5 Tips To Get Your Money Moving
Most of us are setting new year resolutions to get fit and healthy in the new year, but have you considered reviewing the fitness of your finance. Have you done your financial planning?
Here are five lessons to get your money moving faster.
1. Set a target
Whether you have a time in mind, or you just want to reach a milestone, you know how important it is to start with a goal. The same goes for saving and investing. When you know the kind of future you’re planning for and what you want to achieve along the way, you’ll be better motivated, better focused and better financially prepared.
So whether you want to retire comfortably, buy a home, or take the holiday of your dreams, start by setting a target you can focus on.
2. Don’t skimp on the training
You can’t just wake up the week before a big ride or run and decide to be part of the race, with no training or preparation. And you can’t just wait until you turn 60 before you start saving for retirement.
If you’re a cyclist or a runner, you know the earlier you start training, the easier it is to build up speed and strength, little by little. Similarly, the earlier you start saving, the more time you have to earn interest on your interest and returns on your returns, so you can finish in style.
3. In for the long haul
Long rides and runs are all about lasting the distance. Try and do too much, too quickly, and it could all end earlier than you planned.
The same goes for investing. A disciplined savings plan that builds your wealth gradually is a very effective way to get you where you want to go, without suffering too much pain along the way. Even a small amount can build up to something surprisingly big over time.
For example, if you put $1,000 in a managed fund at age 30 and then invested just $100 a month, you would have saved more than $40,000 by age 50 (assuming 7.7% growth annually after fees). If you waited until age 40 before getting started, you would end up with only around $16,000.*
4. Mix it up
You probably know that a varied training regime is better than simply running or cycling kilometre after kilometre at the same pace. Just as you should mix up your training sessions with intervals, hills and cross-training, it makes sense to use a variety of different investments to spread risk and to better enable you to reach your lifestyle goals.
So while it may be tempting to focus on paying off your mortgage, don’t forget to pay attention to your super and other investments as well. A mix of investments inside and outside of super could help you achieve your goals both now and in the future.
5. Get a good coach
Every runner and cyclist would perform better with expert advice from someone who knows the race profile, the terrain and devises a personalised training program. And that’s exactly the role a financial adviser plays when it comes to managing your money.
So if you’d like to achieve a financial PB (Personal Best), consider talking to our financial advisors today with help for your financial planning goals.
* Based on an investment return of 7.7% pa, inflation of 3% pa. This example is for illustrative purposes only and returns are not guaranteed in any way.
Source: Colonial First State