sjsmith.com.au - blog

Anyone can learn

Last week I talked about how businesses have changed from the traditional model. It used to be that you worked all your life in one job for the same company.  When you retired, they gave you a gold watch, a handshake and you started claiming your old age pension.  You'd hopefully paid off your family home and maybe had a little put away.  These days you'll likely have numerous jobs with numerous employers. When you retire, the pension may not be enough to live on (that's if it's still available to you!).  You need to be planning for your own financial future.

Now how you want to live once you finish work is entirely up to you.  If you think that you'll have paid off your home and will be happy living on the pension (currently $A888.30 per fortnight for singles) then you don't need to read any further.  If like me, you want more of a buffer than that,  you want money available to travel, to eat out, to upgrade your appliances or your car when it needs it and even an emergency fund in case you or someone in the family gets sick then read on.

Providing you take reasonable care of yourself chances are that you’ll have a longer life expectancy than previous generations. Advances in medicine and health care also add to our number of years and hopefully, most of us, will be reasonably well at the time we retire.  So we are living longer, healthier lives but theres not a lot of planning about how to comfortably fund  those extra years.

Have you estimated what your financial position will be come retirement?  Will you have enough for the lifestyle you want?

Do you know what your current superannuation balance is and what its expected to be come retirement?  Do you know how much you pay in fees and charges.  Find out and then shop around and see if you can get a better deal.

Leaving cash sitting in a savings account may seem like a safe bet but its not really accumulating any profit for you.  To make money with your money you need to invest. What you choose to invest in is really up to you but even if you've only got a few years till retirement its worthwhile to park your cash where its going to appreciate in value for you.  Maybe you like shares or property or a managed fund.  Stay away from highly speculative investments like wine, art and your cousin Artie’s new I.T. start-up.  If an investment sounds too good to be true it probably is. 

The basics of accumulating wealth remain constant.  Spend less than you earn. Invest in income producing or capital appreciating assets.  The longer you invest in stable assets, the more money you will have.  Try to avoid putting all of your eggs in one basket.  

If you feel like a financial novice then start educating yourself.  Theres a wealth of information available, both in print and online.  Getting rich is a skill anyone can learn.  

Till next time,

Sarah-Jane X