Knowledge hub

Diversifying wealth strategies | Balancing your assets for long-term stability

Back to insights

By Capital Partners Wealth Planning

Owning your own home, in your dream suburb, and living a lifestyle you’ve always aspired towards, is arguably seen as the Australian dream. Significant wealth assets such as your home represent the fruits of your hard work, family bonds, stability, and security. However, to live a life free of uncertainty, wealth deserves to be managed purposefully. That’s why it’s essential to evaluate whether having too much of your wealth tied up in one asset such as your home, aligns with your long-term goals. By being crystal clear on your goals, it is possible to stay on track, make the most of your resources and lean into the best decisions for your future.

Know your goals

Your home is likely your safe space, a place of memories, aspirations and joy. It’s also likely one of your most significant assets. To truly understand if you have too much wealth in one particular asset, such as your home, you need to start by first reflecting on, and defining your goals.

For most of our clients, these goals can look like private education, annual overseas holidays, philanthropy or a number of different lifestyle goals. Ask yourself if you can achieve your goals through your current strategy, or if reallocation could be utilised to help them become more achievable. Life can get away from us and your needs will change overtime. When you have absolute certainty about what you want, it’s easier to identify where some reshuffling might need to take place.

Be conscious of downpricing

You blink, and before you know it, your children have flown the coop, you’ve got spare bedrooms and suddenly too much house.

It’s at this point that many couples decide to downsize, which along with lifestyle benefits, can reduce overall expenses including mortgage and maintenance costs. During this process it’s not unusual to see successful families downsize but not “downprice”, a decision which can dimmish the financial advantages gained from downsizing/pricing.

To navigate this area confidently, understand what’s most important to you, and where adjustments could be made.  Coming to a conclusion that will satisfy you and your family is possible, , it just requires a proactive and clear planning approach.

Diversify your strategy

How diversified is your portfolio? Diversification is a key strategy for managing risk and ensuring you achieve your long-term goals. If you’re well diversified, chances are your wealth is allocated proportionately, but if most of your wealth is tied up in one particular asset, then you may not be diversified enough.

Consider this: If the property market were to experience a downturn, and you were banking on your selling your property(s) to fund your lifestyle, your overall financial position could be impacted. That’s why diversification is so powerful.

To diversify your portfolio, consider investing in a variety of asset classes such as shares, bonds, or managed funds. Alternatively, you could consider investing in other types of property, such as commercial real estate or agricultural land. Every few years we recommend assessing your portfolio to ensure you’re well prepared to weather any storm.

As with all significant investments, it’s important you have assurance that you can manage the lifestyle you’ve created with confidence. Most of the time, all it takes is a closer look and a helping hand. Our team is big on futureproofing and supporting the families we work with to live happy, purposeful lives. Reach out to us if you want to get on with enjoying life with certainty, clarity and confidence.

The information provided on this site is of a general nature only and may not be relevant to your particular circumstances. The circumstances of each investor are different and you should seek advice from a financial planner who can consider if these strategies and products are right for you.

Ideas & insights

Knowledge Hub

Bonus | Steven Boyce on what makes a successful business owner


Kathryn Creasy wins Financial Planner of the Year in Women in Wealth Awards

Capital Partners News • Article

The influence of reality TV stars on financial decisions

Wealth Planning • Article