Wednesday, June 30, 2010

Retirement Strategies 1 July 2010

An investment property in south west Brisbane awaiting landscaping (right)

I’ll PAY YOU $5,000 …

… for each successful referral that you generate.

For some time now I have been paying my private clients $1,000 for successful referrals, and $5,000 to professional referrals – such as accountants, solicitors etc.

My practice helps late career couples plan for 20-25 years of comfortable retirement, by addressing the elements of personal health, financial security, family & friends and a zest for living.

However my main income comes from sharing with private clients certified residential investment properties. The point of difference with my practice is that I focus on retirement outcomes and start by asking: who is the ideal tenant? secondly: what style of accommodation do these ideal tenants want? thirdly I constantly research – of the 35+ regional property markets across Australia - the best location (having regard to lowest land taxes, higher rents, forecast 10 year growth, and nearby diversified economic zones i.e. where there are stable jobs.)

Recently I was asking myself “How can I pour some petrol onto my lead generation?” and then – in a moment of unusual brilliance – I lit the match: “I’ll pay $5,000 to everyone”.

Now if I pay you $5,000 and keep the rest of my professional fees (paid by the property developer) inside my practice, my reasoning is that I’ll still be ahead as this is incremental to my established sources e.g. Google Adwords.

So feel free to find out more about joining me as a Referral Agent. (We could have a lot of fun together. And you could make a lot of money - this year, next year, every year.) Your role is simply to generate leads – I’ll do the rest.

Let me know if you want to know more – for example, when will you get paid? where is the deepest pool of prospects? and the address of the Facebook page where we’ll share our success.

Phone me – Bernard Kelly – anytime. My mobile is 0414 778 518 email
Australia’s Retirement Strategiest®


Now I’m not a Financial Advisor, but I am entitled to give you my personal views on how property investing works.

So let’s say you’re earning $80K pa and you purchase an investment property with a price tag of $400K.

However, as the tenant starts by paying you initially $320 per week and the taxman gives you back almost $10K every year, with rental increases in around seven years your will investment should be positively geared.

Which means your total out-of-pocket contributions i.e. the funds you personally invest, will be around $35K.

Now on the basis that “property doubles every ten years”, your gain in ten years time can be expected to be around $400K – so looking back you will realise that you have been making a gain of $40K each year.

So to my mind, the percentage return is 40/35 X 100 pa

Which is one of the reasons I like property.


I have cordial relations with a financial advisor, and when I was in his office the other day I noticed a new wall graph issued by BT, advocating – naturally – shares over property.

The story is that had you used $31,000 in 1993 to acquire an investment property with value $200,000 or buy a share portfolio, by late 2009 the property would have appreciated to $570,000 while the share portfolio would have moved up to $654,000.

Says the graph.

However in the real world, over a period of 16 years you could have at least ten investment properties – or perhaps you could be close to 707 houses just like those two school teachers did recently in the UK over 15 years. They ended up £240m ahead.

So I’ll be sticking to the real world – where with my very successful investment strategy, property outshines equities every time.

Let me know if you want me to send you the newspaper clippings of how those schoolteachers did it. Just hit the reply button for this email.


The popular press continues to run articles suggesting that house prices are moving out of the reach of first home buyers.

They probably are right, but is that really a problem?

To my mind we are probably transiting from the lifestyle of our parents to the lifestyles of our grandchildren.

Already one third of all housing in Australia is owned by investors, and that trend looks like it will continue.

After all, only 40% of households in Western Europe own their own homes, with 60% owned by investors. They think that’s normal – and I suspect we too will get to the same thinking, eventually.

So while houses in Australia may be becoming unaffordable for first home buyers, the demand will still be there from investors, so prices will continue to rise.


Once you have made your plan and developed goals something wonderful can happen – if you allow it to.

I’m referring to future visualisation!

I am a firm believer in the motivational books that say if you are aware of your goals and review them regularly the brain has a way of ensuring that they are achieved. (The reason why I am firm believer is that it happened to me!)

The reason is that the brain cannot distinguish between real and imagined.

So if you imagine sitting on the proverbial beach, with pleasant company, a glass of something cool beside you and a portfolio of investment properties, the brain will start to want it to happen because otherwise it will be in conflict with itself.

Let me know if I can help you explore your options. Email me – Bernard Kelly – anytime to


The Employee Benefit Research Institute has just released its report how Americans funded their retirement, based on their 2008 census.

It has some relevance to us here in Australia, because US government welfare is the largest source of income for those aged 65 and over.

While income in later years can be correlated closely with a prior career – the lowest retirement income is earned by blue collar workers, the highest by self employed professionals (who typically continue to work) – there is wide variation around such averages.

But while the report makes for interesting reading, what is quite startling is that 25.6% of total income for the cohort over 65 in the United States comes from earned income, and that 20.4% of persons over 65 are still working.

This indeed is worth serious reflection - if one quarter of total income for the cohort over 65 in the United States comes from earned income, and that 20.4% are still working, what is the significance of this for you personally, here in Australia?


For one reason, this is my practice. Unlike a salesman, I can’t just up and leave you and find another job.

And the continuing viability of my consultancy relies on your continuing goodwill, which only exists when everything that I promise comes to pass.

And as I’m only 66, I should be with you and your family for at least the next 14 years.

And then I share the financial risk with you. My warranty (“I’ll pay you the rent if you can’t find a tenant for more than four weeks during the first three years”) remains in place. But as this has only happened once during the past eight years, neither you nor I are at any real risk.

Feel free to contact me – Bernard Kelly – at any time. My mobile is 0414 778 518.


A recent study by Kiplinger Financial in the US (published 30 May 2010) reports that women are more concerned about their long term financial security than men are.

When asked “do you now expect to retire later than you did a year ago?” 62% of women said “yes”. For men it was 50%.

Responses to the question “Will you need to work in retirement to make ends meet?” 41% of women said yes, and 32% of men responded in the affirmative.

To the question “Will you have enough?” only 30% of women said “yes”, but it was 47% for men.

And finally “Will you need to cut back on your lifestyle?” 60% of women agreed, but only 52% of men.

This broadly agrees with what I have found here in Australia over the years. Women appear to think more deeply about how they will be able to spend their retirement.

I’m Bernard Kelly – Australia’s Retirement Strategiest


Once you’re into your 50s, reality starts to set in and you begin to realise that you don’t have enough for 20-25 years of comfortable retirement, and that the government pension may be woefully inadequate to maintain your lifestyle.

Of course, you can wait for the financial markets to breathe life back into your superannuation, but deep down, you know that there’s not enough in there for an heroic comeback.

And you can talk about saving more, but the problem is that it’s virtually impossible to save enough in the time you have left.

Now it occurs to me that virtually everybody is in the same boat, but it’s simply a topic that is never raised in conversation.

But think about it. The logical conclusion is that someone out there has a partial solution, but you don’t know who they are. And if you did know them, and they told you, their approach may only be a partial solution.

But it you made it a common topic of conversation, would that help?

The answer is probably “yes” because there would be more brain power turned on to the topic, and by being able to articulate the problem, your sub-conscious will be in there 24 X 7, seeking a solution.

Men’s health in our later years is now out from under the shadows.

Why not do the same with planning for our retirement?


If you and I swapped jobs, we would both make fundamental errors – simply because neither of us had any experience of what we are supposed to be doing in the new job.

Which is why many mistakes are made when someone decides to “invest in property”.

If a couple is doing it themselves, one of most common mistakes is to buy in their own suburb. These investors think that the ideal tenant is someone “just like us”, and secondly they don’t understand the loss depreciation write-offs (which translates into the loss of real dollars) when they buy an existing property.

And if a potential investor does go to a seminar, those people don’t have a knowledge framework to measure the presentation against. For example, they don’t know their loss every time a tenant leaves, they generally don’t learn about the body corporate fees and sinking fund levies, and they definitely know nothing about an exit strategy. So they become convinced that an inner city apartment is the best investment (when actually it's almost the worst).

The list goes on.

However, by these fortnightly updates from you will over time acquire an education in property investment, that you can use for yourself, or share with family, peers and workmates.

And in the process, you will be building your wealth in property, through a sound educational knowledge base.


I’ll be at the Melbourne Retirement & Lifestyle Expo at the Caulfield Racecourse 10-12 September.

And also at the Leisure & Lifestyle Expo in Perth (Claremont Showgrounds) 29-31 October.

I look forward to meeting you if you can make either event.


Some kind people want to pay me for this service.

Feel free to go to my membership site and pay $110 for a full membership

About Bernard Kelly:

Bernard Kelly BEcon MBA CRPC Australia’s Retirement Strategist®, is a highly sought-after advisor, retirement authority, thought-leader, author and radio commentator because he makes the complicated and mundane topics of investing and retirement fun! Bernard has over 20 years experience providing families with financial thought. He is the author of Live Your Dreams in Retirement, Property Investing for Couples, Goolwa by Breakfast and Raising Decent Kids into Substantial Wealth and publishes a fortnightly newsletter that reaches thousands of subscribers worldwide.

19 Prospect Street, Box Hill 3128 Australia. Tel 61-3-9899 8577 mobile 0414 778 518



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