Whether you’re 30, 45 or 60… planning for retirement or looking to create a financial legacy for your family, it’s never too late to focus on building wealth. Here’s how to start.
Determine your why
Motivation is always easier to maintain when you have one or more specific goals, so start your wealth building journey by dividing yours into short and long term. In the short term, one idea might be to pay off your credit card and lower your limit, while a longer term desire might be a stock portfolio. Once you have identified these goals, you can work on ways to achieve them.
Take that first step
Before you focus on where you want your money to take you, it’s also crucial to understand where things stand. But don’t be intimidated – it’s very doable. First, make a list of all your assets and liabilities. Plug these into a spreadsheet and it’ll give you an idea of whether you’re in the black or the red (noting that most people with mortgages are in the red). Also do a cash flow for next year, forecasting inflows and outflows as realistically as possible. This will allow you to see any problem months on the horizon, flag any “spare” money you may have, and also help you identify where to save.
Sort out the little things
In this budgeting process, one area that will come into play is annual costs like insurance. And it’s important with this type of bill that you don’t fall prey to convenience by simply letting policies renew – you have to shop around. With such competition, competing insurers will work hard to win your business and you could end up with substantial savings. At the very least, you’ll have a bargaining chip to use with your current insurer. The message is clear: make the effort and reap the rewards!
Another key part of being prepared is making research and education a priority to ensure you understand the terrain, especially where you have gaps to fill. So learn all about trading on the ASX, from buybacks to dividends. Find out what an exchange-traded fund is. Discover the potential benefits of investing in mortgage assets. Ask about risk profiles and what you would be comfortable with. Also look beyond the big banks to players such as La Trobe Financial, Australia’s leading credit asset manager, whose 12-month term account has been voted Australia’s best credit fund – Mortgages by Money magazine for 13 years. It’s about seizing the possibilities and deciding what to pursue.
When choosing a wealth creation partner, it is also important to decide what role aspects such as sustainability will play. Some people will only invest in renewable energy, while others look to philanthropy, such as the La Trobe Financial Charitable Foundation, which has given over $21 million across multiple pillars, including better financial literacy for women. It’s about making sure your money not only benefits you, but also the wider community and generations to come.
Call on the experts
Just as you would see a doctor for health help, it’s wise to seek expert advice for wealth building, including financial literacy breakfasts with Better Homes and Gardens and La Trobe Financial. Details opposite.
follow the rules
No two investors take the same path to wealth. But there are two universal principles to adopt.
Don’t put all your eggs in one basket
Instead, seek to diversify your investment strategy. That way, if one sector of the economy has a hiccup, say the stock market, it won’t reduce your entire position.
Be prepared for the long term
We’ve all read stories of overnight millionaire success stories, but for most people, wealth doesn’t come in days or weeks, but in years and decades. So make sure that any funds you invest are money you can afford to set aside for the long term.
*This financial information is general in nature and does not take into account your personal situation. If you need advice, please speak to a licensed financial adviser.
Access to specialists
As part of its commitment to improving women’s financial literacy, La Trobe Financial is partnering with Are Media, publisher of Better Homes and Gardens, to host a series of finance-focused breakfasts in May. At these events, speakers including La Trobe Financial Deputy Managing Director and Chief Investment Officer Chris Andrews will focus on building wealth. More details will be published later on Eventbrite and in BHG. Ticket costs will also be donated to charity through the La Trobe Financial Charitable Foundation.
Develop a plan to create wealth
Follow simple strategies to become a financially healthy woman.
Building wealth is something you can aim for at any age, whether you are starting small or building on a solid foundation. It’s about creating an investment plan, incorporating the following strategies for success.
Focus on paying off high-interest debt like credit cards and payday loans. Not only will this save you a lot of money in interest, but if you later cancel the card, or at least reduce your credit limit, it will also improve your credit score.
Pay yourself first
Always pay yourself first. Not pocket money, but investment funds that you set up as automatic payroll deductions. The idea is that by keeping these funds out of sight, you are not tempted to spend them!
Define your goals
Set short and long term goals and align them with “defensive” (lower risk, shorter term) investments such as term deposits and “growth” options (higher risk, longer term). term) such as shares.
Weigh the risks
Most people are familiar with the risks of investing such as rising interest rates. But other types range from liquidity to gear, so being warned and armed is crucial.
Track your net worth
Don’t just put your funds in an asset and leave it. You need to track performance so you can refresh your portfolio as needed to maintain the best returns.
Build multiple streams of income
Extra income can be crucial in freeing up money to invest, so take a look at your life and skills and see what you could monetize. Could you write a book on a specialized topic? Create an online course for digital download? Working weekends at a local mall? It’s not healthy to work 24/7, but a small sacrifice of free time and expertise can be a significant boost on the wealth-building ladder.
Have an emergency fund
Try to save a few months of expenses so that if you go through lean times, you won’t have to sell your investments to survive.
Find a trusted partner
Look to align yourself with a trusted partner in wealth creation, such as La Trobe Financial, Australia’s leading credit asset manager, whose 12-month term account has been voted best credit fund in the world. Australia by Money magazine for the past 13 years. For more information on investment options, visit latrobefinancial.com.
Meet the Experts
La Trobe Financial and Are Media, publisher of Better Homes and Gardens, will host several monetary breakfasts in May. Speakers such as Chris Andrews, Deputy CEO and Chief Investment Officer of La Trobe Financial, will focus on building wealth. Watch Eventbrite and BHG for details, with ticket costs being donated to charity through the La Trobe Financial Charitable Foundation.