Tips on accumulating wealth
Tips on creating wealth through your life
Depending on your age you may want to consider these different strategies to grow your wealth at different life stages.
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Teens and 20’s
If you’re in your 20s or earlier, it’s time to get smart with your money. It’s important to watch what you spend and have good savings patterns. A good start early on in your life makes a huge difference to your long-term financial wealth. Here are some quick tips for young people to avoid credit card and phone bills. Work hard on careers and maintaining self-discipline to put some money into savings such as a managed investments or bank deposits. Set yourself a simple goal such as to save $7000 per year for 10 years which will accumulate approximately a hundred thousand dollars. A simple way to help you along the way is to have a budget and to track your super expenditure against your budget.
Thirties & Forties
Moving along then when you are in your 30s and 40s, it’s time to get on top your finances. So what’s important here is to learn the important steps of prioritising your debts, such as paying off any credit card and personal loans first, then home loans or private loans, and lastly repay investment home loans and business loans. Investment home loans or business loans should be the last priority to be repaid, as they may create your wealth through capital gains in your investments or give returns on your business. Although the same can be said for home loans, it has priority to be repaid because it is not tax-deductible. Looking after your children may be a big financial effort at this age too.
In your 50s you should be beginning to plan for your retirement and possibly have an empty nest again to time to focus on your retirement from now on. So in this phase, you should be looking at contributing more to your superannuation or to be topping up your investments outside of your superannuation such as to build up a portfolio of shares or properties.
In your 60s you should be well and truly considering how you will be situated when you stop working and planning for your retirement income. It is never to early to start getting advice on and planning for retirement from here on. Additionally, you will want to make your investments continue to work in your favour so that your maximum return ensures your money can last throughout your retirement and maintain your required living standards. As well as this you will be reducing risk to make your retirement nest egg stable and secure.
When you are over 60, if you haven’t yet considered a tax minimizing strategy called transition to retirement, then see us as soon as possible as you need to take advantage of this tax-saving opportunity as soon as you can after 60. Book in your free financial check-up meeting here
Of course, there will always be some other considerations along the way. Some parts of life can mean you are strained to achieve optimizing your financial life. Some of these circumstances are the pursuit of hobbies/sports, growing your family, caring for elderly parents, sicknesses, deaths and supporting your children to adulthood. These are obviously important too as of course life is not just about money but being happy too.
Let’s end with what I recommend at all ages
- In addition to your employment or business get investing. Your business or employment alone will not grow your wealth enough, so invest as early as you can, but it is never too late to start.
- You get good advice; Find out more than you already know from a trusted adviser or mentor.
- Control your spending. If you are spending more than you earn there are modern ways we can help you identify and curb this for good.
- Always minimize your tax, be proactive with your accountant to consider new strategies such as salary sacrificing.
- Consider personal insurances. It is great to understand some of the major personal insurance types like life, income protection and trauma insurance. And how they can save your bacon if some troubles come along to protect your financial position, retain investments and continue to support your family.
- Write down your financial goals. Invest and have a savings plan. Learn which types of investments are for you. If you are interested in managed investments, shares or property.
- Keep your eye on your superannuation. Is your employer paying your entitlements or if you are a business owner – are you exploiting the tax advantages of paying your own super. How is its performance or return going? Is it invested in the right investments that suit you? Find out whether Self managed super funds are for you.
- Regularly review your loans as better deals are coming along all the time and these can save you thousands.
- Make your career a success whether you are in business or employed. Focus solely on one career or business. If you try to catch three rabbits then you won’t catch any, try to catch one for now.
Book in your free financial check-up meeting here
As part of the service of being our client, we would offer you a free financial checkup to review any of the areas we have discussed here, to help you grow your financial position.
For a free talk about your financial check-up simply email us Free financial check-up and a suitable time for you and we will respond.
No matter what stage of your investment and wealth creation process feel free to call us on 8337 4460 to speak to Tax Accounting Adelaide on using accounting to grow your wealth.