Did you know that the Australian Securities and Investment Commission recommends that for a \u201ccomfortable\u201d retirement, a couple will need $60,000 a year, and a single $44,000?<\/strong><\/p>\n That\u2019s a total combined superannuation of $1.24 million for a couple\u00a0or $880,000 for a single.<\/p>\n However, the average Australian retires with $320,0000 in their super, which is less than half of what ASIC recommends.<\/p>\n Obviously, our super savings alone are not always enough to fund retirement.<\/p>\n So, it is critical to supplement your retirement income with investments which deliver great returns.<\/p>\n It\u2019s also important that you know the specific income figure that you want to retire on, so you can work out the dollar value of the investment target.<\/p>\n In short, you need to begin with that end amount in mind.<\/p>\n Which lever do you need to push or pull now? Picture: realestate.com.au<\/p>\n<\/div>\n The process of building wealth is like operating an excavator truck.<\/p>\n There are various levers we can push or pull, which affect the intricate movement of the digger.<\/p>\n We negotiate each of these individually until we achieve the desired balance and outcome.<\/p>\n What income changes do you need to plan for? Picture: realestate.com.au<\/p>\n<\/div>\n It\u2019s very easy to put a dollar figure on how much you earn today, but what will you earn in the future?<\/p>\n Great investing is all about managing cash flow long term. \u00a0Will my income gradually increase, or will I see a large fluctuation overnight, like a bonus?<\/p>\n Perhaps my income will adjust backwards at times for maternity leave or if I take a sabbatical.<\/p>\n Income fluctuations are normal, but they need to be planned out to avoid disrupting the overall investment strategy<\/a>.<\/p>\n This lever is the one you have total control over. Picture: realestate.com.au<\/p>\n<\/div>\n What do you spend your money on?<\/p>\n Do you need to pull that lever towards yourself and rein it in a little? \u00a0Less Sangria, more savings or less brunch to balance the books \u2013 sound familiar?<\/p>\n Expenditure is a great lever\u00a0because it\u2019s the only one we each completely control.<\/p>\n Because spending has a direct impact on the wealth we\u2019ll each have in retirement, it needs to be considered in the short, medium and long term.<\/p>\n So, do I foresee the need to upgrade the kitchen, buy a new car, or invest in private schooling?<\/p>\n We can each make small habitual adjustments to really affect wealth outcomes in the long-term.<\/p>\n The surplus you can create by pulling back the lever on your expenditure is how you build up your property investment fund.<\/p>\n The aim is to create as wide a gap as possible between income and expenditure\u00a0so that you are putting away significant savings every week.<\/p>\n When do you want to retire? Picture: realestate.com.au<\/p>\n<\/div>\n How much time do you have between now and retirement?<\/p>\n If you\u2019re 30 and want to retire at 65, that\u2019s a good 35 years of working life left to accumulate and build your investment portfolio.<\/p>\n However, if you\u2019re first considering this at 45 of 50, then you\u2019d need to work harder on other levers\u00a0to achieve your target amount in the shorter timeframe.<\/p>\n Knowing how much you need at the end is important. Picture: realestate.com.au<\/p>\n<\/div>\n How much money do you actually want in retirement? \u00a0<\/span><\/p>\n This will vary by person\u00a0<\/span>depending on the lifestyle that you\u2019re used to, how much you earn, how much\u00a0<\/span>you spend, and time. \u00a0<\/span><\/p>\n <\/span><\/span>We can push and pull each of these four\u00a0levers\u00a0or fine-tune them in relation to each\u00a0<\/span>other to achieve our goals. <\/span><\/p>\n You may need to amp up the income if your time is\u00a0<\/span>running short or rein in the spending. \u00a0<\/span><\/p>\n Perhaps you need to adjust your target to\u00a0<\/span>something more realistic.<\/span><\/p>\n <\/span>It\u2019s important to tailor these moving parts to each of our unique circumstances\u00a0<\/span>to secure our financial futures in retirement. \u00a0<\/span><\/p>\n
\n <\/p><\/div>\n Realestate.com.au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"What are the four levers\u00a0& how do they help build wealth?<\/h2>\n
![\"Property](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/07\/17100248\/4levers_PCouch_a.jpg?resize=800%2C600&ssl=1\")
<\/p>\nLever 1: Income<\/h2>\n
![\"Property](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/07\/17100246\/4levers_income_PCouch_a.jpg?resize=800%2C600&ssl=1\")
<\/p>\nLever 2: Expenditure<\/h2>\n
![\"Property](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/07\/17100243\/4levers_exp_PCouch_a.jpg?resize=800%2C600&ssl=1\")
<\/p>\nLever 3: Time<\/h2>\n
![\"Property](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/07\/17100242\/4levers_time_PCouch_a.jpg?resize=800%2C600&ssl=1\")
<\/p>\nLever 4: Target<\/h2>\n
![\"Property](\"https:\/\/i0.wp.com\/www.realestate.com.au\/blog\/wp-content\/uploads\/2017\/07\/17100240\/4levers_target_PCouch_a.jpg?resize=800%2C600&ssl=1\")
<\/p>\nFor more from The Property Couch, visit\u00a0thepropertycouch.com.au\u00a0or subscribe to The Property Couch podcast, available on iTunes or Android.<\/strong><\/em><\/h6>\n
The Property Couch provides a general opinion based on current market conditions. These opinions should not be treated as investment advice. Always obtain advice based on your individual circumstances.<\/span><\/strong><\/h6>\n