May 2019

Property Investment should be like a Business

Becoming financially free is a goal many of us aspire to but despite living in affluent countries many never achieve financial independence. We work for 40+ years, earning several millions over a lifetime but very few become financially free

Most people retire just above broke, often relying on state provided pensions for income.

The desire for financial freedom is the reason many investors become involved in property. However, 92% of property investors own never get to own more than two properties and less than 1% of property investors own six properties. Sadly the majority of property investors never achieve financial freedom. Most business owners, self-employed people, employees and property investors never become financially free.

The ones who do achieve financial freedom do so through owning successful businesses. There is also a group of people who are employees that treat their investments like a business.

One of the best ways to earn more and work less is by owning a business, because the “the tax system” favours business people and disadvantages employees.

Successful business owners understand the system of finance, tax and the law and have it working for them. They realise that it’s not how much money you make that is important but how hard that money works for you and how much you keep that counts.

The average employee earns money, pays tax and spends what is left over; while a business owner earns income, spends money and pays tax on what is left.

So does this mean you need to set up a business?
Not necessarily but what it does mean you need to treat your investment portfolio like a business.
Most small business go broke in the first five years and many of those that survive close down in the next five years.

But some property investors, those who treat their investments like a business, become very, very rich by growing a multi-million dollar investment property portfolio.

They do this understanding “the system” and getting the right type of finance, setting up the correct ownership and asset protection structures and knowing how to legally use the taxation system to their advantage.

We all have the ability to become financially free by becoming property investors who treat their investments like a business.

And you can set up your own property investment business while you are still an employee or self-employed.

What almost every wealthy property investor has done is built their wealth by growing their real estate portfolio one property at a time. While this was going on they lived off the income they earned from their day job. They started off with one property, then leveraged off its capital growth to invest in another and another until one day they found themselves with a true property investment business. One that gave them financial freedom and choices in their lives