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One of the delights provided by many teachers is to help students in extra ways. 
And I like to do this. I like to provide help in a wide range of subjects, and one of those I am familiar with is money management.
I like to advise people in creating a firm financial footing.
It is not enough to earn a good income - you have to know how to manage the money you earn and put it to "work" to accumulate a portfolio of investments.
If not, you will be "on the street" by the time you are 65, along with 95% of the rest of the population.  These are the "cold hard facts."
95% of retirees have used up their "nest egg" by the time they are 65 and living on "hand-outs." The welfare in Australia is very generous and this does not apply to those lucky enough to live in this wonderful country, but hardly anywhere in the world meets the standards of "self-sufficiency" in retirement.
To make sure of your future you need a SAVINGS PLAN.
It's not sufficient for me to tell you how to earn an income, without supporting it with an investment plan.
Up to now I have been helping readers get into electronics and make a career in this very-rewarding field.
But no matter how much you earn, you can easily frit it away each week and have nothing left.
Everyone can live a "Kings Life" and it's not difficult to spend everything you earn.
The skill is saving for the future.
By putting aside a small amount each week, you can generate a portfolio 10 times larger than you think possible.
It doesn't require any complex mathematics or a University degree. It only involves dedication and applying a simple savings plan from the first time you receive a pay check.
All you have to do is put aside a small amount, say 10% - 25%, and follow a few simple guidelines. The guidelines are:  BUY PROPERTY.
The only way you are going to stay on top of inflation is to invest in PROPERTY. Property is rising 5% - 17% every year and when you consider this is a tax-free increase, it is by far the best of all investments. This trend has occurred over the past 100 years and it will continue.
Nothing will deflate the price of property and if you can show me one person who has lost on a property transaction, I will show you a hundred who have lost their entire savings on the stock exchange or phony business deal.
The wonderful part of property - it is solid. When everything crashes around you, at least you can LIVE IN YOUR PROPERTY.

Everyone wants to be a millionaire. But this will be "small-change" in 20 years.
You will need $1,000,000 to buy the average house! A million dollars is not a dream. It's all relative. I am not suggesting you become "wealthy beyond all dreams."
All I am suggesting is to aim at buying your own house and also 1, 2 or 3 other properties.
This is possible simply by applying yourself to the simple rule of saving and buying.
Once you start, you can get all sorts of books on buying, renting and negative gearing of property.
The most difficult part is starting.
It doesn't matter how small you start. The important part is to start as soon as you can.
The only way to begin "wealth-building" is to invest in "bricks and mortar."
This is the only item that will remain standing when everything else collapses around you.
Almost everyone knows property is the only way to build wealth, but many get caught by scam artists with offers of big returns for everything under the sun, and they lose their entire life savings.
They invest in bogus shares, shoddy property developments, untested business ventures and "gambling certainties."
All these schemes eventually fall over and it has already been documented that 97% of anything that is "too good to be true" will fail.
I want you to avoid the possibility of losing ANYTHING by getting "on-track," right from the start, and get your money to grow. Don't think of anything other than PROPERTY.
Most advisors steer you off property because they cannot get their "grubby hands" on your investment, once you sign the deeds with the bank.

About 15% of the population (of an industrialized country) will build a nest-egg, either though careful saving, a lotto win or inheritance. However most will lose EVERYTHING through a bad investment, SCAM, gambling, or one of a number of other "ventures."
This leaves less than 3% who will retire with sufficient to live comfortably in their retirement.
These are the frightening facts.
This means your chances of holding on to your money is less than 3%.
I know you will say: "this will not happen to me."
But that's what everyone says.
No-one expects to lose their life's savings.
The only way to avoid the possibility is to know the pitfalls.
And the pitfalls are MANY.
One of the worst things to happen is to get an inheritance or lotto prize.
The fact is 95% of people who receive a large amount of money, will lose the entire amount in less than 3 years!
How does this happen?
Very few know what to do with a large amount of money and they are an ideal target for scam-artists and "advisors".
This can be your solicitor, money advisor, investment broker or anyone who says he can help you make a "wise investment."
The end result is always the same. You lose everything.
If he had any talent he would already be a retired multi-millionaire.
They always offer "larger than life" returns and within a short time the "guaranteed investment" becomes a "dud" and disappears from the face of the earth.
Although the operations of many "advisors" have been limited by legislation, new schemes are constantly being devised to get around the law. These scams are so hard to detect that I suggest you stay away from ALL advice.
I am hearing about new scams every day and some are so unusual and devious that the only suggestion is to keep your check-book in your pocket. In fact, NEVER take your check-book with you to a meeting. The temptation is too great.
Large amounts of money always "burn a hole" in the pockets of the holder and  they are easy prey for advisors.
In Australia, we have seen 10,000 people burnt from a single "spruiker" who sold people dud investment properties by inflating the price $40,000 and guaranteeing them a positive rental return. He topped up their rental by paying them from the $40,000 inflated price! He fell over after 12 months and all investors had properties they could not sell at a profit!
It's always the same. The larger the amount of money, the easier it is to strip it from the investor.
So, what do you do?
Only invest in your own properties. Do not invest in "time share" or any "share agreement" or buy at a seminar. Do your own investigation and buy at an auction or private sale. If you are really smart, you will only buy a new property. Unfortunately these are always a long way from from the "central business district" but it's absolute madness to buy a second-hand house that someone else has "run into the ground."  
The only way to work out a "value" for a property is to see if you can get 5% return on rental. You will finish up with less than 3% as you have to pay council fees, insurance, maintenance, tax, etc etc. Never buy a property with a group of other investors. If anything goes wrong with any of the other "partners" you can be held responsible.
"Time Share" is one of the worst investments to be dragged into.
The idea sounds fantastic.
It consists of buying a 1-week "lifetime" share in a holiday-house for between $25,000 and $40,000 and is something you can use for a holiday each year or "rent out."
The problem starts when you want to sell your share. How are you going to sell it? There are no readily-available methods to sell a share in a house.
You will have to sell it to one of the other "share-holders" and you will be lucky to get 25% of its value.
There are lots of similar "investments" that eventually fall-over, and the one big mistake is not "doing your homework."
Before buying anything, ask yourself one question. "Can I sell it for a profit?" Even though most of the properties will be a life-time investment, you must always consider the  possibility of a sale.

Anything you do will depend on how much money you have to spend.
If you are starting out, open a separate account and when you have sufficient funds, you should consider putting a deposit on a block of land.
Continue to pay off the land and once you have approximately 20% equity, you can go to the bank and use the equity to build a house.
As the house gets constructed, it is re-valued (and re-insured) and a further loan-installment is made to continue construction.
In this way you can have your own home constructed on your own land.
You can also compare house-and-land packages from some of the large developers. They offer extremely competitive prices as they buy materials in large quantities and have a team of workers. They can also offer low-cost financing and are generally much faster than sub-contracting the work yourself.
These are all things you have to find out yourself.
My suggestion applies to the starting process.
You need to start and save from day one.
Any money you put aside will not be missed and you know you are moving in the right direction.
If you are fortunate enough to receive a lottery win or inheritance, you should buy a house.
This should be the first purchase on your list.
If you believe in "leverage," you can put about 50% - 70% into the house and use the rest to buy another block of land or purchase a "house and land" package.
If you have enough money to gain 20% - 30% in a second "house and land" package, you can rent it on a "negative gearing" basis and get the tenants pay the mortgage.
This advice comes ahead of putting money into a personal superannuation scheme or even into the bank for your children's future education.
Property will increase at a faster rate than anything else and you can borrow against it if needed.
At least, with this arrangement you do not have any money invested with "sharks" and you don't have the problem of trying to retrieve it.
The most important part is to never have a large amount of money "sitting around" as the temptation to get "advice" is overwhelming.
Even the largest superannuation schemes are not immune from embezzlement. Only today the Commonwealth Superannuation scheme was robbed of over $100 million dollars. None of these "high-profile" schemes are safe. They can crash tomorrow. We have had banks crash, Building Societies crash, Insurance companies crash, large companies go bankrupt. But how many houses have you seen disappear?


If you are fortunate enough to be living with your parents or the repayments on your house are low, you should consider saving or taking out a loan to start-up your own business.
But firstly, there are two things I do not advise.
I do not suggest you buy a franchise or an established business.
A large percentage of the price of a "ready-made" business is goodwill.
Goodwill can disappear when the previous owner leaves, and you have no recourse.
A local chemist shop had enormous turnover and the goodwill was sold for a very high figure.
Unknown to the new owner, many of the prescriptions were supplied "under the counter" without a prescription. The new owner did not continue this practice and the turnover dived.
The turnover then fell to almost nil when the local doctor moved away.
I can quote dozens of cases where new owners suffered a drastic fall in sales, simply because the customers did not like the service.
The local Juice-Stand at our large shopping centre was bought recently and included $30,000 good-will. The business dived with the new owners and the stand is now empty.
Goodwill is intangible and you should never pay a cent for it.
Franchises on the other hand, offer a group name, sign-writing and book-keeping features that can sometimes add to the presentation of a business.
The only problem with a franchise is the cost. They are all over-priced and again you are paying for items you "cannot touch." Hundreds of franchises have collapsed over the past years. They don't offer any guarantee at all.

How much should you pay for a business?
As little as possible. The only costs should be your start-up costs.
The best type of business is the "service" industry. This is where you offer your "services." This type of business costs very little to set-up and you can work in your own time or after hours. Services such as investment consulting, book-keeping, tax preparation, portfolio management etc
If you are into computer technology, a very large market is software installation. This is more complex than first meets the eye.
The problem arises when a new program is installed. It clashes with other programs and needs setting up and adjusting. That's why few large companies this service.
Another area is virus detection. Many computers crash due to a virus and retrieving data, cleaning and reformatting can take a full day. You need the clients original programs and the rest is patience.
Upgrading is another area of demand.
To be successful you need to be smart.
The best way to upgrade is to install all programs on a new computer and transfer the data.
The client can then have the old computer as a "safety blanket" and if it is not used for say 6 months, it can be thrown out.
This is a very "calming way" to handle the customer as nothing is thrown out or lost.
Tricks like this not only retain a client-base but generate recommendations without the need to advertise.

This is just a few ways to generate an income and it's all a matter of "doing the right thing" to your first customers and the rest will "beat a path to your door."

With the generation of an income and proper handing of the monies you receive, you will be able to create a solid foundation of investment properties and show others how achieve the same rewards.

For now,
Colin Mitchell