54
LISA HUDSON
BUILDING WEALTH
OUTSIDE
YOUR BUSINESS
Lisa Dudson, Financial Educator and
CEO of www.ifindproperty.co.nz and
www.acumen.co.nz
LEAD | January 2018
People go into business for a range
of reasons; they are passionate
about something, have a strong
desire to control their destiny,
want more freedom and flexibility
and of course to make a good
income. However I also think it’s wise to
gradually over time take some money
out and invest elsewhere, just in case
the business doesn’t deliver high
enough returns. The challenge is to
work out how much is prudent to
invest elsewhere.
I have been a business owner and
financial advisor for almost 20 years
and one thing that I often come
across is that business owners have
all of their wealth in their busi-
nesses. Many hope that if they work
hard or smart enough that at some
point in the future they will be able
to sell their business for enough
money to provide financial secu-
rity for themselves and their family.
Unfortunately in my experience this
is rarely the reality for most people. Most investment options require
you to have the actual cash to invest
whereas with property investment
you can borrow all or most of the
value of the asset but get the return
off the entire asset not just the
money you put in. Let’s look at the
key benefits of property investment
in more detail:
When I have the conversation about
having a second investment strategy
and diversifying outside of their
businesses, the main reason for not
doing so is the perceived lack of time
and the belief that all resources need
to go into their business as that is
where the best returns are.
I agree that you need to put most of
your resources into your business.
1.Leverage
Leverage is when you buy an invest-
ment property using borrowed
money instead of using your own.
Leverage can accelerate your invest-
ment return as you get your return
based on the amount invested not
just the money you put it.
There are very few investments
where you can borrow as much as
you can against property as bankers
see it as one of the most secure types
of investments.