Margaret Lomas - How to Make Your Money Last as Long as You Do

CONTENTS

Also by Margaret Lomas:

How to Maximise Your Property Portfolio

How to Create an Income for Life

How to Invest in Managed Funds

The Truth About Positive Cash Flow Property

The Pocket Guide to Investing in Postive Cash Flow Property

20 Must Ask Questions for Every Property Investor

First published 2001 by Wrightbooks an imprint of John Wiley & Sons Australia, Ltd

42 McDougall St, Milton Qld 4064

Office also in Melbourne

Typeset in 12/13pt GoudyOld

Reprinted 2001, 2002, 2003, 2004, 2007, 2008

Margaret Lomas 2001

The moral rights of the author have been asserted

National Library of Australia Cataloguing-in-Publication Data

Lomas, Margaret

How to make your money last as long as you do.

Includes index. ISBN: 1 876627 73 5.

1. Finance, Personal. I. Title.

332.024

All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above.

Cover design by Rob Cowpe

Disclaimer

The material in this publication is of the nature of general comment only, and neither purports nor intends to be advice. Readers should not act on the basis of any matter in this publication without considering (and if appropriate, taking) professional advice with due regard to their own particular circumstances. The author and publisher expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything and of the consequences of anything done or omitted to be done by any such person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication.

WELCOME TO FINANCIAL FREEDOM

Every day I sit in my office and take telephone calls from people just like you and me, who need help with either their current financial situation or who would like to begin working on a retirement plan. In the many years that I have been involved in helping people to realise the power of their income and have a real impact on where they are headed, I have seen a dramatic change in the dreams and goals of ordinary people.

When the term mortgage reduction first became the buzz word, back in the very early 1990s, people to whom I spoke would pronounce my suggestions on the topic to be too good to be true! Consequently, when I would approach friends and family with a sound, commonsense way to pay off debt and work toward a comfortable retirement, they immediately looked for the catch in something that appeared to be too good to be true.

In hindsight, the reasons for this reaction are clear. This was during a time when a number of dubious business opportunities were storming the globe, and it seemed every persons neighbour was trying to get them in. For so many years banks had convinced clients to believe that the very best they could do for themselves on the mortgage front was to pay their loan fortnightly or weekly, thus snipping a few years off the term without making too big a dent in the banks projected profit. Why pay the bank three times what you owed them when you could, in fact, only pay 2.8 times! For too long experienced home owners and impressionable young buyers alike had simply accepted that there was no other way.

Then it happened! Legend has it that four guys in a pub plotted to change the financial future of the country on the back of a coaster, by designing an approach to repaying a loan which would revolutionise the way people thought about home loans and banks. That this could be so simple was far too comprehensive a concept for any one to grasp, so the common reaction was, If you cannot understand it, it cant be legal!

What followed threatened to make the Eureka Stockade look like a schoolyard brawl, as people Australia-wide began to refinance loans and attack the business of owning their homes with renewed vigour. From the dust arose opportunities to begin to invest, and since then we have seen people become far more discerning in their choice of home loan and their need to have a future financial plan. Banks have changed from dictators to being creative, clever competitors with huge marketing departments trying to win our business through the provision of an increasingly complex array of products at discounted rates.

Yet despite the fact that people today are far more informed than ever before, and have a genuine concern for their financial future, it is still a jungle out there! Opportunistic financial consultants are waiting in the wings to relieve unsuspecting clients of thousands of dollars to do little more for them than they could do for themselves! And, despite the fact that we live in a land with more opportunities than ever before, there is still confusion about the best way to really achieve financial freedom.

The 1990s brought with it the SNAGS (sensitive new age guys) YUPPIES (young upwardly mobile professional people) and NEGFANS (negative gearing fanatics)! Accountants nationwide cut the tax bills of income earners from all walks of life through investment in negatively geared property, and everyone knew someone who was doing it. Books were released expounding the benefits of committing $40 per week from your own pocket to one day own a plethora of property. The shift toward property became a stampede as investors scrambled to be a part of the property revolution, no questions asked.

It is only now that people are beginning to wonder whether the decisions they made about property are actually going to be wise in hindsight. As the economic cycles of old begin to behave in ways we can not predict, and the promised 10 per cent per year capital appreciation on property (based on history) is not materialising, investors are realising that the true yield on their investment dollar is not as attractive as negative gearing promised it would be.

Here in these pages you will find a new approach to investing which carries the security of property, without the traditional losses experienced by so many property investors. You will read about the reasons why you should refuse to buy negatively geared property, and learn how to seek out property which will provide a positive cash flow. These strategies and the software program available, Destiny Finsoft , will also provide you with an abundance of clear-cut, easy-to-understand answers to many of the financial questions which you are probably asking every day. No bias (which a bank will have), no huge costs, just simple, easy-to-read explanations and a basic computer program which will fill in the missing pieces for you, without locking you in to a costly package or deal.

Destiny Finsoft is available free to readers, simply by visiting <>. Read the book, then use the software to find out how positive cash flow property can work for you. If you are still a little unsure of where to turn, or would like some help along the way, contact us at Destiny Financial Solutions, or you may wish to get in touch with a provider of mortgage reduction and property investments in your area.

The road to financial freedom is easier today than it ever has been before. Dont waste another moment each day you wait is a day less in which to become financially free!

Part I

WHERE ARE YOU NOW?