Baby, it's you

Guess who's the greatest threat to you ever becoming wealthy? The bank manager? The Australian Tax Office? Treasurer Peter Costello?

No, it's you and that's why I try to share with you the secrets of the financially successful, to knock you into better money shape.

Why put it off?
For starters, we and that includes you, are generally procrastinators and so we put off the program to lift our game in many areas of self-improvement. We're poor at losing weight, getting fit, sorting out our emotional and relationship problems. And of course, we are chaotic when it comes to money or wealth-building decisions.

Spreading the investments
Recently, I read the comments of a private-client research head at a leading financial institution who was quite frank about a lot of investors.

He bagged people who stick with one asset class. That is, if you only play Australian shares or property he put you in the "fool" class. He also gave you the same tag if you only punted your wealth in one country.

He also let rip at people who relied on historical performance for selecting funds or assets. Many agree with him that past performance might be misleading for the future.

The power of one
That said there are some funds, which have put up such a great track record for a long time, that they are hard to write off. Perpetual's Australian Industrial Share fund has not produced a negative return in something like 23 years.

On the other hand, because shares have done so well since March 2003 and property has gone for a slide in most states since that year, it makes sense that this asset class has upside over the next few years.

The Rachel Hunter theory
Economists like yours truly have a fascination with models that show insights into economic and business matters and one model who taught me a bit was Rachel Hunter!

In reference to a hair care product's promise to rejuvenate one's hair, she reminded us: "It won't happen overnight but it will happen."

That is a powerful moneymaking lesson for a time like now in the respective asset cycles of shares and property.

Buying against the herd
You see the people who went into shares in 2002 bought cheaply and looked like losers for a year but by 2003 things started to look up. Similarly, I bet many who have bought or will buy property this year will feel a bit like the 2002 share buyers.
However, by 2008 or 2009 they will be on better terms with themselves and their bank balances.

Spreading the risk
Okay, that's the lesson on timing and different asset classes, as well as the benefits of having a number of asset classes in your investment portfolio. As one goes off the boil, the other will take over to keep average returns at least around the 8 per cent mark.

With better management, I reckon you can do better but that takes discipline, research and a professional commitment to wanting to make money.

The greatest losers
It's like sticking to a diet and getting fit, it involves you understanding stuff - stuff that changes the you that got yourself fat or unfit.

What winners do
If you are toying with the idea of buying property ahead of some improved prices in upcoming years make sure you learn what insiders know about buying right.

Switzer's tips
Make sure you research the areas that historically have strong growth and have big demand from tenants. Know how to buy the safe way, using the tax system to the max and getting the most out of the new mortgage world ensuring you borrow at the best rates.

You have to become a professional property player to get the most out of your investment strategy. The same applies to your share buying or investing in funds.

So, where will you find all of this valuable, money life changing information? Right here of course!

Click here to visit Peter Switzer's website