Investing for life

Posted by Andrew Nicol on 03/10/16

It’s not about what you earn but what you do with it that counts.

What could I possibly mean by the title of this article? To earn a whopping income doesn’t guarantee financial security by any means, it’s about what you tuck away that counts and often it’s the smaller income earners that are the best squirrels!

Investing is the outlay of a dollar to reap the benefits further down the track with the idea being that more than a dollar will come back. Exactly how much more depends greatly on the investment type and the associated risk. Generally people spend what they earn meaning that small and large income earners get to retirement and then realize they have a small issue; they can not afford to retire!

Property Investment for most isn’t about becoming the wealthiest person in town or perhaps a Rich Lister but building a capital base that can generate an ongoing income once you want to retire or perhaps have more flexibility in your life. Maybe you want to help the next generation coming up into their first home or leave something of a legacy for the next generation. Investing gives you options but it does require a sacrifice. As we discovered, to invest requires the outlay of a dollar now for greater than that in the future. The catch is we all have to forgo those dollars presently.

To generate wealth one must generate an income and a growing capital base. Most don’t have this vital balance right. They often get too trapped in their job focusing on their income aspect, which only goes so far. Others focus too greatly on building their investment portfolio only generating a small income (in the early days) and forget about trying to increase their income. It is a balance but that’s just like anything in life.

Many look to the successful investors in the world old and wise in their years who are hailed as the oracles. Let me assure you having read almost everything there is to read about these folk, one thing they know how to do more than successfully investing is to hang in there. It is true that once you get well down the track and your equity in your portfolio has grown it does get easier. You have been in the game longer, your nerves are settled and you have a stronger financial base and can now move ahead easily into further investments.

So with this in mind we must protect and plan for unexpected or should I say the unwanted events that will crop up. Obviously, I haven’t reached retirement and I assume you all hope we have a few more years in us yet but from those I do know who have retired having invested over their lifetime are far better off financially those who haven’t.

The great news is the OPES Team is always here to help for years down the track and yes it will be quite a while until we have any chance of retiring so you are all safe for now!

Just remember, it was never going to be easy!