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Property 2010

Tuesday, March 9th, 2010

Interest rates are on the rise again, I just got my notice in the mail. Since just before Chistmas my monthly repayment has increased by around $300. It would make anyone wonder whether investing in property is currently worthwhile. The economy has certainly taken a lot of us for a wild ride but investment is still a necessary part of your future financial security. Learning as much as you can about investing and creating your own wealth will be of benefit to you and your family, we can no longer rely on government resources as we have in the past.

Is property still a valuable source of financial security? Does it still offer the same rewards as it has in the past? Is it a viable way to create wealth in our current economy?

Yes, property is still looking good. Australia is still struggling to keep up with it’s population growth, there are still not enough properties to go around, this is a plus for property investors. Tighter lending criteria in the banking industry is another plus if you are considering using property investment for wealth creation.

The housing market runs on a 7-10 year cycle with many properties doubling in value during this time, so be prepared to wait, using a buy and hold strategy. Taking advantage of increasing equity over that time (by buying more properties) can assist you in building a healthy property portfolio that will help fund your retirement. Learn as much as you can about the property market and the area you wish to invest in, study the various strategies open to you and find the one that suits you best. Read books, attend seminars or look into various homestudy programs any or all of these will assist you in making the most out of your chosen investment strategy.

Some questions to consider and answer when thinking about property investment in 2010…

  • Is negative or positive gearing better for you?
  • What are the benefits of an interest only loan?
  • What is the best way to purchase the property, in your name, in a trust or in your spouse’s name?
  • What are the investors important checklist criteria when choosing a property?
  • What do renters want?

These are just some of the points to consider, the answers may vary depending on your situation and your goals. Getting expert advice is always a good idea. Property is still a worthwhile investment in 2010 providing you do your research, know what to look for and are making an educated informed decision.

Have an Impressive Day

Teresa and the Team at

AustraliaWealth.com.au

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Getting the Most out of Your Goals

Saturday, March 6th, 2010

More and more people are becoming aware of the need to have goals in many areas of their lives but it is a good idea to refresh what you know and check you are on track.

This week I have been going over some lessons in Og Mandino’s book University of Success, while reading the lesson on goals I realised I didn’t have it all covered. Goal setting is about programming yourself for success and even though we may all be aware of goal setting we may not be putting it to good enough use in our lives.

Goal setting helps you plan for a better future, without a goal and therefore a destination to head for you could end up anywhere. Where do you want to be in the future – in a week, a month, a year, five or ten years? Goals can also be used in more than just your career. Goals should also cover what you want to achive in relationships with your partner, your friends and your children.

  • Setting goals in your area of income will help you achive financial security and a lifestyle you enjoy.
  • Setting goals in your marriage could keep your relationship alive and add a greater depth of meaning and love.
  • Setting goals in the area of children – this may be one you haven’t considered beyond giving them an education. Many parent / child relationships break down in the teenage years because no clear goals have been thought about for the kind of relationship you want with your child or parent. A lot of emotional heartache can be avoided if this is considered and discussed.
  • If you are single you may want to plan and set goals to find a fulfilling life relationship. It has been said that people tend to put more time and effort into buying a car than into choosing the person to spend their life with.
  • Setting goals in the area of friendship will help to keep these relationships strong and meaningful, without them you may find your friendships are shallow and superficial.

Some of these may give cause for thought…

  • How is your life at work going?
  • Are you where you want to be, what can you do?
  • How is your relationship with your spouse, can you do more?
  • How are your relstionships with your children, your friends?
  • Do they feel how much you value them?
  • How is your day to day existence, could it be better?

Be imaginative and creative in your ideas on how to enhance, improve or change anything in these areas of your life.

Our lives should not just be an existence they should, for as long as we live and beyond, be a creation.

Have an Inspiring Day

Teresa and the Team at

AustraliaWealth.com.au

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Learn to Earn in Today’s Market

Friday, March 5th, 2010

Traditional education is not going to help everyone become financially secure and I think most people are aware of that these days. A university degree will give you the potential to earn a higher income but with a 21st Century style education even those with limited schooling can become extremly wealthy.

What is a 21st Century style education?

In order to answer that properly let’s  briefly look first at where we’ve come from. Education has traditionally equipped us with certain skills, reading, writing, the ability to measure and quantify our world as well as providing us with the means to acquire knowledge. However it has lacked and is still lacking, to a degree, in teaching students how to survive in the world. Especially a fast changing world, and to successfully manage themselves in a new world economy.

Financially life will never be the way it was, we must face a new reality and be prepared to grow and change with it. A 21st century education has the means to help anyone who is willing to become financially independant. There are so many strategies in share, property and business investment to reach any level of income you desire. Strategies for the low or high risk investor, for investors with a lot or little to invest as well as methods to secure your investment from loss.

So where can you get this education?

From books, seminars, dvds and homestudy programs. As long as you are learning strategies that you can implement yourself, and you are not giving anyone your money to invest for you, you are on the right track. You must learn and understand what you are investing in.

You may be in a job you love and all your needs are being met but if anything should happen to change that situation what is your Plan B. The answer could lie in a 21st century education.

Have an Incredible Day

Teresa and the team at

AustraliaWealth.com.au

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15 Basic Tips to Ensure Sound Investing

Monday, March 1st, 2010

Rules You Can’t Afford to Forget

  1. Be diversified. Most people never explore all the investment opportunities available to them. For every strategy you choose another eight or nine are available.
  2. Be aware that every year, no matter what the financial markets are like, there will always be  opportunities for profitable investment. This is where diversification is beneficial.
  3. There are two ways to make profits from investing, sell something for a higher price than you bought it or own an investment that will generate a rising level of income that earns you more than a fixed interest investment.
  4. Be aware no investment is ideal and every one carries a risk return trade off.
  5. Always base your investments on facts not hope. Hoping an investment will do well carries a much higher risk.
  6. Never risk more than ten per cent of your capital on a single investment.
  7. Avoid spur-of-the-moment investment decisions. Few people make sound decisions this way especially if someone is pressuring you to buy.
  8. Always invest at your own pace, never feel pressured if it doesn’t feel right.
  9. Be honest with yourself and aware of your own skill level by assessing your own successful investments.
  10. Always know as much as you can about what you’re investing in and the risk involved. Never invest in anything you don’t understand.
  11. Never give anyone discretion to invest your money because you don’t understand the investment.
  12. Understand your own personal capacity for risk, your comfort level.
  13. Write down your investment strategy and stick to it.
  14. Be prepared to sell investments if they are out of your comfort level.
  15. If you want to make money learn your strategies well and be prepared to give the time required to do so.

Have an Amazing Day

Teresa and the Team at

AustraliaWealth.com.au

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Planning For Your Families Future

Monday, March 1st, 2010

It’s something most of us want to do, but not many of us manage to do in the best way possible. Setting up our estate and making a will is as much a part of financial planning as funding your retirement, investing your savings and building a portfolio.

It’s important to have your estate in order so that everything you are working hard to achieve in your life is handled the way you want. Here are a few tips to make sure that your wishes are clear when you are not around to explain for yourself.

Someone other than yourself needs to know where it is. Make sure your executors and at least one beneficiary know where your will is stored. If no one knows where your will is it’s the same as not having one.

Keep your will up to date. Review your will when circumstances change, births, deaths, marriages, divorce, buying or selling assets, setting up family trusts or taking out a major loan will all impact upon the nature of your will and the allocation of your assets.

Make your wishes clear and specific. If your intentions are not clear – if they can be interpreted in more than one way – you’re leaving your estate open to dispute. It can happen easily so be sure to get your will drafted by a professional.

Make sure any changes you make are done professionally. Don’t make changes on notes or rewrite an informal will, they can cause confusion and delays.

Don’t use beneficiaries as witnesses. Using a beneficiary or their spouse as a witness could mean any gift to them is invalid and they will not be entitled to any part of your estate.

Choose your executors carefully. Avoid appointing someone as an executor who might have a conflict of interest, such as a business partner, older people or people who might not be capable because of a lack of experience or knowledge in financial matters or because of time or business pressures.

Preparing your estate and making your will is an essential part of your financial plan don’t leave it until it’s too late and be sure to get professional advice.

Reference

McIntyre, J 2001, What I Didn’t Learn at School But Wish I Had.

Have an Amazing Day

Teresa and the Team at

AustraliaWealth.com.au

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The 4 Buckets of Wealth

Tuesday, February 23rd, 2010

Jamie McIntyre has spent a lot of time studying and researching wealth creation. He has had a number of millionaire mentors that have steered and guided him in creating his own wealth, even after being broke and in debt.  Jamie uses a strategy he calls, The Baby Bucket Principle, which is designed to turn the risk factor of investing into your friend. This is done by dividing your available funds into separate wealth buckets. Starting out with a big bucket containing all your investment funds you then divide your wealth into four smaller buckets.

  • The Security Bucket, The Growth Bucket, The Momentum Bucket and the Lifestyle Bucket.

The Security Bucket is low risk investments. These include cash management trust accounts ie cash. Insurance would also be in here, eg income protection, disability and health, use a broker as they will find what suits you best.

Growth Bucket investments include renting shares, residential property and quality companies.

The Momentum Bucket would cover renting shares, commercial property and traditional business. Be careful here as traditional business can be one of the highest risk strategies if not done properly and funded from the right sources (ie. not your home).

The Lifestyle Bucket is for funding lifestyle investments such as holiday homes, a restaurant because you always wanted one or a hobby farm if that’s your dream. Hopefully these can also be growth investments but if not your  other investments should help fund your lifestyle ones. The reason for these buckets is to stop you from choosing the wrong kinds of strategies and using all your money to do it. By using the buckets you divide your wealth into different levels of risk instead of choosing to put everything into one hot tip and possibly losing most, if not all, of your investment.

The whole process that Jamie teaches is aimed at increasing your financial intelligence but in doing so you also have to have control of your emotions. The buckets help with our emotional intelligence they teach us to not be attached to outcomes, instead because the risk is spread we can take a certain amount of risk with one bucket while ensuring the security of another. Combining good financial intelligence with sound emotional intelligence will ensure you’re on the road to strong financial growth.

Have a Profitable Day

Teresa and the Team at

AustraliaWealth.com.au

Reference: What I Didn’t Learn st School But Wish I Had, Jamie McIntyre, 2002.

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Results, Purpose, Action – RPA

Sunday, February 21st, 2010

Results, Purpose, Action (RPA) is a strategy Jamie McIntyre has implemented and now teaches to ensure that once a person’s dreams and goals have been established they have a system to turn them into reality.

The RPA Planning Process is a proven system for taking anything you can envision and making it real. It teaches you how to organise and think clearer thereby turning your thoughts into positive action instead of a muddling, overwhelming chaos.

The process is broken down into three steps:-

Step 1 -

Result – Ask yourself – “What do I want from this situation – what do I want my result to be?” Result is the R in RPA so be sure you ask yourself what you want the result to be not “What should I do” but “What result am I committed to achieving?”

Until you are clear on the result you want any ‘to do’ lists or plans will not be enough to motivate you to action.

The second step is:-

Purpose – Ask yourself – “Why do I want that result – what is my purpose”? To achieve anything successfully there must be a ‘why’ a compelling purpose or reason something that will keep you going in spite of setbacks. Without a reason then giving up is easy,
there isn’t a lot we do without a reason. So find your purpose and be specific and clear about it.

The third step -

Action – Ask yourself – “What action do I need to take to achieve the result I want”? So once you know what you want your result to be and why you are committed to achieving it you are then in a state of mind to begin creating an action plan.

The sequence for stepping towards success in achieving your goals and dreams always begins with the end in mind. You must be totally clear about the result you want, then be able to build a burning reason to achieve it before you can decide the action you need to take and have the commitment to follow it through.

Have a Productive Day

Teresa and the Team at

AustraliaWealth.com.au

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4 More Steps on the Road to Wealth

Saturday, February 20th, 2010

We have already looked at the first four steps on the path to wealth, in this post we will learn four more, together they make up Jamies‘ eight steps to becoming a millionaire which he learnt from his millionaire mentors.

It is necessary to understand that creating wealth is made up of several different forms of income and the goal is to create a system of wealth producing ventures that will earn money without you being there or doing anything. These steps are setting you up to begin your wealth creation system.

STEP 5 – OPM

OPM stands for Other Peoples Money, it is possible to use other people’s money to invest but it is something that has to be considered carefully by weighing up all relevant facts. For example if you were to take out a personal loan it would mean you have money to invest with straight away and the opportunity to earn income from that investment. What you would have to consider is your current situation, the cost of the loan to you, the potential risk of your investment and the potential earnings. Borrowing money to invest can get you started but it must be carefully considered before going ahead so you don’t end up worse off than before you started.

STEP 6 – USING EQUITY

If you own your home or are paying off a mortgage there’s a good chance you have or will have equity. Equity is the portion of your home that is yours above and beyond what you owe to the bank. Equity can be used to build wealth. Investing in property or secure, insured share strategies offer low risk ways of creating wealth out of your equity.

STEP 7 – PARENTS EQUITY

If you don’t have your own home it may be possible to use the equity in your parents or grandparents home. Many people have done this successfully myself included, my husband and I purchased our first property using his mothers home as security for a short period of time. Once the value in our property had increased enough to secure the mortgage we were able to release my mother-in laws property with no cost to her at all. In the majority of situations in Australia, where property is concerned, you have an appreciating asset. This means, providing you do your homework, you have managable risk that will increase in value and create wealth for you.

STEP 8 – SUPERANNUATION

Learning what you can about super is a good idea, having your own self managed super fund could work out to be more beneficial, as long as you are prepared to learn and understand the rules and regulations and how to make it work for you. If you have your own self managed super fund you can choose your investments and take an active role in funding your retirement.

So now you have eight steps that will help to get you started in creating a life of wealth and financial freedom. Everything we do in life comes with a certain amount of risk but to do nothing is even riskier, none of us are going to get out of this alive, so live as much as you can.

Have a Wonderful Day

Teresa and the Team at

AustraliaWealth.com.au

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4 Steps on the Road to Wealth

Friday, February 19th, 2010

Every journey has to start somewhere, it doesn’t matter where you start but if you have a destination you want to reach then you have to start from somewhere. In other words if you want a life of financial freedom then it doesn’t matter what your financial situation is now what matters is you start doing what it to takes to achieve that.

In Jamie McIntyres book What I Didn’t Learn in School But Wish I Had he covers eight steps to get yourself in a situation where you can begin to invest. Then your investments can start generating some passive income, that is income that doesn’t require you being there to earn.

These are Jamie’s 8 Steps to Start You on the Path to Becoming a Millionaire:-

STEP 1 – SAVINGS

Saving will always be your first step to wealth. It doesn’t matter how much you earn you always need to save at least 10%. Learn this principle well, teach it to your kids as soon as they can understand, no matter what you earn or what you owe, SAVE. Even if you can’t manage 10% at first, save whatever you can, pay yourself first. Developing a savings habit creates a mental shift that makes wealth creation possible.

STEP 2 – SELL SOMETHING

Most of us have accumulated more stuff than we need or use – sell it. You would be surprised how much cash you can make by cleaning up and clearing out all those items. Use the money you make to begin your savings plan or to start an investment strategy.

STEP 3 – TAX

This step is about minimising the tax you pay. The majority of Australians, the middle income earners pay huge amounts of tax, there are legal ways to reduce the tax you pay. Tax rules are constantly changing so it’s best to ask your accountant some ways you can minimise the tax you pay.

STEP 4 – INCOME

You may be thinking an increase in income is easier said than done, that may be true but not impossible. One very important skill of the current century is the ability to think creatively and solve problems, if you can do this in your current field you have a valuable skill. Effective communication is another sort after ability that has the potential to earn you rewards. The ability to market a new idea or concept and bring it to reality can earn you huge amounts whether in your current field or independant of it. The art of negotiation is also a valuable skill, one or all of these skills have the potential to increase your income and put you in a position to negotiate a better wage or payment plan for yourself.

In the next post we will complete Jamies total of eight steps,

Have an Incredible Day

Teresa and the Team at

AustraliaWealth.com.au

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Debt Help

Tuesday, February 16th, 2010

Bad debt is easy to get but getting rid of it can be like a ball and chain around your neck. In Jamie McIntyres book, What I Didn’t Learn at School But Wish I Had he covers a debt reduction strategy that can help reverse the situation.

Remember there are two kinds of debt, good debt and bad debt. Bad debt is the kind that once purchased goes down in value and is usually not tax deductible such as holidays, clothes and cars. Good debt on the other hand is when you buy something that goes up in value and has a number of tax deductions, such as property or shares.

Jamie’s strategy is designed to get your bad debt under control so you have the opportunity to increase your good debt and create more wealth in your life.

First of all list all your debts as shown in the example below:-

  • Personal Loan      25 000   Payment Amt      520            Factor        60
  • Credit Card              5 500   Payment Amt      160            Factor        34
  • Store Card                4 500   Payment Amt      160            Factor       28

Total                       35 000   Payment Amt      840 per month

In this scenario the factor is the number of payments left to make. By taking the lowest factor, being the least number of payments to finalise the debt, and increasing the payment with any extra money you have you will decrease the amount of time required to finalise it. For example, let’s say you decide not to go out for dinner once in the month and that gives you $100 to spare, add this to the $160 store card payment, this will reduce the factor to 17. So ,in seventeen months your total store card debt will be gone and you can then add $260 to the credit card debt. So now you are able to pay $260 + the original $160  = $420 off the debt per month. This means your credit card can be paid off in thirteen months instead of thirty four.

These figures are a little off due to balance adjustments as payments are made, but I hope you get the idea and can apply it to your own debt.

The most important thing to do if debt has got out of control is to contact the lender, inform them of your situation so you can work out an acceptable payment arrangement.

Have a great day

Teresa and the Team at

AustraliaWealth.com.au

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