On a recent trip to Adelaide, South Australia, I had the luxury of being able to spend two hours reading the weekend financial review at breakfast.

An article caught my eye, ” Having a lend – lighter rules throw borrowers to the sharks”. It talks about being asset rich and income poor, and explains the case of Sally, a retired lawyer having problems associated with being asset rich and income poor.  Sally has $3 million dollars worth of property, however was last year knocked back when wanting to borrow $300,000 to renovate one her properties due to new regulations.  The focus has now changed and the ability of being able to repay loans through income versus using assets as backing is no longer an option.    Changes are now opening up avenues for finance brokers to offer, other less desirable options of borrowing funds.

This problem is not a new problem for many Australian’s.  An article attached from November 2004  “Senior Role for Jeff” quoting Jeff Kennett about the issue with the introduction of reverse mortgages for older Australians’ . Jeff is also chairperson of Beyond Blue, a depression initiative,  states  “One of the trends that I have picked up is that people, as they get older, find themselves stressed and suffering anxiety because they are asset-rich and income-poor”  This is due to the fact that having that having these assets does not give them the flexibility of being able to do what they want to do, when they want to do it…

Our main objective at Income Solutions  is to help our clients create a consistent and reliable, truly passive, tax-effective, and increasing income stream which is large enough for them to enjoy the lifestyle of their choice. Our information evening “Common Sense Financial Planning” also breaks down the asset classes – cash, property and shares and which over the long term provides the most income.

Please continue to concentrate on building a wonderful income stream from your career to gain long term independence for a worry free retirement

By David Ramsay