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In this new series, DSB will explore the benefits, strategies and advice to help you build your personal wealth, starting with an introduction to wealth creation and what it means for business owners.

In the world of small and medium business, being successful depends on planning, effective execution of strategy and taking opportunities. The same principles apply with wealth creation.

Planning & Strategy Execution

Just as an accountant or business consultant may provide advice and guidance to your business, an investment adviser will take you through the planning process, implement your strategies and help make the most of all opportunities. Advisers and financial planners working in stockbroking firms are best placed to help you develop, implement and monitor your investment strategies. Plus they offer the most direct access to a broad range of investments.

The planning process your investment adviser will take you through helps set short and long term goals and use a range of investment strategies to achieve those goals. Strategies are developed around the principles of saving tax, choosing the right investment structures, minimising risk and generating a large enough asset base to provide financial security. The strategies to save tax involve structuring salary, superannuation, investments and debt. Risk is minimised through the diversification of investments and monitoring portfolio performance.

Investment Opportunities

Active ImageInvestment opportunities present themselves in many ways to the investor. For example, many people take advantage of changing legislation, particularly relating to superannuation regulations and personal income tax schedules. And as these changes are often complex an investment adviser is essential if the opportunity is to be fully grasped.

Making the most of investment opportunities generally involves the right timing and allocation to the various asset classes. The major asset classes are cash, fixed interest, shares (Australian and international) and property, and within each asset class there are numerous individual product options to choose from.

For instance, the well publicised price falls in some residential property areas does not mean investment in other property sectors such as commercial and industrial is not timely. However as many businesses own their premises using a diversification strategy to minimise risk is usually a consideration.

Finding Value

As an asset class, the Australian and international stock markets have performed very strongly and many individual stocks have produced outstanding short, medium and long-term returns.

While there is always value to be found in stock markets, floats and capital raisings provide investors with an opportunity to enter the market (or increase the size of their existing holdings) in a relatively cost effective way. The large number of floats (Initial Public Offerings) and capital raisings in recent years have offered investors unprecedented access to businesses at the start of their lives as publicly listed companies. This trend will continue in 2006 and one of the high profile issues will be the sell down of the Federal Government’s remaining Telstra shares.

Creating personal wealth requires planning, successful strategy execution and review, and the ongoing advice of a professional investment adviser who can offer you direct access to all the investment opportunities. As in your business, you don’t have to go it alone.

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