Age pension still exists to help those who need it, but the retirement planning professionals in our Perth office are dedicated to helping you secure a future in which you don’t have to rely on age pension.
The earlier one begins investing, the more money then can amass for their future. Sound investments make money due to the principle of compound interest. Compound interest is what happens when you reinvest interest that you made in previous years and make interest on your past interest.
As anyone who is paying attention to their home or auto loan knows, compound interest can add up to a lot of money. AMP Capital uses a simple example. If you make 15% interest on $1,000 in one year and reinvest it, the next year you are making interest on $1,150.*
If $10,000 is invested a 4% per annum over twenty years, the simple interest will provide a total of $17,600 while the compound interest will yield a total of $21,068 at the end of twenty years.*
Right now, interest rates are low, but the same principle applies to investments. Compounding profits is the same principle as compounding interests. It is the job of the financial planner to find investments for you that yield as much profit as possible with as little risk as possible. Generally, the higher the yield, the higher the risk, but that is only a generalisation.
At Approved Financial Planners, we are one of Perth’s trusted names when it comes to financial advice and financial planning. To learn more or for a free consult, call us today: 08 6462 0888.
*Remember that all of the numbers above are projections based on a 4% per annum return over 20 years with $10,000 invested. The projections are for illustrative purposes only and is not an estimate of the investment returns you will receive or fees and costs you will incur.