The rich are getting richer, and so can you

The rich are getting richer according to the recently released BRW Rich 200 list. The total wealth held by this year’s Rich List members was up 23% on last year, in part helped by our resources boom.

And just in case you haven’t notices, the divide between the rich and the poor has never been so evident according to the BRW. The average income for Australian families is $80,000 with just 15% of us earning $150,000 or more each year, which seems to be Treasurer Wayne Swan’s definition of wealthy.

In contrast it would take the lower-ranking members on the Rich List less than 5 days to earn $150,000, which seems to be the new cut off between the rich and the average Australian.

So, what can we learn from Australia's wealthy individuals?

Firstly property remains the single biggest source of wealth with 49 real-estate entrepreneurs in the top 200 list, and many of those who didn't make their fortunes in property have stored their wealth by investing in property.

This should come as no surprise – looking back over the years, no matter how the Australian economy changes, the Rich 200 has always been dominated by the property entrepreneurs.

Remember, there's nothing wrong with seeing what other successful people do and applying those principles to your own life. If so many extraordinarily wealthy people have used real estate profitably, it stands to reason that there's money to be made in this sector.

The other lessons I learned by reading the various entrepreneurs' stories are:

Anyone can become rich in Australia. While 17% inherited some of their fortune, most on the Rich List were self-made successes, some coming from working-class backgrounds. Attending a private school and an elite education is clearly not a prerequisite to joining Australia’s wealthy. While some forged important networks at school, many went to public schools and others didn’t even finish high school. In fact, less than half have tertiary qualifications.

Invest counter-cyclically. While the average Australian was gripped with fear of the fallout from the Global Financial Crisis, many successful investors took advantage of the opportunity to buy up big over the last few years. Remember Warren Buffet's famous quote: "Be fearful when others are greedy, and be greedy when others are fearful."

Make your millions and then reinvest it – don't spend it. This is really just using the power of compounding to grow your asset base before you start spending up big.

Take risks early on, but not once you are established. While many entrepreneurs took big risks to get their enterprises going, successful investors then preserved their wealth by cautiously investing rather than taking further risks.

Have one good idea and repeat it. One core trait that successful entrepreneurs share is the ability to take a good idea and repeat it over and over again. Look through the list and you’ll see so many entrepreneurs stick to the same concept for years and just expand in different locations.

Pick the trends. This is different to picking fads, which are transient.

Go for growth. Sure, cash flow is important but to become really rich you need a large asset base. While the average Australian tries to increase their cash flow, the wealthy are obsessed with building their asset base. Much the same as those on the BRW Rich 200 list who concentrate on building their balance sheets even more than they do on their profit and loss accounts.

Surround yourself with a good team. As I've often said, if you are the smartest person in your team, you are in trouble.

Take action. All the people who made it onto this year's BRW Rich 200 list started with a dream and then took action.

You’re never too young and you’re never too old. The youngest member of the BRW Rich 200 is aged 35 and has an estimated wealth of $1.01 billion, which is even more than the oldest member who at the age of 92 has accumulated $289 million.

Michael Yardney is the director of Metropole Property Investment Strategists, a best-selling author and one of Australia's leading experts in wealth creation through property. For more information about Michael visit www.metropole.com.au and www.PropertyUpdate.com.au.