Avoid These 7 Financial Mistakes
In almost two decades of working in financial services, I’ve come to find there are common money mistakes that too many people make. I’m sharing them with you in the hope that you can avoid as many of them as possible!
1. No Set Goals
You are going to work for a certain number of years and then want to retire. In that time, you will likely want to buy and pay off a house, put the kids through school, have plenty of fun along the way and somehow put enough money away to one day be able to afford to stop working. This is why you need to set short, medium and long-term goals. Setting goals gives you direction and then drives your decision making to get you where you want to go. Don’t wander aimlessly through your financial life.
2. No budget system
No one likes the idea of budgeting, yet everyone likes the idea of being wealthy. One doesn’t happen without the other! If you can’t budget to save, then you have nothing to invest. If you can’t invest, you can’t create wealth. If you don’t create wealth, you can never afford to stop working. Ouch! Budgeting is a whole lot easier than you think.
3. Keeping up with the Joneses
The Joneses might look they’re going great guns! Chances are they are spending everything they earn to look the part. At some point life catches up with them and it’s a really sad fall from grace. I’ve seen it too many times! Put it this way… the biggest regret of people over the age of 65 is that they didn’t save enough when they were younger. I’ll repeat that because it’s so important… the biggest regret of people over the age of 65 is that they didn’t save more while they were younger. When you reach the point in life when you really don’t want to keep working, you’ll be bitterly disappointed if your working life leads to you then being poor for 25 or 30 years. When it comes to money, if you want to be successful, do the opposite of what most of the people you know are doing.
So many people I meet end up saying to me, “I wish I’d come to see you 10 years ago”. I want you to have a better financial future and I know from experience that I need to shake people out of the comfort of a fortnightly pay cheque. Working is casual living, part-time at best. If you would like to one day be able to comfortable say you no longer need to work and can therefore do living full-time, you want to get started now to make it happen!
5. Not investing
You cannot create wealth without investing. You will never save your way to being wealthy. You need to save AND invest. Shares and property are not to be feared. They are your ally in building wealth. The key is investing the right money in the right assets for the right timeframe. Do that and I promise you that you will become wealthy if you address number 4 above!
6. Not having enough personal insurance
Your most valuable asset is not your house or your car, it is you and your ability to produce an income. We all insure our cars and our houses, yet not ourselves. What good is car insurance if you are in a serious accident and the person driving the car can never work again? If you care about your future lifestyle and that of the people you love, then proper personal insurances are a must, and then hope you never have to claim. If you never claim, you’ve led a charmed life. If disaster strikes and you have the proper insurances in place, you will be very thankful!
7. Thinking you can ignore super until you get close to retirement
Super… it’s the best legal tax break in town, 9.5% of your income is paid to it and yet most people treat it with utter disdain! Ignore it at your peril, because if it’s not your biggest asset by the time you get to retirement, then retirement is not going to look like you want it to look.
If you feel like you could use a little guidance with these sorts of things, give me a call!
If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.
Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.
Daniel McGregor and Wealth Train are authorised representatives of Independent Financial Advisers Australia AFSL 464629