Wouldn’t it be wonderful to wake up one morning and find your bank account had increased into the 6 figures. Unless we’re lucky enough to win lotto, it’s highly unlikely it’s going to happen. However you can increase your wealth gradually by putting your efforts into the most profitable areas.
Following are 10 tips which consistently increase our wealth creation.
Tip 1 – If you are in a low income bracket, investing $1,000 in your superannuation fund each year can net you a whopping 150% return from the Government’s Co-contribution scheme and in fact last year gave up to a 300% return.
Tip 2 – The best home renovation is to upgrade an old bathroom. With an estimated 102% return. Kitchens and windows come in second adding about 90%. But of course windows have the extra benefit of saving on your energy bills each year. In upgrading your property you also have the benefit of making it more saleable – an important consideration. As a rule, upmarket improvements pay off at lower rates than mid-range or inexpensive ones. And making a house bigger and more luxurious that those of your neighbours will also cost a lot more than it will return when the house is sold.
Tip 3 – It’s worth refinancing your mortgage when you can cut your interest rate by at least 1% and you expect to be staying in your house for a while. Otherwise the benefits of a lower monthly bill many not be worth the additional expenses of transaction costs and fees involved in any refinancing.
Tip 4 – For a home deposit, it’s best to come up with at least 20%.
Tip 5 – Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%. These guidelines include payment on all loans, such as a car loan and credit card debt as well as any major payments, such as school fees.
Tip 6 – If it sounds too good to be true or you don’t understand how an investment works, don’t buy it.
Tip 7 – A lot of people who have large investment portfolios today, started out small. So aim to save at least 10% of your earnings for investment.
Tip 8 – Expect the unexpected and have an emergency account. Keep three months’ worth of living expenses in a high-yield savings account. If you have children you may need six months’.
Tip 9 – The earlier you start saving, the less you’ll need to set aside every year to meet your goals. That’s because you allow your money more time to grow – the gains on your invested savings will build on the prior year’s gains.
Tip 10 – Diversify your investments and then diversify within the areas. For instance, in property have residential and include commercial or if you only want residential, include a mix of homes and strata properties. This gives you the advantage of limiting your overall risks while giving you the best opportunity to capitalise.
Try to estimate future maintenance costs and work them into your budget. Some homes, especially older ones, may require more regular upkeep than homes built with more modern materials. Nothing outrageous. Just plain sensible suggestions.
The Educators Catch 22: Knowledge to Action is Not a Scam
This post is not just about Knowledge to Action (accused by a small minority of people as being a scam) but for all the educators out there.
As I mentioned in my post titled “Is Knowledge to Action a Scam?” the bulk of people who complain about training courses are normally people who are trying to avoid the risk of changing their life. Risk is scary for many people so providing an opportunity to change their life can cause a lot of internal conflict.
Most people like to stay “safe and comfortable” with their life even though, deep down, they are very aware that this is not how you reach your dreams and goals.
People who complain about the cost of a course or the fact that the educators don’t provide lunch tells me this person is looking for any excuse to invalidate the chance to change.
If you do want to change your life and you have heard about a course that could help you get closer to your goals, but you see a negative review or comments about the course, ALWAYS look behind the comments and look at the person who wrote the review. You will normally find a person who constantly complains and has a “safe and comfortable” approach to life.
Is this how you want to live your life as well?
I will always ask the people who attended the course to see what value they got to help me make a decision – not the “tire kickers of life”.
Making your money work for you – A quick introduction
As an avid property investor and owner of Capitalise Investments, understanding how to use money to make it work for you is vital to what I do on a daily basis.
As an avid property investor and owner of Capitalise Investments, understanding how to use money to make it work for you is vital to what I do on a daily basis. I often get asked how one would go about making more money or how do you get your feet on the steps of property investing, or I’ve got too many outgoings to focus on any investments. The latter being fundamentally the problem and many people fall straight in to this trap.
Formerly from the UK, I grew up in mediocre town, went to mediocre school and I followed in the footsteps of my parents. I went to school to get a great education hoping that one day I’ll be able to afford anything I wanted. Soon it was time to leave studies and focus on my “career”. I got a job, I earned, I paid my bills and got a car to match my job. Without realising at the time, that was the biggest mistake of my life. Obtaining the car through finance and having that liability to pay every single month. This is the first signs to becoming financially unstable and ultimately forming part of the daily rat race that will see me trapped forever.
To make your money work for you, there is one simple rule and I only learnt this much later in life. Focus on assets as opposed to liabilities. It’s that simple. Liabilities being everything that takes money away from you, finance, mortgage, credit cards, personal loans, those are the things that will ultimately make you poor. Think about it, you go to work to get paid, you pay off your mortgage debts, car loans and the circle begins again.
However the assets – this is something that puts money in to your pocket. If you want to be rich, spend your life buying assets and I have chosen to work within tangible assets, something you can see, feel, stay in and sell on. I work with tangible assets within emerging and distressed markets that not only appreciate, but you earn from rental income, rental income that puts money in to your pocket every single month to supplement your income from your daily job.
Making your money work for you is easier than you actually think. For example, If you want a nice new car, instead of thinking, I can’t afford the car – why not think, HOW can I afford the car. Personally I would look for money making assets; my chosen example would be real estate. I carefully invest in to an emerging market or a distressed market that will generate me income, with that income I’ve generated from my money making asset; I can afford to pay for the car loan without losing any liquid cash. Once the car is paid for, I now have an income generating assets that has appreciated in value, plus a nice new car that is mine to own 100%.
Depending on how much money you have to start with, you could use the example above to generate you future financial success to overcome mortgage repayments, car loans, credit card bills and to secure that all important financially free future. Once you have obtained the asset, it will usually look after itself without any support from you whatsoever.
So as my first post and if you’re reading this, take a look at what you can cancel out in your life to free up more cash to focus on building that asset column of your own. Take a look at your cash flow, where you get your cash and where it goes because that will tell you a story of how you handle your money.
Remember, it’s the Assets vs. The Liabilities and now is the time to learn the difference between the two.
I run a small investment consultancy and I’m always seeking ways to further my wealth creation through real estate, feel free to send me an email and follow us on twitter and Facebook.
A friend and reader recently mentioned they were hoping for inspiration from these blogs… we trust this will suffice….
A friend and reader recently mentioned they were hoping for inspiration from these blogs… we trust this will suffice….
Sonam and Bayermaa, lived in the great mountains, near Paryang in the heart of western Tibet; a place where the four great rivers of South Asia originate, from slow, crushing, time-wearing glaciers as old as the planet itself; the air is always full of gnawing, biting vitality, and life is as bright and real as the contrast between snow on the far flung slopes and the yawning gulfs between the valleys.
Sonam and Bayermaa are happy, and modestly proud with reason. Sonams only son is strong and vital, and a walking painting of father; the three daughters Bayermaa bore are all sharp of wit, keen of frame and visage, and will be well-contested when they come of age in the small village. The family work hard and willingly, either in the long hours of summer or a little more frenetically when the clouds settle in for winter. The fields are well tilled, and there is always tsampa and chang, butter tea and time available for guests or elders who are passing the family home. And so lifes melody has skipped along, with intermittent ups and downs, childrens bruises and tantrums and all the texture one might expect in a good life.
Yet Sonam was beginning to be troubled. The source of this abrasion he could identify, and so slowly it gained power, he became restless, and eventually the chang he put so much of his time into could not suppress this itch. He began to stir constantly at night, until Bayermaa could not help but be woken; yet Sonam could not tell her what bothered him, merely say “it’s nothing, it’s nothing”, and force himself to lie still. But by dawn, when he had been staring at the slate above him, Sonam could stand it no more.
When the family had all gotten about their work for the day, Sonam slipped away to seek out Anil. Anil was the oldest male in the village, frail, blinded by cataracts, yet alert and always willing to expound upon any matter in the village, although his thoughts might take quite some time and tea to be finally rolled out, like the bright little pebbles one would play with in his youth. Sonam explained this uncalled for and bothersome thorn had developed in his soul; he was aggrieved, he said to Anil “I have worked hard in my short years, I have good land and good people around me, my hands are skilled and I always contribute well when the men sit to ponder the seasons and workings of the valley together, I have by all gods, been most fortunate — why may I not be content — yet I feel, I feel, its not enough.. this is an unworthy feeling”
Anil considered his response a long time, and finally, said to Sonam, “many nights I have watched you, since you were a small boy. Now your family is grown, they do not need your chivvying and strong arms to lift them, Bayermaa is dutiful and a good mirror to you, yet your wits are undimmed and indeed, you are almost, idle” raising his hand to forestall the protest this word would bring. “I have seen you begin to reflect on yourself in the chang, yet there is no answer there, indeed I had hoped you would see this yourself. But it is now clear to me, you are now drowning in your own unused vitality. Why are you not using your strengths and mind to grow as a man and be beyond yourself?”
“Anil”, said Sonam, “I am an empty well, long I have thought, and yet I have no answer”. “Then you must seek inspiration, Sonam. May I suggest that you will not find it here, in the four walls of this valley you know so well. You need to climb Sonam, climb above and look beyond what you know.” “How then, should I do this, Anil?” Anil looked Sonam straight in the eye, and said — “it is a simple thing. You need many days tsampa, a strong hoe, and a good waterskin. You must climb (mount) Kailash and seek your answer from her at her peak. You should go now, before the winter truly arrives. I will explain this to Bayermaa. If you do not, this poison in your soul will grow, and then it will begin to infect us all — this is nature”
Sonam left that very evening. Many days he climbed, for Mount Kailash was 7 days walk to her feet, and then slowly, slowly he began the ascent. As he climbed past the first notes of the glacier, into the moraines and moss-struck boulders, he wondered, the first of many times, “ai, this madness, will it be my end?” The days passed and Sonam was now a stick figure on the bright slopes, able to be seen by hawks and bright adolescents maybe, but he was now truly ascending unheard of and terrifying heights. His boots were failing, blisters were formed and bleeding and he began to chafe and these constant pains and knocks to his spirit were indeed mounting against his resolve. Yet still he climbed. On the 14th day he nearly broke.
The wind had begun in earnest, each step was a torture to his thighs, the snows were beginning to form above Kailashs brow, yet still he climbed, stumbling, slipping, now sliding back foot after foot, now gaining, his lungs stabbed at each breath with “the little knives” of winter. Yet still he climbed. He could not stop.
For Sonam knew how, he would go on or perish, for walking down now was as bad an option as going up — he did not have the werewithal to make the bottom before he failed utterly in his strength. And so he faced his fate, turned his face to the slopes again, and lifted us foot up, again, again again… The following morning, at about that time of day when the first red rays court the clouds, the mists and echoes began to disperse, a cleanliness and sombre sparseness began to surround Sonam. 30 steps, 25 steps, 20 steps to go, 10, now a stumble, a sob, another step, 2 more, now 6 to go, and finally, when his heart truly was leaping out of his chest, he placed his hand on the summit if Kailash.
Many long minutes he kneeled there, eventually gaining back his breath, and knowing that he had achieved a tremendous victory over himself, and calm, clear and proud as he was, he still had no understanding of why he had needed to do it. It was then that Anils voice came to him. “Sonam, Sonam” the voice whispered. “Anil? Is that you”, Sonam replied peering all around him, wondering if he had gone mad. For there was nothing to be seen, save the hundreds of kilometres of mountain peaks, snow rock and ice and a blue sky so sharp it was blinding. There was no place here for a trifling human. “Sonam, Sonam, why are you here?” cried the voice. Sonam stood, and puzzled as he was, could not answer, until it came to him, Anil had said all those long days ago, “you must seek inspiration, Sonam” Swaying now, tottering in the breeze like an old man, Sonam finally replied ” I am here to seek inspiration”
The answer came back from the void —
“and here you are, Sonam, having become what you sought – here you are”
See you at the Masters, Sunday May 23rd
And folks, remember to enter our competition for Free tickets to the Masters day and Free copies of Seans book.
Management2 years ago
Home Insulation Requirements
Tenants11 years ago
Window Coverings in Rental Properties – Nets, Curtains or Blinds?
Build3 years ago
Soil types: the key to structural problems for homeowners
Investment2 years ago
Another date NZ property investors are dreading
Accounting & Finance2 years ago
Low Interest Rates Winners and Losers
Build2 years ago
How to Choose and Purchase a Suitable Property to Subdivide
Education11 years ago
Important Facts about Minor dwellings
Tenants3 years ago
Coworking Countdown – 4 Things to Prepare Before You Move In