If you ask an Australian what their lifelong dream is, they will likely reply that they want to be financially free before they retire. Regardless of how each person defines financial freedom, their wealth creation strategy often consists of one, very similar goal – to own their own home.
As a nation, our desire to own our own home has been passed down through numerous generations. Some of you may recognise it as “The Great Australian Dream.”
Consequently, most of us believe that owning our own homes is the best strategy, if not the only strategy, to achieving financial freedom. But, is this actually the case?
Let’s take a look at “The Great Australian Dream” in context.
The Life Cycle
Since our childhood, most of us have been coached to follow the below steps as a strategy to achieve financial freedom:
1. Do well at school to get accepted into further education
2. Do well at university or college to open up career opportunities
3. Get a good job that allows you to save a deposit for your own home
4. Work hard to increase your position and income
5. Keep working so you can pay off your 30-year loan
6. Re-finance to renovate or buy a bigger home
7. Keep working into your late 50’s and 60’s to pay off the loan
8. Finally, own your own home and retire
But are you financially free?
Why “The Great Australian Dream” is flawed
Did you know that only 9.1% of Australians retire self-funding? With 42% of baby boomers expecting to work into their seventies.
These statistics are concerning. Here’s the problem.
“The Great Australian Dream” has a very narrow and linear focus towards achieving financial freedom. Additionally, it has only one endpoint – owning your home.
Despite our emotional attachment to the concept of “The Great Australian Dream”, those who aim to realise it are not guaranteed financial freedom. Instead they often find themselves struggling to pay off their mortgage before retirement. Here’s why.
By following this strategy, numerous Australians (like you and me), continue to spiral downwards until finally realising that despite their frequent repayments, they are still too deep in debt by their 60’s to retire.
They have bought a house which is either 1) Too big, meaning that eventually, they will need to sell and downsize, or 2) The outstanding mortgage is too great, and they can no longer afford the repayments. Their dream of once having their house paid off before retirement has vanished; now seeming unachievable.
Some of you may relate to this situation, and that’s ok – we’ve all been there one way or another.
For others, it may come as a bit of shock.
The main thing to keep in mind is that you don’t have to get stuck in this negative cycle; spending the rest of your life repaying your mortgage.
Achieving Wealth Is Not a Linear Process
In contradiction to what we have been taught, achieving financial freedom is not usually a linear process. There are many areas that need to be taken into consideration.
To achieve wealth, you should be considering a selection, if not all, of the following:
- Developing your knowledge
- Creating a plan
- Budgeting your money
- Diversifying & accumulating assets
- Implementing a Chain Reaction Strategy
- Protecting yourself financially with insurance
- Creating multiple sources of passive income
- Having your money working hardest for you
- Taking action early in your lifetime to reap the rewards later on
So, is owning your home the best strategy to achieve financial freedom?
Well, no. Not necessarily.
At Infinite Wealth, we provide the education, direction and on-going support for everyday hardworking Australians to reach their financial goals. Whether they be home ownership, travel and lifestyle, or early retirement.
If you are interested in developing your wealth, join us for a FREE one-hour Planning & Strategy Session. This session is an extraordinary tool that will allow you to see how you’re currently tracking financially and what is possible for your future.
Using our sophisticated software, one of our specialist Client Managers will walk you through reliable, affordable and tested strategies based on the fundamental and unchanging principles of creating wealth.
The Planning & Strategy Session will give you a much clearer pathway to achieve your financial goals and live the life you really deserve.
The most important time is now. So, what are you waiting for?