Today, I’m joined by Stuart Wemyss to discuss two fascinating topics.
The first one is the life cycle of a typical investor, and you’ll find it's a roadmap that provides insight into the ebbs and flows of the financial journey you’ll experience as a property investor and the strategic decisions you’ll have to make along the way.
And then we chat about the concept of giving your children and grandchildren an early inheritance rather than waiting till you die.
And even if you don't have children or grandchildren yet, you are somebody's child, so this may be very relevant to you.
Over the years I’ve come to appreciate that property investing is a complex affair and despite all the podcasts, blogs, webinars, and so-called “advisors” the fact is that most investors fail to achieve the financial freedom they are looking for.
I’ve also learned that the various market participants are playing a wide range of games, each with their own unique goals, attitudes, timeframes, risk profiles, and incentives.
The problem is most investors haven’t figured out what game they’re playing.
Maybe they have a vague idea of their game, but they haven’t clearly defined it.
And when they don’t know what game they’re playing, they’re at risk of taking their cues and advice from people playing different games, which leads to risks they didn’t intend and outcomes they didn’t imagine.
Today I’m joined by my regular guest independent financial adviser Stuart Wemyss, director of Prosolution Private Clients.
In a recent blog post and in his Investopoly Podcast, Stuart outlined the typical life cycle of an investor, detailing the different stages people go through and the financial decisions they make at each stage.
From starting out to starting a family to retirement, Stuart provided a roadmap for anyone navigating the world of investment.
Listen in to hear his thoughts on this and on whether it’s a good idea to give your children an early inheritance rather than waiting till you die.
Importance of understanding the game of property investing and making strategic decisions at different stages of the financial journey
- What are the different stages of the investor’s journey
- It starts when you first start earning income
- Cash flow management is crucial in property investment and good financial habits can set the foundation for successful investment
- Importance of gearing in property investment for those who are income-rich but asset-poor
- The easiest way to use gearing is through property
- The property should be of the highest quality your budget will allow
- Examination of the property investor life cycle in relation to family planning and the importance of having a financial buffer
- The family-building period is the most difficult time to invest
- You should get as much investing done as possible before you start planning a family
- First investments should be aimed at capital growth, not cash flow
- How to think about retirement planning and property investment, including reducing debt and investing in more liquid assets outside of superannuation
- Prioritizing your personal financial position before considering helping children or grandchildren
- Exploration of the concept of intergenerational wealth transfer and the potential for family conflicts arising from inheritance
- Examination of the potential risks of giving away inheritance early and strategies for asset protection for those gifts
- Discussion on planning for the impending intergenerational wealth transfer and creating strategies to pass on wealth in the most tax-efficient way
- It starts when you first start earning income
Links and Resources:
Stuart’s Book – Rules of the Lending Game & Investopoly
Some of our favorite quotes from the show:
“You really only need to understand a few fundamentals well, and the others are really just variations of those few basics.” – Michael Yardney
“A financial strategy isn't really about the lowest interest rates or even how much you can borrow, but it's actually how you protect yourself.” – Michael Yardney
“I think what he's trying to tell us is enjoy the journey because if you don't enjoy the journey, you're not going to appreciate the destination when you get there.” – Michael Yardney
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