Property investment a good way to secure your financial future

The statistics are scary. By 2019 it is estimated that women will have on average half the amount of superannuation than men, according to a Queensland report called Focus on Women.

This is an alarming figure for women looking to retire within the next decade. The national trend is to have superannuation, the mandated compulsory employer contribution equivalent to 9% of earnings, as the primary income for individuals in retirement. Because the number of retirees compared with the working population is increasing, the likelihood that the government will be able to afford any sort of reasonable amount of pension is slight. The Australian government has realised this, which explains why it introduced superannuation and are encouraging people to work well beyond 65 years old.

This looming hardship will affect women disproportionately. Why? As the report points out, women on average earn almost $300 less a week than men. In addition, while in the workforce women are more likely to take time off work to raise children or take care of other family members. When you add the fact that women tend to live longer than men, you quickly realise a women’s financial security in retirement is definitely at risk.

So what should a woman do to improve their situation? First of all, women need to change their perception. The report states: “While investing may seem indulgent to many women with dependants, securing a future retirement income is imperative.” This is a statement I wholeheartedly agree with – not only for a woman’s own financial future but for her family’s future as well.

Women, now more than ever, need to begin taking action to build up income-producing assets and one of the best ways to do that is by investing in property. Consider this: if you have $10,000 invested at 7% compounding monthly, in the year 2019 – about eight years from now - you will have about $17,000, giving you a $7,000 gross profit (before tax of course!). However, if you used that same $10,000 and make a 5% deposit on a $200,000 property, which grows in value by 7% per year, after eight years the property will have grown in value to nearly $350,000, giving you a gross profit in the vicinity of $150,000.

You don’t have to be a mathematician to figure out that $150,000 in potential profits from property investing is far preferable to the meagre $7,000 profit you’d make otherwise. These figures don’t even take into consideration that investment properties can generate an income from rent or the tax benefits that can also apply. They also don’t take into consideration that some properties cost you money to hold, or are negatively geared; it is important that you get educated before rushing into purchasing any property.

My partner, John, and I are firm believers in property investing, and we have a portfolio of more than 70 properties across Australia, New Zealand, and the United States. We can attest to the fact that one of the best ways to secure your financial future is by accumulating investment properties and letting the power of compound interest work for you.