Q Magazine - - Q Wealth: -

Wealth Strate­gies for ev­ery Age Group No mat­ter what your age cur­rently, the ac­tions (or in­ac­tions) you take to­day are ei­ther help­ing or hin­der­ing your abil­ity to create real wealth. The ear­lier you start your jour­ney the bet­ter the out­come. By ac­cu­mu­lat­ing growth as­sets such as prop­er­ties, busi­nesses, or shares that in­crease in value over time, it means that in re­tire­ment those same as­sets may now be used to ei­ther par­tially, or wholly, re­place the in­come you cur­rently gen­er­ate via your job. De­pend­ing on your age group there are key things you should be look­ing at to get your­self on the right fi­nan­cial track. Let's take a look AGES 15-25

Nor­mally, at this age you are just find­ing your way in the world. When you just start out in the work force, or work part-time whilst study­ing, you may not earn a whole lot of money, so it may seem im­plau­si­ble to start think­ing about re­tire­ment so soon. Any money you earn will nor­mally be al­lo­cated to things like pay­ing rent/board, go­ing out, buy­ing a wardrobe of new clothes, get­ting a phone, lap­top or other toys/tools of your cho­sen field that you need, travel or your first (or sec­ond) car. How­ever, there are a num­ber of really prac­ti­cal things you can in­vest in at this age.

1. In­vest in your ed­u­ca­tion! It is never too early to start to learn about in­vest­ing and there are many low-cost or free re­sources both on and off-line that could help to get you started.

2. De­velop good money habits. Learn how to create a bud­get (and stick to it). A valu­able skill is to keep a han­dle on how much you earn Vs how much you spend.

AGES 26-35

You've prob­a­bly been in the work force now for a few years and hope­fully you are start­ing to get on top of your per­sonal fi­nances. Per­haps, you have even joined up with a life part­ner, and have now dou­bled up your in­come po­ten­tial. So, what can we do at this age to get ahead?

1. Buy the least ex­pen­sive car that your ego can af­ford

Cars are gen­er­ally a de­pre­ci­at­ing as­set, mean­ing that their value starts drop­ping as soon as you drive it off the show­room floor. Con­sider, driv­ing a less ex­pen­sive (but safe and ser­vice­able) sec­ond hand car and al­lo­cate those ad­di­tional funds to­wards growth as­sets in­stead.

2. Con­sider the strat­egy of Rentvest­ing. At this age it may be more ad­van­ta­geous both fi­nan­cially and from a life­style per­spec­tive to buy an in­vest­ment prop­erty BE­FORE buy­ing your own home. That is rather than buy­ing your first home you buy your first in­vest­ment prop­erty in­stead and let the ten­ant and the tax man help you pay for it!

AGES 36-45

Even if you are more fo­cused on rais­ing the kids through this age bracket than think­ing about in­vest­ing for the fu­ture, what can you do to keep mov­ing for­ward?

1. Pour Any Ex­cess In­come Into Your Off­set Ac­count

Hav­ing your money read­ily avail­able via a Line Of Credit, or Off­set, fa­cil­ity means you should have the flex­i­bil­ity to ab­sorb any of life's un­ex­pected bills whilst con­tin­u­ing to keep­ing your mort­gage costs as low as pos­si­ble.

2. Can aou af­ford an In­vest­ment Prop­erty as well? A good qual­ity in­vest­ment prop­erty, af­ter ac­count­ing for the rent from the ten­ant, and any tax de­duc­tions, may only re­quire $20, $50 or $100 a week to own in part­ner­ship with a lender. Or the right prop­erty might even put a sim­i­lar amount of money back into your pock­ets each week.

AGES 46-55

Now is the time to take ad­van­tage of all the hard work and sac­ri­fices you have put in over the last 20-30 years. So, what can you do to ac­cel­er­ate your wealth po­si­tion?

1. Use Other Peo­ple's Money (O.P.M) To Your Ad­van­tage

This is gen­er­ally the time when you will be at your peak earn­ings ca­pac­ity. It is also of­ten the time where banks and lenders are hap­pi­est to part­ner with you on your wealth jour­ney. Given, that you may never have the abil­ity to bor­row more eas­ily than now so

con­sider your re­la­tion­ship to debt and de­cide if safe de­grees of lever­age can help you get to your wealth goals sooner. 2. Su­per­charge your Su­per­an­nu­a­tion: If the kids have left the nest, you may now have more dis­pos­able in­come to start ac­cel­er­at­ing your as­set pur­chases. You might also want to con­sider salary sac­ri­fic­ing, &/or mak­ing vol­un­tary con­tri­bu­tions to fur­ther boost your su­per­an­nu­a­tion through­out this decade.

AGES 55+

For those that have seen good gains in eq­uity on their home &/or in­vest­ment prop­er­ties now may be a good time to look at con­sol­i­dat­ing your as­set po­si­tion &/or max­i­miz­ing your cash-flows.

1. Go Smaller for a Big­ger Re­tire­ment: Now is the time in life where you might be able to con­sider down­siz­ing the fam­ily home. For ex­am­ple, you might look to sell the 5BR fam­ily home on a larger block and move into a low-main­te­nance smaller prop­erty ex­am­ple in an amenity rich lo­ca­tion. Or per­haps it is time for that sea or tree change you have al­ways wanted?

2. In Re­tire­ment Cash is Still King: Per­haps now is also the right time to look at re­bal­anc­ing your port­fo­lio or re­duc­ing your debt lev­els to pro­vide for the in­come you will need to fund your ideal life­style into re­tire­ment. Or at least have plans in place as to how you are go­ing to tran­si­tion ef­fec­tively into your re­tire­ment years.

And Here are 3 Things We All Can Do To En­sure We Have A Great Re­tire­ment:

1. Have a Plan. We travel all around Aus­tralia ed­u­cat­ing thou­sands of Aus­tralians ev­ery year on how to use prop­erty to bet­ter help them achieve their fi­nan­cial goals and are con­sis­tently shocked with how few peo­ple ac­tu­ally have a con­sid­ered prop­erty in­vest­ment plan.

2. Start Early. Ac­cord­ing to Ein­stein “Com­pound in­ter­est is the eighth won­der of the world. He who un­der­stands it, earns it. He who doesn't pays it!”

3. It Pays To Get Ed­u­cated. Un­for­tu­nately, decades of fi­nan­cial and bank­ing scan­dals, have shown us that it is can be hard to know who and what to trust. That is why we al­ways rec­om­mend that you in­crease your knowl­edge base and get well ed­u­cated in any mar­kets you may want to be in­vest­ing into.

Matthew Bate­man and Luke Har­ris are co-founders of The Prop­erty Men­tors, a Mel­bourne-based busi­ness com­pris­ing an elite team of prop­erty pro­fes­sion­als who ed­u­cate, mo­ti­vate and fa­cil­i­tate clients from all around Aus­tralia. Their new book, Let's Get Real (Ma­jor Street Pub­lish­ing $29.95) is now avail­able.

For more in­for­ma­tion visit www.the­p­rop­er­ty­men­tors.com.au

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