What is a financial fortress? It is about building up your income, residential assets, commercial assets and superannuation and having all of them protected. Whilst there are no guarantees in life. Building a financial fortress is not easy, however like all things, it is simple when you know how.

The following is a very rough guide of what a financial fortress looks like and the figures will vary depending on your location (obviously the value of property will be different if you live in Broken Hill or Bondi).

$1 Million – 2 Million in residential property – this is property that would own with no money owing to the banks. Depending on your location this would roughly equate to you owning your own home and 1 or 2 investment properties.

$1 Million – 2 Million in commercial property – this includes offices, shops and factories etc. Typically commercial real estate is less volatile than the residential market and doesn’t tend to fluctuate as much. You can earn a 7-10% return on Commercial Properties and so we believe it is better for long term buy and hold than residential property. The most important strategy is having the right tenant.

$1 Million – 2 Million in your Self-Managed Superfund – you can use your Super Fund to buy property and other investment options and with a low tax rate of 15% it is a great way to invest and you can also use it to protect your assets. Remember you must always follow the ATO rules and be very clear on your outcome.

And then once you have the above income producing assets all lined up you would be looking at earning $150k – 200k per year in passive income and can create some other income from your business and other interests.

The bottom line to your financial fortress is to ensure that you and your assets are protected and you stop working for money by having money work for you.

There are 3 crucial steps that come before you can begin to Build Your Financial Fortress

1. Create Multiple income streams – working just a job is ineffective but is an important place to start – swapping your life for money on an hourly basis should only ever be temporary. Start working on additional income streams through trading property, starting a business or share trading. A great place to start is adding 2 additional income streams in the first year of your 7 year plan.
2. Look at your debt and your expenses – become a strategic spender and get your debt under control. This is a vital step, because if you do not get your spending under control as your income increases, so too will your spending.
3. Start buying or trading assets that will produce income – this is where you start looking at buying or trading residential or commercial real estate that will offer you a rental return or cash flow from trading.

To some of you this might seem overwhelming right now, however it is achievable if you break it down into smaller goals and intentions.

Here are 8 quick tips for Building Your Financial Fortress

1. Avoid ‘conspicuous consumption’ – this is a term for people who buy luxury or brand named items to create an image of being Rich or Wealthy eg. Luxury Cars, Yachts, Planes or other depreciating assets.
2. Avoid putting assets in your own name – this is very important. You must protect your assets.
3. Do not go Guarantor on someone else’s loan – this is a very dangerous thing to do, even if it is family or close friends
4. Always ensure you have adequate liability insurance – it is important to hope for the best but prepare for the worst at all times
5. Avoid personal debt – you should always be looking at minimising your own debt
6. Never go into business without a detailed business plan / marketing plan /management plan.
7. Never go into a partnership without a partnership agreement, which includes the breaking up of the partnership.
8. And do not put all of your eggs in one basket!

To learn more – register now for a FREE  Financial Fortress Strategy Session with us:

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