Posts Tagged ‘investment strategies’

The Work Life Balance

Tuesday, March 30th, 2010

How do you feel about your life? Do you have enough quality time with your family? Do you have enough time to do the things you love? Are you working enough or too much?

Many of my friends lately have been complaining about how busy life is. That the days are just a crazy collection of busyness. We have decided there must be a solution a simpler way that doesn’t include discarding all your worldly possesion and going to live in the bush.

The most important reason for looking at your life and how you balance it with work and your other commitments is because you deserve to live a good life. Some of us learn our life’s lessons too late and I believe it is a duty to pass on what we have learned and hope that others do not repeat our mistakes if possible. I’m sure you have heard the scenario of being on your death bed and not wishing you had spent more time at work.

So how can we be wealthy, make a contribution and still enjoy life and time with family?

There are several things that will help us to gain wealth and starting as early as possible is the best option. At the forefront of wealth creation is savings. Whatever your income it is possible to save. You may have to resist the desire to buy every latest gadget but ask yourself if they truly contribute to your quality of life or are they a diversion from it.

No one can examine your life and give you more time for the things you enjoy except you, even one hour a day could make a difference. Educate yourself on multiplying your sources of income without having to increase the time you have to give. You can create options that mean you can reduce the time you currently commit to earning an income. There are areas of investing that can supply you with regular income, there is the option of internet businesses that can be conducted anywhere, anytime.

If you feel you are spending too much time away from family and the things you enjoy don’t just accept it as being the only way to survive, look for other options and opportunities.

Have an Amazing Day

Teresa and the Team at

AustraliaWealth.com.au

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21st Century Education

Saturday, March 27th, 2010

Your 21st Century Education can go from strength to strengh with the release of Jamie McIntyres new 21st Century Wealth Educator magazine. If the first edition, which was released earlier this month, is an indication of whats to come then you will always have plenty to learn and keep you informed.   One of the main articles covers an interview with Richard Branson where he shares seven key lessons for business and life. Not to be outdone Warren Buffett shares his thoughts on being a billionaire.

Of course we are all starting to realise the benefit of a correct mindset, one that is attuned to and focused towards wealth creation and success. Jamie would never leave this area uncovered and who else would he choose to be a part of his first edition but Napolean Hill. The timeless strategies first published over 70 years ago in Think and Grow Rich need constant revisiting and more so now as we dust ourselves off after the worst financial crisis the world has seen.

What you will also learn in the first edition of the new Wealth Educator magazine is reassurance that Australia is still sitting pretty when it comes to wealth creation through property. Jamie explains that Australia is in a solid position and will grow stronger in the future due to our strong trade relationship with China and our ability to cope with population growth. Interest rates are rising but only so we can have steady property growth and not a bubble effect that is difficult or impossible to sustain.

Also in the area of property we learn from Konrad Bobilak, that property investing is not necessarily about property but more about managing the amount of good debt you use to acquire appreciating assets. An interesting fact worth noting in this article is The Pareto Principle, otherwise known as the 80/20 rule, which states that 80% of effects are caused by 20% of causes. This principle has been proven in many different scenarios and in wealth creation it simply means that 80% of your wealth will come from 20% of your investment strategies.

Successful wealth creation in the 21st century will come from being well informed and well educated and Jamie is doing his best to ensure he provides you with the best education possible.

Have a Successful 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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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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Guide to Investing ~ Robert Kiyosaki

Saturday, January 30th, 2010

Robert Kiyosaki continues his Rich Dad, Poor Dad, series with his Guide to Investing, What the Rich Invest in That The Poor and Middle Class Do Not! in this book he introduces sixteen investor lessons let’s go over the first four now and the rest over the next few days..

Investor Lesson 1 ~ The Choice – Do you want to be secure, comfortable or rich? Most people would agree that being rich will usually mean they will be secure and comfortable the problem is most people go for security first, then comfort and last on the list is being rich. Kiyosaki says if you really want to be rich think about it carefully because it may require you forego security and comfort for a while.

Investor Lesson 2 ~ What Kind of World Do You See? – How do you feel about money, your deep down intimate feelings? Is it hard to get? Do you feel there is never enough? or Do you believe you will always have enough money? There are two types of money problems according to Kiyosaki, not having enough or having too much. What problem do you want? What is your money reality? Whatever you see in your life, too much or not enough, this is what you believe inside. If your current situation is a lack of money are you willing to believe that a world where you have too much money is equally possible?

Investor Lesson 3 ~ Investing is Confusing – Robert learnt from his Rich Dad that investing is confusing because there are so many different ways and types of investing no one could possibly learn everything about investing. Don’t despair though there is a way out of the confusion as explained by Rich Dad in lesson four.

Investor Lesson 4 ~ Investing is a Plan, Not a Product or Procedure – If you want to invest successfully then you have to understand this lesson according to Kiyosaki. What you have to understand is that investing is what you do to get from where you are now financially to where you want to be sometime in the future. You may use stocks, real estate, business or a combination of these to get where you want to go, they are the vechicles. Use them without any emotional attachment to fulfill your investment plan.

Have a Happy Day

Teresa and the Team at

AustraliaWealth.com.au


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Points to Consider Before Selling Your Stock

Friday, January 22nd, 2010

Whenever you invest you are taking a risk, most successful investors have a strategy they follow which ensures the bulk of their capital is protected thereby maximising their wealth creation potential. Develop a strategy, after learning as much as you can, and stick to it, following are a few points to check regularly when evaluating your share portfolio.

1. Do you have a stop loss in place. Make sure you have at least a 10% automatic stop loss in place. This ensures your stock will not fall past a 10% loss, but allows for some up and down movement.

2.Make sure you examine the market and consider what the overall sentiment is, it is better to make a small loss rather than a big one so you can come back tomorrow.

3. If there is a lot of volume in a stock and the price is stagnating it is a signal to sell.

4. Keep an eye on the fundamentals and technical analysis what are these telling you? What is the overall feel in the market?

5. Has the stock been performing as you expected? If it’s not check the other points, you invested for profit if this is not happening it could be an indication to sell.

6. When there is good feeling in the market and media reports are positive the market will go up when reports and feelings are negative the market will go down. A general rule is when the market is climbing sell, when its falling buy.

7. Have a target in place as well as a stop loss, when you reach your target sell, don’t be greedy.

8.Keep an eye on the companies you have invested in if they are experiencing disruptions such as changing management, profit margins falling more than the sector margins or any other negativity around the company consider these as warning signs to sell.

Have a Smiley Face Day

Teresa and the Team at

AustraliaWealth.com.au

Disclaimer:Please obtain your own independant financial advice we offer general education/information only.

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Winning in the Market

Saturday, January 9th, 2010

Picking winners in the share market can be complicated and mistakes can be costly, education can avoid a lot of the pitfalls. Shares have the potential to earn you a good return but there is always risk,  no magic formula exists for making money from shares it involves work, patience and knowledge. So if you’re OK with that read on.

You work hard for your money; it’s time to get your money to work even harder for you.

Of course there are lots of different share market strategies, what you do depends on what suits you and how much you can invest in time, money and education. It is important that you have some knowledge and understanding of the strategies you choose so at least some education is necessary in each.  Let’s for a moment talk about long term strategy, five years or so. Before you get started its a good idea to learn a bit about what drives the market, you want to know that you are investing in a good company.

To work out what a good company is requires some homework, gathering information about the company must be on the top of your list before you decide to invest. Remember buying shares means you are a part owner in that company take your role seriously and know what you are contributing your money to. Don’t just think it’s an easy way to make money, that attitude is extremely risky.

Keep accurate records and files of company releases and media stories, make notes on why you are investing in that particular company, review regularly, about every three months is good. The nature of the share market means it can rise and fall daily, don’t panic if the price of your shares drop be patient. If you did your homework and all the factors you based your decision on when you purchased the shares are still accurate the prices will rise again.

You do obviously have to sell at some time in order to realize your profits, make your decision and sell. Taking your time to purchase is necessary but once you’ve decided to sell, just do it. Always keep you’re goals in sight, you had a reason for investing keep that in mind along the way don’t try and out do yourself because that’s when things can come undone. If your goals have changed then reassess the whole situation before you act on impulse.

What risk can you afford to carry? A wise investor will balance their risk by investing in various sectors of the market. A portfolio of an average of eight good stocks across the different market sectors is a good place to start. Invest wisely so that you don’t lose more than you can afford. Things can always change; we can’t control a lot of what goes on in the market so even if you have done your home work, and put your money into good companies, don’t put yourself in a position that you could lose more than you can afford.

Two terms you will have to get used to if you are going to invest in the share market are dividend yield and price/earnings (P/E) ratio. They are tools that will help you decide a companies worth or value.

A dividend is what a company pays out to its shareholders. It is shown as a percentage and represents the value of the annual dividend against the current share price. For example if you bought shares at $10.00 each and received an annual divided of 0.50c per share than your dividend yield would be 5%.

The P/E ratio represents the profit, after tax, a company makes on each share it issues in other words the measure of how expensive a stock is. If a company’s stock is $10.00 and it’s earnings per share is $2.00 the P/E ration is 5. The higher the P/E ratio the higher the market is willing to pay for each dollar of annual earnings. Higher P/E ratios can be risky because expectations are higher.

Picking a winner in the share market definitely involves some work on your part, learning some terms, doing company research, educating yourself and being diligent. The market will rise and fall it’s the way the game is played, but if it is an investment strategy you are interested in then obviously how you play and how much you understand the rules are vital if you want to win.

Have an amazing day

Teresa and the Team at

AustraliaWealth.com.au

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One for the Girls

Wednesday, December 23rd, 2009

Book Review

‘A Man Is Not A Financial Plan’ by Joan Baker
Investing For Wealth and Independence.

Joan Baker has written this book with women in mind but her message is clear whether you are young or old, single or in a relationship, whether you have savings or not you can take control of your finances. Women are capable of so much, keeping a family functioning while holding down a job is no small task. Taking care of yourself is often on the bottom of the ‘to do’ list, however taking care of yourself financially is essential for your own and your families long term security.

Women need to create their own wealth, enough to survive independently, so that whether they have a man in their life or not they will be ok financially. A plan is needed, even if you have a high income that alone is not enough to grow wealth.

Joan demystifies the jargon covering areas such as budgeting, principles of investing, superannuation, diversification, and managed funds. She explains the emotion that drives the share market. Which, by the way, women are often more successful at conquering than men are. She explains the importance of making your money when you buy and how to borrow smart for investments.

She covers how to plan your investment strategy and how to decide what is the best investment for you. She also passes on some encouraging thoughts on taking action, for without action no amount of investment knowledge will help.

Joan has had twenty years experience as a financial coach and says the main thing she has learnt is that anyone can become financially free, but you have to know what it is you want and you have to want it enough.

Have a day you can smile about,

Teresa and theTeam at

AustraliaWealth.com.au

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The Potential in your Equity

Sunday, December 6th, 2009

It’s quite common these days for Australians to use the equity in their homes to create wealth, let’s go over a few of the ways property can take you on the road to a financially secure future.

Property Investment Strategies

  • Buy a second property, then another
  • Upgrading your home every few years
  • Renovating
  • Redeveloping
  • Paying off your mortgage quickly
  • Buy commercial property
  • Joint venture property purchases

Determine what type of strategy you are more comfortable with as they all involve different amounts of commitment and investment. A combination of strategies over time could provide you with variable returns that balance out well. Your choices will of course be in relation to your circumstances and depend on whether you have more time or money available, whether you are after capital growth or cash flow.

One of the common forms of investing for many Australians is using the equity in their current home to buy a second property, then once the equity is sufficient in the second property, buying a third. Income can be obtained through rent which will also assist in paying off the mortgage as well as providing taxation benefits. It is possible to build up a substantial real estate portfolio using this method.

If buying another property seems daunting or out of reach investing in your own home could still give you financial benefits and get you started. Making any amount of extra payments on your mortgage will reduce the amount of interest you have to pay and you will pay your loan off a lot sooner. Loan products can vary quite a bit though, so check yours thoroughly and make sure you understand the terms fully.The added benefit here is that you will be creating more equity which can be a great asset to you in creating wealth. Many Australians have become financially independent through property investing and it is possible for you too.

Power Thought

I am creating wealth in my life.

Repeat this to yourself often

Have a very Happy Day

Cheers

Teresa and the Team at

AustraliaWealth.com.au

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Making It in Hard Times

Wednesday, November 11th, 2009

It has been well documented that money can be made even when the economy is struggling. The economy like most things has a cycle, riding out and protecting yourself during low economies can be boosted to actually making profits just like others have done in the past.

There are four cycle’s, prosperity, recession, depression and recovery, each cycle’s length and intensity can vary and it is believed with sound economic management a depression can be avoided. At the peak of the cycle savings are up, unemployment is down and there is a lot of spending going on. Companies are optimistic about there earning possibilities and the price of stocks will rise, prices in general go up. The cycle starts to move into a recession as interest rates rise aneconomic-depressiond consumer spending slows, because spending slows employees are laid off so unemployment rises. Spending slows even further and stock prices fall, fear takes over the market. At the bottom of the cycle businesses fail, unemployment is even higher and people lose their homes.

It might not seem like much but your attitude in tough times is an indication of how well you’ll do. You may lose your job but with the right attitude you are able to find the opportunities that are always out there. So what else can you do, no matter what the economy is doing, to keep putting food on the table, a roof over your head and grow a strong and sound financial foundation?

It’s important that you don’t buy into the fear that is being fed to you via the media. Now that’s not encouraging you to keep your head in the sand either it just means that you should inform yourself and not just believe everything you hear or read. Bad news sells but you don’t have to buy it, stay positive no matter what. Be prepared to learn what you need to learn, there will be no improvement if you don’t increase your knowledge base.

Try to have more than one source of income, what that will be will depend on you but think consistently about supplementing your main source of income. If in good times you can create an income earning hobby for example it could end up being more than that if required in bad times. If you have managed to save during the growth period of the cycle instead of spending a recession is a great time to buy lower priced properties and shares. Always follow sound investment strategies when buying though you want to invest in those things that will go up in value when the economy recovers.

Don’t be afraid to think differently than most people around you, most people will buy into the fear, for you to profit in hard times may mean doing something different to most people. Take charge of yourself and your emotions if you can stay calm in the midst of turmoil you will fare much better.

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