Building long term wealth is not a quick fix solution and it's only human nature to want to rush things along and take risks we don't understand. If there are 2 lanes on the highway we want to invest in the fast lane but unfortunately we often crash and end up on the sidewalk when we should have just stuck to the steady lane in the first place.
Warren Buffet is one of the most successful investors of all time and says that "You don't need to be a genius to invest well."
He also said that "Some things take time."
The reality is that 66% of Australians will retire with a sole reliance on the pension and 81% will retire with a partial reliance on the pension. That's the large majority of us.
The pension is $447.20 per week for singles and $337.10 each for couples which is the equivalent of $23,254 and $17,529 per annum respectively. To live comfortably in retirement you are going to need a lot more than that. The only way to avoid this is to build wealth for retirement and the earlier you start the better.
Most people want to retire on what they currently earn so they can maintain their lifestyle. This means that if you currently earn $100,000 per annum then you will need $2.0m in savings today to give you a 5.0% return providing $100,000 per annum in retirement. However by the time you retire due to inflation you will need a lot more than this. You will require $163,861 in income in 20 years time (2.5% inflation per annum) to maintain the same purchasing power of $100,000 today. So not only do you have to save a lot of money, you also have to beat inflation. What chance have we all got?
In Australia we have the benefit of compulsory employer superannuation contributions currently 9.5% of your pay. For most people this alone will not even come close to providing sufficient retirement income unless you are lucky enough to be on a high income. So your are screwed. You need a backup plan that is almost guaranteed to work. HELP! We call it the Capital Growth Safety Net ("CGSN") and could provide you with more than sufficient wealth on retirement so you do not have to rely on the pension.
Based on the initial purchase of a $500,000 property today you could create between $115,000 and $208,000 in tax free average equity per annum over a 20 year period depending on the growth rate achieved (5.0-7.0% assumption). This is the easiest way to avoid retiring on the pension yet most people won't do it due to a lack of patience. By trying to outsmart the market they outsmart themselves and their retirement. As Warren Buffet says, "Keep it simple."
Ask us how.