
and how to use that debt to

create financial freedom and get
rid of the bad debts and stuff

that pulling you away from
financial freedom. So when we

talk about property, some of you
might think, I want to I want to

make money on property. I know
someone that invested in Sydney,

and the prices have gone berserk
in the last few years. And it's

true, but many of them have just
flicked it, they were just in

the market. And it just, it went
up, because that was a time of

the current cycle. But if you
deal with strategy work with the

right people, and you look at
other markets, you can get into

a more affordable position. And
you could do potentially

something what's called rent
vesting, that's what I do, my

wife and I rent festers. What
that means is we rent where we

can afford, sorry, we rent where
we want to live, and we buy

where we can afford based on
strategy. And something that's

more realistic. So we get to
live in the eastern suburbs of

Sydney, while we invest in other
markets into state, we own two

properties, one in Tasmania, the
other one in Adelaide, and both

of them are positive cash flow.

And I'll explain a little bit
more in detail of what that

actually means. So let's
consider for a moment, if you're

an investor, and you invest in
you want to buy a business, but

let's say you want to buy a
business, and you raise capital

to buy that business and
investor comes down, let's just

say hypothetically, they they
pay 80%, and you put 20% down,

that investor will most likely
want to get 80% back on their

investment, right? Oh, they want
to own 80% of that business,

because they put down 80%. Right
makes sense. And you get 20%?

Well, you got to look at
property in a similar manner.

Because property is like a
business. It has income, it has

expenses, it has assets, and
liabilities. So the asset being

the value of the property, the
liability being the loan, the

mortgage, and the income being
the rent, every expense related

to that property is tax
deductible. The tax office

actually says that you can claim
everything on an investment

property, like it's a business,
and you don't even need an ABN.

So I know people that have got
15 properties, and they don't

have an ABN. It's all under the
name, you know. But the point

is, if you treat it like a
business, you can grow it

substantially. And more
importantly, you use the power

of leverage, and you use other
people's money, the saying OPM

stands for other people's money.

So I'll break that down for you.

So for example, you buy that you
buy a property, you've got

$100,000, if you didn't use
leverage, and you put that in

the bank, you might get say,
three and a half percent a year

at the moment. So at the end of
12 months, you will make three

and a half $1,000. If you don't
take that money out, then you

can compound that over time. So
the power of compounding comes

in. So at the end of year one,
you've got 103,500. And then you

start to get a return on that
the year after, right. But your

return will only ever be on
100,000. So what you do is you

actually go to the bank and say,
look, here's 100,000, I want to

buy a property for 500,000. So
then the bank will then give you

400,000 to buy the property. The
bank doesn't say I want to take

you know, profit of that when
you sell that property, or I

want to take some of the income
you generate. All they care

about is interest in fees. And
the interest is tax deductible.

So the face, right, and the
other thing is, the tax office

says that you can claim all the
expenses on this property. So

now you're getting tax
deductions, you're getting money

from the bank to help you buy
the property. And then you get

tenants to live in the property
that they're actually paying for

the interest on the loan and the
fees. And if you buy well,

they'll also cover all the costs
as well, like your maintenance,

like council rates, all the
running costs, earning

insurances, property management
fees, you know, water rates. So

if you just consider for a
moment you ended up getting, you

put 100,000 in but now you're
getting a return on investment

on 500,000. And you've used the
bank's money, the tax office and

the tenants to help you buy
that. So you know, instead of

getting three and a half percent
per year and 100,000 Imagine you

get three and a half percent on
on 500,000. So that's the main

reason that I want to help.

That's the main reason that I've
started this podcast is to teach

people the fundamentals and to
interview people that can

actually share their insight.

Alright, so in this section, I'm
going to answer some frequently

asked questions or FAQs. As I'm
a mortgage broker Finance broker

I get asked a lot of questions
in this current market, so I'm

just going to answer that.

Answer some of them. So the
first one, should I refinance my

home loan? It depends. Is your
current loan fixed or is

currently variable. A lot of
people are currently in a fixed

rate, because they were able to
get a couple of years ago,

sometimes below 2%. If you're
going to expire in the coming

months, and there's a lot of
loans that are, then it's worth

understanding, what will that
rate be when it changes over but

still holding on to it for as
long as you can, because, at the

moment, variable rates for owner
occupiers, 4% and above and for

investors, the 5% and above, so
you need to be pretty conscious

of what you're going to revert
to, what I would recommend is to

calculate what your future
repayments will be based on

today's rates, and start putting
money aside to match that, so

that you're prepared for when
the when the loan rolls over.

Because fixed rates are even
higher. They're like 6%,

potentially, depending on if
it's investor interest only. So

if you're already on variable,
definitely time to time to

review, just be aware that your
borrowing capacity could be

affected. So speak to your
mortgage broker, get them to run

the numbers and see what your
borrowing capacity is, and just

see what interest rates are on
offer. There's also some

Cashback Offers. So at the
moment, a few banks are trying

to win business. And they're
giving back in two grand three

grand four gram has a cash
rebate, and said that's to

incentivize you to refinance. So
it could be worthwhile to do it.

Now. The other thing you can do
is potentially stay with the

bank that you're with, if
they're aware that you're

considering leaving, they might
offer you something more

competitive nine times out of
10, they're probably not going

to match what a new bank will.

Because many of you may not know
this, but banks have a back book

and a front book when it comes
to the pricing. So some people

call it a loyalty tax. And that
means the longer that you're

with the bank, the higher
interest rate, even if you've

made all your payments on time,
and then a new customer will get

actually a better interest rate
a more competitive one. And you

think why would they do that?

I've been loyal to them. It's
they repriced their back book,

and then they try to, you know,
get better rates or new

customers on their front book,
because they are aware that

people are going to live and
then they just bring on new

customers. So it's a structure
that exists in Australia, it's a

rare thing. But keep that in
mind that you probably are gonna

get something better if you did
refinance. Next question. What's

my view on increasing interest
rates? So at the moment, we're

in, obviously, a strange time
we've we've come out of, you

know, we've come out of COVID,
we've come out of a lot of

stimulus, there's a lot of
inflation that's happening in

the market.

You know, realistically, it's
probably is going to increase in

the next few months and into
next year. But I don't believe

it's going to continue. Because
the way the economy runs is

people spending money, right?

They, you know, one man's
expenses, another man's income,

if the, if the interest rates
rise so much that people have to

for sell everything, because
their income isn't increasing,

to be able to afford the loans,
then they're going to stop

spending everything. So it's
going to actually impact the

economy worse. So I do believe
that we will get to a point

where they will, they will slow
it down and potentially even

reduce rates. Of course, I can't
predict that I can't see into a

crystal ball. But you know, if
you just go off, you know, if

you think about cycles, and if
you look at the past and the

way, rates have gone up and
down, you know, rates aren't as

high as they've been in the past
right now. And when they were at

record lows two or three years
ago, that was a very, you know,

not, it wasn't a sustainable
amount to stay at sort of 2%

interest rate. So right now, I
think, you know, five 6% is

probably a decent amount to kind
of accept as a reality. But

we'll see how things go in the
next year. Now, the question I

get is, How can I get my home
loan approved faster? So that's,

that's an interesting question,
because it all depends on your

circumstances, and the
paperwork. So if you're self

employed, you're going to need
at least two years of tax

returns and financial
statements, right. If your ABN

has only been registered for a
year, it's going to be a little

bit difficult to get a loan,
especially from a big bank. So

it's important to get all your
ducks in order, get all your

paperwork, upfront. banks and
lenders will approve your loans.

If you provide everything
upfront, if you miss things,

it's gonna delay things. So
that's what I would recommend.

First and foremost, have all
your paperwork, line it all up,

send it to your broker and let
your broker run the numbers and

find the best solution for you.

There also are banks that are
much faster, that will approve

your loan in a day. And there
are some that might take a few

more days. So you got to weigh
up like, you know, what is the

reason you want the loan
approved faster? Yeah, if it's

to buy a property, then you need
to exchange quickly on a

contract, it would make sense go
to a bank that's going to prove

it faster just to refinance.

Realistically, you can't
refinance, unless it's like two

weeks, or three weeks, sometimes
before the current bank will

actually discharge or actually
let you live. So that gives you

time anyway, so I do recommend
to not just consider the time

it's going to take, but also
what, what cost, like how much

is it going to save you in terms
of the interest rate and the

cashback? Now the question is
variable versus fixed. So

that's, that question comes down
to flexibility and cost. So at

the moment, variable rates are
cheaper than then fixed rates.

So it's going to be, but they
are increasing. So it might,

what might happen is that the
variable rate will overtake the

fixed, but that's today's fixed.

So if you fix the loan, today,
you're going to be paying higher

than variable. But maybe in 234
months, that variable weight

will overtake the fixed. And if
it does, that's when you're

going to be in a better
position. So you're taking a bit

of a risk upfront to say I want
to pay more, and betting that

the variable rate will overtake
it. So it is, it is something

that, you know, if you're going
to do that, I would say maybe

have a bit of bit of both, some
people will fix some of the

loan, and then have another
portion variable. The other part

I mentioned, which is
flexibility. Well, flexibility

means that, you know, if you've
got a variable loan, you can

make extra payments, as much as
you want, you can put in, you

know, $10,000, a lump sum if you
sold a car, or if you had a

bonus, and there's no limitation
of how much you can pay back. A

fixed loan has a limit of about
10,000 per year. So if you pay

more than that the bank can
charge you break cost, and they

can also you lose your fixed
rate. So that's why I mentioned

earlier, it's probably good to
have a combination of both some

fixed some variable, so you can
get some flexibility. And you

also can give yourself that
certainty for that for that

fixed rate. Couple more go
through, is now a good time to

buy. I think it's always a good
time to buy personally, it's

just about understanding the
different markets whereby where

you can get an affordable price,
I use the buyer's agent for my

last property, I really
recommend using a buyer's agent,

because not all buyer's agents
are the same, you need to work

with ones that that are genuine
that care that are good at what

they do that deliver that you
can get testimonials from.

Because they will then look for
property that's in a market that

you can afford based on your
borrowing capacity, and where

it's going to get you that
rental return. And the capital

growth in the short term as well
as the long term. Because

property is typically a long
play. Unless you're a bit more

sophisticated, you got access to
more capital, that's when you do

more say developments or
renovations and flip property,

etc. But usually you'd want to
buy and hold. So yes, rates are

expensive at the moment, and
borrowing capacity is being

squeezed. But there are markets
where you can buy positive cash

flow property. And many of you
might be aware that there is a

rental shortage. So rental
returns are much higher right

now. So that means that even
with the high rates, the high

rental return means that you can
afford to cover the mortgage

payment with that rent. So
definitely good time to buy

just, it's about knowing where
to buy. Should I use my equity

to buy another property? That's
an that's a good question.

Because that's exactly what I
did. My wife and I, we bought a

property in Tasmania, and it
went up close to 100,000 in a

year. And we extracted the
equity and we use that equity as

a deposit to buy another
property. So what I like about

property is that if you buy
Well, you don't have to keep

saving up a deposit, you can
just get the equity out and then

buy another property. So there's
there's only two ways of getting

equity out of your property. One
of them is to borrow it, which I

just mentioned. And the other
one is to sell. The problem with

selling is you've got costs that
you have to cover. So there's

obviously selling agent fees,
and there's capital gains tax,

if it's an investment. And most
importantly, once you sell

you're out of the market. So you
know if you if you sell to tap

in that cash, it's likely you
get out. It's likely once you're

out you're you can you can get
back into that market. So I

think it's important to think
about that if it's a strong area

that's going to have good long
term growth. It would probably

make more sense to extract the
equity by borrowing it rather

than selling. The other thing to
consider it is how much equity

Do you have? Right? If you're
with one bank, they will order

they'll provide a valuation. And
that will tell you what the

property is worth and what you
can borrow in terms of equity.

But another bank may have
another valuation, that's even

higher. So it's always good to
talk to your broker to order a

few, I usually order about
three, sometimes four, and try

to get the most possible because
it's subjective, the value of

May one value a minor area
better than another and think

the property is worth more, and
that can give you access to more

equity. But you do have to think
that if you, if you did borrow

the equity, it's going to
increase your loan. Because

you're essentially you can
potentially borrow 100%, right?

So say you bought the property
for 500,000, you borrow 80% of

that, you know, which is
400,000. And then you had equity

of 100 Another property, and you
borrow that so now you borrow

the full 500,000. So no money
down, but your debt is 500,000.

So you need to consider like is
the rent actually going to be

able to cover that? And will it
cover it as the rates go up. So

it's always important to have
buffers in place. So cash put

aside to cover off any of those
shortfalls that you have. So

talk to your mortgage broker,
and they can run the numbers for

you and talk to a good buyer's
agent that can help you buy a

will. So you don't end up you
know, like my parents. Thanks

for listening to today's
episode. If you want to learn

more insights about property
investing, and using that to

help you create financial
freedom, subscribe to this

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episode. Season.