For many CEOs, much of their personal wealth is often tied up in the business they own or manage.
While this is a great way to build wealth, it’s also essential to diversify your income and move some of your profits or salary into other assets. This grows your long-term wealth and acts as a safety net in the event that business conditions change or you lose your senior role.
For most individuals with high net worth, investing in property is the most effective way of moving money out of your business. It’s also a great way to create a passive income that can support the lifestyle you want and that of your children.
Here are four steps you need to take to achieve it.
1: Know your why and define your goals
Before creating a strategy, it’s essential to start with your ‘why’. Your reason for pursuing the lifestyle you want for yourself, your family and generations to come. When you know the why, this can help fuel your passion for achieving it.
Achieving the financial goals you set for yourself will offer you more choices, empower you and bring independence to all areas of your life.
To do this, you need to ask yourself some basic questions. What would you do if you had all the time and money you ever needed? Where would you travel? What hobbies would you pursue? Would you like to leave a legacy or contribute to a social cause?
Achieving the financial goals you set for yourself will offer you more choices, empower you and bring independence to all areas of your life.
2: Know your numbers
Once you know where you want to get to, you can begin to assess your current situation.
Start by clearly understanding your current financial position in terms of your borrowing capacity, your cash position, how much you’re prepared to invest and your risk appetite.
You also need to ensure your risk tolerance is in keeping with the goals that you’ve outlined. In real estate, more risk means more complicated strategies like development, but they can fast-track wealth creation.
3: Build your own blueprint
Once you have your endpoint in mind, the next step is creating the map to get there.
Your map or blueprint is like a GPS, which helps you navigate where you are, where you want to be and how to get there. With your blueprint, you can determine the size of the property portfolio you need to build, when to start consolidating, the exact strategy you want to undertake and, importantly, what your exit strategy will be.
If you are unhappy with the wealth blueprint timeline, then it is a matter of adjusting your risk tolerance. For example, not taking enough risk when building a portfolio can sometimes be a significant risk if it holds you back from achieving your goals.
4: Build your A-team
As a successful CEO, you know that your main job should be finding the best people you can in your business and trying to find ways to free yourself from the day-to-day operations. Building a property portfolio or even undertaking more advanced strategies, such as developments, is exactly the same.
To succeed in property, you don’t need to be an expert. You just need to surround yourself with the best professionals you can find. This typically means building a team that includes a buyer’s agent, an investment-savvy mortgage broker, a property wealth strategist, an accountant and a lawyer who specializes in property.
To succeed in property, you don’t need to be an expert. You just need to surround yourself with the best professionals you can find.
Focus on finding independent professionals who have a long track record and who have done it for themselves. Identify people who value relationships and are aligned with what you want in terms of goals and philosophy.
Building a property portfolio should be treated with the same level of professionalism that you operate within the business world. If you treat it casually, you will get, at best, casual results. If you treat it professionally, you will get professional results. Being prepared to diversify your income and asset base is best done with the help of other professionals who are experts in the property field.
Rasti Vaibhav is the author of The Property Wealth Blueprint and CEO of Get RARE Properties, a bespoke independent buyers’ agency that has been helping hundreds of clients across Australia secure their financial freedom through property. For more information, visit getrare.com.au.
