Never learning to invest.

Most of us have never been taught how to save, let alone invest. It is a long while since I went to school and I’m not sure what they are teaching kids these days, but I doubt that it will be anything to do with creating wealth.

Younger generations are living differently to their parents; they’re marrying later, spending more on “lifestyle” and many fearlessly take on credit card debt. As a result, they have significant earning capacity, but few assets.

I must admit that when I was young, I couldn’t spend money fast enough! But inevitably a time comes when you need to manage your finances better.

To be financially independent you need to build an asset base that generates passive residual income, like a sound property portfolio.

So what are you doing about it? I am here to remind you and to nag you to get started. If you don’t know how all you have to do is ask.

Here are some interesting snippets off our Facebook page, which you will see if you like our ‘It’s a Breeze’ page on Facebook. Just click on the link.

From boom to bust:

Click here to read

Buying a property without a price guide:

Click here to read

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Saving for retirement – The inherent flaws

The average Australian has been taught to invest in superannuation or set aside 10% of their income to build a retirement nest egg.

This is fine if your goal is to be a middle-income earner – but it will never make you wealthy.
The trouble is the concept of building a “nest egg” is inherently flawed.

Your goal shouldn’t be to accumulate a lump sum to slowly spend during retirement, hoping you don’t outlive your money.
Rather you should build an asset base that generates ongoing passive income; a self-perpetuating money machine – like a portfolio of well-located income producing properties.

As I have pointed out before we are living longer and as such we will need more income for longer. At the current bank interest rates paid on deposits you will be lucky to get 4% on your money, but if we use 4% in the calculation; to receive an income of $52,000 ($1000 per week) in your retirement you will need $1,300,000 in savings today, which will have to be indexed as time goes on.

So can you save $1.3M? That will mean saving $65,000 for 20 years with after tax income. Surprised? Not many people think about this and we certainly are not taught any of this in school.
So what is your plan?

As I have said before I am biased towards property, because I have assisted people to use property to create wealth.
It is an established fact over the last 50 or more years that property in Victoria doubles every 7 to 10 years. So why go past it! Add to this capital growth a return of 4% or 5% and you have your answer to the dilemma of how to provide for your retirement with a total return of 10% per annum rent plus capital growth), that will index by virtue of rental increases.
But be aware! Although more than 30 locations across the country now have rental yields in excess of 10 per cent, with all but one of the states and territories offering the impressive returns these top-performing suburbs are locations that are susceptible to seasonal fluctuations, including the tourism-based economies.

There is no substitute for the tried and tested suburbs that keep on keeping on. As I said in a previous post, it is not about ‘hotspots’ it is about doing your homework to find suburbs that have remained steady and doubled in the 7 to 10 year timeframe. Either that or look at where the growth suburbs are that have shown a steady capital growth over the last 10 years. It is hard to conceive that Caroline Springs was a paddock ten years ago.

The journey of a thousand miles begins with the first step.

Nothing beats gaining the right knowledge, planning the right strategy and then taking the right action.

Property Investment – The smart way

The fact is that we will live longer and healthier and consequently need to think carefully about how we will sustain ourselves in our retirement. In fact, you are never too young or old to think about this. In fact the sooner you start the better.

So, ask yourself this question; ‘What does my retirement look like’ and work backward from there. Start with the end in mind. How much income would you need in retirement? What sort of lifestyle would you want for yourself? These are important questions to ask yourself.

I read somewhere recently that; Superannuation saved over 12-15 years is spent in 6 years. So how much would you need to retire on and how will you get there?

I might be biased, but property has always been my focus. In Victoria it has always been ‘steady as she goes,’ with property doubling in value every 7 to 10 years. So why would you consider anything else?

Plan ahead

A savvy way to look to the future is to “hope for the best and prepare for the worst.” Look at where you are; think about where you want to be, and set a course that will help you reach your destination.

In this economy it takes about six investment properties to achieve financial freedom. If you purchase wisely, across a number of marketplaces, with generous buffers and quality insurance in place you’ll not only take advantage of the great wealth creation that property investing is, you’ll hedge against falling values by keeping your portfolio diversified.

Ask for help. You “don’t know what you don’t know.” That’s why it’s important to ask for help from people who are where you want to be, such as active and experienced property investors.

People LOVE to share what they know. Don’t you?

Do what you love ?It’s been said… and it’s so true… that if you do what you love you’ll never work a day in your life!

Property investing can give you the financial freedom to chase after your dreams and do what you love to do.

Make property work for you, not you work for the property.

What is the income trap and what to do about it?

From my observations many people believe that the way to become rich is by increasing their income. So they work harder and longer and manage to survive on a basic wage and everytime they get a raise they use the extra money to buy “stuff” – a bigger car, a new TV or a bigger house. It is called a consumer society. Buy more stuff.

And on it goes – the more they earn the more they spend and now even their substantial salary wouldn’t cover their increasingly expensive lifestyle.

You see…when you focus on income you fall into the trap of spending all you earn.
More income, without the right financial understanding, habits and skills, is as dangerous to your financial success as too little income.

The solution is to earn passive income; money you make when you don’t work. Robert Kiyosaki in his books mentions the Cashflow Quadrant; with the ultimate goal; where the money makes the money and you are not exchanging hours for dollars, but where your dollars are making the dollars. The dollars work for you and you are not working for the dollars.

The question is; have you thought about this? If so, what are you doing about it? Putting your money into a savings account or Superannuation will not do it for you.

Call me biased, but I always say and will always say that you cannot go past ‘Property.’ The above diagram says ‘why.’
So I hope that this might spur you onto making some changes to your life; for the better.

Nothing changes till you change.

Do you think investing in property is difficult?

Many people feel they can’t invest because they think it is so difficult and complicated, so they take the path of least resistance and don’t do anything.

Others start and then give up along the way because they over complicate it and can’t see themselves getting anywhere and in some cases they don’t know where to start.

People listen to property spruikers who say that they have all the answers and that you need to do courses to do this and it all seems too difficult.

However wealthy people plan, take action, learn from their mistakes, consult experts and take charge of their own financial affairs.

Sadly, most people aren’t prepared to pay for good financial advice.
The truth is we all pay a learning fee as we move up the ladder of property or investment success. Some are prepared to pay mentors and advisors, while others end up paying the market and this tends to be a very expensive way to learn.

There is an easier way. Just email me and I will help you and assist you get there in a way that suits YOU.

Email: bertram@itsabreeze.com.au

What is the income trap and what to do about it?

From my observations many people believe that the way to become rich is by increasing their income. So they work harder and longer and manage to survive on a basic wage and everytime they get a raise they use the extra money to buy “stuff” – a bigger car, a new TV or a bigger house. It is called a consumer society. Buy more stuff.
And on it goes – the more they earn the more they spend and now even their substantial salary wouldn’t cover their increasingly expensive lifestyle.
You see…when you focus on income you fall into the trap of spending all you earn.
More income, without the right financial understanding, habits and skills, is as dangerous to your financial success as too little income.
The solution is to earn passive income; money you make when you don’t work. Robert Kiyosaki in his books mentions the Cashflow Quadrant; with the ultimate goal; where the money makes the money and you are not exchanging hours for dollars, but where your dollars are making the dollars. The dollars work for you and you are not working for the dollars.
The question is; have you thought about this? If so, what are you doing about it? Putting your money into a savings account or Superannuation will not do it for you.
So I hope that this might spur you onto making some changes to your life; for the better.
Nothing changes till you change.
Till next time.
Cheers, Bertram

2015 and Property

As the new year has begun in earnest and the first auctions for the year have been done, let’s briefly look at last year and then look ahead to 2015.

2014 saw a heated market with most auction reserve prices exceeded and prices rising. Foreign investors were out in force in many suburbs with many auctions selling after spirited bidding by two or three foreign investors.

The Reserve Bank stated that foreign investors did not buy many properties! The reason being is that these investors had already created a vehicle to purchase as an Australian Company. So this is treated as an Australian purchase NOT a foreign investor, which in reality it was.

So what about 2015?

My prediction is that the market will continue strongly and this is backed up by the fact that the numbers through home open for inspections are similar to last year and we now enjoy lower interest rates than last year.

I do not see prices increasing as much as last year and they should remain the same or enjoy a small rise.

As far as ‘It’s a Breeze’ is concerned, we have some very exciting plans for 2015 ahead of us, which I will share in due course. Suffice to say everyone will benefit as we roll out our expanded services with the over-arching vision of ‘Personalised Service.’

Please feel free to call or email me with any property related queries or questions.

As you may or may not know it is my mission to help and assist people to create wealth through property.

So please remember; if you learn to think like a wealthy person, you’ve got a much better chance of becoming one. Remember anyone can do it, but not everyone will.

Have you considered that ‘A once in a lifetime opportunity comes by at least once a week!’

Time flies when your having fun

It would seem like a couple of weeks, but it has been much longer than that since I last wrote to you and it has been a hectic time with some surprises and I will share some very important and interesting news with you about all this shortly.

In the meantime I have been pondering why so many people do not make adequate plans for retirement. I wrote about this sometime ago and it still bothers me, because as I move around this country I am confronted by ‘apathy.’ Yes! Apathy; regarding wealth creation.

I have come to the conclusion that it is ‘FEAR’ that stops people from making a move. Not just in wealth creation, but in trying something new or going beyond their comfort zone. As someone said “Life begins at the edge of your comfort zone.” How true is that?

Just think about riding a bike for the first time or driving a car for the first time. You were probably frightened and yet encouraged because your Mum and Dad and or friends were around you when you took off for the first time. So why don’t people venture into wealth creation?

My guess is that they do not have people around them encouraging them and in fact it would be just the opposite; because their friend would be in fear as well. How many times has someone said to me that their family or friends discouraged them from taking a step into investing and I have asked how successful and wealthy those people were? Only to be told that they were not.

Why do people take advice from people who know very little about investing in property? Why is it that Financial Advisors don’t advise on property?

Property has been the single biggest wealth creator in this country. Just take a look at the BRW Top 100 and see what I mean.

But I caution you about property spruikers, as well.

Many people give little thought to exactly how much money they will need in reserve come retirement time. For example, if you would like to have a yearly income of $60,000, and assuming you hope to live at least 20 years past retirement, you will require $1.5M. This of course does not include your home (which hopefully is paid off by retirement time). This is available funds that are TAX FREE. That means net value – after you’ve cashed in your Super, sold off investment properties (and paid your capital gains tax), flipped your shares, etc.

If you want to speak with someone who has been and done it and who is passionate about property and loves to share his knowledge; drop me a line or give me a call.

Warm regards

Bertram

THE NEWS – A perspective

This is a reprint of a page from a book by Alan Cohen that has a page for everyday of the year. I felt that I wanted to share this one. Hope that you enjoy it.

A radio commentator noted that the news we generally received through the media is “a proctological view of life.”  What is presented, as the news is a carefully distilled entree of mayhem, culled for commercial saleability, playing on base fears and sensationalism. Much of the news we receive is not honest, for it is not an accurate reflection of the truth. While the media lets us know that a rape occurs every five minutes, it does not tell us how many acts of kindness occurred in that time. We rarely receive statistics on how many children were brought into the world with delight and appreciation; how many teachers told the students, “You are destined for greatness”; how many athletes dug into themselves for the stamina to complete their jogging; how many creditors extended extra grace to their overdue accounts; how many drivers slowed down to allow cars from a sidestreet into the lineup of a main thoroughfare; or how many times anyone said, “I love you.”  When the news reflects the whole of life, not just its sordid aspects it will be honest, serviceful and worthy of our attention.

If we wish to get more accurate news, we must withdraw our fascination from evil and reinvest it in peace. A San Francisco newspaper published two different versions of the day’s news, one with the sensational headline about a murder, and the other with a more modest banner about progress in peace talks. The sensational headline outsold the more mellow edition by four to one.

Invest n a better world by placing your attention on what works, rather than what doesn’t. Do not start or end your day by listening to newscasts. Celebrate all the good you hear about and pray that we may learn from our pain and suffering, rather than dwell on it. Make the news of the day better by shining the light of your consciousness on the good, the beautiful, and the true. – Alan Cohen

Wealth. What is it and why doesn’t everyone have it

I’m sure you have heard the saying “health is wealth” and by that definition it is clear that wealth is not money. So what is wealth?

Some would say wealth is having enough to live how you want, where you want, with whom you want and more.

Others would see wealth as being rich, being a millionaire and able to build or buy the house of their dreams or drive the car of their dreams and live in the suburb of their dreams in the country of their choice.

Many people would associate wealth with rich people, actors, and pop stars that live in mansions in exotic locations.

Wealth is described as the abundance of valuable resources or material possessions and yet economists describe wealth as ‘anything of value,’ which means that it is different for each and everyone of us. Values are unique to every individual.

If I come from the point of view that wealth is having things of value it is fair to say that many people value having a comfortable lifestyle and doing what they really enjoyed doing.

Taking this a step further to have a comfortable lifestyle you need to have a comfortable home and enough money to live comfortably.

That being the case it may surprise you to learn that the majority of people live on a pension. So you might have a comfortable home and live on a pension but would that afford you a comfortable lifestyle to do what you really enjoyed doing?

Would it surprise you if I told you that one percent of the population owned fifty percent of the assets in the US and I would suggest that it is not that different here in Oz.

What I have learned through my work of assisting people to create wealth is that most people do not think about it till it is too late to do anything about it. Sad but true!

Most people seem to think that their superannuation will give them a comfortable lifestyle, but generally this is not the case. The returns on Super are disappointing to say the least and if you wanted an income of $60,000 per annum in your retirement you would need over $1.5M in the bank.

There are many factors that create this situation but from my experience four things stand out that can address this situation.

  1. The right Mindset
  2. The right Information
  3. The right Strategy
  4. The right Actions

I will address these topics in future posts, but if you have any questions feel free to call me on 0418 31 32 99.

Till next time

Namaste

Bertram