This stage often follows the end of full-time educational training and the first few years when you enter the workforce with one or more employers. A few people manage to get into this stage during school or university.

With little equity, gearing (borrowing) is unavoidable.

Yet there are some factors that weigh in favour of the young — time, energy, and potentially higher future annual incomes. Lending institutions look favourably at these attributes.

With little deposits required these days, it might make sense to get into the property market sooner than later even if the costs (as they often are) are a little higher. It's even better if you can get into this stage whilst living at home.

Married or Defacto

Economists often call this stage, DINKS, or Double Income No Kids.

Whilst in the midst of this terrific situation financially, many at this stage don't know that things hardly get better. Aside from the emotional stability, incomes double as the living costs halve. As humans, tending to be short-sighted, we forget that it's important to do what you can at this stage.

Double income vastly increases your options and opportunities. Granted, one might be much interested in borrowing say $600,000 or $6,000,000 but also remember that it's not every day that the bank will even consider offering you that amount of money.

What's more important is what you do with that money.

What's important for you, if you are at this stage, is that this opportunity exists for you now and that you should make the most of it.

Correctly financed and structured, DINKS can go a long way to establishing financial stability and certainly set the groundwork for Stage 3. Imagine missing the opportunity Stage 2 provides and trying to catch up lost ground in say Stage 3 or later? The longer a couple is in this stage, the better off they financially become, but this decision is not always yours when you enter Stage 3.

Having Children

I'm still not sure what the economists call this, but it's clearly a need for you to recognise that repositioning your financial affairs might be in order.

Many people enter this situation as a matter of personal preference, but the challenge is to determine how best one can reach the next stage without overly impacting the financial situation — in fact, you can come out much better off.

We're back to one (or one and a half) income(s), and two adult living costs, plus one or more children.

Beginning with little sleep, expensive childcare costs, and moving into educational costs (about one in three Australian children are in private schooling at say $10,000 per annum), how does one manage to keep up?

Often, families either never quite get back to the double income situation or only manage a part-time income for the other person.

Certainly and hopefully, the principal income earner continues to work well, and even better, if you've managed Stage 2 well you'll find the going in Stage 3 much easier.

It is very important to manage this lengthy stage well by maximising income and minimising all expenses, understanding that we all wish to do everything we can to help out the children. Do you know that 5-year-old birthday parties can cost between $500 - $1,000? And it is doubtful that your child will even remember it! Things were a lot cheaper in my day!

Wealth Accumulation Stage

Finally, some breathing space. With kids in their teenage years, different challenges arise. Perhaps the main income earner has continued their string of luck with annual income continuously growing — a great situation. But this is not always the case. It may be that the main income earner is finding their own footing with a new career path or even simply working through issues related to changes in employment with their current or new job.

With teenagers sometimes self-managing, the parents may be freer to do what they need to do. The spouse/partner might go back to the part-time job, but the teenagers seem to keep asking for more money.

Things are never quite as good as when they were DINKS, but they will find themselves much older and, now more than ever before, concerned about wealth accumulation. Interestingly, when they were DINKS, it wasn't that wealth accumulation wasn't a problem. It was more like wealth accumulation wasn't on the horizon.

Stage 4 brings Wealth Accumulation to the fore. And the expenses are still there. It's just that another parent has more time. Kids are not necessarily cheaper — with tertiary educational costs, kids wanting cars, and even and often the cost of weddings needs to be attended to.

The trick at this stage is to balance these still high costs, whilst managing the overall financial picture from a growth perspective. And this can be done whether you have a fast-growing income or not.

Alone Time. Relief, finally.

As each child grows and leaves the nest over a period of up to 10 years, the energy and resource committed to a growing family can leave you exhausted ... but at least relieved. What will you do with all the spare time?

You're now getting that nagging feeling that you're not getting any younger. Health concerns suddenly come more to mind. A client came in and said that amazingly, over a short period of about 6 months, her eyesight just dropped away when reading. Another client had no real idea what a root canal was but since age 42 has now had two. Some things are beginning to wear out.

Yet it's too early to consider retirement - there's still a good amount of energy still there. And that's the great news: there's still time and depending on your perspective possibly more than you need. Should you be looking at the future more positively, or is it time to begin downsizing? This is an important working presumption; one of our clients ended up divorced because they could not agree on this starting point.

Certainly, we think that "where there's time, there’s opportunity.”

But with the realisation that there's less time, it means that we have to be very careful as to WHICH opportunities we pursue.

And we suddenly realise that there's plenty of time for the right things and that we have less time (and patience) to do the wrong things.

It's the time of making the right decisions.

Preserve and Grow

Most people think of downsizing. But this is not always an option and not always the best option.

For those still without sufficient equity, what are you going to retire on? And more, a lot of retirees actually want to stay active through an occupation of sorts. Some turn into full-time investors.

Certainly, it's even more important to preserve the nest egg built up over the previous stages, but also we somehow inherently understand that selling everything, taking no risk, and putting it all into a St. George fixed deposit account is not a good answer.

And financial planners who simply get you to sell up your assets to invest in superannuation funds, giving you a chuck of it here and there (based on a presumed stock market historical return) until the money runs out — doesn't always seem to be, intuitively, the best advice.

How do you manage to grow your assets carefully?

The Successors We always think that the best investment is not only in education but, even more broadly, in the family.

You can run away from your job and your creditors and even deceive yourself — but you can't run from family: they'll tell you what the real go is.

Those who recognise the blessings of being in Stage 6 or Stage 7 soon realise they have the power of perspective, knowledge and experience, which, when combined with the power of their children in Stage 1 who have energy and time, provides a backdrop for a very powerful financial setting.

We encourage your support of your children not only during school years but into their first job, their marriage and their initial financial affairs — not to snoop, but to help out.

After all, we know where all our money ends up anyway...