What’s your financial future?

By Jo Chivers

“Hey Jeff, just wanted to let you know that I’ve transferred some money into my super account, can you tell me the best place to invest it right now within the fund?” This was a question I asked of my financial planner yesterday. It was that time of year when I had to make the obligatory transfer of money into my managed super account to meet requirements as an employer (to myself). Each year I struggle with this...transferring cash into my super then watching it disappear into the deep, dark hole of the managed super fund then opening my bi yearly statement to see it has disintegrated!

Jeff said “well Australian equities are good buying right now (translation: because the market is so crap), so we’ll just put it in there.” So that’s what we did, dumped some money into shares and I will now await my statement to see how that investment performs.

My next question for Jeff was, “how far out of retirement should we start moving money out of the more risky areas and into the safe havens or defensive stocks?” Whilst I’m not at that age yet, I don’t want to end up like a lot of retirees at the moment who have lost buckets of their retirement funds in the poorly performing share market because they were caught out with the impact the GFC had on their super. They’ve been forced back to work or to rely on the government pension. Jeff recommended that we should look at transferring into the safer areas, such as Cash about 10 years before you are looking to retire. Wow, so for 10 years we have to cop a low return on our money just to play it safe? The alternative is to run the risk or losing a fair chunk of it.

Gosh, a lot can happen in 10 years in property, I thought.

Reading my mind, Jeff said, “Jo, with your experience in property why don’t you set up a Self Managed Super Fund and then you can just invest in property.” He thought that to be a really good bet. The fact that I’m already holding a substantial amount of property didn’t seem to faze him but I always thought it best to diversify.

So I thought this an interesting topic to ponder on today....just how much property do we need to retire comfortably on? I picked up my favourite property magazine and saw on the cover the headline “Retire Richer and Sooner” ok what have they got to say?

Their headline story was titled “Get Rich from Regional Australia”. Of the nine regional towns they highlighted as having the best capital growth potential, two were from the Hunter Region of NSW. Property Bloom tracks the long term growth of suburbs we develop in. I pulled up my graph on a particular town that I just had Residex update for me. I track the quarterly median value and the volume of sales in this postcode. There was a very nice upward trend with varying degrees of peaks since March 1996 when I started the tracking. I personally bought into this particular town in 2001. Looking back over the past 10 years I saw the median price was $114,500 in March 2002 and in March 2012 it was $250,268. It had grown 119% in this 10 year period.

119%...says it all really. I know where I’m putting my retirement funds.

My retirement strategy is to buy and hold but with one very important twist and that is to add value. The property I purchased in 2001 in this town has increased by 119% but I also renovated and developed the land, adding more dwellings so the yield on this property is also very high.

Property Bloom is always looking at development strategies that will add value, increase yield and create equity. We have one very new strategy that we are adding to our portfolio now that will see clients make an 8% yield on an affordable investment. It will also give good depreciation for those still working. The NSW government are also helping us with this strategy by throwing in $5,000 as they see the need to boost housing in this state. If you’d like to hear more about this growth strategy then let me know, I’ll be covering it in more detail on Property Observer soon. It just might be what you need to boost your retirement fund.

“I was bitten by the property bug, there was no turning back.”

Jo Chivers proves that women can indeed have it all- a career that you are passionate about and a family.  While all of this sounds great, it does require hard work, dedication, perseverance and a bit of risk-taking.

Jo’s love of property development inspired her to leave her corporate career and pursue her true passion. After educating herself in property investing, she started building up her own property portfolio. After purchasing a few blue chip properties in Sydney, she soon realised how negatively geared they were and began researching outside of Sydney. She discovered a more affordable, large region of NSW where she completed her first property development.  Soon her friends were asking her to find them sites and manage their developments. 

She realised there was a need for an all encompassing project management service and her business Property Bloom™ was born.  Ten years down the track, she has developed over 60 properties for clients, creating literally hundreds of thousands of dollars in equity and high end yields.