Is your New Years Resolution to grow your wealth in 2017?
Janine Cox, Senior Analyst at Wealth Within shares her top tips on how to boost your savings with her easy to follow five-step financial health plan that will have you enjoying maximum wealth in no time!
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If you could do exactly what you dream of doing right now, what would that be? Maybe you are sailing on a yacht off the Greek Islands with a gorgeous Greek god at the helm, building houses in a third world country for children in need, or maybe just taking more time out to spend with loved ones. All this can come true with a little planning today.
I’ve seen people who earn less than the average Australian wage build massive amounts of wealth. Achieving this comes down to the decisions we make, not our current earning power. Should you decide that you want to get ahead financially, below I have included five simple things that you can do now to move closer to securing your financial future.
Five steps to financial health
1. Spend less than you earn
If you struggle here there is a solution, simply set a budget. Most people think a budget will generally make you miserable, however none of this is true – a budget is simply a financial plan to succeed. It actually frees you from money worries, so you spend more on what you want and less on the impulse spends that you don’t necessarily need.
2. Invest your surplus wisely (at least 10% of your income)
For those who have their spending under control and invest surplus cash, many fail to do their homework and consequently, through lack of knowledge, do not invest wisely. In fact, in my experience all too often people do what is easy rather than what is wise. A wise investment must have two components – it must give you capital growth and income.
3. Leave it alone so it can grow
Some people are unable to leave their investments alone to compound. Instead they spend money on assets that depreciate to satisfy short term needs rather than continue to invest in ‘financial assets’ that create growth and income.
4. Get the knowledge to create wealth
The most appropriate investments to achieve income and capital growth are direct shares and property. Remember, if your investment is not getting both then someone else is benefiting from the component you are not getting.
Although I am a property investor, shares are my investment of choice as they are easy to get into, especially for those new to investing, and unlike property you can start with very little. As someone who supports other women in this area, I have found that when we have the knowledge, we gain the confidence to take control our financial futures.
5. Document your investment plan
High on the list of items that successful people do is they create a plan. Setting financial goals is the part of the plan that allows you to understand what you really want and why. By understanding the ‘why’ there is a clear driver to achieve the goals set. In your plan you also need to record some investment rules and you can find examples of these in a book called ‘How to Beat the Managed Funds by 20%’.
The above steps are achievable by anyone, all it takes is a bit of know-how and a little effort. So do something powerful with your money rather than spend years working to sustain a lifestyle that only satisfies our immediate needs. If you are willing to work smarter by spending some of your time creating your long term wealth, then you will have what you want today and tomorrow. The great thing is that we all have it in us to decide our future path.