Make It, Keep It & Protect Your Wealth
Gaining control of your financial position is very important because it better helps you control your personal life.
It’s easier to live life on the terms that appeal to you if you have wealth and are keeping it protected, than if you’re being led by the need to chase that extra bit of money just to stay afloat.
And the best way to get into the position you need to be in is to manage money effectively.
More people these days are realising they can no longer rely on one income source if they want to become financially comfortable. Mortgages are low on interest at the moment, but it’s incredibly hard to save money in the same environment. You may end up working big hours your whole life just to pay back the bank, unless you are savvy enough to invest in quality debt that returns cashflow and can free up your money enough so that you can get it working for you.
Successful investors are able to not only take advantage of the upside with their investment, but also to control the potential downsides of investment by minimising exposure to risk.
They have an end goal in mind and a clear strategy to get there. Along the way they have structures and systems in place to identify and allow for hurdles and roadblocks along the way and minimise the risks they might encounter.
A good example of a successful investor strategy is that of b Invested founder Nathan Birch, who invests in affordable investment properties purchased for below market value; with an upside for growth; and a positive cash flow due to plenty of rental demand. Building an investment property portfolio on many affordable investment properties, rather than speculating on fewer, more expensive assets, means he only ever has a small portion of his overall investment exposed at any one time and is safe guarded if he needs to sell down for one reason or another.
These days it’s hard to put your faith in the age old methods of protecting your money that we used to rely on.
Superannuation will not be enough to retire on for most Australians, as inflation will likely swallow up their savings. They will need more.
And then there’s insurance, which is getting harder to claim each year.
First, look at what the pandemic did to landlord insurance…all of a sudden it was nearly impossible to insure against tenant vacancies within a landlord policy because the companies expected a lot of vacancies.
And then there’s insurance on your health, which is what William Ha, financial advisor and founder of Breakthrough Wealth Solutions, believes is the most important part of insurance.
Because if you lose your health, you lose your ability to earn an income, unless you are in a position where you already have a significant passive income.
William says that in recent years, the insurance industry has been through a major change because with low interest rates, providers have not been able to invest the premiums they collect in order to help them pay out the claims that they receive. Because of all that, plus Covid, it’s much harder to get adequate insurance cover.
So, it’s up to you
Investment properties can help you look after your own future and that of your family, by creating an intergenerational wealth vehicle.
A good investment property portfolio of positively geared investment properties can be paid off over time using their own rental return, which goes up with inflation as the debt remains the same or comes down.
Speak to our Investor Relations team member if you’d like to connect to William Ha, a financial advisor and founder of Breakthrough Wealth Solutions.