G'day,


Thanks for stopping by. I hope you find the information useful. I am very passionate about educating people in the area of financial literacy as it is one area we are not taught at schools. I am also very passionate about helping people to change their financial situation to a better one and helping to achieve their goals. At the end of the day, you are the driver on all these things, I can only advise or educate.



I think this update is a timely one, especially when people will be making New Year’s resolutions and one of them should definitely revolve around today’s topic. I know it is one of mine to keep working towards creating wealth, along with losing weight and start treating my body more like a temple than a pub! Next year I’ll be 4 years away from the big 50 (though I reckon I look more like late 30’s to early 40’s….in my opinion). So health and wealth are big on the cards.

With that in mind, onto the last update for 2014, enjoy. ( Note, you may be all over this, if so, forward to someone who may benefit.)

What is “Wealth Creation”?

Grab a moment and think? What does “wealth creation” mean to you? Do you believe it is something within your reach? Do you believe it means a McMansion and a Ferrari out the front? Is being wealthy, the same as being rich? Think about your mindset when it comes to the word “wealthy”. If you Google the word “wealthy” you will find the average definition seems to be “a great quantity or store of money, valuable possessions, property, or other riches”.

Now if you were to Google “wealth creation” the average definition is “involves the building of assets by means of careful investment into asset based investments, usually over a long period of time so as to achieve an income stream that will ensure a continuation of a high quality lifestyle in the years beyond retirement.”

So the question you need to ask yourself is would you prefer to be rich or wealthy? Again, being rich or being wealthy will be defined differently dependant on what you want out of life. I believe being wealthy means having no financial restraints based on your goals in life, in other words financially independent. In that respect, we can all be wealthy in our own way, but you have to want it, you have to work hard for it and you have to educate yourself on how to achieve it.

Ok, you have read this far and have decided, yep, I want to be “wealthy”. What next. You decide you want to invest, excellent. Now many people think they should pay down their mortgage before they start investing - but this doesn't necessarily make good financial sense for many reasons. For one, you could be in your late 50's/ early 60's, so not a lot of time to allow for investments to grow (remember the power of compound interest and time to grow wealth). So you could be left with your home and not much else. Instead, you might want to consider reducing your extra repayments and diverting those funds instead towards other investments, such as shares, property or a business venture. Of course, this depends on the size of your mortgage and what you want to invest in, but it's worth considering as part of your financial plan.

In essence wealth creation is focused on:

Building investment assets from surplus money to create additional sources of income that over time replaces your salary or wage from your own job. This is also called Financial Independence, i.e. you do not depend on your income to be able to have a life.


We can also take this a step further and you will end up with surplus money for which you do not have a specific purpose. Once you reach that stage, you have achieved Financial Freedom. Sound good? Of course it does. So what are you doing about it? Do you have a financial plan or are you winging it. Can I tell you, chances are if you do not have a financial plan, if you do not have specific goals, then say good bye to being wealthy. There is a reason 97% of the population retires on less than $37k p.a. These are your “DIYers”, people without a plan, people who left it to late, people who didn’t seek advice or get educated in this area. Do you want to be one of those stats?

To create wealth and just importantly protect it, you need a financial plan. As a refresher from previous updates, a financial plan can consist of the following:


  • · Savings and investment goals i.e. wealth creation, financial independence.


  • · Education funding goals for children/ annual holidays, home renovations


  • · Risk Management, Life, TPD, Trauma and Income Protection. i.e. protection of your assets, your ability to generate an income, family/spouse/children.


  • · Estate planning goals i.e. ensuring that your assets and family are protected and looked after.


  • · Income tax reduction goals i.e. how to increase tax savings and reduce tax payable.


  • · Debt reduction goals i.e. cashflow management, get rid of “bad” debt e.g.. non tax deductible debt, pay off mortgage sooner.


  • · At retirement, wealth preservation i.e. protecting what you have worked hard for and making sure you don’t run out or have to rely on Aged Pension ( assuming it is around in years to come.)

Aside from wanting to create wealth, reduce debt/taxes, protect yourself and your assets, other reasons for getting a plan in place are as follows:


  • · You want to improve your current and future lifestyle.


  • · Getting married, having children, buying first house.


  • · You want to learn/ find out about investing.


  • · Cash flow issues/ debt issues.

Now ask yourself, is any of this ringing any bells, getting you thinking, causing a bit of concern? Then greatJ, these are important things. This is first and foremost about you. Having a financial plan in place and creating wealth is all about you and want you want in life. Trust me, life will pass you by whilst you “think” about these things. It’s by taking that first step and “doing” something that will head or improve upon where you are going and what you want to achieve. You are the driver of that plan, that future and if you feel that you may need someone to advise and assist along the way, give me a hoy in the New Year.

If you would like me to develop cutting edge strategies to improve your current financial position, give you certainty around your future, increase the value of your assets and enhance your lifestyle, then as I have said numerous times, take advantage of a free financial health check up and a cup of coffee or tea with me in the New Year. Make having a plan and coming to see me a 2014 New Years resolution.As an AULRO member you get a discount on your plan and first meeting is free of charge.


On that note, thanks for reading, feel free to share with those you feel would benefit from this information and have a great Christmas and New Year with your friends and family. This will be the last update till the New Year, but don’t hesitate to message or call me if you want to secure a place now,

Regards


Stevo


P.S. More free info at https://www.facebook.com/stevosbetterlifeaheadforyou