As you go through life your needs and priorities change. For most Australian’s our first main concern is paying off our home mortgage and taking care of the children’s education. It then dawns on us as to how we are going to maintain a quality lifestyle and create some wealth for our retirement. This can be quite daunting. Most people being with debt, management of their money is not generally done as well as it could be and people continually battle to make ends meet.

It is not the amount of money we earn - but how we manage money and what we do with that money that makes the difference to our lifestyle. Budgeting or money management is vitally important, once you understand this, know where you spend your hard-earn money and become comfortable with your money management you will be then in a position to start to reduce your home mortgage, free up some equity in your home and should then be seeking to implement a plan to create future assets through wealth creation for a better lifestyle and your retirement years ahead.

Most of us do not realize financial security is about planning today for tomorrow. It’s about how we manage the money we have, by setting goals and planning ahead so that we can be prepared for whatever opportunities that may present themselves along the way and then using those opportunities to make money and acquire assets for our future.

This is where financial structure becomes very important. If we break this down into two areas it becomes easier to understand.

YOUR OWN HOME:

We work hard for our money, pay tax on this money and then have to pay-off our home from our net income. We need to get this paid off as soon as possible through finance structure and money management, by doing this you could save thousands of dollars in interest over the life of the loan. At AAA we have many clients we have been able to do just this and move on to start their investment portfolios. You too can do this with some guidance and knowledge.

Most Australian people like property - we can touch it, feel it, see it and over time watch our investment grown in value. Investment property is treated somewhat different than our own home for taxation.

Tax-assisted investment planning - How does this work ? When the costs associated with owning an income-producing asset exceed any income generated then these cost can be off-set against taxable income to create legitimate tax deductions and refunds.

Some people purchase investment property for taxation reasons and may choose to purchase many properties using negative gearing whilst other may choose to purchase to have a cash-positive situation.

Whatever the choice, to make the most of the investment property, you need to understand all the areas that could contribute to you making more profit, allowable taxation deduction, ( example -  depreciation... and how do you have this done and by who) ... and how to claim these deductions. You may have management fees, boby-corporate fees, rates, insurance, rent insurance and the list goes on. Finance structure is extremely important as the interest you pay on the investment property mortgage is fully tax deductable, unlike the interest you pay on your home mortgage. At the end of all this you need to understand if you are looking at an investment property purchase how much it will cost you each week or month out of your own pocket – and if you are comfortable with this amount.

Some people just do not progress to purchasing other property as they do not understand the process or simply are too frightened as they do not know how much it could costs them.

They could be pleasantly surprised - we have had many people find that they can afford to look at investment property once they understand the process and their financial situation.

Everyones situation is different, what suits one person may not suit another – the basis rule is to put yourself in a situation to make an informed decision and be comfortable with your level of exposure.

It’s the starting that stops most people but if you do not take the first step towards creating some feature wealth then the prospect of retiring on a pension is not too exciting.

" financial management & planning ahead – it is up to you "