Page 61 - Smart Money

CHAPTER 3

Investing in your future

When considering your future, buying a second home as an investment
property is probably the most popular thing to do. Once you have an
investment property, you can build equity in it and use that to buy another
property. Most people also use their owner-occupied home, which holds
most of the equity, to cross-collateralise and buy something else. Or you
could buy commercial properties.

If you buy an investment property, you can stay in your job and lease it out,
or you could do what we call a business expansion. Business expansion
could mean buying a commercial property and instead of renting it out,
using it for your own business. Or it could mean borrowing money to
expand your business, because not everyone has enough cash flow or cash
upfront to do so. For example, if you already own one franchise cake
shop, you might buy another and have two franchises.

Equipment finance is another form of investment. You could expand your
business by buying bigger machinery which allows you to expand and
diversify so you can produce other things and make more money.

And lastly, buying properties through a Self-Managed Super Fund
(SMSF) also seems to be more popular now. You can buy residential
or commercial property using an SMSF, and although there are lots of