Women aged 40+ should take a look at their younger sisters’ knack of leveraging credit – the final key to really build true wealth.
Many women born during the 1970s or earlier had careers, married and bought a home, and spent time out of the workforce which in turn seriously impaired their financial futures – particularly when going through a divorce. At its worst, we’re seeing ageing women at growing risk of being homeless with their low asset bases and lack of superannuation. The good news is that for those working and with a share in the former family home, we can learn a thing or two from our younger sisters about modern wealth creation – starting by getting comfortable with credit.
Our younger sisters aged 25+ have been born into credit and it’s become an accepted way of life. They know that borrowing money is okay – more than okay – if it’s going to get them where they want to go. They’re smart with their banking, not afraid to work with another lender if their own says “no” and look to the internet to find the best deal. They understand that there’s nothing to be gained from sticking with a financier who’s not prepared to work with them and find the right monetary solutions. This determined and focussed approach means we’re seeing a dynamic group of independent women coming up through the ranks, inspirational rule-breakers who are making the world their own.
Our younger sisters aren’t scared to admit their wealth building aspirations. When they undertake property investment, they’re talking multiples – and they realise the best way to grow their portfolios is by forgoing the family home. By becoming ‘rentvestors’ – renting where you want to live and investing elsewhere, often in more affordable areas – these women are subverting the traditional ways of building wealth. Choosing instead to follow a strategy that affords them maximum tax deductions, maximum capital growth prospects by investing in different markets and creating diversified portfolios, they’re comfortable with using other people’s money to create passive income and plan for their retirement.
Women who fight to keep the family home during divorce unwittingly block themselves from future wealth creation. It’s one of the biggest mistakes they can make and becomes a necessity of emotion, rather than being the best financial option. You go from 50% to 100% ownership, with full responsibility for maintenance, insurance and loan repayments. This puts many newly single women behind the eight ball from day one. Instead, when we consider a divorced couple selling the family home for around $550k, both parties end up with $250k after expenses and cash to start again. This could be invested into one, two or three properties – a portfolio to create financial security for years to come.
Our younger sisters tend to understand more easily the value of stepping stones – that by purchasing one investment property and then another and another, you will end up with the funds eventually to get back into your own home, should you so desire. In the meantime, it’s quite feasible to build your portfolio and secure your retirement, build a decent superannuation balance and protect yourself in later years. This emotional crossroad can be hard to navigate, so you must seek our different advice to get comfortable with knowing how the numbers work. Then you’ll be able to take full advantage of the stepping stones required to get you back on track again and create worry-free independent wealth.
The Carousel would like to thank Christine Williams, who is a property portfolio strategist, for her story. Check out her website here.
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