Tag Archives: investment strategy

How to Build your Property portfolio and Still sleep at night

Posted on June 7, 2011 by

Congratulations on wanting to learn how to grow your asset base quickly and safely.
At AssetZ we want to show our clients how you build your property portfolio and still sleep comfortably at night.
This means building a multimillion dollar portfolio without having to worry about where the money is going to come from should there be a small emergency , for example the hot water service breaks down.
The key to becoming a successful property investor is being able to hold the asset over a period of time to allow it to grow in capital growth. We want to ensure all our clients are in a position where they can do this and benefit from a more secure financial future.
Where most property investors go wrong is they only purchase a property and that is it, what you need to do is purchase the property and purchase time.
This is a strategy AssetZ teaches their clients and this is the strategy that allows our clients the security of knowing they have protection on their side.
Now what do we mean when we say you need to buy time?
If a property costs you $350,000 plus$15,000 in stamp duty and fees your total costs are $365,000. Cost is $365,000 to buy the property but remember you also want to be a successful investor and buy time, we would recommend you have a minimum period of 2 years time buffer. This is 2yrs worth of the expected holding cost of the property.
Let us say the holding costs after rental income and tax rebate back is $5,000 per year, this would mean if you wanted 2 years worth of time protection you would need to have access to $10,000 ( 2x $5,000)  in available funds or in a line of credit.
This is a very basic principle yet one where the majority of property investors do not follow. The amount of time you buy with each property depends on the individuals comfort level, some people may want 5 years as a buffer period, the important thing is to buy time when you purchase your property.
On average an investment property will become positive geared (income is greater that outgoings) within 3 to 5 Yrs.
As the time buffer is very much tied to the individuals comfort level AssetZ will tailor the strategy to ensure we meet the client’s needs.
Once the appropriate buffer has been determined along with the individual’s budget and risk appetite, an individual strategy is implemented that identifies the right investment  property. Ongoing assistance, advice and direct one on one attention is given to each client on how to fund the holding cost of the new property without using any of their own income.
This allows you to build your property portfolio without affecting your day to day cash flow.
So remember, when you buy your next investment property do not forget to buy time with it.
If you need help with this please click here.

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Are you Procrastinating about Starting an Investment plan?

Posted on May 2, 2011 by

In 2010, 43% of Australian workers had less than $10,000 in retirement savings. People are claiming to have logical reasons for not having enough retirement savings. There are some that say they are still paying off personal debts with high interest rates; others say that they are dealing with mortgage or the kids are still in college. There isn’t any limit to what reasons they claim to have.
No matter how logical they may seem, it is still simply procrastination.
Procrastination kills time and time is the most critical factor in retirement planning. You can’t build wealth in just savings alone but through savings compounded over time.
Below are ways to overcome retirement planning procrastination which is relative to its causative factors?
Procrastination is caused by 3 psychological factors:

  • Fear
  • Disorganization
  • Perfectionism

Fear



People are putting off their retirement savings plan because of fear for immediate discomfort. Our present fear often consumes us that we tend to delay dealing with the things concerning the future. We don’t realize our delays may cause scarier predicaments than our present fears.
Money coaches say that if you contribute $2,000 to your retirement savings annually for 9 consecutive years and let it compound for 41 years, you’ll get approximately the same amount if you waited 9 years to begin saving and contribute $2,000 yearly for 41 consecutive years? If you’re afraid to commit $2,000 dollars per year of your budget to retirement savings for just 9 years, how can you commit to save $2,000 per year for 41 years? The latter is definitely more terrifying.
To overcome your present fear, enhance your perception of the future pain to make the present inconveniences more bearable.
Disorganization
Organizational skills such as careful planning and budgeting are needed in retirement planning. In short, retirement planning is a very complicated thing to deal with. People often deal with complicated tasks in delay or avoidance, so they always end up procrastinating in their retirement savings plan.
The best way to solve this problem is to take small incremental steps in eliminating the clutter from your finances. Create a money log where you can jot down all the comings and goings of your money. This is a good way to organize your finances because this will show you your total monthly income and expenses where you can base your budget on.
The best way to be able to control your expenses completely is to make a budget. Budgeting will significantly reduce your risk for overspending and increase your chances of saving.
Perfectionism



Perfectionism is characterized by: an attitude of avoiding doing something unless it can be done perfectly and; by a great need to finish a current task before starting doing another. In relation to retirement planning, perfectionism makes people procrastinate because they’re still either figuring out the perfect way to do something or they are still busy perfecting their current lifestyles, they can’t seem to start preparing for their future.
If you are a perfectionist, start your retirement savings plan by setting your savings in auto-pilot. Arrange a percentage of your finances to be automatically pulled into your savings account. This technique will save you the effort and you can focus all your attention in perfecting your current task while your savings increase automatically.
If you follow the steps above you will be able to stop procrastination in your retirement planning. Time is the secret to wealth building so don’t delay anymore and start saving now.

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