An Adaptation from John Burley's "7 Steps to
Financial Freedom"

Australia's Money Secrets of the Rich; John R Burley with Bruce Whiting; 2000 Treasure Chest Unlimited, Inc.

To put it in a nutshell, there are seven basic steps or principles to build wealth according to John Burley. Obviously, you can only start from where you are now. By starting, and with support and a mentor, you can make the transition through the stages of wealth creation. By continuing to do what you have been doing, without support or a coach, your strategy is likely to continue to deliver the same results. By learning financial management, and improving your money skills; by fully investigating and applying our home ownership or property investment strategies; by committing to establishing and growing your own independent business; you can secure your own financial future.

Change nothing, and your situation will continue to deliver the results it has, or get worse.

These are the 1st Questions to seriously consider as you begin to decide to do something to begin a wealth creation pathway, and we suggest you write your answers down, or start a workbook!

What do I want to achieve in the next 30 days?

MY commitment to achieving anything written here, on a scale of 1 - 10 I would rate at…?
(1 is low - 10 is high),

What are my consistent dreams about or for our future?

What are my top five goals?

What are my five highest values

What strategies should I use?

What do I really want to accomplish with my life?

What is my purpose in having and living this life?

Where do I want to live?

What type of lifestyle do I want to have?

What have I always dreamed of doing?

What toys would I like to have for myself and my family?

How much income each month (cash flow) do I need to meet current needs?

How much income each month (cash flow) do I think I'll need to meet future needs?

How much income each month (cash flow) do I think I'll need to meet retirement needs? (Many say that 75% of last earned income annual salary / wage is sufficient!)

Therefore, to retire and have income from an investment or capital base, an estimate can be calculated from the income levels you have set (other income sources such as pension / annuity not included): -

We think some important aspects of income generation and "capital base"
acquisitions to be considered include: -

Real estate property rental might be included for income. The property capital base from which that income is earned from can be calculated. A conservative estimate for rental property is a return of 5% of property value per annum as rental income, after costs.

So, a net rental income stream to deliver $ pa (you're A, B or C $ previously) suggests a capital base of $M in residential rental property is required.
(eg $M1,500,000 in property, generating 5% net rental return = $75,000 pa or $1437.00 pw, if able to be kept at almost 100% occupancy and before fully deducting the actual agents fees, maintenance, tax, insurances, levies, fees and charges, etc, etc)

Independent Business Ownership with establishment costs at less than $500.00) plus reinvestment of first one to six months returns, plus the overhead costs per month (paid for out of gross profits) can deliver an income stream of a genuinely passive nature. One where your business support team is there as a risk free, cost free, business building resource. The income stream can be from as little as about $10.00 per month, but can be grown very quickly, with very little overhead costs, to be many hundreds or even thousands of $ each month.

Superannuation is considered an excellent vehicle. Between the government taxation changes, the fluctuations in equity markets, and the variable commissions paid to funds managers, returns on superannuation can become a little uncertain looking ten or twenty years ahead.

What are the projected returns of your fund? Have you sought to change the amount you currently contribute? Do you make additional payments in a more taxation effective manner? Have you planned what is going to happen when you stop contributing and start living off the returns? Have you considered how long it will last if that is all the capital base and income you have?

Many retirement planners suggest we should be tucking away 15% of our income above employer contributions (currently 9% OTWE) to superannuation for 20-30 years to fund our retirement. Are you meeting that goal? Using Superannuation as a wealth creation vehicle when you're 55 years old may be a little late!

The share market is another major consideration for many people. How many people do you know who own shares? How many do you know who are able to financially support themselves from the earnings from their shares? That is income from dividends paid, without actually selling the shares and reducing their capital base?

Been watching the markets lately? Everyone says you have to take "the long view" when investing in shares. Ever actually worked out how many years add up to "the long view" in the share market?

Cash accounts, cash management accounts, term deposits or saving enough to retire on are considered inappropriate because rates are so low, and show every indication of staying very low for some time. There are "high interest" accounts, mainly on-line without any bricks and mortar branch networks. These can offer a good return for your short term money management strategies. We do not suggest considering them for long term retirement income generation however.

Therefore, we are left to ponder just how much are we currently paying ourselves from our current income to achieve an enduring, sustainable retirement income?

Out of all we spend each year, there are the REAL $ spent on assets or services that return income to us, or have the potential to in the future. These are notional expenditures within our budget which are, or can be, aligned to investment purposes. Depending on your viewpoint you may count your current, or planned (who isn’t going to do a course of some sort, sometime?) education in that.

PAY OURSELVES $ _____________ divided by our yearly income X 100/1 = _____ % which means we currently pay ourselves $ _________ per year, which has the potential to produce investment returns, and eventually retirement income. When did you want to retire though?  

Where did the $ ________ returned go? What did it get spent on…? What has it been reinvested? When are you likely to be able to retire with that strategy then…?    

We make no apologies is this is a very low number. We suggest, offer and support wealth creation strategies to grow it! What future do you want? Register 

Do you believe you actually pay yourselves $                  or                   % (approximately) of what you earn each year? Do you believe that contributes to your objective of creating a retirement income level of your A$ or B$ or C$ above?  Do you believe that it is a self funding, perpetual (doesn’t consume itself to pay you), and is well managed?

Every dollar consumed (spent) can never again earn another dollar for you unless it is spent in building a business or acquiring an asset which appreciates in value over time. It will be consumed when spent on any other thing. That is all money knows how to do… be consumed or earn more dollars!

Some pundits suggest that to be truly financially independent and self funded as a retiree, we should aim to live off the interest paid on the interest paid on our capital base of shares, property, bonds, etc! They generally ignore the capacity to build a business which has passive income returns to the original independent business owner who built it! Read Robert Kiyosaki’s books for details, and contact us to get started! Register

If you are a little concerned or would like to do something about what you’ve discovered, even to just understand what it is you are now concerned about, talk with an informed financial planner or adviser. Talk with a practice accountant. Do some more research on the internet. Read some books and learn some new information. Listen to what government says about what Australia is going to be like in the future! Think about, and discuss, why it is the government is already lifting the retirement pension age for women. Why is government talking about doing the same thing, raising the retirement age, even further for everybody! Consider your options to improve your future!