In Perth, it seems like clients asking about financial planning are getting younger and younger. Many Australians in their twenties and thirties are already solidly on the way to retiring at the ages they choose to retire. We can’t give any specific financial advice without an individual consultation, but here are three strategies that can help a younger person get ahead.
Setting Financial Goals
The foundation of any financial plan is the goals. Once a person knows where they want to go, it is a lot easier to start taking steps to get there. We usually have our clients set short term goals, mid term goals and long term goals with the option of evolving them at any time.
The short term goal could be to start a savings account or purchase a first home. Mid term goals could be to own an investment property or pay for children’s college educations. The ultimate goal usually to retire at a specified age with a specified income.
Paying Off Personal Debt
Personal debt, such as store cards and credit cards, is expensive. The sooner expensive debt is paid off, the sooner a person’s money can start working for them as investment capital.
Taking an Active Role in Their Superannuation Fund
This example was provided by the Financial Planning Association of Australia. A person who is 25 years of age is making $65,000 per year, already has $1,000 in their super fund and contributes 9.5% of their income to the fund is investing $6,175 per year. The person wants to retire at 65 years of age.
If their super fund generates a return of 5% per year, they will retire with $752,979. But if they can make their fund generate 7% per year, they will have $1,247,721. Which option sounds better to you?
For an individual consult, call 08 6462 0888.