I often find that my clients at Premium Finance Services misunderstand what an investment is due to confusion created by government advertising, the superannuation industry, and the media.
What is an Investment?
An investment is an income producing asset that will be sold or restructured as required to improve financial security or maintain financial well being.
- If an asset does not, or cannot, produce an income (gold, vacant land, etc) it is speculation not investing; and
- If an asset will not, or cannot be sold (family home, art work, etc) it is a life style asset not an investment:
At Premium Finance Services we assist our clients to understand;
- What is an investment and what is not an investment;
- The difference between an investment & a tax strategy;
- What makes an investment a good investment; and
- How to choose a good investment.
A good investment for one person may be a bad investment for another person depending on their individual circumstances so a sound understanding of the personal circumstances and personal goals of an individual is required before any investment decision can be made.
A sound investment may be classed as good or bad for the same person depending on what their primary financial purpose of holding the invest is. At Premium Financial Services most of our client are looking to create wealth (as opposed to preserving wealth or utilising wealth) so we recommend the use of investments
Certain investment classes are more suited to certain investment strategies than other and most often Residential Property is the most appropriate vehicle for wealth creation.
Why Use Residential Property For Wealth Creation?
Shares: Property has a lower risk (volatility) & higher gearing
= better Real Outcome.
Cash: Property has growth & tax advantage
= better Real Outcome.
Brand new residential property is often the BEST form of investment available for wealth creation in Australia. By best we mean;
- Higher than average returns,
- Lower than average investment risk,
- We can borrow more against it giving greater leverage;
- Tax effective;
- Easy to understand; and
- Simple to do and worry free with help from groups like Premium Finance Services!