Saving and investing – these two things when done effectively can pave the way to a comfortable retirement. But for most, this is easier said than done. If you haven’t yet started saving for your retirement or made use of investment property strategies to increase your portfolio, now is the time to do so. The earlier you prepare for your retirement, the better.
To help you with this, these are the steps you should follow.
1. Track your spending
You need to know where you’re at right now financially. A good way to gauge this is by knowing where your money, every dollar of it, gets spent every month. So list down all your expenses – from mortgage payments to occasional dine outs. Also include other expenses such as bi-monthly, quarterly or annual payments like insurance payments.
2. Simplify your life and redefine luxury
Based on your current expenses, separate the necessities from the luxuries. Cut down or completely take out the unnecessary expenses to make room for more savings. Also reconsider your necessities. Discuss with the family if all of these are really needed, or is there something that you can do without. Redefine luxury as well by planning to indulge in less expensive possessions and experiences.
3. Make your savings inaccessible
With the adjustments made to your monthly budget, you’ll now have more money going to your retirement fund. It is very important though to keep this fund and or investments untouched (other than periodic reviews) until your retirement. There will be many circumstances where you’ll be tempted to borrow from this fund (and never pay back again), and in most cases it may even be due to reasonable situations. But if this keeps happening, what was supposed to be your retirement fund will become your emergency fund. To avoid this from happening, place your savings in a tough to access, investment and retirement plan.
4. Put your money to work
After you’ve saved three months’ worth of your salary, use part of your savings for investment. Don’t just rely on your savings and instead put your money to work. Do not ignore the power of leverage and compound growth, make these work for you.
5. Start with a low-risk investment
You can start with a low-risk investment then work your way up. To know what type of investment would work for you, better ask for help from a financial expert. Discuss with them your retirement goals and the span of time you’d want to achieve these. They will be able to advise you and may even help you with asset protection to ensure your wealth and asset base are safeguarded, and you can fully enjoy these during your retirement. When investing seek assistance and always do your research.
Chan & Naylor is one of Australia’s leading property tax accountants and wealth advisory groups. We can help grow your wealth so you can have a comfortable retirement, and protect your assets to ensure you can enjoy all the fruits of your labour. Contact us now to know more about our services.
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.