It drives me crazy when I hear people talk about that particular investment or wealth building strategy as the only way to go. Some people are so caught up in just property or just business or just stocks and they wear black and blue that this is the only way to do it and the only real way to create wealth, then they go ahead and have the audacity to say that another kind of investment is completely inferior. Trash!
This represents such a narrow view of investing, finance and the world and I think it is a disservice to the potential investors whom they are advising, apparently with their clients’ best interests in mind.
The reality is that almost all investment strategies work and potentially have a place in a portfolio for the right person with the right strategy in the right situation, and most of the time using a multi-pronged approach to your investment will pay off. better. results, in a more conservative and effective way.
The key is how you use them together, if you get the mix right and work in harmony together, you can take what was a 15-20 year strategy to create your version of financial freedom and turn it into a 5-10 year strategy or even faster.
Unfortunately, this is rarely practiced, as the advisors they see are too busy trying to sell their own product and as much of it as possible without taking the client’s best interests into account. I hear this all too often from the clients I work with.
I recently started working with a new couple and sat down for an initial strategy session with them the other day, found out they had been working with another group who had advised them to just buy one property, don’t worry about any other strategies. or asset class, property only. Under his guidance, they bought a couple of packages of houses and land in an area, which ‘could’ potentially provide some growth in the next 10 years, perhaps, and they had low rental yields, this was sold to them as a tax benefit. So here they were with all their money tied up in a flat market with no signs of growth any time soon and now they had massive negative cash flow and were struggling to live from day to day.
Unfortunately I hear this very often. Now they felt ‘stuck’, which any of you who have felt it knows is not a good place to be. My job now is to wind them down, get them back to some sort of lifestyle and some respite, and then almost start over on their investment journey.
wealth strategy
Let’s think about how we go about creating wealth for a moment.
We generally have three types of strategies.
1. Capital growth through asset accumulation
2. Cash flow from receiving income greater than the potential expenses of assets, businesses or commercial strategies
3. Savings strategies that are things like tax reduction strategies
Here is something to remember:
The growth of capital creates wealth; cash flow creates a lifestyle and supports your assets
Wealth needs a strategy, just random actions and hoping for the best just doesn’t work. So why not be proactive in building wealth and make your strategies work together in harmony?
So how do we do this? We do a couple of pigeons with our strategies; a cash flow strategy with an asset build strategy, probably the most common example of this is using a cash flow through trade and pairing it with building quality frontline property as a capital growth strategy.
This now becomes a mini wealth system within your overall wealth building strategy. The cash flow strategy is used to support the continued accumulation of quality properties in your portfolio.
Here are some key points:
Think of your investing strategies as mini-systems in which the strength of one strategy offsets the weakness of the other.
Pigeon combines your strategies to achieve your ultimate success: cash flow with capital growth.
Capital growth assets create wealth, cash flow creates a lifestyle and supports your assets.
If someone tells you that a particular strategy is the only way to do it… RUN!
It’s time to get on the smart side of investing and make your strategies work together in harmony for you and be proactive in designing the life you want to live, rather than hoping for the best. If you do this effectively, your results could be life changing.