Episode Details

If you're like me, you're probably sick of hearing about coronavirus all the time, so good news!

Today's episode won't be about the coronavirus. Instead, I'm going to teach you about wealth accelerators.

If you don't know what those are, you will know by the end of the show, and you'll understand how wealthy people use them to keep getting richer.

Then I'm going to have a chat with Pete Wargent about how Australians aren't moving much anymore.

The rich use these 7 wealth accelerators to keep getting richer

Do you understand what a wealth accelerator is?

Well, maybe you should … because that's the way the rich keep getting richer.

Now you've probably heard the expression money begets money.

Maybe you've even wondered why it's easier for people who already have plenty of money to make more of it.

Or maybe you've wondered why making your second or third million is much easier than it is to make your first million dollars?

Well, here's why….

Strategic property investors who have built a true property investment business, grow their wealth faster by using a number of what I call "wealth accelerators" that leverage their returns.

Let's look at them….

1. Other people's money

One of the biggest differences between how the rich and average Australian go about building wealth is how they invest…not their own money, but how they leverage and use other people's money.

The wealthy have mastered the art of using money they don't have to build their wealth.

They used borrowed money to magnify their investment activities and enjoy accelerated returns by borrowing and leveraging against assets they own and use this to acquire even more assets.

2. Other people's time

While many beginning investors waste time, energy, and effort trying to do everything themselves, successful investors put their time to its highest and best use.

Some beginning investors believe they're saving money by doing their own research, spending weekends house hunting, and competing with agents undertaking property negotiation.

However, their lack of experience usually means they get a secondary result and pay a huge learning fee to the market by paying too much for their property or buying the wrong property and missing out on significant future capital growth.

3. Legally take advantage of the tax laws.

Believe it or not, the tax laws were written to benefit business owners, meaning if you run your property investments like a business you're able to accelerate your wealth creation by taking advantage of these laws.

Essentially, as an employee, your cash flow is a bit like this…. You earn money, you pay tax, you spend what's leftover.

However, as a business owner, the pattern is quite different. You earn money, you can spend it on legitimate expenses associated with operating your business and earning income, and then you pay tax on what's leftover.

4. Correct ownership structures.

Another wealth accelerator used by the rich is their ownership structures.

If you choose the right ownership structures for your investments you can accelerate your wealth.

Sophisticated investors own nothing in their own name, or very little in their own names, but control everything in structures such as companies and trusts.

5. Their network.

Successful investors realize they don't have to be an expert in every field if they develop a good network around themselves, including a smart finance broker, good solicitor, a property savvy accountant, and a knowledgeable property investment strategist.

Having a great network around you enables you to leverage off other people's expertise.

Your network of relationships is critical to growing your wealth, not just for what t