Finance advice

How to get control of your finances

By Dean Berman

dean berman tnHow much do I earn? This is a statement easily answered as you know your income and how much tax you pay. But do you know where it all goes? This is a crucial first step for every investor.

Blogger: Dean Berman, 37 Property Group

How much do I earn?...a statement easily answered as you know your income and how much tax you pay. But do you know where it all goes?

Looking back a thousand years a system of barter existed where we would trade like for like items..."I'll trade my cart for your sheep".

Fast forward to the current climate and we have shiny and creased money to exchange for goods and services we desire. Our modern lives are focused on spending to buy a variety of products to maintain our existence such as food, beverages, clothing, transport, recreation, medical, health and housing.

As spending makes up such an important part of our lives, it would make sense to work out ways to maximise your current situation so you can spend more on those things you really enjoy. Successful property investors seem to have in-built discipline patterns to maximise incomes.

How much do we spend?

- Lone Person Households (under 35): $869 per week or $45,188 per year
- Couples (under 35): $1,429 per week or $74,308 per year
- Couples with kids (kids under 5): $1,484 per week or $77,168 per year
- Couples with kids (kids 5-14): $1,670 per week or $86,840 per year
- Couples with kids (kids 14-24): $1,900 per week or $98,800 per year

It could be concluded the more people living in a house, the more will be spent.

Where do we spend our incomes?

1. Housing: 13% - 32%
2. Transport: 15% - 17%
3. Food & Drink: 12% - 17%
4. Medical & Health: 3% - 5%
5. Clothing & Footwear: 3% - 4%
6. Fuel & Power: 2% - 3%
7. Alcohol: 2% - 3%

In order to live we need shelter and a way to get to and from work, which is evident as housing is typically the largest expense amongst the various categories. When we work, the median gross weekly household income for Australians is $1,320 or $68,640 per annum.

The median equivalised disposable household income which is the total income of a household, after tax and other deductions that is available for spending or saving per week is $715 or $37,180 per annum. This is the important measurement as it actually shows what is actually left to spend.

Therefore, Australian households  have roughly $715 per week to spend to enhance living standards and improve their future wealth reserves.

Enter Property...If you are looking to increase your families wealth, take a leaf out of ABS statistics which talk about incomes and wealth.

The lowest household group in these statistics earns a weekly after tax income of $314 compared to the second lowest at $524 per week. That is a $210 difference per week or $10,920 per annum.

If you compare the net household assets of both groups the $524 per week household has amassed more than $163,900 compared to the $314 group ($195,700 versus $31,800).

Fundamentally, the difference between both groups wealth reserves are 'Total Property Assets' of roughly $190,000 in favour of the $524 group.

The $524 household group earns $10,920 more, but somehow amasses 6 times more wealth.

It can be concluded...

- Maximise your income and minimise your expenditure as $210 more per week has made an enormous difference too many Australian families wealth.

- Look to property as an investment class, it stands out as being one of the leading contributors to Australian families with more wealth than thosewho don't invest.

Sources: ABS, IBISWorld,  Moneysmart


About Dean Berman
dean bermanDean Berman is a lover of property and Director of 37 Property Group, a property investment company and buyers agency focused on helping clients amass substantial property portfolios. Dean is a licensed Real Estate Agent.

His goal for 37 Property Group is to implement his research knowledge and investment fundamentals studied in a Bachelor of Property Economics and Diploma of Financial Planning to help clients become truly wealthy through passive income and long-term growth.

He understands the busy lives of modern Australians and provides a service which is efficient, individualised and incorporates a professional and fun atmosphere. Surrounding 37 Property Group is a mixture of highly skilled professionals to provide convenience and smooth assistance in the wealth building process.

For more information on 37 Property Group http://37propertygroup.com.au

You can follow Dean on Twitter by clicking here

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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  ["introtext"]=>
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Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

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To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
  • Interest only loans and if that is the way to go<\/li>\r\n
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    Whether it\u2019s building a successful property portfolio or investing in one of their Development Funds, Open Corp can help you through every stage of your investment journey. The team has 40 property specialists who collectively have been involved in over $4 billion worth of property transactions and the acquisition of more than 8000 homes and investment properties.<\/p>\r\n

    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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    • Why Brisbane is a good investment option right now<\/li>\r\n
    • How he wants to help clients take advantage of the current market<\/li>\r\n
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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

" ["fulltext"]=> string(2483) "

In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1213 (52) {
  ["id"]=>
  string(5) "18287"
  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

" ["fulltext"]=> string(2323) "

Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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