It may be no secret that Australians wealth, your wealth, is primarily held in property. A release of data by the by the Australian Bureau of Statistics in September 2017 shows;
‘Average household wealth between 2013-14 and 2015-16, is up 11 per cent from $835,300 to $929,400, net of debt. Rising property values are the main contributor to this increase. The average total value of property assets owned by households increased from $548,500 in 2013–14 to $626,700 in 2015–16.’
An interesting piece of information which is great news for Australia as it shows in one small way the health of our economy and more importantly, the health of your personal financial position.
There is a problem though. This measure of wealth is of no use to you, unless you plan on selling your property with a view to parking the cash and living in a tent.
Our property cannot be used to live. It isn’t possible (nor desirable) to sell off your bathroom for an annual holiday and it isn’t a source of income or cash when needed. The only time your property may be used to fund what you want to do in life is when you retire and you choose to downsize your home. This will depend though on how much you can profit by downsizing, if at all.
All too often when chatting with clients, I see their spare cashflow over their working life has usually been invested into raising a family and their property (primarily through paying debt, upgrades, renovations etc), leaving them asset rich and cash poor close to or in retirement.
To realise what I call real wealth, assets you can actually use, you need to invest outside your property. High interest savings accounts, bonds, shares, superannuation and investment properties are all ways you can build real, useable wealth.
The difficulty is in knowing what to invest in, how much to invest and for how long. The answer to this will depend on your personal lifestyle objectives, what matters most to you in life and channelling your existing asset base, including your income, into the right areas.
With a sound, concise investment plan, you can be clear on what’s needed to realise real, useable wealth so take the next step and seek advice.
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