MoneyLink Articles

One simple thing anyone can do to create wealth

Posted August 17, 2018 by MoneyLink

So, you missed out on the $100 million Powerball?

Yeah. Me too.

Never mind, better luck next time … right?

In the meantime, until that big jackpot comes along and your numbers all line up, there is something you should bear in mind, and that is … When it comes to wealth creation, luck has nothing to do with it!

Anyone, and I mean anyone, no matter what their income, no matter what their stage of life, no matter how big the debt, can do just one simple thing to begin to create wealth.

In fact, you have the ability right now, to change your financial position, by doing one simple thing: Set financial goals.

Setting financial goals

It’s not as silly as it sounds – if you want to lose a few kilos, you quit the sugar and watch what you eat. When you want to get fit, you start an exercise regime. These things simply require a plan and some discipline and pretty soon you’re feeling healthier and more vibrant. Easy.

And it’s the same with wealth creation. All you need is a goal, a plan, and commitment.

So where do you start?

The first step is to work out your current financial position, and then figure out where you want to be. Ask yourself – what are the priorities? Saving for a house? Being debt free? Sending the kids to private school? A long, overseas holiday? Starting your own business? An investment property? Early retirement?

Every single one of these things is achievable with the right financial strategy in place.

Once you’ve set goals, you need to work out how much money you need to make them happen. It helps to be specific and realistic and to set yourself a timeframe.

Next, take action …

Work out what you can save towards your goal. A budget is the best way to do this – identify exactly what you spend, and then figure out ways you can save. Automate your savings – then you won’t even miss the money going out of your account.

If you’re in a relationship, both of you need to get on the same page – set goals together, and work out how to achieve them together. There may be some short-term sacrifices, but the long-term will be worth it. And these sacrifices don’t have to be major – you can still enjoy your life, but by being aware of what you spend, and setting priorities for how you spend your money, will get you where you want to be.

And don’t forget to regularly check your progress. Look at your savings account monthly. This is really motivational – and it may even prompt you to top it up further …!

Remember, every little step forward takes you closer to your goal.

Get professional help.

While most of us think nothing of hiring a personal trainer to get fit, signing up for a meal plan to lose weight, or attending a conference or a workshop to learn new skills, when you want to build your wealth, it’s worth considering the benefits of getting professional financial help.

A personal financial planner can help you to: reduce debt, pay off your mortgage faster, identify investment opportunities that can grow your money quickly (if you have a short-term goal) or over the longer term. A planner can also ensure that you have wealth protection strategies in place, so that if you find yourself faced with a costly, unexpected life event, you’re not in danger of eroding your current financial position.

The fact of the matter is that most of us aren’t particularly financially savvy. Sure, we look out for the best deal, and we pay our bills on time, we might even manage to save a few dollars, but the financial system is more complicated than that and it is becoming more complex all the time. It’s also full of specialised industry jargon and the fine print is not always easy to comprehend.

The only sure-fire way to get ahead, is to understand it.

It’s only been in the past decade or so that schools have begun to introduce financial studies for young people, to teach them about concepts like compound interest, the difference between fixed and variable mortgage rates, and the fees and costs associated with bank accounts, loans and other types of finance like credit card, car finance, rent-to-buy schemes, superannuation and insurance.

These are critical things to learn, because to be honest, these can be financial traps, unless you know how to navigate them wisely, and you review them periodically to make sure that you’re not paying more than you should, and that you’re getting exactly what you need.

For example, research shows that the majority of Australians are seriously under-insured. Or, worse, people are paying for insurance that isn’t actually going to provide them with adequate cover when they need it.

We’re all different – with different jobs, earning capacities, dreams, goals and responsibilities. And if you want to get ahead financially, then you need a financial strategy that is specifically tailored to YOU.

A financial planner’s job is to be in your corner, to work with you, to help you to achieve a strong financial position that will not only enable you to live the life you want, but create wealth along the way. You can still play the lottery, but taking control of your money is a much more effective way of making sure you’ll get where you want to be.

This is general advice and should not be treated as personal advice. Tyron Mitchell is an authorised representative of MoneyLink Financial Planning Pty Ltd ASFL No: 247360.

More Articles

Got a minute?

Get in touch if you're keen to get ahead and stay ahead.