Journey to financial freedomJourney to financial freedom

The Cold, Hard Facts about South The Cold, Hard Facts about South Africans financial fitnessAfricans financial fitness

What the rich teach their childrenWhat the rich teach their children

Property as Investment VehicleProperty as Investment Vehicle

AGENDAAGENDA

Over 74% of South African families spend more Over 74% of South African families spend more than they earn. than they earn.

((Source: SA Reserve BankSource: SA Reserve Bank).).

Debt-to-Income Ratio 82% Debt-to-Income Ratio 82% (Source: IOL July 2008)(Source: IOL July 2008)

February 2008 February 2008 –– 60 920 civil judgments amounting 60 920 civil judgments amounting to R560.7million to R560.7million

((Source: Stats SASource: Stats SA))

THE COLD HARD FACTSTHE COLD HARD FACTS

Credit card debt (Banks, Discovery)Credit card debt (Banks, Discovery) Retail Accounts (Edgars,Woolies)Retail Accounts (Edgars,Woolies)

OverdraftsOverdrafts Personal loansPersonal loans Hire purchaseHire purchase BondsBonds

THE COLD HARD FACTSTHE COLD HARD FACTS

Economic CyclesEconomic Cycles

0

10

20

30

40

50

60

J71-A72

S72-A74

S74-D77

J78-A81

S81-M83

A83-JUN84

J84-M86

A86-F89

M89-MY93

J93-N96 D96-

Dow n

Up

Dow n

UP

Dow n

UP

Dow n

Up

Dow n

Up

WHAT THE RICH TEACH THEIR KIDS WHAT THE RICH TEACH THEIR KIDS ABOUT MONEY ABOUT MONEY

AND AND

WHAT THE POOR AND MIDDLE CLASS WHAT THE POOR AND MIDDLE CLASS DON’TDON’T

Proverbs 22:6-7Proverbs 22:6-7

V6V6. . Train up a child in the way he Train up a child in the way he should go and when he is old he will should go and when he is old he will not depart from itnot depart from it

V7V7. . The rich rule over the poor, and the The rich rule over the poor, and the borrower is a servant to the lenderborrower is a servant to the lender

Master the “fundamentals” Master the “fundamentals” of wealth creation so that of wealth creation so that they have a foundation upon they have a foundation upon which to build a financial which to build a financial future.future.

• Invest money (Story Of Roy)Invest money (Story Of Roy)

• Don’t work for money, let money work for youDon’t work for money, let money work for you

• Financial Literacy – Get to know the money gameFinancial Literacy – Get to know the money game• • Mind your own businessMind your own business

• Learn the history of taxes and the power of corporationsLearn the history of taxes and the power of corporations

• Work to learn-don’t work for moneyWork to learn-don’t work for money

• Learn to SellLearn to Sell

• Manage your cash flowManage your cash flow

Rich Lessons

Rich Lesson: The Rich Don’t work for moneyThe Rich Don’t work for money

AssetAsset LiabilityLiability

Cash flow Pattern of the Cash flow Pattern of the POORPOOR

Cash flow Pattern of the Cash flow Pattern of the MIDDLE CLASSMIDDLE CLASS

Cash flow Pattern of the Cash flow Pattern of the RICHRICH

PropertyProperty as an as an Investment Investment

VehicleVehicle

Property as an Property as an Investment VehicleInvestment Vehicle

There are no silver bullets or Get There are no silver bullets or Get Rich Quick SchemesRich Quick Schemes

No investment is better than No investment is better than another. Investments are only another. Investments are only vehiclesvehicles

There are no “good investments” There are no “good investments” only “good investors”only “good investors”

What do you need to know to What do you need to know to play the game?play the game?

If I had 4 hours to cut down a tree I If I had 4 hours to cut down a tree I would spend 3 hour sharpening would spend 3 hour sharpening

my ax my ax ((Abraham LincolnAbraham Lincoln))

The Internal JourneyThe Internal Journey

Be… Be…

Do… Do…

HaveHave

Rich Lesson: Rich Lesson: Mind Your Own BusinessMind Your Own Business

CASHFLOW Quadrant CASHFLOW Quadrant

Employees (E) and Self-employed (S) individuals -Left

Business Owners (B) and Investors - Right

Creating a TeamCreating a Team

AttorneyAttorneyEstate AgentEstate AgentAccountantAccountant

Bond OriginatorBond Originator

Bank ManagerBank Manager

Money always Money always follows follows Management Management..

The Seven Myths of The Seven Myths of Real Estate InvestingReal Estate Investing

Myth #1Myth #1You have to be Wealthy You have to be Wealthy to invest in Real Estateto invest in Real Estate

Myth #2Myth #2You Need to Start You Need to Start

Small – Small – Big Deals Are Too Big Deals Are Too

RiskyRisky

Myth #3Myth #3

You Can “Flip” Your Way You Can “Flip” Your Way to Successto Success

or or Get Rich Quick With No Get Rich Quick With No

Money DownMoney Down

Myth #4Myth #4Some People Just Some People Just

Have the Midas Touch Have the Midas Touch

Myth #5Myth #5You Have to Know You Have to Know

Somebody Somebody to Get Going in This to Get Going in This

Business Business

Myth #6Myth #6You Have to Be a You Have to Be a

Seasoned Negotiator and Seasoned Negotiator and Businessperson Businessperson

Myth #7Myth #7You Have to Know a Lot You Have to Know a Lot

About Real Estate About Real Estate