Pivot Wealth’s Ben Nash said a few ‘small-but-meaningful shifts’ helped boost one Aussie couple’s retirement assets and cut their tax bill. (Source: Getty\/Ben Nash) <\/p>\n
Kyle and Karen were a young couple in their late 30\u2019s, living in Sydney\u2019s inner west with two young children. On the surface, they were doing all the right things – growing their incomes, saving consistently, and chipping away at their mortgage<\/a>. But they weren\u2019t getting ahead in the way they wanted.<\/p>\n Kyle and Karen were emerging from the financial cash crunch that comes with having children – years of parental leave, part-time work, and childcare costs<\/a> piled on top. But now with a bit more financial breathing room, they could see the opportunity.<\/p>\n From our first conversation, it became clear they were missing some fairly major opportunities to get more out of their money.<\/p>\n Within a year, by making a few small-but-meaningful shifts, they\u2019d cut their tax bill by over $18,000 per annum \u2014 and set themselves up to build an extra $600,000 in investments by age 65.<\/p>\n RELATED<\/p>\n Kyle and Karen\u2019s financial playbook looked pretty similar to a lot of people.<\/p>\n They\u2019d slightly stretched themselves early to buy a family home<\/a> (with some help from the bank of mum and dad<\/a>), and parked some savings aside for a renovation they\u2019d been planning for years.<\/p>\n And there\u2019s nothing wrong with this \u2014 but focusing only on their home meant they\u2019d ignored the bigger investment building levers.<\/p>\n Renovating their home<\/a> would have felt great and given them some emotional wins, but it would have actually pushed them further away from financial security.<\/p>\n Tip: Don\u2019t assess your money moves in isolation. A renovation, investment, or anything else might look \u2018smart\u2019 on its own \u2014 but you need to see how each of these options fits with your broader financial trajectory.<\/p>\n Kyle and Karen didn\u2019t really have any meaningful investments<\/a> outside their own home.<\/p>\n Their plan was to get their mortgage down first, and then start investing \u2018one day\u2019 in the future.<\/p>\n But by delaying, they\u2019d already missed out on years of compounding growth<\/a> – and were about to miss out on years more.<\/p>\n Once they saw the bigger picture, they pressed pause on their renovation and redirected savings into income-producing investments instead, so they could start the process of replacing their salary with investment income<\/a>.<\/p>\n That one choice alone set them up for hundreds of thousands more over the long term.<\/p>\n Tip: Start investing early \u2014 maybe even earlier than feels comfortable. Even a modest level of investing in your 30\u2019s and 40\u2019s can grow significantly by the time you\u2019re getting ready to retire.<\/p>\n When we first talked about buying an investment property<\/a>, Kyle and Karen told me they thought it wouldn\u2019t have been possible.<\/p>\n Their mortgage broker had told them previously that the bank wouldn\u2019t lend them any more money.<\/p>\n This seemed a little strange to me, given they seemed to be in a reasonably strong position, so I checked in with one of our internal mortgage brokers \u2014 and they were able to secure a mortgage pre-approval, which allowed Kyle and Karen to purchase a quality investment property<\/a>.<\/p>\n At the same time, they were able to cut 0.65 per cent of their existing mortgage interest rate, generating over $4,500 in savings over the next 12 months alone.<\/p>\n The timing of this was slightly fortunate \u2014 they bought just before an uptick in Sydney property values<\/a>, which gave them a solid equity boost that could be leveraged later \u2014 and in the meantime, the tax deductions<\/a> from their negatively geared investment property started rolling in.<\/p>\n This, in turn, meant an increase to the cash they had available for further investing.<\/p>\n Tip: If one bank or broker says no, it doesn\u2019t always mean no. A quality broker will be able to find good solutions where others may not \u2014 this is why it\u2019s so important to have solid professionals in your corner.<\/p>\n Kyle and Karen were already saving well, but not quite enough to hit their most important longer-term lifestyle goals.<\/p>\n Like many people, they\u2019d assumed a decent monthly savings figure<\/a> meant they were \u2018doing well\u2019.<\/p>\n But running the numbers showed them this wasn\u2019t quite true.<\/p>\n They needed to save a bit more now to reach their target future income in the timeframe they wanted.<\/p>\n By trimming some short-term spending, Kyle and Karen increased their savings rate<\/a> without any drastic sacrifices, and created a path that would take them to where they wanted to be.<\/p>\n Tip: It\u2019s important you test your savings rate against your actual goals. Saving \u2018a good amount\u2019 might feel good, but without crunching the numbers (or having someone do it for you) you won\u2019t know if it’s really enough.<\/p>\n Being time poor and juggling careers and young kids, Kyle and Karen used a property buyer\u2019s agent to source and negotiate on their investment property<\/a>.<\/p>\n This wasn\u2019t just a convenience \u2014 it allowed them to buy their property faster, and given how quickly the property market rose after their purchase, moving quickly made a big difference to their bottom-line returns.<\/p>\n Tip: Outsourcing can easily pay for itself when you get this right. Whether it\u2019s a property buyer, financial adviser, or accountant, quality professionals can help you get better results faster – which is one of the most important elements when it comes to your money and investing.<\/p>\n In just 12 months, Kyle and Karen shifted their focus from short-term, \u2018feel good\u2019 moves to long-term asset building and wealth creation. They cut their tax bill<\/a>, increased their savings rate, and bought a quality investment property that set them up for even more growth ahead.<\/p>\n The biggest lesson for this couple was that success with money isn\u2019t about just blindly following conventional \u2018wisdom\u2019. It\u2019s about stepping back, mapping out all the moving parts, and making decisions based on the numbers.<\/p>\n For Kyle and Karen, that clarity added up to more than $600,000 in extra projected assets. For you, it might mean something different – but the principle is the same. Step back, set up your plan, and let the numbers guide your choices.<\/p>\n Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth<\/a>. Ben\u2019s new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon<\/a> | Audiobook<\/a>.<\/p>\n If you want some help with your money and investing, you can book a call with Pivot Wealth here<\/a>.<\/p>\n Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n Kyle and Karen opted to redirect their savings into income-producing assets, purchasing an investment property. (Source: Getty) <\/p>\n
The couple also cuct their short-term spending. (Source: Getty) <\/p>\n