Over the past 10 years the Federal Government has made it harder to qualify for the aged pension and has indicated it will make it even tougher in the future.

The introduction of the assets test, deeming on savings accounts and changes to the treatment of shares and unit trusts have all ensured that fewer retirees will get the pension.

Retirement used to be a time to enjoy. Today it is a time to fear. Australia's retirees are fast becoming the nation's poor, squeezed by lower interest rates which is slashing the income of their investments and starving them of funds to pay bills.

Today's retirees are providing a sobering lesson for future generations. Poor retirement planning has cost them their lifestyle. Retiring rich means starting to plan early and building a separate retirement nest egg on top of superannuation. The Government's new superannuation rules will limit most superannuation payouts to $400,000. For many this will simply not be enough to maintain their present lifestyle in retirement.

Statistically in Australia, over 70% of property investors are on incomes between $35,000 and $40,000 per annum. Over 90% of all millionaires become so through investment in real estate.

In plain terms, negative gearing allows people to borrow money to purchase an income producing property, to claim a tax deduction for many expenses they incur running that income producing property including loan interest.

You tax rebates, along with your rental income are used to pay off your loan, with the least amounts coming out of your own pocket.

The end result down the track, the tax man and your tenants will have paid most of your running costs for you and your property will have more than doubled in value, so you can now sell it and earn a tidy profit, or use this system to accumulate multiple properties to use the rental income as part of your retirement portfolio. In the early stages of investing in a negatively geared property, your costs like interest and so forth are higher than the rental income you receive, so your property is negatively geared.

Apart from negative gearing, there are two other types of gearing situations which offer you even more benefits.

Firstly, there's neutral gearing which happens with the costs incurred "running" your income producing property match the income that the property generates. And then there's positive gearing, where the income from your property actually exceeds the costs of running the property.

Negative gearing is the first step for most investors because, through the tax deductions offered, it is most affordable, so it enables you to purchase multiple properties for a low up-front and ongoing cost. Once your loan has reduced, and your property has increased in value, you'll start to experience neutral gearing. This process is greatly accelerated with Mortgage Reduction.

Then down the track your portfolio will be positively geared which is the ultimate goal for many investors, enabling you to retire on a very comfortable income... Much higher than you'd expect through superannuation.

Essentially, property investment performance means minimising your 'out of pocket' expenses and maximising your potential capital growth. Some of the reasons property investments fail to perform as expected can include:

• The loan taken out was structured wrongly;
• The loan was taken out in the wrong name;
• "High maintenance" houses were purchased;
• investors missed out on claiming the highest possible amount in non-cash tax deductions;
• Low rents and high vacancy periods;
• Paying too much for the property in the first place;
• Low capital growth potential.

These mistakes can easily be avoided by allowing us to do the research on your behalf prior to purchasing an investment property.

The unique feature of residential property as opposed to all other investment vehicles is that everybody must be housed, whether they rent, or are owner occupiers. No matter who the occupier is, the capital growth is still generated for the owner. The safety of residential property is underpinned by owner occupiers who do not sell if a market lacks strength. They need more compelling reasons, are better placed to hold through softer markets and continue to need a roof over their heads.

Maintaining good occupancy is important to the successful outcome of a property investment. Here again residential property offers the safest level of exposure. We have already seen that 70% of Australians buy their own home.

Correspondingly almost 30% are renters providing a huge pool of around 5.4 million Australians who are housed in rental accommodation, combining this and a well researched property in a highly sought after area by renters makes finding tenants not a problem.

It is that compounding effect of property value increases which is so powerful. As each year passes growth occurs on top of growth. If a property is worth $100,000 today, and next year it increases in value to $110,000, then the year after that it increases at 10% again, that is $100,000 plus 10% (or $11,000), taking its new value to $121,000, and on goes the escalation. Its exponential growth accelerating at a faster rate as each year passes.

Property wealth comes ever so slowly at first, but eventually arrives in abundance. But you have to make a start, no matter now small. With prudent property investment all you need is time, the right research, and patience.

In recent years, during which we have seen the incidence of inflation falling to low levels and fairly static property markets, the conventional wisdom has adopted a view that low inflation means low, or no growth in property values.

Newspapers have reported it, real estate agents accepted it, and even large property developers and institutional investors, handling millions of dollars at a time, seem to have embraced the idea. They continue to espouse this particular notion despite the fact that nobody appears able to support it with facts, or able to point to any past evidence of a correlation between low inflation and capital growth, or lack of it.

There is a link, but the facts support the view that it is not necessarily a negative at all.

There are many benefits from investing in property in a low inflation environment, and particular risks in investing in a high inflation environment.

Definitely not, no matter what stage of life you are at, by setting goals now and planning ahead, you will prepare yourself for whatever opportunities and obstacles that may present themselves along the way.

For most mature people, the greatest fear is that they will live longer than their money. Fear of poverty is the number one fear from which the majority of people suffer. Sadly, so few take any action to prevent poverty or are blissfully ignorant of what the future holds for them.

There are six main reasons why 93% of the population do nothing about tackling their fear of poverty and they are:

• indifference
• indecision
• doubt
• worry
• overcaution
• procrastination