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What the rich do & YOU can too!
 

What the rich do & YOU can too!

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Top habits that millionaires have that you can copy... Here's how you can be like the secret millionaires and copy their strategies to enhance your wealth

Top habits that millionaires have that you can copy... Here's how you can be like the secret millionaires and copy their strategies to enhance your wealth

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  • 1.2 Million SME’s in Australia, half sole traders and half who employ others These employ 3.3 Million people or around 47% of the private sector workforce In the top 10% of households, 41% own their own business. Business assets comprise 21% of the total net worth of millionaires Closely held and family-owned businesses are a major source of wealth but – it can be risky having so much of one's net worth tied up in a single investment it could be tough to sell. planners often encourage their business-owning clients to diversify their other investments.
  • Give away more (& more will come) Establish your own business (franchise, P/T, etc) Borrow intelligently (for investment & income, not toys) Live within your means (have a personal cashflow plan) Invest (pay yourself first & make investing a priority)

What the rich do & YOU can too! What the rich do & YOU can too! Presentation Transcript

  • What the Rich do, and YOU can, too!
  • What the Rich do, and YOU can, too Investment Management Professionals Pty Ltd Corporate Authorised Representative #306558 of Financial Planning Services Australia AFSL 225982 Jeremy Britton DipFA SA(Fin) www.24hourwealthcoach.com
  • Disclaimer
    • Disclaimer:
    • This report is produced by Investment Management Professionals Pty Ltd and as such any views expressed herein are those of the individual creator and do not necessarily reflect the views or opinions of Financial Planning Services Australia Pty Ltd and its directors, associates or employees.
    • No responsibility is taken for errors or omissions and all data should be checked for reliability. Seek professional advice before making any investment decision, including buying, selling or holding.
    • WARNING : Information provided is of a general nature only and does not take into account your financial situation. Information is not a substitute for a formal statement of advice. Always seek advice tailored to your unique circumstances prior to making any investment decision
    • References: ABS data, Merrill Lynch
    • www.24hourwealthcoach.com
  • The millionaire next door
    • Classified as an individual with over $1M in investment assets , (cash, shares, property & bonds); not including their own home , art, cars, collectibles or coins
    • There are now over 160,000 millionaires in Australia – almost 1% of the population
    • Millionaires worldwide increased 8.3% in 2006
    • Millionaires in Australia increased faster, up by 10.3%
    • The greatest number of new millionaires came from Singapore, India, Indonesia and Russia.
    • Australia now in the World Top Ten for millionaires
  • Five things that millionaires do differently, which you may choose to apply The rich don’t just HAVE more money. They spend it, borrow it and save it in ways that might benefit you, too .
  • 1. Give away more
    • Be above an “above average” giver
    • The average donation is about 2% of income for all Australian households
    • Households with $500,000 or more in investment assets give away 6% of their incomes
    • Those with net worth of $5 million+, excluding primary residences, give away 6.1% of their incomes.
    • Which came first?
  • 2. Mind your own business
    • Get a business, any business.
    • 1.2 Million SME’s in Australia, employing almost half of the private sector workforce
    • In the top 10% of households, 41% own their own business.
    • Business assets comprise 21% of the total net worth of millionaires
    • Closely held and family-owned businesses are a major source of wealth but –
    • it can be risky having so much of one's net worth tied up in a single investment
    • it could be tough to sell.
    • planners often encourage their business-owning clients to diversify their other investments.
  • 3. Borrow strategically
    • Less Consumer debt:
    • Wealthiest 10% are half as likely to have credit card debt (22% vs 44% average population), BUT, if they do, the rich owe about the same as average ($3000)
    • Wealthy are less likely to have car loans (25% vs 45% avg)
    • Choose your debt:
    • 30% of all Australians vs 25% of the wealthiest people do not own their own home
    • Have investment debt:
    • Millionaires are more likely to have investment loans for property +/or shares (15% vs 4.7%)
  • 4. Live simply
    • Ferrari sales in Australia increased by 97% in 2006, BUT, millionaires are more likely to be subtle and live within their means
    • The total average value of cars owned by millionaires is $30 000 vs $13 000 for the general population, BUT this is 2.5% of their assets vs 9% of average person’s assets
    • House represents 10% of net worth for millionaires
    • ABS data shows wealth is distributed differently to income
    • Higher incomes are often spent; the wealthy invest
    • Millionaires are likely to spend LESS of their income on clothes, cars and luxury goods
  • 5. Prioritise Investing
    • Millionaires more likely to put money into investment assets and income-producing assets
    • Most own some investment property (although now selling off property: millionaire landlords now 44% down from 50%)
    • Half of net worth is likely to be in shares or managed funds
    • Around 10% of net worth is in a super fund
    • Around 6% of net worth is likely to be in annuity or insurance bonds
    • Only 10% of net worth is likely to be in their own home
  • SUMMARY
    • The top 20% of Australian households have 60% of the assets (not necessarily related to income)
    • Millionaires do things differently & so can you
    • Top five tips from millionaires:
    • Give away more
    • Establish your own business
    • Borrow intelligently
    • Live within your means
    • Invest
  • Further Resources
    • Websites:
    • www.24hourwealthcoach.com
    • www.invest.org.au
    • 15 questions – 9 ways
    • Newsletters:
    • www.lorereport.com
    Questions
  • But WAIT, there’s more!
    • The Economic Clock:
    • Where WERE we?
    • Where are we NOW?
    • Where are we HEADING?
    • What to do about it
  • Further Resources
    • Websites:
    • www.24hourwealthcoach.com
    • www.invest.org.au
    • Newsletters:
    • www.lorereport.com
  • DIY Stock Selection Some great strategies to sort the GOLD from the glop
    • Imagine you are buying a BUSINESS, not a share
    • Know what the fundamentals mean
    • Know when they apply
    • Buy on FACTS not rumours
    • Pretend that there are no buyers
  • Putting the FUN into Fundamentals It’s all about the ….?
    • Dividend, Yield, Rent, Distribution, wage, salary, EBIT, EBITDA, EPS, = Income
    • Income is based on what it looks like now and is measured on what it the income WAS before, but on what the price IS now
    • Higher is often, but not always, better
    • Goes down as price goes up, and vice versa
  • Putting the FUN into Fundamentals “Not Telling Anyone”
    • NTA, NTAB, SP, Book Value or “book” = Assets Less Liabilities
    • Sometimes 1/4ly stats available but often only disclosed at end of Fin Year, therefore may be “old news” in December
    • Mostly expressed in $, sometimes in ratio
    • A favourite secret for oversold stocks & TLR
    • Possible to “buy a house for less than the bricks”
  • Putting the FUN into Fundamentals It’s got to be PERfect…
    • PE, PER – refers to Price divided by Earnings or the inverse of the yield. Lower is often, but not always, better
    • PE goes up as price goes up
    • PEG is strongly correlated to future price growth
    • Consider that a business with a good yield is good, one with a good PE is good but one with a good PEG may be better
  • Further Resources
    • Websites:
    • www.24hourwealthcoach.com
    • www.invest.org.au
    • Newsletters:
    • www.lorereport.com
  • Disclaimer
    • Disclaimer:
    • This report is produced by Investment Management Professionals Pty Ltd and as such any views expressed herein are those of the individual creator and do not necessarily reflect the views or opinions of Financial Planning Services Australia Pty Ltd and its directors, associates or employees.
    • No responsibility is taken for errors or omissions and all data should be checked for reliability. Seek professional advice before making any investment decision, including buying, selling or holding.
    • WARNING : Information provided is of a general nature only and does not take into account your financial situation. Information is not a substitute for a formal statement of advice. Always seek advice tailored to your unique circumstances prior to making any investment decision
    • References: ABS data, Merrill Lynch
    • www.24hourwealthcoach.com