Guiding Principles for wealth creation

Subject to personal circumstances, the following points provide a good start.

• Buy for the long term- ie 10 years or more. Allow compounding income over the years to work in your favour.
• Put in place a program where regular amounts are contributed to your investments.
• Diversify holdings to ensure that in changing markets, not all your holdings will suffer in a down turn.
• Divide assets between superannuation and non superannuation for accessibility and tax effectiveness. Presently, superannuation assets can grow at close to no tax if arranged properly with some level of risk taken.
• Quality growth assets held for the long term will create reliable wealth generation.
• Build in risk management. There is no point in sound long term asset accretion if you have not provided for asset protection in the meantime. Changes in health, job position and personal circumstances can quickly ruin a long term plan where no protection is in place.
• Try to find –and pay for- the top investment managers in your areas of interest.
• Use increasing equity in assets to borrow for further asset acquisition where such action is appropriate and meets your risk appetite.