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Do You Have a Wealth Plan?

What is a Wealth Plan? A wealth plan is a plan to achieve your personal financial goal, of when you want to become financially free or financially independent.

The key characteristics of this plan can be summarised in 5 key points:

  1. How much money would you need to stop working?
  2. When would you like to stop working?
  3. What resources do you have to begin with?
  4. What skills do you have?
  5. What is your passion?

The point of the wealth plan is to bring all these 5 elements together to create a plan that identifies the steps you need to do in order to achieve your wealth targets.

  1. The first step is to decide what level of passive income you decide will determine the amount of investment assets you require. For example, if you wish to have a passive income of $150,000 per annum, you would need investment assets of between $3,000,000 to $4,000,000. Now these are investment assets, not your house, holiday house, cars or another exotic investment that produces zero cash flow.
  2. The next step is to decide when. What is going to be the last day of work, or when would you like to sell your business. Now retirement has nothing to do with age and all to do with the amount of passive income and assets you have.
  3. Once you have decided on your timeframe when to start working on the plan. Now the first step of that plan is to work out our starting point. What is your current position in regards to our assets, liabilities, investment assets, current income and expenditure, cash flow, borrowing capacity, future personal expenses and future business expansion plans. The more comprehensive you analyse your starting point the better your plan will be, as we will determine what resources you have at your disposal.
  4. Now we are ready to develop your plan and identify the best strategies and tactics to achieve your investment goals.

Over the past 25 years we have found most financial plans don’t get executed because not enough time was spent identifying the final three elements, the plan therefore, was doomed from the beginning.

We have found that the more the plan fits your current resources, skills and passions the more likely that it will get implemented. For example, one of my clients were very keen on achieving their financial goals through property. They had and planned to buy property which they wanted to renovate and possibly develop. Whilst this was a great plan their skill sets were not in construction nor project management; further, their passion of looking for the right property and then coordinating consultants and finance was short lived. In the end they never got round to buying their first property because it all got ‘too hard’.

A few years later we revisited the plan and the strategy, and they are now up to their third investment property. The end target and the starting resources never changed. It was the plan and strategy that incorporated the final three elements that changed. I am glad to say that Jim and Jane are well in their way to achieving their goals.

  1. The final part of the process is to review your progress on an annual basis (if not, more frequently). Just as we reviewed Jim and Jane’s plan, (despite being three years later) we had revised the plan and put them back on track to achieve their wealth goals.

We can help you achieve your wealth and retirement goals. Call Gemma for an appointment and we’ll discuss how you can create the wealth that you deserve (03) 9355 0500.