Has it Been A Good Year For Property?

Has it been a good year for property?

I can not see a lot of confidence in the market, yet prices are rising ? 

Perhaps we are at an equilibrium where we will see a more balanced market going forward? 

Interesting thought, Are we more motivated by making money or does the fear of losing money outweigh our greed?

In my opinion the main problem with any investment at the moment is affordability. Whilst inflation may be under 3% overall, do some research on essential services and see what high inflation is about.

You cannot rip an extra $5000 -$10,000 out of the average families cash flow and expect no flow on effect.

What is the easiest thing you can do to keep in the black,easy forget about the future and stop saving or investing- you need a house to live in, a car to drive, clothes, gas, electricity TODAY, not in 10, 15 or 20 years.

So if you are short on money after losing so much on extra essential services charges what do you think you will give up to make up for it?

Of course, your future financial goals are first on the list. They don't come around to cut the power off if you don't pay unlike your power provider.

Hence it is pretty hard to save your way to Financial Freedom living in a society where boundaries move and you have absolutely no control.

Obviously, this scenario is nothing new, 20 years ago it was oil and petrol, prior to that building materials etc, there will never be a perfect storm in an economy with natural disasters, financial crashes and market cycling happening everyday.

Savvy investors are usually people who make well researched decisions based on reliable modelling, whilst you can never totally remove risk you can plan for it. A plan that takes into account the what if's and provides a strategy that is based on worst case scenario integrated with good risk management and reporting is the most safest, secure and predictable way to success.

Whilst it may take a little longer your journey is going to be so much more relaxed and enjoyable.

If you are struggling to get ahead financially and feel that you are caught up in a scenario where you have the least amount control over your money then perhaps you may need to consider making an effort to stop being reactive and become proactive.

A simple phone consultation can often save our clients over half their term in mortgage payments and still have more cash flow coming in than previously.

It really depends on your circumstances and what you want to achieve, not everyone wants to buy and own investment properties or shares, however you need to find something to reduce the amount of interest and tax you will pay in your lifetime if you want any chance of financial freedom and don't want to be be another million dollar sucker paying your banks CEO's yacht off for them.

Book a Free Consultation during September using our Online Appointment Scheduler & Reminder System and Receive a $50.00 SHELL Fuel CARD as a Free Reward to pay for next weeks fuel bill.even better it may change your life....

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EVER WONDERED WHY SOME LAZY PEOPLE SEEM TO SUCCEED IN BUSINESS YET NICE GUY'S FINISH LAST?

Ever notice how some small businesses seem to thrive under just about any economic conditions, while others constantly struggle and miss opportunities that come their way?

 In part, in might be the type of business, the location, or financial backing. But the most successful business owners display some clear patterns and habits.

And on the flip side of that, other business owners make many of the same mistakes that are often avoidable, especially when it comes to growing a business.

Part of the problem is short-term thinking – chasing the latest shiny advertising object that happens to pass by, for example.

Or spending too much time seeking new customers and not enough taking care of the ones you have.

Solid, long-term growth starts with what I call “inside-out” thinking – doing the things inside your business that you can control, and paying less attention to the outside things you can’t control.

Here are 10 such “inside out” secrets for successful growth.

 1. Change how you think about growth 

Consider growth a constant – not something you switch on or off depending on conditions. For example, many business owners reduce offerings at the first sign of an economic storm, or overspend when the outlook seems rosy. But a steady-as-she-goes approach makes for long term success.

2. Check your ego; seek out sound advice  

You know your business inside and out, but that doesn’t make you an expert at running every part of it. Smart business owners know what they don’t know. Don’t be afraid to ask for advice and then take it.

3. Remember your first fans  

Many entrepreneurs seem to forget who helped them get started. If you have investors, keep them apprised of what’s going on. Good communication is critical.  A good investor group can provide mentoring and other resources, so keep them involved.

4. Share your knowledge 
In today’s social media driven world, success and influence are in the hands of those who share ideas and information. So when you’ve found a great tool or solution, or gained insight, tweet it, blog about it, author an article, post it to Facebook.

5. Hire help to watch your money
Lack of strong accounting and finance can be the only thing keeping you from reaching your financial goals. Find well qualified people who share your vision and then step back and take their advice.

6. Know when to persevere 
Stick to your mission. Many would-be success stories end prematurely because they give up when challenges mount. Don’t let hurdles stop you. Arm yourself with market knowledge and an expert team and push through.

7. But recognize when to change direction 
Still, there are times you may need to change direction or call it day, and having the courage to do so can be liberating. You may end up with a clearer picture of what will or won’t work.

8. Keep cash on hand

One of the biggest mistakes growing businesses make is to run out of cash. While the sun is still shining on your business or before your financial picture has a chance to turn sour, meet with lenders and/or landlords proactively to see if there are opportunities to restructure debt, payment terms, etc. Having cash on hand is critical for staying afloat and continuing to grow.

9. Get more when you have more
Don’t wait until cash balances get low to secure more funding. The best time to get more is when you don’t need it. Securing a line of credit while you still have money in the bank gives you the ability to negotiate a larger line and better terms. It also gives you the ability to make payroll during slow times and to have access to cash as needed. In addition, it gives you an opportunity to develop a business relationship with a bank.

10. Sell when you get the chance
Many business owners miss, or worse – pass up – incredible chances to sell their company because they are not prepared to adequately evaluate the opportunity. Know where you stand in the marketplace at all times. That includes what your potential is, and what it will take to reach your potential.  That way, when opportunity knocks, you’ll know

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Australia the land of Broke Retirees

Retirement and  why property may help 

Research shows that only one in 10 Australians currently invest in residential property as a vehicle for wealth creation. With statistics showing that less than 10% of Australians are retiring in a similar or better financial position than before retirement. Do we need to ask the Question ? Is property the best investment vehicle to achieve a self-funded retirement? And if so, what is stopping the other 90% from investing in Australian property.?

Broke at 40 - Wait until your income drops by 60%

According to the Commonwealth Bank on their website Commbank.com.au when it comes to wealth creation for Australians’ residential property remains the number one asset, accounting for $4.4 trillion of our wealth”.

In comparison to other asset classes the bank states that superannuation accounts for $1.5 trillion, Australian listed stocks $1.3 trillion and commercial real estate $0.7 trillion.

Based on the above there are strong indicators that Australians feel safe in bricks and mortar. After conducting research there were three repeating reasons that appeared when questioned non investors on what was stopping them.

1) A Fear of Investing - this could be as simple as not wanting to lose money or a deep seated fear or phobia.

2) Don't know how to do it or where to start - some people are financially inept and for whatever reason can't put a plan in place to make it happen.

3) Could not be bothered with the headache - Unfortunately this is where most Australian's are placed. Most people do not see the URGENT need to create wealth at this very moment.

Unfortunately it seems the majority also underestimate the amount they will require to fund their retirement and overestimate how much their Superannuation will provide.

Data provided by the Australian Bureau of Statistics from their Census results indicate these people are in for a rude shock. Unless they make fundamental changes to their financial structures chances are without a lottery win or recieving a substantial inheritance they will end up either Dead, Dead Broke or Still Working though their twilight years.

Not much reward for a life time of sweat and toil !

If you grew up in Australia with Baby Boomers as parents, keeping in mind they were raised by parents who lived through a depression, you were most likely told that debt is bad and should be avoided at all costs.. The safest way to secure your future was to save a large deposit then buy a home. Once you had a family you would work as hard as you can to pay your mortgage off and when you retire you will always have a roof over your head and a back yard to grow vegetables.

Now fast forward to 2013 and according to the Melbourne Institute you will need at least $38,000 per year as a household just to live above the poverty line in retirement. The website then advises that as of March 2013 the maximum age pension a couple can receive in Australia is $31,688.

Realistically, a comfortable lifestyle Retirement goal in 2014 should provide at least $60,000 p/a for a couple.

To achieve this you would require approximately $1.200,000 invested in an income producing asset, this figure should not including the value or equity in the family home.

This scenario would provide an annual income of around $60,000 p/a with a 5% return.

As you can imagine saving your way to Retirement seems a futile exercise. This is where you need to take advantage of leveraging and using debt to your advantage. There have been very few wealthy people who have saved their way to wealth. You need to use debt to leverage your exposure and therefore multiply your returns.

Also as important is the need to protect and preserve your most important asset - your family home. There is clear anecdotal evidence that more and more Australians are relying on using the equity in their home to help fund retirement. They are effectively reducing the amount available for future generations

To highlight the problem, the investment management firm Challenger provide data from APRA that show that the average superannuation fund for couple aged 60 plus is currently between $120,000 - $200, 000. These figures are a far cry from the amount required and you don't need to be a mathematician to work out there is very little that could be done to fix the problem. In reality,these people are heading for a meager existence unless they remain employable.

Missing the mark with your finances - your not alone

So back to Property & how to avoid the above scenario? It really comes down the old adage "Just Do Something".

The longer you leave it the harder it is going to be - Already the Federal Government has began making changes to reduce the Age Pension entitlements and reduce Social Service payments.

The Government can see the writing on the wall and need to take decisive action and implement policies and tax incentives to encourage mum and dad investors. If we want Australia to remain the Lucky Country then who is going to pay for increasing costs' associated with a large increasing number of an aging population?.

Another key difference in our modern society is the increasing expense involved to provide essential services and we live in a much more disposable society, 'things aren't made like they used to be"

this makes for interesting times for the Generation X crowd who will be heading in to their last quarter of their working lives very soon.

So what can you do?

First - Make an appointment to see a good Advisor who understands and works with Direct Property,Property Funds, Superannuation, Tax Planning & Debt Reduction is a good place to start.

Just like your Doctor, don't worry they've heard it and seen it all before. so don't feel embarrassed about your current situation. no matter how Grim the future may look.

OK, you've found your Adviser - Now what?

The 6 Important Questions to ask

1) How can I reduce my debt in the shortest time frame by utilising cash flow management?

2) How can I save paying so much tax & how can I use this improve my cash flow & reduce debt?.

3) How much am I risking in equity or cash and how long is this risk expected to last?

4) What will your strategy achieve for me in xyz years?

5) What will happen if this or that happens?

6) What are the risks associated with my family home?

If your Adviser cannot answer these 6 Basics questions then find another. Other professionals that can assist are your Accountant, Your Mortgage Broker or your Asset Managers & Strategists.

Good luck and we would love to hear your experiences and comments.

Remember - Sharing is Caring

We truly believe property is the best vehicle for the average Australian to create wealth

Author - Antonio Sawlwin - Santolo

Contact - antoniosaw@gmail.com

Copyright 2014 -

RASA

References

<http://www.commbank.com.au/about-us/news/media-releases/2013/introducing-property-mywealth-brings-world-first-do-it-yourself-investors.html>

<http://melbourneinstitute.com/downloads/publications/Poverty%20Lines/Poverty-lines-Australia-June2012.pdf>

<http://www.superguide.com.au/how-super-works/age-pension-rates>

<http://www.challenger.com.au/funds/TechnicalUpdates/CRIR_How_much_super_do_Aussies_have_Apr12.pdf>