Strategies in a Diversified Income Portfolio

The J.O.B.

Many of us need one, had one or are employed in one. It can help fund our lifestyle, improve our financial prospects, and reward us in many ways. Many of us recognise it isn’t going to be enough though, or may be not as secure as we thought it was. For many younger people today there is an acceptance that they will have and work in many different jobs and careers in their lifetime. There is a degree of acceptance that the lifetime job or career of their parents is no longer applicable.

What needs to be understood is that the job takes on a different relationship to us when we have other strategies for our income, and our future, working for us as well.

Clearly for many Australians it just isn’t working. The lifestyle is less and less achievable to a preferred standard for many though.

For many it is only achieved by using the JOB to have credit to live with. Then you have to keep the job to pay the credit back!

The Basic Principles of the JOB are that if you don’t turn up you don’t get paid, and if you don’t turn up often enough, you don’t keep the JOB!

The Business – the JOB You Bought or Built

Many people use the skills, knowledge or qualifications acquired through schools, universities, TAFE or a JOB to start a Busy-Ness. Many mortgage their own home to the hilt to keep the busy-ness afloat!

Frequently there are products and inventory to keep, major overheads in offices, shopfronts, transport, or warehousing. There are huge investments in the tools of trades, offices and related service providers. At times there are no systems to acquire, so significant time and costs are associated with their development. And that is just to make the busy-ness run somewhat efficiently. Then there may be employees and their training and management to contend with. Then the Unions, the government, the inspectors, and on it goes…

Why does Australia have one of the highest proportions of self employed and franchise ownership in the world? One reason is that Australian’s are committed to the “…do it my way or take the highway…” strategy. But 95% of them go broke in the first 5 years!

Most busy-ness owners and operators don’t undertake any training. They don’t invest in systems and processes which guide and direct their busy-ness. They’re just too busy doing the busy-ness to keep the cash flow going to pay the bills. They work IN the busy-ness, rarely ON it! They may do a TAFE course or two, might attend a seminar or conference, but generally it is a total and utter focus on “the busy-ness” to ensure the bills are paid and the family’s lifestyle needs are met.

The Basic Principles of the Busy-ness are that if you don’t turn up, you don’t get paid! If you don’t supervise employees, if you don’t manage the accounts and customers, your busy-ness goes bust!

Equity Shared Property Investment

For relatively small amounts of money you can joint venture with others and acquire a “share” of an investment property. You could occupy the property with a contract to share the capital growth at a predetermined date with the investors when some capital works or refurbishments are complete.

Set up properly you could sub-let the first one, and do it again. You could have a share in the rising capital value of a string of rental investment properties!

You could do this while you stayed in the JOB, or moved from one JOB to another JOB, or ran your own busy-ness. Equity Shared Leasing of residential property can be a rather exciting way to increasing wealth accumulator! Register

Joint Ventures in Property Investment

A client, who has come to understand the opportunities, might identify and contract for value adding works to be undertaken with a property they already control. We all share the capital gain on the property when later sold or refinanced. Other more complete development or redevelopment strategies can be used in joint ventures.

From simple renovations to complex rebuilds and remodelling, joint venture partners make it less risky!

It is a very broad concept of partnering with others to create wealth. We have available 14 Keys to Joint Venturing which sets out the principles that we consider must be observed to manage the venture risks involved. Register

Standard Vendor Finance Terms in Property Investment

This strategy is often referred to as WRAPS. They are a lawful instalment contract. Rural properties, commercial business properties and business people have used these contracts for over 100 years in Australia. How many mum’s and dad’s have been able to help their kids get into their own home?

Vendor financing, or more correctly “vendor terms”, can be used very successfully with clients to achieve higher returns from the disposal of a property. It can be used to assist those who want to acquire a property for home ownership, investment, or any number of other reasons. There are constraints on their use in some states in relation to residential properties.

We will only use them where everybody wins! Register

Rent Buy Plans as Property Investment

In conjunction with investors, a client can enter contracts, fully disclosed, advised, negotiated and agreed before occupancy. These are used frequently where the client intends to, and can finance out to a bank or prime lender in 6 to 60 months, and cannot afford the higher costs of vendor terms. Again, we will only use these contracts where everybody wins.

These arrangements can have the greatest win-win-win outcomes, and are lawfully developed and applied in this state. Register or Read More…

Property Refurbishment as Property Investment

These are the “worst house in the best street” scenarios we’ve all seen on the reality TV shows. They are the “handyman specials” advertised as suiting the investor or first home owner. They may be a deceased estate sale, or a mortgagee in possession sale.

They are properties and strategies which can have significant risk associated with them, like all investment activity. They can have those risks managed and minimised though.

There are significant legal and building regulations which govern this type of investment.

Our experience is that commencing a refurbishment or renovation without good planning and support, or with a faint heart, can be seriously detrimental to your future wealth and current bank balance!

Independent Business Ownership

There are truly independent and sustainable business venture opportunities, in areas such as property investment, property development, property renovation & rejuvenation, property related investment and management services.

There are also i-Commerce and distribution business ventures which involve simple models, very low cost entry levels, autonomy to the business owner, and exclusive access to and marketing of quality products and services.

These are sometimes referred to as multi-level marketing, direct marketing, or network marketing. There are some good ones, and some not so good ones. FBP and Associates suggest having a look at how it has changed.

For anyone interested in supplementing and growing personal or business income, obtaining significant rewards financially or otherwise, these models can offer fantastic opportunity and returns.

After reading The Business School you will understand the need for some cautious considerations. They are not all risk free and vary significantly with their costs, their systems and the supports to individual business owners.

They are not all risk free, and vary significantly with their costs, their systems and the supports to individual business owners. Be careful in considering which you might take on. Read More…

Contact FBP and Associates to arrange a convenient time to discuss it if you decide you’re interested in any of these options. Register or Read More…