The 3 Ways You Can Reduce Financial Risk in Your Life… & Why We Recommend No. 3 the Most!
A lot of Australians are in a situation with their home loan where a potential loss of income or steep rises in interest rates can be quite terrifying and daunting, with the thought of losing the house always looming.
A lot of us feel like we are right on the edge!
I am going to discuss how you can structure investment properties to help reduce that risk factor and live with peace of mind.
Many Australians are living on a treadmill where the loss of 2-3 months of income could be the difference between keeping their home and having to sell.
So, if you’re out of work or if you have an accidental fall, you can be insured against those. But the reality is even in those cases there is a major risk facing most Australian families that if something goes really wrong- they could lose their home.
A typical thought process is “If something happens to me I will just have to go to the bank and borrow money against the house”
The problem is if you’re out of work at that time, the bank won’t lend you any more money.
1. So, one way around that is to try and reduce the home loan. Right?
2.Or you could try and create some other assets so that if push comes to shove, you’ve got something else to sell.
3.BUT the 3rd way and the way we operate is to create these very large buffers so that you don’t have to sell the house. You don’t have to sell the investment properties. You’ve got big financial buffers that you create so you don’t have to go to extreme lengths.
There’s just money available that you can use to pay for those things! What a concept.
Typically you start out with 3 months of income buffer. And what we do is bring that out to about 12 months over a period of 4 or 5 years.
It’s a really substantial comfort to have that sort of thing in place. So, for someone who can see that there’s assets growing there, the home loan is going down and I’m creating this very large safety buffer, it’s a much better position for the average person to be in.
If you’d like to find out more about structuring your investment properties so you’ve got that buffer in your own home loan and can take a little bit of that risk and pressure off, don’t hesitate to contact our team here at Profitable Investment Concepts.
