Step 4 Acquire Assets

Now the fun starts. You’ve taken control, you’ve started getting an education and you’re connecting with like-minded people. That’s all very lovely, but the rubber only hits the road when you start accumulating wealth. And that means moving to step four – acquire some assets.

How you acquire assets to give you both income and capital gains very much depends on where you’re starting from. If you’re a complete beginner, it’s a case of taking a careful look at your income and outgoings and seeing where you can make some cuts to free up some cash. But be careful. Don’t turn this into the financial equivalent of a crash diet. If you deny yourself every little luxury you’ll never sustain it. Instead, play with your own psychology to form a powerful habit. Here’s how:

1. Open a separate bank account and call it ‘Your Name’ Wealth Account eg Graham Rowan Wealth Account. Make it a bank you don’t normally go to that has a physical branch that’s easily accessible.

2. Decide a percentage of your income that you’re going to save. I suggest a minimum of ten per cent whatever your age, rising to twenty per cent plus if you’re in your forties or fifties

3. Every time you are paid, walk into the bank and deposit that percentage of your income. And I mean every time. If you’re paid monthly, it’s a monthly visit to the bank. You get a quarterly bonus as well? Add another four visits each year. You own a business? Every time you take salary or dividends, off you trot to top up your Wealth Account. I call it the Walk of Wealth. Yes, you could do it online but trust me, it doesn’t have the same psychological effect as making a physical detour solely to add to your personal wealth.

4. Notice how quickly the account balance increases. Notice how your Walk of Wealth turns into a swagger. The only downside is the pathetic return on investment you’re getting – probably between 0.1% and 0.3%. Don’t worry, the cash won’t be here for long.

5. Once you get to ten thousand pounds the world of investing starts to open up to you. You can invest through a tax wrapper like an ISA. If you’ve been a member of Elite Investor Club and made a couple of investments in unlisted companies through a platform like Crowdcube, you also open up the world of unregulated investments with returns in the eight to twelve per cent per annum range.

But what if you already have funds sitting in a savings account, or in your company? We have property and land based investments starting at as little as eight thousand pounds with returns from ten per cent a year to forty per cent in two years*.

But to gain access to the full range of available investments you now need to satisfy one of two conditions from the Financial Conduct Authority – to be a High Net Worth individual or a Sophisticated Investor. High Net Worth – this means you earn a hundred thousand pounds a year or you have investable assets of two hundred and fifty thousand pounds outside of your main home and pension Sophisticated Investor – either you have been certified as such by a regulated adviser, or you are a director of a company with a turnover of a million pounds plus, or you are a member of Elite Investor Club for six months and make two investments in unlisted companies (eg via the Crowdcube site where you can invest as little as fifty quid).

Either of these qualifications opens up our full portfolio to you including bonds and loan notes that offer anything from eight to fourteen per cent a year with strong security, usually against property related assets. Can you see how your wealth will grow with assets like these? One of our most popular investments, dementia care homes suites, can throw off nearly six thousand pounds a year. Just five suites costing less than three hundred K would produce £30,000 a year in entirely passive income. That’s a higher income than you could buy with a conventional annuity if you had the maximum allowable pension pot of a million pounds! And you still own the assets without handing your hard earned cash to the annuity provider and hoping you live long enough to make it worthwhile.

We have a whole range of investments that give returns from 8% over one year to forty per cent over two years*. Imagine how those kind of returns could supercharge your net worth. And it’s all entirely passive income. Once you’ve signed the paperwork and transferred the funds, there’s nothing to do but sit back and wait for the money to arrive in your bank account. Only by acquiring a portfolio of income generating assets can you hope to achieve genuine financial independence. But there’s one critical area of wealth creation that we haven’t covered yet – In the next episode I’ll show you the best way to give your wealth a massive boost – building (and selling) businesses. See you soon!

  • Please note this is out-dated information which is no longer accurate