Since the Global Financial Crisis many Australians have become disillusioned with investments and in particular for Australians who are about to retire or have retired have watched their Superannuation drop by as much as 40% in some cases. This has had a devastating effect on the lifestyle and retirement dreams and aspirations for many people. Unfortunately unless they go back to work there is little that can be done to recover the money in this market environment. So what we have all learned from this is a very big lesson and that is the growth we saw over the 40 years prior to the GFC is not sustainable.
In fact over the last 40 years we have seen unprecedented growth both economically and in our personal wealth. These have been the golden years of modern society and we have become addicted to growth. The question our clients are now asking is where to from here?
As responsible financial planners we leave nothing to chance. The growth outlook is looking particularly shaky and so what we have done to protect our client’s wealth is look for investments that will produce solid income returns for the immediate and longer term. Not only must the income be good but the income growth potential must be present.
This will do two things: the first is ensure that the income helps the investments base grow, or in the case of retirees fund their living costs as well as insuring against the eroding effects of inflation as the income grows each year. And secondly when the markets do recover the underlying value of these investments will very quickly improve, and in the case of retirees this means their retirement savings will last longer.
So the key to growing and retaining your wealth in the modern investment era is to look for assets that not only have long term growth potential but in the short term make you a good income return which your research shows will grow.
If you would like to know more about how we grow and retain our clients wealth please call Josh Mechielsen and the Total Advice Partners team on (07) 5416 9300 to book a complementary consultation.