Life Stages Wealth Creation strategies are based on the principle of steady and continued investment, using gearing or leverage and diversification across asset classes.

You don't have to be wealthy to invest,but you have to invest to be wealthy.

It recognizes that while each individual has their own particular circumstances, most people face similar challenges as they progress through the different stages of their lives.

Stage 1

the first job, having money for the first time and the opportunity to spend is very attractive. Often it is a stage where there are few commitments and less concerns.

Stage 2

is where most people are in permanent relationships, may already have purchased a house and may have moved from a double income, no children lifestyle to one main income and children. It is often a time when cash becomes tight and lifestyle and choices become less.

Stage 3

may be the most difficult financial period for families where child costs are highest, although it may be the period of highest income and earning potential. Both situations require different strategies.

Stage 4

is the period pre-retirement, where family costs are lower, greater time available and the need to consider post-retirement lifestyle is critical.

Stage 5

post-retirement with potentially another 30 years or longer of life. With government support set only at a subsistence level, other income streams are critical and the need to balance lifestyle and future needs are paramount.

Each stage requires an understanding of what is important, both now and in the future for you and your family.

The basis premise of the Life Stages Wealth Creation strategies is founded on two principles - save some of what you earn now and use it wisely to create wealth over the long term-and use other people's money to work for you.

Start early in Stage 1 by making the choice not to spend all you earn and it will set the foundation that you need.

If you have not gone down that path, then you can still make that decision to create wealth for you and you family and, there are strategies to adopt to achieve your goals,both short and long term. Many Australians create wealth by investing in property, they understand what it is and how it can grow in value. It was our parents superannuation plan. The ability to purchase multiple investment properties without necessarily sacrificing lifestyle is what most people do not understand.

Some information to consider:

• The current Australian government aged pension for a single person is just under $13,000 per annum. A modest lifestyle is estimated to cost $17,826 pa and a comfortable one at $34,560 pa (assuming the home is paid off).
  
• A rough guide to the amount you need invested to be able to have an income stream for 20 years is 15 times that income. So if you want to retire at 65, live for another 20 years on an income stream of $50,000 pa, you need to have investments worth about $750,000.

Are your plans going to achieve this?

If not give Reid Consultants a call on 03 9397 7275 to discuss ways to bridge the gap.