pwfadmin, Author at PWF

30 Jul, 2018
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How a young couple built their financial security

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Every day about one quarter of all Australians suffer from financial stress. That stress, caused by overwhelming debt can lead to insomnia, irritability and serious health problems. Not to mention the hours worrying about how you’re ever going to afford to retire.

The great news is, we can help. And I want to share with you how we have helped one such Aussie couple get on top of their mortgage and start planning for their financial security through our ground-breaking Mortgage Reduction Program.

The first step in reducing your mortgage, admit you have a problem

*Susan and *Mark are a young Brisbane couple with two kids at school. They approached us last year because they had mortgage debt of about $352,000. Now this is a lot lower than you’d expect from a couple in Sydney, but because Susan was at home with the kids and not earning a full-time wage, they only received a modest income of $95,000 and were looking at another 27 years before they could be mortgage free. As Susan said to us when we met her,

“…unless we do something about our finances, we have no chance of being able to retire, let alone building the nest egg we’d always dreamed of.”

Step two to reduce your mortgage – sign up to our Mortgage Reduction Program

The greatest part of my job is being able to calm people like Susan and honestly tell them we can help. A large mortgage does not mean you will never have financial security. But, it does mean you need to take some practical steps to get your finances under control.

Firstly, we mapped out how our program could help them, even with their moderate income. We showed them all the various components of our Mortgage Reduction Program and the effect those components would have on their day-to-day lives.
We then showed them the projected benefits they could expect if they followed this program.
Both Susan and Mark felt confident that the program would prove only positive for their lives, and the benefits were well above their expectations, so they signed up on the spot.

Our plan for Susan and Mark’s debt reduction

We mapped a realistic plan for Susan and Mark that meant they didn’t have to eat meals from a can or cancel their Netflix subscription (something Mark said he couldn’t live without). We consolidated their debt, reduced their interest rate and changed their approach to spending. They were pretty surprised at how much our changes could impact the life of their loan and they felt that finally they might have a chance to beat the banks. They were determined to follow all our advice and were happy to report in once a month to make sure they stayed on track. They left the office feeling a lot less stressed and were confident they’d sleep well that night for the first time since having the kids.

The results of our Mortgage Reduction Program

I am thrilled to share that Susan and Mark have achieved a pretty incredible turnaround. In less than four months they reduced their home loan by $48,000 which means they are on track to becoming mortgage free in only seven years.

Both of them are sleeping better as they no longer worry about their financial future. They are even thinking about buying an investment property next year because they know they’ll be able to afford it.

While Susan and Mark are a lovely couple, they wouldn’t consider themselves extraordinary. They just followed the proven and practical strategies offered through our Mortgage Reduction Program and they are so happy they joined.

Susan wanted to offer some advice for people in a similar situation.

“Take control of your debt now, before it takes control of you, your health and your family.”

Want financial security?

I don’t think money is the root of all evil, but debt can be a killer. I think Susan has taken such a positive move and I’m so happy we were able to help her and her family. We’re here to help you too. If you have about 20% of equity in your mortgage and you want to reduce it quickly to gain your financial independence, contact us and we’ll be happy to help get you on the road to financial security.

Like many Australians, you probably want to live well in your retirement and have a choice about when you can afford to retire. You have worked hard, and you deserve it.

Sally-Ann Benson

Contact Sally-Ann and the PWF team here.

*Names were changed to protect privacy.

4 Tips To Maintaining A Steadfast Wealth Mindset

“The definition of insanity is doing the same thing over and over again, but expecting different results” – this is a famous quote that is widely accredited to Albert Einstein.

There is no evidence that Einstein did coin this phrase but someone did provide us with this insightful piece of genius that we can all derive inspiration from to drive us forward to changing our mindset.

It sounds simple in theory: change your wealth mindset to a positive one and you will start seeing positive results from your wealth building decisions.

In reality actually changing your mindset and what you believe to be true is the first step and is normally also the most challenging. If you continue to make the same decisions, then you will continue to see the same results.

A successful property investor has a positive wealth mindset, so if you also want to be a successful property investor then you need to start thinking like one. Once you embrace this new way of thinking you will open up a whole new exciting future and start to see your wealth grow.

Start today with these simple yet effective steps:

Understand your goals: Everyone has a different idea of what wealth is and what will make them happy. Have a clearly defined goal that is specific to you and your family. This will provide you with determination and also give you a clear focus on your wealth building.
Be open to learning: Every successful property investor builds their wealth by continuing to learn and developing their knowledge every day.
Seek expert advice and get perspective: A key part of learning is to affiliate yourself with industry experts who can teach you how to build wealth. Investing in property is daunting and can easily feel like an insurmountable task. Staying in regular contact with a mentor will enable you to overcome those feelings and retain focus.
Take the opportunity: So many people miss an opportunity because they did not have the courage to grasp it when it is presented to them. Every successful property investor started their personal journey with a single decision to seize an opportunity. You can also make that choice!

Subtle changes to your way of thinking will transform you from someone who wishes and hopes to someone that learns and succeeds through consistent action… Practical advice for those starting out and nice reminder for those already on the journey.

15 Jul, 2015
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4 steps to building REAL wealth

Anyone can buy an investment property. But, if you want to build real wealth through property, it’s important to get four things right…

We follow a tried and proven system that will teach you how to create wealth through investment in Australian property, safely and securely. We have over 2,000 clients that have worked with us to build multi-million dollar portfolios and, in doing so, changed their financial futures. They prepared their wealthy future and in return received the benefits.

Have you registered for the brand-new “Prepare Your Wealthy Future” seminar yet? We’re getting close – be quick to Secure Your Seat!

– Sally-Ann Benson & The PWF team

06 Jul, 2015
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Melissa’s Success Story

It’s Sally-Ann here and I’m very excited to be sharing a special story about our client Melissa.

Here at PWF, our role is to navigate our clients safely and successfully through the complex world that is wealth creation and give you complete guidance that’ll enable you to reach your goals sooner than you thought.

Melissa is one of our many clients who was able to experience this process first hand. As a team leader for Child Support, Department of Human Services and a single mother of three, Melissa has a life goal of ensuring her family is financially secure at all times.

Prior to working with PWF, Melissa had one investment property of her own purchased through Defense Housing. Melissa purchased property with the goal to retire on the rental income that she received from her property investments but this property was costing her more money every week than what was going into her pocket. It was negative geared.

Melissa needed a solution, as she knew investing this way would not provide her the financial security she was striving for.

Click the PLAY button below to discover how simple it was for Melissa to turn her situation around and start preparing a solid financial future…

If you’re like Melissa and want your investments to start giving you the results you want for your future then register for the next Prepare Your Wealthy Future seminar today.

We follow a tried and proven system that will teach you how to create wealth safely and securely. We have over 2,000 clients that have worked with us to build multi-million dollar portfolios and, in doing so, changed their financial futures. They prepared their wealthy future and in return received the benefits.

Secure your seat to the next Prepare Your Wealthy Future Seminar

– Sally-Ann Benson and The PWF Team

14 May, 2015
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How To Maximise Return On Property Investment

Return on Investment is the best measurement to determine whether your investment is good or bad. The logic is very simple: the higher the returns relative to the money you put out, the better your investment.

In Australia, property is arguably the most popular investment vehicle, so it’s not surprising why many have thought about investing in property. The challenge for most is that home values in the country are among the most expensive in the world. This means that an investor will most likely need to raise quite a huge capital in order to get started.

Therefore, maximising property investing returns is very important if you want to offset your debt and earn profits as soon as possible.

Improving Rental Returns For Better Return On Property Investment

The culture for most investors in the country is to gear investment properties negatively. This means that the investor charges a rental income lower than the cost of their investment loan. The monthly losses can be used for tax breaks. And in an ideal scenario, those tax breaks accumulated through the years will offset the monthly losses when the investor sells the property at its appreciated value (say double its original price after a decade or so).

However, life is usually more complicated than the ideal scenario; and in a practical sense, losing money each month can be very taxing on four personal finances. At the end of the day, are you truly willing to lose an average of $50 – $100 per week for an annual tax break?

So rather than gear your property negatively, it’s more practical to charge rental rates that can cover your loan and, ideally, yield you profit at the same time. Ensuring passive income is the start of maximising return on property investments.

Granted, rental rates will vary depending on where your property is situated, so location is very important. Typically, demand is strong in the inner suburbs because people like to live in areas that are close to work. Moreover, blue chip suburbs usually have a variety of shops, restaurants, clubs, parks and other recreational places, which make these locations all the more appealing. The higher the demand for these areas, the better the rental rates.

Structure Your Finances Wisely

Aside from improving rental income, another factor to consider in maximising return on property investment is how quickly you can pay-off the debt you’ve incurred when you bought the property. This is something most people overlook since people simply tend to pay off the mortgage as structured by the bank.

However, because banks earn most of their profit from interest, it is beneficial for them to structure their loans where you, the borrower, end up paying the most interest.

If you want to minimise your debt to boost your net profit, it’s important that you pay off the principal on your loan as quickly as possible. This can be done by structuring your finances strategically so that most of your investment’s income goes towards paying off your loan. You’ll be surprised at how quickly you can shave off the years from your mortgage once you focus on paying off the principal.

These are just some practical tips to help you yield better return on property investment. For more investment tips, register for our ‘Prepare Your Wealthy Future’ seminar at www.pwf.com.au/prepare-your-wealthy-future-seminars.

14 May, 2015
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Layman’s Guide to Financial Independence

When people hear ‘financial independence’, most think about making a lot of money or having a high net worth. However, these two notions aren’t exactly accurate.

For instance, picture an entrepreneur that makes $5 Million a year. Most people will think that that entrepreneur is wealthy. But what if he needs to spend 5 Million-and-one dollars to make that 5 Million? Will you still think he’s wealthy?

The same can be said for a person who owns a multi-million dollar property. Suppose that person is already a retiree and living on a pension. Chances are, most of his pension is going to the insurance and taxes of that mansion of his. If so, how much cash will be left for himself? On paper, that multi-million dollar property owner is ‘wealthy’ even if he is struggling to sustain that property despite not owing anything on it.

Understanding Financial Independence

Creating wealth is more than just the money and the net worth. Real economic wealth is having financial independence – the freedom to do the things you want, when you want.

It is important for you to understand this whenever you chart out your goals and financial plans. Unless your plan will give you more time for yourself and your family, then what’s the point of following that plan?

This is the problem many people face when they buy properties. They don’t have a clear idea on what they want to do with the property. Their focus is too much on just securing it and then hope everything works out from there.

Unfortunately, without a specific plan, properties will most likely take money from you rather than make money for you. Just ask those that have been forced to work extra jobs the more they expanded their property portfolio.

On paper, having two, three and four properties under your name may look impressive. But if you end up working 16 hours a day just to sustain those properties, then it defeats the purpose of why you invested in the first place.

So before entering the property market, it’s important that you sort out how your property will earn you money. If you are having the property rented out, do you know where to find tenants? Do you have any basis of screening to avoid problem tenants (delinquent in paying rent or those who don’t take care of the place)?

Another point to consider is how you will structure your finances. The common practice is negative gearing where the investor chooses to lose money each week to qualify for tax breaks. But are you really willing to lose an average of $50-$100 each week for tax breaks? Or would it be better for you to gear your property positively so that you earn a weekly profit instead?

These are all very important factors to consider if you wish to benefit from your investment. If you are interested in learning about how to achieve financial independence through property investment, register for our ‘Prepare Your Wealthy Future’ seminar at www.pwf.com.au/prepare-your-wealthy-future-seminars.

14 May, 2015
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How Home Ownership Can Contribute To Wealth Creation

Why Some Investors Struggle

According to the 2014 Global Wealth Report of Credit Suisse, property makes Australians the world’s richest people in the world. It’s a nice statistic for sure, and it also reinforces the notion that investing in property is the smart thing to do.

Despite being labeled the richest people in the world, many Aussies don’t feel wealthy. In fact, there are property investors in the country who feel the exact opposite. In their experience, the more houses they invest in, the more they have to work extra hours just to make ends meet.

Asset Rich, Cash Poor: How Does Home Ownership Contribute To Wealth Creation?

One of the reasons why people struggle despite having a property portfolio is that they have no idea how property ownership contributes to the creation of wealth. Most people think that the value of the house is wealth in itself. While this is technically true, this ‘wealth’ isn’t something you can actually utilise in a practical sense.

Think about it: Assuming you own a $500,000 house and you lost your income today, will you be able to get by with that $500,000 property? Probably not if you factor in monthly mortgage payments and maintenance costs. In that scenario, your house feels more like it’s eating away at your wealth than something that generates wealth.

Many people are in this dilemma. They are asset rich thanks to their house, but they are cash poor with few options to get by if something goes wrong such as unemployment or an unexpected medical expense.

Moreover, the common practice of negative gearing makes it all the more difficult to sustain a property portfolio. Rather than create cashflow, investors end up losing money each month to qualify for tax breaks. With the cost of living increasing, how can people afford to lose money on their properties each month?

Changing Our Wealth Creation Framework

The bottom line is this: left alone, your property won’t generate you wealth. In fact, it becomes a source of a mountain of expenses if you don’t know what to do with it. This is the reason why it is very important to have concrete financial planning. You have to have a clear idea on what to do with your property so that it puts money into your pocket – not take money from your pocket. In other words, you must have a detailed plan on how ownership of your investment property will contribute to the creation of wealth.

The only way to do this is to gear your investment positively. Investment Properties are easier to maintain if it brings in profit. Rather than look for ways to pay for your property, the property ends up taking care of itself and, if the cash flow is big enough, bring extra into your bank account. Isn’t this the reason why people want to invest in the first place?

If you want to learn more about how home ownership can contribute to wealth creation, register for our ‘Prepare Your Wealthy Future’ seminar at www.pwf.com.au/prepare-your-wealthy-future-seminars.

14 May, 2015
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Why It Makes Sense To Invest In A Cash Flow Positive Property

Negative gearing is the common practice among property investors. In simple terms, negative gearing is when an investor borrows money to invest, and the income from that investment is less than the cost of owning and managing the investment.

For instance, a person may purchase an investment property and his mortgage is $500 per week. If his rental rate is $400 per week, then that investor is losing $100 per week. That $100 loss will be eligible for tax breaks. The rationale behind this is that in a decade or so, the value of your property increases and you’ve accumulated tax breaks in all those years thereby negating the losses you’ve incurred.

If that sounds complicated, that’s because it is. Somehow, when people hear something complicated, they seem to just nod their heads and trust the finance expert. After all, the numbers presented with all the fancy calculations can’t be wrong – right?

However, there are times when common sense should prevail over fancy Math. If there’s one common complaint people make year after year, it’s that everything seems to be getting more and more expensive. With cost of living rising, can you truly afford to lose money in your investment on purpose just to avail of a yearly tax break?

People say that a good investment is based on its rate of return. A negatively geared property yields a negative return. Despite that, many people still think that that is a good thing because of the tax breaks. But ask yourself this: Would life be easier if you were earning $100 extra each week or losing $100 each week? In a practical sense, making money weekly is always better than losing money weekly. Additionally, is not earning money the main goal when you purchase an investment property?

Why take a hit for 52 weeks just to get that one annual tax break? Besides, that annual tax break ends up paying for your previous losses rather than going to your savings anyway.

Keep in mind that the average weekly losses in a negatively geared property can amount up to $50 – $100 each week. So if you purchased five investment properties, which are all negatively geared, then your potential losses will be up to $500 each week. That’s a lot of money to burn.

Won’t it be more sensible to purchase an investment property makes you money now rather than a year from now? If your investment property is positively geared, then you won’t have to worry about the cost to sustain that property. The property takes care of itself and brings in money to your pocket each week. What’s not to like?

If you are looking to invest in a cash flow positive property, but are not sure on where to start, register for our ‘Prepare Your Wealthy Future’ seminar at www.pwf.com.au/prepare-your-wealthy-future-seminars.

14 May, 2015
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Why You Need A Wealth Creation Strategy

Question: Is simply saving money good enough for retirement?

Answer: Not as good as you may think…

Challenger’s chairman of retirement income, Jeremy Cooper, suggested that if a $1Million nest egg was used to buy a lifetime of income using current interest rates, you would roughly make $648.50 a week, which isn’t that much different from a government pension. So if you are thinking that having half a million or even a million dollars in superannuation will be enough to make you comfortable in retirement, better think again.

Changing our perspective on money

When we think of money, we think of something that’s tangible. For instance, most people think like this: ‘if I have X amount of dollars, I can do this, this and this’. The greater ‘X’ is, the more you think you can do.

For some reason, most people think that $1 Million is a lot to be able to do all the things you want. Unfortunately, that is just a tired old perception on money.

Don’t get me wrong. $1 Million is a lot of cash on its own. However, it isn’t ‘a lot’ in terms of lasting you your retirement (assuming you’re relying solely on it for daily living).

The truth is that money is really just a concept. It is a way of measuring value (of a product or service). When we hand out cash, we are handing out notes that represent a certain value. This value isn’t set in stone. It is affected based on economic trends. In other words, what you think is a lot now may not be in 15, 20 or 30 years time.

This is the problem we have with inflation. We may open up a savings account for retirement now, which guarantees X amount of dollars when we retire. The estimates you see today look good. But as the years roll by and cost of living increases, the less valuable that savings account feels.

Wealth creation is more than just being prudent with your spending and developing a habit of saving money. Relying solely on savings is a risky proposition if you want to be comfortable in retirement because it is hard to outrun inflation by just saving a portion of your income time and time again. This is the reason why you need a wealth creation strategy.

Building A Wealth Creation Strategy For Your Retirement

It is funny (or should I say tragic) that schools don’t really teach about personal finance. By the time we graduate, most people have no idea on how to build a wealth creation strategy for their retirement. We develop an employment mindset and hope that we’ll be able to save enough when we choose to retire.

Very few are equipped with the knowledge to prepare for the future after graduation, so much that young people have become skeptical of whether they will ever be able to afford their own home.

Building a sufficient wealth creation strategy is an important skill and it is something people must be willing to learn and apply for themselves. Otherwise, life will be a constant struggle at the hands of inflation.

If you are interested in learning more about wealth creation strategies through property investment, register for our ‘Prepare Your Wealthy Future’ seminar at www.pwf.com.au/masterclass/