Why portfolio planning is paramount for wealth creation

Many people dream of retiring early and living off the rent from their investment portfolios.

Unfortunately, that ideal future lifestyle often never comes to pass because they didn’t start out with a plan to achieve it.

In days gone by and, alas, still today many people become investors by accident.

Perhaps they decide to hold on to their home when they upgrade to a new one or they inherit a property from a family member.

Most of the time, though, owning one investment property is not going to spectacularly change anyone’s finance future – and especially if the location or the dwelling is not one that ticks all the right fundamentals for superior capital growth.

These are some of the reasons why we offer portfolio planning to all of our clients to help them crystallize what they want to financially achieve but also to create a plan for them to get there.

This is where not only my property investment expertise comes to the fore, but also my background as a qualified chartered accountant, which saw me have a long career as a CFO and senior business adviser in both Sydney and London.

Whether we’re helping a homeowner or investor, we follow the same strategic process to create a successful property investment portfolio plan for every client. 

This process involves strategy, asset and loan structuring, research, evaluation, and securing the best properties for our client’s needs and goals.

By completing a portfolio planning session, we not only aim to understand our clients better, but it’s a process that will also unpack what is important to them now – and in the years to come, too. 

Some of the elements that our portfolio planning cover include:

  1. Understanding risk

    Everyone has different risk profiles, with each half of a couple often sitting at opposite ends of the spectrum, too.

    That’s why it’s vital to understand each person’s appetite for risk at the outset, which we can incorporate into everything we do.

    The added bonus is that couples often learn to understand each other better and why they may not agree on some financial decisions from time to time!

  2. Wealth creation

    Whether you’re single or a couple, you can’t achieve your financial hopes and dreams if you haven’t reflected on what they actually are.

    For many people, their ideal financial future is to be able to retire early or have the option to do so without having to worry about money.

    While no one knows what can happen in our lives from one year to next, it is always a wise idea to create a plan to work towards our goals, which can be also be fluid as needed.

  3. Generational wealth

    Another important factor that we cover in our portfolio planning sessions is the creation of generational wealth.

    Most of us hope that our descendants will have a better life than we did – and if we can help them achieve that then we will have lived a successful life ourselves.

    Understanding how to achieve this is part of our process, including general advice on property ownership structures to make it easier to pass on property assets once we have passed.

  4. Annual review

    The ability to annually review a portfolio plan is paramount to update it with the most current factors.

    This can include equity that has been created in the portfolio, cash flow changes such as rent increases, and the inclusion of any changes to income levels.

    By regularly reviewing and updating portfolio plans, they become living and breathing documents that evolve over time to guide the way to a future that many of us continue to dream about.