This represents such a narrow view of investing, finances and the world and I believe is a disservice to the would-be investors who they are advising, apparently with their client’s best interests in mind.
The reality is, almost all investing strategies work and potentially have a place in a portfolio for the right person with the right strategy in the right situation, and more often than not using a multi-pronged approach to your investing is going to yield far better results, in a more conservative and effective way.
The key is how you use them together, if you get the mix right and working in harmony together you can take what was a 15-20 year strategy to create your version of financial freedom and turn it into a 5-10 year strategy or even faster.
Unfortunately this is seldom practiced, as the advisors they see are to busy trying to sell their own product and as much of it as they can without the best interests of the client in mind. I hear this all too often from the clients I work with.
I have recently begun working with a new couple and sat down for an initial strategy session with them the other day, I found out they had been working with another group who had advised them only to buy property, don’t worry about any other strategy or asset class, just property. Under their guidance they bought a couple of house and land packages in an area, which ‘may’ potentially provide some growth over the next 10 years, maybe, and had poor rental yields, this was sold to them as a tax benefit. So here they were with all of their money tied up in a flat market with no signs of growth happening anytime soon and now had massive negative cashflow and were struggling to live from day to day.
Unfortunately I hear this far to often. They now felt ‘stuck’, which any of you who have felt it know it is not a nice place to be. My job now is to unwind them, get them some form of lifestyle back and some breathing space and then start almost all over again on their investing journey.
Lets think about how we go about creating wealth for a moment.
Generally we have three types of strategies.
Capital growth through the accumulation of assets
Cashflow from receiving income greater than expenses potentially from assets, business or trading strategies
Savings strategies which are things like tax reduction strategies
Here is something you need to remember:
Capital growth creates wealth; cashflow creates a lifestyle and supports your assets
Wealth needs a strategy, just random actions and hoping for the best just does not work. So why not be proactive in your wealth creation and get your strategies working together in harmony?
So how do we do this? We pigeon pair our strategies together; a cashflow strategy with an asset accumulation strategy, probably the most common example for this is using a cashflow stream through trading and pair this with the accumulation of quality blue chip properties as the capital growth strategy.
This now becomes a mini wealth system within your overall wealth creation strategy. The cashflow strategy is used to support the continual accumulation of quality property in your portfolio.
Here are some key takeaways
Think of your investment strategies as mini systems where the strength
of one strategy compensates for the weaknesses of the other.
Pigeon pair your strategies to realise your maximum success – cashflow
with capital growth.
Capital growth assets create wealth, cashflow create lifestyle and
supports your assets.
If anyone tells you, one particular strategy is the only way to go….RUN!
Time to come over to the intelligent side of investing and get your strategies working together in harmony for you and being proactive in designing the life you want to live, rather than hoping for the best. If you do this effectively your results could be life changing.
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