![\"financial](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2016\/08\/14461378_l-800x651.jpg\")
<\/p>\nAchieving financial freedom is a goal for most people.<\/p>\n
Unfortunately, the reality is that not that many people will achieve it.<\/p>\n
<\/p>\n
So what is financial freedom?<\/p>\n
There are lots of definitions but I like the one from T Harv Eker<\/a>:<\/p>\n \"Financial freedom is simple: it is the ability to live the lifestyle you desire without having to work or rely on anyone else for money.\"<\/p><\/blockquote>\n Let\u2019s look at 17 steps that can help turn your financial dream\u00a0into a reality through property investing.<\/p>\n \r\n\r\n How much cash do you want to live off and when do you want it?<\/p>\n How many properties will you need to do this?<\/p>\n How big an asset base will you require?<\/p>\n Having a plan shows you where you should be heading and\u00a0takes emotion and luck out of the equation.<\/p>\n It will tell you what opportunities to follow and which opportunities you should ignore.<\/p>\n Over the years, you\u2019re going to make more money by saying \u201cno\u201d to so-called opportunities than by saying \"yes\" to all the new schemes that get offered to you.<\/p>\n This is one of the most important steps because it is the foundation for your wealth.<\/p>\n If you don't get your head right then anything else you build will topple over.<\/p>\n Your wealth success mindset<\/a> consists of your beliefs, your habitual thoughts, and your habitual actions.<\/p>\n But it is important that these three attributes are in-line with achieving and maintaining wealth.\u2028\u2028<\/strong><\/p>\n Acquire the appropriate skills and knowledge.<\/p>\n You'll need to become financially fluent \u2014 learn about property, finance, and tax.<\/p>\n And don\u2019t be swayed by the many myths about money<\/a> and wealth creation.<\/p>\n Luck plays no role in wealth creation.<\/p>\n You may have some good or bad luck from time to time,<\/strong> but over the long term, you accumulate exactly what you deserve based on your mindset and your application of knowledge and skills.<\/p>\n If you don't have the knowledge or skills to create wealth, then the first investment you should be making is in your own wealth education.<\/p>\n If you think getting knowledge is expensive then try investing without it.<\/p>\n You'll soon find out just how expensive ignorance can be.<\/p>\n Select an appropriate property investment strategy<\/a> that fits with your cash flow and risk profile.<\/p>\n And one that suits your stage in the property game.<\/p>\n By the way\u2026just buying a property is not a strategy. It is not a plan.<\/p>\n You need to strategy to bring your future into the present and plan for it.<\/p>\n Let me be clear... there is no such thing as a one size fits all property strategy or the ideal investment to suit everybody.<\/p>\n Instead of treating property investing as a singular game, we should view it as a collection of games, each with its own objectives and skills.<\/p>\n For example, a beginning investor who wants to\u00a0build a substantial property portfolio<\/a>\u00a0over the long term, one that will eventually give them financial freedom and choices in life should invest for capital growth, because if they don't, they won't be able to build a portfolio of properties.<\/p>\n The problem is many beginning investors play the wrong game and invest for cash flow, and while cash flow is important and keeps you in the game, buying the wrong type of property means you will never build a portfolio of sufficient size to give you financial independence.<\/p>\n You can't buy the next property in the next one out of the cash flow from your rent.<\/p>\n You need capital growth and asset appreciation to get the next deposit.<\/p>\n Growing wealth through property involves going through four stages, namely:<\/p>\n So things must be done in the right sequence \u2013 build your asset base first, then live off your cash machine \u2013 not the other way around.<\/p>\n Note: <\/span> Why not let the team at Metropole build you a <\/span>Strategic Property Plan<\/a> - <\/span>click here<\/a> and find out more and have a Complimentary Clarity Consultation<\/span> Successful property investment involves more than just you.<\/p>\n That's why it's vital to assemble a team of experts who can assist you in working towards your dream of financial freedom.<\/p>\n On your team should be the following people who are also property investment specialists:<\/p>\n And remember...if you're the smartest person in your team, you're in trouble.<\/p>\n Saving a deposit for your first property is usually the hardest part of the journey.<\/p>\n There is a variety of ways to do this, but one of the simplest ways is spending less than you earn.<\/p>\n Perhaps you can earn additional income via the gig economy<\/a> as well.<\/p>\n Once you have a deposit, then you buy the best investment-grade property that you can and perhaps manufacture equity over time via a renovation.<\/p>\n Then you extract the equity and do it all over again.<\/p>\n You must begin with the end in mind<\/p>\n You are going to want a multimillion-dollar property portfolio and while it may seem a waste of money to set up a trust structure when you start, it is too expensive to change ownership structures<\/a> later on.<\/p>\n So, get advice from the accountant on your team to ensure you have the correct structures from the start.<\/p>\n Note: <\/span> <\/span>Ken Raiss and his team at Metropole Wealth Advisory<\/a> specialise in providing tailored strategic wealth advice including ensuring that you have the right structures in place to safely grow intergenerational wealth. Find out more about how Ken can help you here.\u00a0\u00a0<\/a><\/p><\/div><\/div><\/span><\/p>\n When you are buying your first property, whether it's a home or an investment, make sure you have your finance organised beforehand.<\/p>\n Not only will this improve your bargaining power, but it will also ensure that you have all your numbers worked out well ahead of time.<\/p>\n Ensure you also have the sufficient cash flow to buy you time if you can\u2019t support the negative gearing for a period of time.<\/p>\n This can be done via a line of credit or using an offset account or just some rainy-day money saved for the moments when you really need it.<\/p>\n This first property that you buy is essential for your future wealth creation.<\/p>\n Why is that?<\/p>\n Well, that first property will act as the springboard for your future portfolio.<\/p>\n So it must be one that will outperform the averages when it comes to capital growth.<\/p>\n The problem is most people don't know how to identify such a property, which is where your expert property team<\/a> comes in.<\/p>\n At the current stage of the property cycle, I believe less than 5% of the properties on the market are investment-grade properties<\/a> \u2013 obviously, these are the ones you should be looking to buy.<\/p>\n Warren Buffet says the first rule for investors is to not lose money.<\/p>\n However, there is a difference between risk management and risk avoidance.<\/p>\n Every investment contains an element of risk. If you practice risk avoidance then you will do nothing.<\/p>\n Risk management is the skill of identifying potential risks and then taking action to minimize the potential for loss.<\/p>\n For example:<\/p>\n Note: <\/span> Ken Raiss and his team at Metropole Wealth Advisory<\/a> specialise in providing tailored strategic wealth advice including ensuring that you have the right risk mitigation strategies in place to safely grow intergenerational wealth. Find out more about how Ken can help you here. <\/p><\/div><\/div><\/a><\/p>\n While your investment strategy should be to build equity (your asset base), you need to watch your cash flow to ensure you have sufficient to service any negative gearing on your property after allowing for the funds to live on.<\/p>\n This means budgeting and living within your means.<\/p>\n Again, ensure that you have a financial buffer that can see you through periods of extended vacancy or unexpected repairs.<\/p>\n This could be in an offset account or in a line of credit.<\/p>\n That way, you will continue to sleep well at night.<\/p>\n Here's the thing: property investment is not a get-rich-quick scheme.<\/p>\n It's actually a get-rich-slow strategy.<\/p>\n Despite what you might have heard, it takes time to become rich through property.<\/p>\n It takes two or three cycles to build a substantial asset base,<\/strong> therefore, you need to hold your properties for the length of time it takes for the magic of compounding to work.<\/p>\n Unfortunately, most investors waste the first 5-10 years of their investing career buying the wrong investments, then they need to sell them off.<\/p>\n The good news is, with the right strategy, you can speed up the process and achieve your financial freedom sooner.<\/p>\n This is where your trusted mentor and independent advisors could help you immensely.<\/p>\n They can guide you on how to buy well in the right area and how to grow your equity quickly so you can expand your portfolio.<\/p>\n Most investors never buy more than one property.<\/p>\n That's because they often bought the wrong one to start off with, or\u00a0they don't understand that they can borrow against the increased equity in their portfolio.<\/p>\n And those who buy positive cash flow properties, don't always get sufficient growth to borrow more equity.<\/p>\n However, investment-grade properties increase in value at wealth-producing rates and the rent you receive will also increase in time.<\/p>\n This means you can borrow against your increased equity for your next deposit and the increased rent will help subsidise the mortgage costs.<\/p>\n One of the keys to financial freedom through property investment is to regularly review your portfolio and adjust your strategy as necessary.<\/p>\n Whatever stage of the journey you're at, it's wrong to adopt a set-and-forget attitude.<\/p>\n Every year I like to ask myself a couple of questions about each of my investment properties:<\/p>\n Logically, if a property has not performed well over a three or four-year period, it\u2019s possibly a dud investment.<\/p>\n The answers to these questions help ensure that I only retain top-performing properties in my portfolio and that my money is working hard for me.<\/p>\n This means that if your property isn\u2019t giving you the return you feel it should, then it might be time to make a change either through renovations, by changing property managers or by selling up and buying a better-performing investment property.<\/p>\n Over the years, you will keep growing your asset base so that it reaches critical mass.<\/p>\n That mass will be a different point for different people, however, this should have been part of your long-term strategy as well as your plans for the next stage of your investment journey.<\/p>\n Many investors buy properties without any idea what their exit strategy is.<\/p>\n Now let\u2019s be clear \u2026by exit I don\u2019t mean to sell all your properties, but for most this plan would include paying\u00a0 off your home loan over time and then slowly lowering your loan-to-value ratio on your investment properties as you exit the accumulation phase of your investing<\/p>\n There are a number of ways to do this, which your expert team can advise you on, depending on your individual circumstances.<\/p>\n These may include paying principal and interest or even selling a property or two, while some investors find this a great time to add some cash flow-positive commercial properties to their portfolio.<\/p>\n The objective of your wealth-building plan is likely to be that the income from your assets can eventually provide you with your desired lifestyle whether or not you choose to continue working.<\/p>\n Interestingly most wealthy people do keep working because they enjoy it.<\/p>\n However, they always have the choice to stop if and when they ever want to.<\/p>\n If you follow these steps correctly, buy the right properties, and allow compounding, leverage, and time to work its magic, then you will arrive at this point.<\/p>\n In fact, you will be one of the few Australians who have achieved financial success and freedom.<\/p>\n And that is something to be very proud of.<\/p>\n1. Devise a plan<\/span><\/h2>\n
<\/div>What are you trying to achieve?<\/p>\n2. Develop the right mindset<\/span><\/h2>\n
3. Educate yourself<\/span><\/h2>\n
![\"Research\"](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/research.jpg\")
<\/p>\n4. Use the right strategy<\/span><\/h2>\n
![\"Business](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/01\/property-puzzle-800x534.jpg\")
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![\"pencil](\"https:\/\/propertyupdate.com.au\/wp-content\/themes\/oldpaper\/img\/note.svg\")
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\nYou see... the property you eventually purchase should be the physical manifestation of a whole lot of decisions that you have made in the right order because property investment is a process, not an event.<\/p><\/div><\/div><\/span><\/p>\n5. Assemble your team<\/span><\/h2>\n
![\"Diverse](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/01\/diverse-group-of-businesspeople-solving-a-puzzle-i-team-pazle-800x533.jpg\")
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6. Save a deposit<\/span><\/h2>\n
![\"Deposit\"](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/08\/deposit.jpg\")
<\/p>\n7. Set up the correct ownership structures<\/span><\/h2>\n
<\/picture><\/span>8. Get finance pre-approved for your first purchase<\/span><\/h2>\n
9. Buy your first property<\/span><\/h2>\n
10. Set up risk management\u00a0strategies<\/span><\/h2>\n
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<\/picture><\/span>11. Watch your cash flow<\/span><\/h2>\n
![\"Cash](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2021\/07\/cash-flow.jpg\")
<\/p>\n12. Allow time for your property to increase in value<\/span><\/h2>\n
![\"Property](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/07\/property-value2.jpg\")
<\/p>\n13. Borrow against the increased equity<\/span><\/h2>\n
14. Regularly review your property portfolio<\/span><\/h2>\n
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15. Keeping growing your asset base<\/span><\/h2>\n
16. Instigate an exit strategy<\/span><\/h2>\n
17. Live off your \" cash machine\"<\/span><\/h2>\n
![\"Cash\"](\"https:\/\/cdn.propertyupdate.com.au\/wp-content\/uploads\/2022\/08\/cash.jpg\")
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