Building a Property Portfolio for Retirement?

Have Plans to Build a Property Portfolio or are you ‘Planning’ to Build a Multi-Million Dollar Property Portfolio for Retirement?

Many people have plans to travel around Australia, but you wouldn’t just jump in your car and start driving, would you? No - you’d plan it, time it, have contingency strategies and a detailed roadmap of how to get there and back again.  It’s a safe bet to say that those who undertake extensive planning and preparation tend to have far less issues and dramas on their journeys, so in the end they get to see more and enjoy it more.

The same is true for building a multi-million dollar property portfolio.  You get far superior wealth outcomes through detailed strategies and long term planning, yet why is it that most people forgo tens of thousands of dollars in poor money planning and lose hundreds of thousands of dollars in opportunity cost through the impulse purchase of the wrong property asset?

The overall financial impact of poor planning and poor decision-making will result in you having less wealth and income for your retirement.  At Empower Wealth we have developed a detailed and extensive process to allow us to design personalised strategies and plans to build our clients an individually tailored multi-million dollar property portfolio.

I am pleased to be able to share with you a couple of fundamental tips we use in our approach:

Tip 1 - Money & Wealth Planning:

Firstly, what is the concept of Money and Wealth Planning?  It’s the highly sophisticated modelling of household cashflows, assets, liabilities, expenditure, income, taxation, superannuation, property, shares, savings, debts, provisioning, etc. These are all measured in real-time projections and forecasts in both present value and future value terms.  This ‘global view’ modelling of a household’s real-time financial position allows us to project and forecast anticipated cashflow needs for the next 40 years and provides our clients with future wealth and income projections for their planned retirement.  It’s the means by which we can confidently develop a detailed property investment strategy and overall wealth creation plan.

Why is it so Important?

Unlike what most households adapt, this very sophisticated and integrated treatment and analysis of the cashflows within the home allows our Empower Wealth advisors to build budgeting strategies, debt elimination models, savings plans, household spending tracking, bill payment automation and ultimately, the grand prize of building a multi-million dollar property investment strategy.

Our ‘global view’ of all household monies allows us to build an overall plan from the ground up and it provides an incredible insight into household current and anticipated future surplus cashflows.  So when a household tries to work out their future cashflow needs for future events such as planning to have a baby, future school fees, renovations, holidays, new cars and investment properties, a global view using sophisticated money modelling can allow households to make informed decisions about their money now. 

To best illustrate the positive financial impact of using sophisticated money modelling on households future wealth, let me provide this example - A household is debating whether they can afford to buy an investment property and also do some reno’s on the existing home.The numbers are hard to crunch because the household also have lots of upcoming bills and expenses.  Therefore they decide to do the reno’s now and wait five years before they buy an investment property.  Their smarter neighbour is in the same situation as them, but through the use of sophisticated money modelling he realises he can do both. 

Both households each buy a $400,000 investment property that grows on average by 7% p.a.  For the household that waited five years their property is worth $1,103,000 in 20 years from now and their neighbour’s property is worth $1,547,000 – a difference in wealth outcomes of $440,000.  The first household would hate to look back in five years and realise that they could have actually afforded to buy it when their neighbour did.

Tip 2: Selecting the Right Investment Properties for Your Overall Money and Wealth Plan:

The right asset selection can alsomake a significant impact on a households overall wealth position. Let’s use the same purchase price of $400,000 in our last example, however this time both households buy at the same time.  In this example the smart neighbour realises he can’t just buy any property (as a small percentage of properties perform better than others) and he really doesn’t know how to tell.  So he decides to seek professional advice from Empower Wealth’s Property Investment Advisors and Buyers Advocates. They specialise in finding, negotiating and buying investment properties for clients.  By getting professionals to assist him; he was able to achieve average annual capital growth of 9% p.a whilst the other household who did it on their own only got a 7% p.a average return. 

The financial result in 20 years was the smart neighbour’s property value was $2,241,000 against their value of $1,547,000; a difference in wealth outcomes of $694,000 over this period.  If you also factor in rental income at the time of retirement (assuming a 3.5% yield) – the smart neighbour gets $67,230 in rent per year and the do-it-alone household gets $46,410.  A difference of $20,820 per year and once again that’s just the comparison on one property!

So there you have it – two very important tips that have wealth impacts in the hundreds of thousands of dollars over time.  I hope they help you plan to achieve what you’re smart planning should allow you to achieve.

I want to finish on this message - If you asked every Australian household if they would like to be better off financially, I’d be betting everyone would say yes, because we all have the desire and we all plan (dream) one day for a better life to come along.  The only problem is that the majority of you just aren’t doing any ‘real planning’.  And for most of us, sophisticated money and wealth planning is too daunting and complex.  However, just because you may not have the ability to crunch complex numbers, shouldn’t mean you give up on your desire for a better life.  Your just need to get some professional help with your plan – and that’s where Empower Wealth can assist you.

(Watch Empower Wealth’s new Money & Wealth Planning Video by clicking here).

and visit our website for additional property education material:


Yours sincerely,

Ben Kingsley QPIA
Founder of Empower Wealth

The above information is supplied by Empower Wealth.
Disclaimer: while due care is taken, the viewpoints expressed by sponsors do not necessarily reflect the opinions of Your Investment Property.


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