Becoming wealthy is a long game and one of the best ways to win is to get a diversified portfolio of assets under your control as soon you can.
If you’re under the age of 50 and have the national average savings and investments outside super, you are holding $5,000 in savings. If you also have average personal debts, then you have $3,841 on credit cards and $17,700 other personal debts. (Source: Canstar Consumer Pulse Report 2021). These are of course average figures, and you may be in a better position than this, however, many clients we meet for the first time are not saving enough to create assets that can help achieve goals and ambitions
So why don’t we save more? One answer is our in-built bias. Once we understand this, we have a better chance of overcoming it.
Present Bias[i]. One of our challenges is the human tendency to settle for a present reward now rather than being prepared to wait for a future reward, which would be much larger. On one hand, we could suggest this is a matter of self-control. However, don’t beat yourself up, being impulsive is pre-wired. We need to consciously work on delayed gratification, but the rewards are worth it, if you can overcome your present bias. We can help you do this.
Like many endeavours, investing is no different. Starting is the most important step. Often quoted, “A journey of a thousand miles begins with a single step” (Lau Tzu) is true for creating wealth. The longer you leave the wealth creation discussion, the less time you have, to create wealth and benefit from the time you have in front of you.
One of our most fundamental philosophies for our clients is to find a financial balance to live now, whilst having a plan for tomorrow. By following this mantra, you can live sustainably today, satisfying our present bias and set aside some of your hard-earned cash to save and invest and even consider boosting your wealth creation with smart use of leverage i.e., borrowing to invest.
If you think it is important to find balance, save more now and invest regularly, we encourage you to contact us and review your current pathway to investment.
Information provides knowledge, that can give you the wisdom to make better financial decisions. This is what a professional financial plan can do for you, give you options. Help you make the most from your money through investment strategies that can create long-term wealth
Contact us to discuss how you can start your journey to financial freedom, so you can balance today with a plan for tomorrow.
[i] Thaler, Richard H. “Behavioral economics: Past, present, and future.” American economic review 106, no. 7 (2016): 1577-1600.
General Advice Warning: The information in this communication is provided for information purposes and is of a general nature only. It is not intended to be and does not constitute financial advice or any other advice. Further, the information is not based on your personal objectives, financial situation or needs. You are encouraged to consult a financial planner before making any decision as to how appropriate this information is to your objectives, financial situation and needs. Also, before making a decision, you should consider the relevant Product Disclosure Statement available from your financial planner.
