Creating Financial Security through Property Investment.
It is vitally important in this current day and age for all of
us to begin taking control of our financial situation and start
planning for our future, and the futures of our children.
In Australia we can no longer rely on the government to hand out
an aged pension once we retire. We cannot take for granted that
at the end of our working life we will be taken care of
financially.
Our population is ageing, due to the baby boomer generation, and
within 30 years there will be so many retired people, compared
to the number of working age people, that it will be
economically impossible for the government to afford to provide
any reasonable source of monetary assistance for the elderly.
The government has realised this, and that is why they
introduced the compulsory employer paid superannuation scheme
and are even now beginning to give financial incentives to
Self-Funded retirees.
Most of us have never sat down and even considered the
ramifications of why the compulsory super was introduced and for
many of us it is a matter of too little too late. Even for the
young women in our society - who have a full working life ahead
of them, they still cannot rest assured of a comfortable
retirement.
Why is this? It is because that unfortunately even with
contributions at the current level of less than 10%, someone on
an average wage who works continually for 30 years, is still
going to find themselves trying to survive on an income
equivalent to less than $20,000,00 per annum in today's dollars.
You will notice that I said continually working for 30 years.
This is another reason why women are particularly disadvantaged.
Firstly because they often have to take up to ten years leave
from the workforce to raise children, secondly because women in
general earn less than their male counterparts and thirdly
because an enormous proportion of the women in Australia, will
never have received any superannuation contributions, prior to
the compulsory superannuation being introduced, and will
therefore not have had contributions made over their entire
working life so far, giving them even less to fall back on by
the time they retire.
Many women may previously not have thought of lack of
superannuation contributions as being a problem, as their
husbands may have been contributing to super since they first
began work. Unfortunately though with the high number of
divorces in this country, even among Christians, it is unwise to
rely on the fact that your partner's superannuation will be
there for you in your retirement years and even if a large
proportion is awarded in a settlement - that it will be
sufficient to sustain a comfortable retirement for any length of
time.
All of these factors are why women now more than ever, need to
begin taking action to build up a source of ongoing income, that
will grow to such an extent, as to be able to provide a secure
and happy future for themselves and their children.
It needs to be a source of income that is unrelated to physical
work...that is an income that is generated from income producing
assets - and not from our personal efforts. One of the best
sources of creating this ongoing income stream is to begin
building an investment property portfolio, also aptly
paraphrased as bricks and mortar.
We need to start investing in income producing assets now, so
that they will have time to grow and develop so that we will be
financially independent for our retirement years.
The most important concept to grasp in relation to building
wealth for retirement and for creating finances that can be
directed towards the Lord's kingdom is that of Compound interest.
In mathematical terms 72 divided by Compound Interest Rate of
Return = Years for Money to Double in Value.
Therefore if you have $1,000.00 invested at 10% interest, then
the number of years that it will take for your money to double
to $2,000.00 is 7.2. It will quadruple in 14.4 years and be
worth 8 times as much in just over 21 years.
If your money is invested at 7% interest, then it will take
approximately ten years to double in value. If it is invested at
5% it will double in just over fourteen years.
The two most important aspects of compounding are one: rate and
two: time. The higher the rate and the longer the time something
is left to compound, the greater the final result will be. This
is why the sooner we start investing, the better.