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Part I
The Steve McKnight story
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1
Humble beginnings
A few months ago I received an invitation to attend my 20-year high school reunion. On one hand I was interested in going along and seeing what my old high school friends were up to, and on the other hand perhaps it is better to leave the past in the past.
I wonder, what would you do?
My high school years werenāt particularly happy. I was overweight and an academic underachiever; my year 10 maths teacher summed up my potential when he wrote on my end-of-year report: āAlways pleasant and amiable, Stephen has much difficulty with even the most basic of maths problemsā.
Itās lucky that high school isnāt always the best indicator of future success.
Today, at age 37, Iām involved in more than $13.5 million worth of property projects that span all types of real estate (residential homes, units, commercial property, land and so on), have multi-million-dollar business interests, and am the author of Australiaās most successful real estate book ever (which you happen to be reading right now).
On reflection, Iād have to say that the kid who struggled with algebra managed to at least gain a good appreciation of the maths involved in making money!
While your past doesnāt determine your future, if you want something other than what youāve got at the moment, youāre going to need to make some changes!
Please donāt think this is a rags-to-riches story, or that I have some supernatural ability that only the truly blessed receive. Neither is the case. My upbringing was decidedly middle-class, neither flush with money nor crying poor.
Working hard in the one job selling trucks for 40 years, my father abandoned a lot of his own ambition so that his wife and children would never go without food, shelter and the occasional luxury. For this I love and respect him deeply. Mum never worked in a paid, full-time position, instead she showered her children with delicious home cooking and cuddles. As a gifted musician, Mum would teach piano after school for extra housekeeping money when time allowed.
DANGEROUS ASSUMPTIONS
My life was decidedly normal and uneventful until the end of high school. Previously a strictly pass and occasional credit student, I discovered a rote learning strategy that allowed me to achieve a respectable year 12 score ā I even got a C for English; a miracle for sure!
Looking back itās clear that I was never shown how to study effectively. Instead, it was just assumed that everyone could do it ā like reading and counting to 10. A similar problem exists today in that property investors are never taught how to invest profitably. Itās just assumed that all of us will be able to invest successfully once we have the finances to start, but no-one ever explains how we should go about it.
Having languished at the bottom of the social and academic pecking order for most of high school, I feel compelled today to do what I can to right the wrongs caused by dangerous assumptions. In terms of property investing I will show you how to make a profit from day one. But more on that later.
My choice of career was made with little forethought. I always wanted to be a physiotherapist, but I was deemed too mathematically challenged and my high school forbade me to do maths in year 12 ā a prerequisite for the course of my dreams.
So, what does someone who is hopeless at maths do? I became an accountant, of course! Now, please donāt make the mistake of thinking that accountants need to be savvy with maths ā thatās what they invented calculators for. All thatās needed is a solid grasp of how to push buttons, a callused index finger and a good understanding of your times tables.
I managed to graduate from my RMIT accounting degree without dropping a subject and somehow talked my way into a job in the midst of the early 1990s recession. Turning up for work in a suit that looked uncomfortably like plush-pile carpet, with a pink shirt and tie that Iād be embarrassed to give away today, I began my accounting apprenticeship completing simple tax returns and running errands. Still, much to my Dadās surprise, I never had to make the coffee.
Before long my career took a turn for the better and I secured a job with one of the big six (now big four) international accounting firms. The only cause for concern was that I worked in audit. Unfortunately, audit is not the most exciting of fields, especially at the junior level. But I had a bout of late-onset work ethic (inherited from my father) and worked exceptionally hard. I was regularly promoted and, having already completed the prerequisites, I began to study to become a chartered accountant. This was not an easy thing to do as the postgraduate exams are notoriously difficult to pass. Iād work long hours during the day and then come home to many long nights of study. You could accurately say that I had absolutely no social life. Such was my lot until I succeeded in gaining the status of a chartered accountant ā at which point I immediately suffered a massive meltdown.
Disillusioned with my chosen career, I tried in vain to study physiotherapy at Sydney University. It was the only course that would even consider me, and I did exceptionally well to get number 17 on the second-round offers, but the cold, hard fact was that I was not offered a place.
Shattered, I realised I needed a change, and I made a career blunder by accepting a job in industry (as opposed to public accounting), more because I felt wanted than because it was a match to my skill set. In between roles I took a holiday and met a woman, Julie, who captured my attention, and my heart. The only problem was I lived in Melbourne and she lived in Mackay ā 2500 kilometres away. Lasting only two months in the new job, I used the excuse of moving to Mackay to be closer to Julie to save face when resigning. Luckily, accounting skills are portable and I had no trouble finding yet another position as an audit manager, with yet another firm of chartered accountants.
By this point in my life I was certain that Iād shaken off the shackles of my high school limitations. Iād gone to Weight Watchers and lost 16 kilos, Iād worked hard and achieved membership to what many regard as the peak accounting body in Australia, and Iād found a woman whom I loved. Yet this new-found self-confidence was to come crumbling down when I was sacked after nine months, and told I was someone who overpromises and underdelivers. This left my confidence savagely beaten and those nasty self-doubts that I thought Iād buried began to resurface.
Luckily, Julie was a rock of stability. We became engaged and then moved back to Melbourne. Once again, I found work in a small accounting firm, again as an audit manager, and soon I was working harder than ever in an effort to resurrect my career.
I remember my office well. It was long and oddly shaped. A glass partition separated me from the only other manager, Dave Bradley, with black venetian blinds providing limited privacy. What I remember best were the thick iron bars on the windows, which Iād regularly joke were there to keep the employees in rather than the burglars out.
By late 1998 Julie and I were married and I was still working, working, working. Iād regained my confidence and was beginning to branch out into teaching, too. Iād taken on a lecturing role at my old stomping ground, RMIT, and was also, ironically, mentoring other aspiring chartered accountants to manage the art of studying effectively.
I wouldnāt say that I ever felt truly settled though. Iād dread Sunday nights and having to iron five work shirts for the week ahead. I was certainly someone working five days to fund two days off. I was a rat taking my place in the race.
MY WAKE-UP CALL
You might be able to ignore the warning signs, but when youāre not happy your body will eventually give you a wake-up call you canāt ignore. Some people are unlucky and suffer crippling or fatal events, such as heart attacks or strokes. For me it was ulcers on ā¦ well, āunusualā body parts.
I raced off to see the doctor, who happened to have a surgery next door, and I was lucky to get an immediate appointment. The doctor was perplexed at my condition and suggested I needed some time off work. Later that afternoon after returning from a walk, I found a piece of paper in the letterbox. It was a photocopy from a medical journal explaining my condition. The...
