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| Author: Debra Lohrere |
It is vitally important in this current day and age for all of us to begin taking control of our financial situation and start planning for our future, and the futures of our children.
We can no longer rely on the government to hand out an aged pension once we retire. We cannot take for granted that at the end of our working life we will be taken care of financially.
The world population is ageing, due to the baby boomer generation, and within 30 years there will be so many retired people, compared to the number of working age people, that it will be economically impossible for the government to afford to provide any reasonable source of monetary assistance for the elderly.
The government has realised this, and that is why they introduced the compulsory employer paid superannuation scheme and are even now beginning to give financial incentives to Self-Funded retirees.
Most of us have never sat down and even considered the ramifications of why the compulsory super was introduced and for many of us it is a matter of too little too late. Even for the young women in our societywho have a full working life ahead of them, they still cannot rest assured of a comfortable retirement.
Why is this? It is because that unfortunately even with contributions at the current level of less than 10%, someone on an average wage who works continually for 30 years, is still going to find themselves trying to survive on an income equivalent to less than $20,000,00 per annum in today's dollars.
You will notice that I said continually working for 30 years. This is another reason why women are particularly disadvantaged. Firstly because they often have to take up to ten years leave from the workforce to raise children, secondly because women in general earn less than their male counterparts and thirdly because an enormous proportion of the women in Australia, for example, will never have received any superannuation contributions, prior to the compulsory superannuation being introduced, and will therefore not have had contributions made over their entire working life so far, giving them even less to fall back on by the time they retire.
Many women may previously not have thought of lack of superannuation contributions as being a problem, as their husbands may have been contributing to super since they first began work. Unfortunately though with the high number of divorces in this country, it is unwise to rely on the fact that your partner's superannuation will be there for you in your retirement years and even if a large proportion is awarded in a settlementthat it will be sufficient to sustain a comfortable retirement for any length of time.
All of these factors are why women now more than ever, need to begin taking action to build up a source of ongoing income, that will grow to such an extent, as to be able to provide a secure and happy future for themselves and their children.
It needs to be a source of income that is unrelated to physical work'that is an income that is generated from income producing assetsand not from our personal efforts.
One of the best sources of creating this ongoing income stream is to begin building an investment property portfolio, also aptly paraphrased as bricks and mortar.
We need to start investing in income producing assets now, so that they will have time to grow and develop so that we will be financially independent for our retirement years.
The most important concept to grasp in relation to building wealth for retirement and for creating finances that can be directed toward charities, or helping out your family is that of Compound interest.
In mathematical terms 72 divided by Compound Interest Rate of Return = Years for Money to Double in Value.
Therefore if you have $1,000.00 invested at 10% interest, then the number of years that it will take for your money to double to $2,000.00 is 7.2. It will quadruple in 14.4 years and be worth 8 times as much in just over 21 years.
If your money is invested at 7% interest, then it will take approximately ten years to double in value. If it is invested at 5% it will double in just over fourteen years.
The two most important aspects of compounding are one: rate and two: time. The higher the rate and the longer the time something is left to compound, the greater the final result will be. This is why the sooner we start investing, the better. |
Author Bio:
Debra Lohrere
Debra Lohrere works as a Commodity Trading Logistics Administrator. She previously spent over ten years working in an Accounts Administration position with her primary roles being collections and financial forecasting. She has also run her own computer retailing business. Knowing the vital importance of cash flow in business led her to begin investigating the benefits of personal investments. She decided it was time to start taking control of her personal finances and begin building a wealth base for her future. After researching the powerful medium of property investment as a means of bringing financial independence into a reach she began to build her own property portfolio. Within the space of four years she was able to go from renting a house, to owning her own home and three investment properties. She built up a large base of contacts with fellow property investors, which has proved to be an invaluable source of information. She now writes books and articles about property investment and creating financial security. She also writes on subjects of spiritual encouragement.
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