what the rich do & you can too!

What the Rich do,

and YOU can, too!

What the Rich do, What the Rich do, and YOU can, tooand YOU can, too

Investment Management Professionals Pty LtdInvestment Management Professionals Pty LtdCorporate Authorised Representative #306558 of Financial Planning Services Australia Corporate Authorised Representative #306558 of Financial Planning Services Australia

AFSL 225982AFSL 225982 Jeremy Britton DipFA SA(Fin) Jeremy Britton DipFA SA(Fin)

www.24hourwealthcoach.com www.24hourwealthcoach.com

DisclaimerDisclaimerDisclaimer:Disclaimer:This report is produced by Investment Management This report is produced by Investment Management

Professionals Pty Ltd and as such any views expressed herein Professionals Pty Ltd and as such any views expressed herein are those of the individual creator and do not necessarily are those of the individual creator and do not necessarily reflect the views or opinions of Financial Planning Services reflect the views or opinions of Financial Planning Services Australia Pty Ltd and its directors, associates or employees.Australia Pty Ltd and its directors, associates or employees.

No responsibility is taken for errors or omissions and all data No responsibility is taken for errors or omissions and all data should be checked for reliability. Seek professional advice should be checked for reliability. Seek professional advice before making any investment decision, including buying, before making any investment decision, including buying, selling or holding.selling or holding.

WARNINGWARNING: Information provided is of a general nature only and : Information provided is of a general nature only and does not take into account your financial situation. does not take into account your financial situation. Information is not a substitute for a formal statement of Information is not a substitute for a formal statement of advice. Always seek advice tailored to your unique advice. Always seek advice tailored to your unique circumstances prior to making any investment decisioncircumstances prior to making any investment decision

References: ABS data, Merrill LynchReferences: ABS data, Merrill Lynchwww.24hourwealthcoach.comwww.24hourwealthcoach.com

The millionaire next doorThe millionaire next door

Classified as an individual with Classified as an individual with over $1M in over $1M in investment assetsinvestment assets, (cash, shares, property & , (cash, shares, property & bonds); bonds); not including their own homenot including their own home, art, , art, cars, collectibles or coinscars, collectibles or coins

There are now over 160,000 millionaires in There are now over 160,000 millionaires in Australia –Australia –almost 1% of the populationalmost 1% of the population

Millionaires worldwide increased 8.3% in 2006Millionaires worldwide increased 8.3% in 2006 Millionaires in Australia increased faster, up by Millionaires in Australia increased faster, up by

10.3%10.3% The greatest number of new millionaires came The greatest number of new millionaires came

from Singapore, India, Indonesia and Russia.from Singapore, India, Indonesia and Russia. Australia now in the World Top Ten for Australia now in the World Top Ten for

millionairesmillionaires

Five things that Five things that millionaires do millionaires do

differently, which you differently, which you may choose to applymay choose to apply

The rich don’t just HAVE more The rich don’t just HAVE more money. They spend it, borrow it money. They spend it, borrow it and save it in ways that might and save it in ways that might

benefit you, toobenefit you, too..

1. Give away 1. Give away moremore

Be above an “above average” giverBe above an “above average” giver

The The average donation is about 2% average donation is about 2% of income for all of income for all Australian households Australian households Households with $500,000 or more in investment Households with $500,000 or more in investment assets give away 6% of their incomes assets give away 6% of their incomes Those with net worth of $5 million+, excluding Those with net worth of $5 million+, excluding primary residences, primary residences, give away 6.1% give away 6.1% of their incomes. of their incomes. Which came first?Which came first?

2. Mind your own 2. Mind your own businessbusiness

Get a business, any business.Get a business, any business.

1.2 Million SME’s in Australia, employing 1.2 Million SME’s in Australia, employing almost half of the private sector workforcealmost half of the private sector workforce In the top 10% of households, 41% own their In the top 10% of households, 41% own their own business. own business. Business assets comprise 21% of the total net Business assets comprise 21% of the total net worth of millionairesworth of millionaires Closely held and family-owned businesses are a major Closely held and family-owned businesses are a major source of wealth but –source of wealth but – it can be risky having so much of one's net worth it can be risky having so much of one's net worth tied up in a single investment tied up in a single investment

it could be tough to sell. it could be tough to sell. planners often encourage their business-owning clients to planners often encourage their business-owning clients to diversify their other investments.diversify their other investments.

3. Borrow strategically3. Borrow strategically Less Consumer debt: Less Consumer debt: Wealthiest 10% are half as likely to have credit card Wealthiest 10% are half as likely to have credit card

debt debt (22% vs 44% average population), BUT, if they (22% vs 44% average population), BUT, if they do, the rich owe about the same as average ($3000)do, the rich owe about the same as average ($3000)

Wealthy are less likely to have car loans Wealthy are less likely to have car loans (25% vs (25% vs 45% avg)45% avg)

Choose your debt:Choose your debt: 30% of all Australians vs 30% of all Australians vs 25% of the wealthiest 25% of the wealthiest

people do not own their own homepeople do not own their own home Have investment debt:Have investment debt: Millionaires are more likely to have investment loans Millionaires are more likely to have investment loans

for property +/or shares (15% vs 4.7%)for property +/or shares (15% vs 4.7%)

4. Live simply4. Live simply

Ferrari sales in Australia increased by 97% in 2006, BUT, Ferrari sales in Australia increased by 97% in 2006, BUT, millionaires are more likely to be subtle and live within millionaires are more likely to be subtle and live within their meanstheir means

The total The total average value of cars owned by millionaires is average value of cars owned by millionaires is $30 000 $30 000 vs $13 000 for the general population, BUT this vs $13 000 for the general population, BUT this is is 2.5% of their assets vs 9% of average 2.5% of their assets vs 9% of average person’s assetsperson’s assets

House represents 10% of net worth for millionairesHouse represents 10% of net worth for millionaires ABS data shows wealth is distributed differently to ABS data shows wealth is distributed differently to

incomeincome Higher incomes are often spent; the wealthy investHigher incomes are often spent; the wealthy invest Millionaires are likely to spend LESS of their income on Millionaires are likely to spend LESS of their income on

clothes, cars and luxury goodsclothes, cars and luxury goods

5. Prioritise Investing5. Prioritise Investing

Millionaires more likely to put money into investment assets Millionaires more likely to put money into investment assets and income-producing assetsand income-producing assets

Most own some investment property Most own some investment property (although now selling off (although now selling off property: millionaire landlords now 44% down from 50%)property: millionaire landlords now 44% down from 50%)

Half of net worth is likely to be in shares or managed fundsHalf of net worth is likely to be in shares or managed funds Around 10% of net worth is in a super fundAround 10% of net worth is in a super fund Around 6% of net worth is likely to be in annuity or insurance Around 6% of net worth is likely to be in annuity or insurance

bondsbonds Only 10% of net worth is likely to be in their own homeOnly 10% of net worth is likely to be in their own home

SUMMARYSUMMARY The top 20% of Australian households have 60% The top 20% of Australian households have 60%

of the assets (not necessarily related to income)of the assets (not necessarily related to income) Millionaires do things differently & so can youMillionaires do things differently & so can you Top five tips from millionaires:Top five tips from millionaires:

1)1) Give away moreGive away more2)2) Establish your own businessEstablish your own business3)3) Borrow intelligentlyBorrow intelligently4)4) Live within your meansLive within your means5)5) InvestInvest

Further ResourcesFurther Resources

Websites:Websites: www.24hourwealthcoach.com www.24hourwealthcoach.com www.invest.org.auwww.invest.org.au

15 questions – 9 ways15 questions – 9 ways

Newsletters:Newsletters: www.lorereport.comwww.lorereport.com

QuestionsQuestions

But WAIT, there’s more!But WAIT, there’s more!

The Economic The Economic Clock:Clock:

1.1. Where WERE we?Where WERE we?

2.2. Where are we NOW?Where are we NOW?

3.3. Where are we Where are we HEADING?HEADING?

What to do about itWhat to do about it

DIY Stock SelectionDIY Stock Selection

Some great strategies to Some great strategies to sort the GOLD from the glopsort the GOLD from the glop

1.1. Imagine you are buying a BUSINESS, not a shareImagine you are buying a BUSINESS, not a share2.2. Know what the fundamentals meanKnow what the fundamentals mean3.3. Know when they applyKnow when they apply4.4. Buy on FACTS not rumoursBuy on FACTS not rumours5.5. Pretend that there are no buyersPretend that there are no buyers

Putting the FUN into Putting the FUN into FundamentalsFundamentals

It’s all about the ….?It’s all about the ….?

Dividend, Yield, Rent, Distribution, wage, salary, EBIT, EBITDA, Dividend, Yield, Rent, Distribution, wage, salary, EBIT, EBITDA, EPS, = IncomeEPS, = Income

Income is based on what it looks like now and is measured on Income is based on what it looks like now and is measured on what it the income WAS before, but on what the price IS nowwhat it the income WAS before, but on what the price IS now

Higher is often, but not always, betterHigher is often, but not always, better Goes down as price goes up, and vice versaGoes down as price goes up, and vice versa


“Not Telling Anyone”“Not Telling Anyone”

NTA, NTAB, SP, Book Value or “book” = Assets Less LiabilitiesNTA, NTAB, SP, Book Value or “book” = Assets Less Liabilities Sometimes 1/4ly stats available but often only disclosed at end Sometimes 1/4ly stats available but often only disclosed at end

of Fin Year, therefore may be “old news” in Decemberof Fin Year, therefore may be “old news” in December Mostly expressed in $, sometimes in ratioMostly expressed in $, sometimes in ratio A favourite secret for oversold stocks & TLRA favourite secret for oversold stocks & TLR Possible to “buy a house for less than the bricks”Possible to “buy a house for less than the bricks”


It’s got to be PERfect…It’s got to be PERfect… PE, PER – refers to Price divided by Earnings or the PE, PER – refers to Price divided by Earnings or the

inverse of the yield. Lower is often, but not always, inverse of the yield. Lower is often, but not always, betterbetter

PE goes up as price goes up PE goes up as price goes up PEG is strongly correlated to future price growthPEG is strongly correlated to future price growth Consider that a business with a good yield is good, one Consider that a business with a good yield is good, one

with a good PE is good but one with a good PEG may be with a good PE is good but one with a good PEG may be betterbetter

DisclaimerDisclaimerDisclaimer:Disclaimer:This report is produced by Investment Management This report is produced by Investment Management

Professionals Pty Ltd and as such any views expressed herein Professionals Pty Ltd and as such any views expressed herein are those of the individual creator and do not necessarily are those of the individual creator and do not necessarily reflect the views or opinions of Financial Planning Services reflect the views or opinions of Financial Planning Services Australia Pty Ltd and its directors, associates or employees.Australia Pty Ltd and its directors, associates or employees.

No responsibility is taken for errors or omissions and all data No responsibility is taken for errors or omissions and all data should be checked for reliability. Seek professional advice should be checked for reliability. Seek professional advice before making any investment decision, including buying, before making any investment decision, including buying, selling or holding.selling or holding.

WARNINGWARNING: Information provided is of a general nature only and : Information provided is of a general nature only and does not take into account your financial situation. does not take into account your financial situation. Information is not a substitute for a formal statement of Information is not a substitute for a formal statement of advice. Always seek advice tailored to your unique advice. Always seek advice tailored to your unique circumstances prior to making any investment decisioncircumstances prior to making any investment decision

References: ABS data, Merrill LynchReferences: ABS data, Merrill Lynchwww.24hourwealthcoach.comwww.24hourwealthcoach.com

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