As published in The Q Review Spring 2020 Magazine.  Follow the link to Subscribe and receive your FREE copy each quarter!

The CapitalQ Team have recently been assessing the common characteristics of the affairs of our most financially successful Community Members.

We have assisted hundreds, probably thousands, of West Australians, plus some interstate Australians and a number from overseas, during the 15 years of CapitalQ’s operations. And of course, there were many more clients in Duncan’s various roles prior to starting this business.

So our Team have just about seen it all.

From those who have never, and due to their inaction will likely never, achieve financial comfort and peace of mind…

To those who thought they were doing well, but who neglected certain areas, and then an unexpected (though often not unforeseeable) event brought it all undone…

To those who have methodically worked and planned and thought ahead, who therefore have avoided disaster, who enjoy the journey and who ultimately achieve and maintain a stress-free lifestyle of their design (though no billionaires yet, were still working on that one)!

Of those in the final category, we believe we have identified six primary characteristics of their financial affairs, that just about anyone can mimic in order to maximise their chances of achieving financial success…

1. A fulfilling, reliable, growing Income Source, that they have control over

The majority of the time this means owning and operating one or more successful businesses, though there are many of you who achieve this via employment careers.

The key seems to be that they harness their best skills in order to generate a good income, while ensuring they remain stimulated by their work and that they consistently upskill to avoid ever becoming obsolete.

They also stay nimble, recognising in advance when an income source is at risk, and ensuring they don’t fall victim to inevitable change.

2. Primarily Tax Deductible Debt maintained within a conservative Loan to Asset value ratio

Debt is unfortunately a part of modern life.

It is very difficult to build real wealth, or to enjoy some of the finer things in life at an age that is palatable, without using debt.

The key is to ensure that your debt is primarily used for wealth building, not short-term gratification, and that it is never permitted to exceed a manageable loan to asset ratio, or for that matter interest to income ratio.

It must also always be coming down, unless being increased for a specific wealth building purpose, with a pre-planned strategy to repay the increase as quickly as possible.

3. Adequate Personal Insurances covering all of the key risks, maintained even when it is tempting to avoid the cost

Insurances can sometimes be controversial, and many look at the cost and deem it too high or just unnecessary.

However, the fact is virtually all of us at some point in time will suffer a setback which, if not adequately prepared for, will put an end to all our best laid plans.

When we mention insurance, most think Life Insurance.

Life Insurance can be very important for those with families who want to provide for their loved ones’ futures in the event of their untimely demise.

But for most, there are other insurances that could arguably be considered much more important, giving you a chance to still achieve your goals despite health concerns, and ensuring you do not become an unnecessary burden to those who care for you.

Trauma Insurance ensures a short-term health scare doesn’t leave your goals out of reach unnecessarily.

The peace of mind and financial security it can provide in such circumstances can also go a long way in supporting your recovery.

Income Protection Insurance ensures even a long-term loss of earning ability doesn’t have to mean bankruptcy and a life on social security.

Total and Permanent Disability Insurance means that when you will already be physically reliant on others, at least financially you have the means to provide for yourself.

Watch out for Part 2 in coming weeks…