• Scheduled Maintenance

    Please note that our Internet Banking, Mobile Banking and Mobile App may be unavailable between 10:00 pm Saturday 25 and 8:00 am Sunday 26 May 2019 due to scheduled maintenance. Members will still be able to use their cards during this time. We apologise for any inconvenience.

Close

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.

SARAH'S TAKEAWAY:

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.

Home First
Home First