Mortgage paid? Now it’s time to build wealth for the future

Mortgage paid? Now it’s time to build wealth for the future

Mortgage paid? Now it’s time to build wealth for the future

It’s like buying $100 worth of apples every week — you get more when they’re cheap, so you end up with more cheap apples than expensive ones. Then, if apples go up in price, you’re investment should be worth more than you paid for it.

With your mortgage finally paid off, you can think about building more wealth for tomorrow.

Here are two ways to build wealth for the future:

1. Invest regularly in managed funds

Paying off a mortgage teaches you the healthy financial habit of investing a set amount each month. So, now the house is paid off, why not keep up that discipline with a regular investment into a managed fund?

Managed funds can help you gain exposure to a diverse range of assets, even for a relatively small investment. You’ll also get the benefit of the expertise of the fund manager who selects and manages the investments — so there’s no need to research and choose stocks yourself.

By regularly investing the same amount of money over time, you’ll be employing a strategy known as ’dollar cost averaging’. Because you automatically buy more units in the fund when prices are low, and fewer when they’re high, your average cost per unit is reduced, increasing your potential for profit.

It’s like buying $100 worth of apples every week — you get more when they’re cheap, so you end up with more cheap apples than expensive ones. Then, if apples go up in price, you’re investment should be worth more than you paid for it. However, the cost of apples will go up and down.

2. Salary sacrifice into super

Another good place to invest some of your income into your super, through a salary sacrifice arrangement.

It’s easy to do — simply arrange for your employer (if this option is available) to pay part of your pre-tax salary into your super, along with the compulsory superannuation guarantee super payments they already make.



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