This is what sets wealthy people apart from the rest of us.
Wealth and its creation should not be considered ‘dirty words’, and if you are a working Australian in your 30s with a growing super fund then there is no reason why you should retire poor.
For the average worker, compulsory superannuation contributions will go some way to creating an adequate retirement income, assuming you are 30 and plan to work until the age of 65. But you will need to save substantially more to ensure a really comfortable retirement. Every additional one per cent of your salary that you save from now will add on average $100,000 towards your final super balance.
Super contributions, both voluntary and compulsory, are amazing opportunities to generate wealth. But unfortunately the majority of us tend to live entirely in the moment and forget about the importance of boosting our wealth now for later.
It doesn’t matter how much you earn, whether you are a Gen Y first time investor or a seasoned baby boomer with multiple assets, there are seven key strategic behaviours that set apart wealthy Australians from the rest of us.
- Spend less than you earn – this sounds obvious but many of us live from pay cheque to pay cheque, which indicates it’s a lesson that is quickly forgotten. Save and invest because the law of compound interest will help ensure your nest egg grows quickly. Start as soon as possible because time is your best friend.
- Invest as much as you can in assets whose underlying capital value will grow – remembering income is taxable while capital growth is not.
- Reinvest any capital growth – because standing still will decay your wealth.
- Do not be afraid of debt – leverage accelerates your net worth but keep a suitable buffer for the unexpected.
- Invest in yourself – it pays to broaden your fundamental investment knowledge.
- Have a mentor – a coach will help drive you and keep you focused on your long-term goals.
- Have a team of experts – remember you don’t have to be the smartest person in your team.
Above all, generating wealth is about having a purpose and focused determination. We are all living longer and will need more wealth to look after ourselves when we are older. The pension is no longer the safety net it once was and advances in medical research keep us healthier for longer, but at a cost.
So it’s important to have a game plan and play hard from the starting whistle, not in the last quarter.
*Original Article by Ken Raiss: http://www.theage.com.au/small-business/startup/seven-steps-to-getting-rich-20140617-3a9ic.html