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Journey to financial freedomJourney to financial freedom
The Cold, Hard Facts about South The Cold, Hard Facts about South Africans financial fitnessAfricans financial fitness
What the rich teach their childrenWhat the rich teach their children
Property as Investment VehicleProperty as Investment Vehicle
AGENDAAGENDA
Over 74% of South African families spend more Over 74% of South African families spend more than they earn. than they earn.
((Source: SA Reserve BankSource: SA Reserve Bank).).
Debt-to-Income Ratio 82% Debt-to-Income Ratio 82% (Source: IOL July 2008)(Source: IOL July 2008)
February 2008 February 2008 –– 60 920 civil judgments amounting 60 920 civil judgments amounting to R560.7million to R560.7million
((Source: Stats SASource: Stats SA))
THE COLD HARD FACTSTHE COLD HARD FACTS
Credit card debt (Banks, Discovery)Credit card debt (Banks, Discovery) Retail Accounts (Edgars,Woolies)Retail Accounts (Edgars,Woolies)
OverdraftsOverdrafts Personal loansPersonal loans Hire purchaseHire purchase BondsBonds
THE COLD HARD FACTSTHE COLD HARD FACTS
Economic CyclesEconomic Cycles
0
10
20
30
40
50
60
J71-A72
S72-A74
S74-D77
J78-A81
S81-M83
A83-JUN84
J84-M86
A86-F89
M89-MY93
J93-N96 D96-
Dow n
Up
Dow n
UP
Dow n
UP
Dow n
Up
Dow n
Up
WHAT THE RICH TEACH THEIR KIDS WHAT THE RICH TEACH THEIR KIDS ABOUT MONEY ABOUT MONEY
AND AND
WHAT THE POOR AND MIDDLE CLASS WHAT THE POOR AND MIDDLE CLASS DON’TDON’T
Proverbs 22:6-7Proverbs 22:6-7
V6V6. . Train up a child in the way he Train up a child in the way he should go and when he is old he will should go and when he is old he will not depart from itnot depart from it
V7V7. . The rich rule over the poor, and the The rich rule over the poor, and the borrower is a servant to the lenderborrower is a servant to the lender
Master the “fundamentals” Master the “fundamentals” of wealth creation so that of wealth creation so that they have a foundation upon they have a foundation upon which to build a financial which to build a financial future.future.
• Invest money (Story Of Roy)Invest money (Story Of Roy)
• Don’t work for money, let money work for youDon’t work for money, let money work for you
• Financial Literacy – Get to know the money gameFinancial Literacy – Get to know the money game• • Mind your own businessMind your own business
• Learn the history of taxes and the power of corporationsLearn the history of taxes and the power of corporations
• Work to learn-don’t work for moneyWork to learn-don’t work for money
• Learn to SellLearn to Sell
• Manage your cash flowManage your cash flow
Rich Lessons
Rich Lesson: The Rich Don’t work for moneyThe Rich Don’t work for money
AssetAsset LiabilityLiability
Cash flow Pattern of the Cash flow Pattern of the POORPOOR
Cash flow Pattern of the Cash flow Pattern of the MIDDLE CLASSMIDDLE CLASS
Cash flow Pattern of the Cash flow Pattern of the RICHRICH
PropertyProperty as an as an Investment Investment
VehicleVehicle
Property as an Property as an Investment VehicleInvestment Vehicle
There are no silver bullets or Get There are no silver bullets or Get Rich Quick SchemesRich Quick Schemes
No investment is better than No investment is better than another. Investments are only another. Investments are only vehiclesvehicles
There are no “good investments” There are no “good investments” only “good investors”only “good investors”
What do you need to know to What do you need to know to play the game?play the game?
If I had 4 hours to cut down a tree I If I had 4 hours to cut down a tree I would spend 3 hour sharpening would spend 3 hour sharpening
my ax my ax ((Abraham LincolnAbraham Lincoln))
The Internal JourneyThe Internal Journey
Be… Be…
Do… Do…
HaveHave
Rich Lesson: Rich Lesson: Mind Your Own BusinessMind Your Own Business
CASHFLOW Quadrant CASHFLOW Quadrant
Employees (E) and Self-employed (S) individuals -Left
Business Owners (B) and Investors - Right
Creating a TeamCreating a Team
AttorneyAttorneyEstate AgentEstate AgentAccountantAccountant
Bond OriginatorBond Originator
Bank ManagerBank Manager
Money always Money always follows follows Management Management..
The Seven Myths of The Seven Myths of Real Estate InvestingReal Estate Investing
Myth #1Myth #1You have to be Wealthy You have to be Wealthy to invest in Real Estateto invest in Real Estate
Myth #2Myth #2You Need to Start You Need to Start
Small – Small – Big Deals Are Too Big Deals Are Too
RiskyRisky
Myth #3Myth #3
You Can “Flip” Your Way You Can “Flip” Your Way to Successto Success
or or Get Rich Quick With No Get Rich Quick With No
Money DownMoney Down
Myth #4Myth #4Some People Just Some People Just
Have the Midas Touch Have the Midas Touch
Myth #5Myth #5You Have to Know You Have to Know
Somebody Somebody to Get Going in This to Get Going in This
Business Business
Myth #6Myth #6You Have to Be a You Have to Be a
Seasoned Negotiator and Seasoned Negotiator and Businessperson Businessperson
Myth #7Myth #7You Have to Know a Lot You Have to Know a Lot
About Real Estate About Real Estate