When studying wealthy people and how they’ve accumulated their wealth, many of them have a large proportion of their investment assets in property. This is because it offers fantastic leverage as well as the peace of mind that it is not going to ‘disappear’ like some stocks on the share
market have been known to do from time to time.
When investing, it is always important to invest in something that you understand and you feel comfortable with. This is why property seems to be a favourite investment vehicle for most Australians.
I regularly ask clients – “What is your Number 1 financial goal?” To which 90% of people respond – “To own property and be debt free”.
This makes a lot of sense to them because they know that you can’t retire on equity alone. You need cash flow. It’s very difficult to go down to Coles to do your grocery shopping and say to the checkout lady “I’d like to pay for that on equity please”…
Cash flow and income streams are what you retire on.
When investing in property my advice is to buy and hold – never sell. I know that this is not always achievable however to get the real benefits from property, holding is the best option.
If you are not considering holding the property for a minimum of 10 years, then there may be other investments out there that are more suitable for you and your investment objectives, which we’d be happy to discuss with you.
Property is a long term play. No more get rich quick strategies exist in property, gone are the good old days where your property doubles in value in 3 years. These days you’re lucky to see any growth due to the over-supply and lack of demand in the market.
Invest with a long term perspective – the lower it is, the cheaper it will be if you’re investing regularly.
Unlike your grandparents, and maybe even your parents, you are going to be on your own in retirement, there will be no government pension. The baby boomers are going to suck the pension pot dry before you get old enough, so it’s up to you to save for yourself.
You have to get an early jump on your retirement savings.
The earlier you start, the faster you retire!