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The average age of retirement in Australia has risen to 63 years old in the last five years. More people are having to retire later, with one of the main reasons being lack of a personal nest-egg. These 5 steps will help you start building your wealth and work towards a better financial future for yourself and your family.
1. Put Away More of Your Income
This may sound obvious, but the most reliable strategy to retire earlier is to save a significant percentage of income. A good baseline standard is 30% of your income. If your income reaches six-figures, look to increase that to about half. Rather than just putting it into a savings account you could use this to invest and multiply your returns, as discussed further below.
2. Start a Side-Hustle
Full time workers with a side-hustle is a growing trend in Australia, particularly amongst millennials. It doesn’t have to be a full-blown business – even just monetising hobbies can bring in a significant amount of extra cash each month. Think about your skills that someone else may value, for example, can you teach an instrument? A language? Yoga or a sport? A good place to start looking for clients is within your network or Facebook groups for your local area.
3. Work Smarter
Every successful wealth builder needs to work out how they can best use the hours in their day. Are there areas in your life that you could outsource in order to use those hours to earn more? For example, you could spend an hour cleaning your house, or you could pay a cleaner $30 for that hour and use it for consulting in your specialty, making $100 in the same hour.
4. Invest Your Money
Now that you are making money, you need to find a way to invest it to grow without any effort. All high-yield investments come with the risk of losing money, however you need to balance this against the possibility of making money and decide whether you are comfortable with that risk. There are hundreds of investment strategies, so it’s well worth speaking to specialist that can help you invest according to your risk profile and goals.
5. Clear All High-Interest Debts
It’s hard to save money whilst you have debts standing in the way. Prioritise high-interest debts by paying more towards them, and keep minimum payments going towards your other debts to reduce the total amount paid over the lifespan. This method of reducing debt is known as the “snowball method”. As you free yourself from your debt, you’ll have more money to pay off other loans, and eventually put it towards your wealth-building process. A faster option may be to consolidate all debts into a single low-rate loan, meaning you have only one repayment to worry about every month.
Plan For Your Personal Wealth
Start building your personal wealth today and plan for your future, and visit a financial planner to get professional advice. Wealth isn’t built overnight, but the strategies that you put in place today will pay off later in life.
If you are looking for help to finance any new investment or business opportunities, Speedy Finance can help. Get in touch with our specialists to see how we can help on your personal wealth building journey.