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How to build wealth

This article is part of a fictional case study series following "Sarah", a typical first home buyer in Victoria. Read each article to follow "Sarah" through a variety of articles exploring issues related to buying a home.

After a while, Sarah grew a little tired of telling people she was going to buy a house. She got to thinking, what's this all about? What's the purpose of buying a house in the first place?

Well, not only is living in a paid-off home the dream, but it's actually the first step in building wealth.

Building wealth over time is something that any first home owner should be concerned with. A home is just one part of the equation, but so is savvy investing, superannuation, and other decisions you can make to build wealth.

After a while, Sarah finally realised what she truly wanted: financial freedom. That might even mean retiring early at 55 or 60 years old. As a result, she’s come up with a few things that she can do straight away:

  • Sarah took a 25 year mortgage, rather than a 30. It’s just five years, but doing that – and making extra repayments – can save tens of thousands of dollars on the life of a mortgage. That’s money she could use to stick into super and grow even more.
  • Sarah’s buying a fixer-upper. Sure, it’ll take some renovations. But the capital growth she’ll have will definitely help her later on when she sells – and she can invest that money into either her super, or her shares.
  • Sarah is thinking about investing in property as a long-term goal. Doing so – especially when the rent covers the mortgage – ensures she’ll be setting herself up for the long-term.


Buying a home is just one step towards building wealth. The more little changes Sarah makes, the better off she'll be in the long-run.

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