The following article is contributed by guest writer, Adam Boyer from Morgans Financial Limited.
Congratulations! You’re getting ahead on your mortgage, and you’re wondering what to do with your extra funds. As a business owner, you have several investment options that could help grow your wealth.
Paying off your mortgage early is a smart move. By reducing your mortgage debt, you’ll save thousands of dollars in interest charges over the life of your loan. More cash flow allows you to invest in other asset to build a better future for you and your family.
So how can you leverage your hard-earned cash flow through investing?
As a business owner, particularly in the building and construction industry, you may have a competitive advantage when it comes to investing in property. You understand the market and can use your knowledge to identify undervalued properties that have the potential for high returns.
Investments in the South-East Queensland market may also benefit from the upcoming 2032 Olympic games, which seems to have been overshadowed by rising interest rates as an investment theme.
Investing in property requires a significant amount of capital, and you also need to carefully consider the amount of debt you can take onboard in funding a property purchase. Borrowing to invest can increase your expected return, but also with certain risks, such as interest rates, periods of vacancy, and property damage.
Investing in shares or managed funds can be an excellent way to diversify your portfolio and potentially earn high returns. The Australian market has a wide range of investments options available, including blue-chip stocks, exchange-traded funds (ETFs), and index funds.
Investing in shares and managed funds also comes with risks, such as market volatility and economic uncertainty so should only be considered with longer-term goals in mind.
As a business owner, you may have focused solely on the growth of your business in past years to generate the level of income you have now. Despite Government tinkering in recent years, superannuation remains the most attractive vehicle for contributing and investing your retirement savings and should be considered as an attractive option at this point.
You may also wish to consider a self-managed superannuation fund (SMSF). This allows you to take control of your retirement savings and potentially earn higher returns than traditional super funds. Managing your own super fund requires time and expertise, and there are strict rules and regulations to follow, but also professional assistance available from your advisers.
Your business may be your largest, and highest returning investment to date, and you could use your extra funds to invest in further growth, such as upgrading equipment or expanding your services. This can help increase your revenue and profits over time, and potentially increase the saleable value of your business. Investing in your own business also comes with risks, such as market saturation and economic downturns.
Being ahead on your mortgage is a great achievement that opens up new investment opportunities. When deciding how to invest your extra funds, it’s important to consider your personal financial goals, risk tolerance, and investment timeframe. Considering your options and working with a financial advisor, you can make informed investment decisions to create a personalised investment plan that will help grow your wealth and secure the financial future for yourself and your family.
If you’d like to set up a time to discuss your personal circumstances and discuss any of the content in this article, you can reach out to:
Adam Boyer BCom CFP®
Private Client Adviser | Authorised Representative 001242822
[email protected]
Direct: 07 3114 8626 | Mobile: 0410 792 820
IMPORTANT DISCLAIMER: This article is for general information only and should not be used or relied on to make specific investment decisions. This information has been provided in full by Morgans Financial Limited ABN 49 010 669 726 | AFSL 235410. Xact Accounting refer our clients to Adam and the team at Morgans for investment advice from time to time. We do not receive commissions or payment in any form for doing so. Whilst we are not licenced to provide investment advice we like our clients to be looked after so are happy to refer them to licenced experts like Adam.
