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3 simple – but BIG – mistakes people make with their money Posted on October 9, 2018
In this article we will briefly touch on and analyse the most common financial mistakes people make, and how we can help you avoid an insecure financial future…
Mistake 1: Spending big on lifestyle rather than investment assets
Unlike lifestyle ‘assets’ like a car, boats and consumer application that depreciate in value over time which also require ongoing expenses, Investment values tend to grow over time earning you money.
ACTION-You need to find the right balance between spending and investing not just for now but into your future. While you have good cash flow it is best to focus on putting significant amounts into long term investments that will benefit you in the future.
To assist you in this you should set goals, have a realistic budget, seek financial advice as your financial adviser will know your situation best, implement your long term wealth strategy and review it on a regular occasion with your financial adviser to ensure everything is working to plan.
Mistake 2: Not knowing how much money you will require in the future
Let’s face it none of us own a crystal ball to foresee our future and for most if not all of us…
We started full time work in our 20’s
Expect to retire in our 60’s and;
Plan to live to at least 80!
Although you have mapped your career lifespan and when you will retire, have you planned how you will fund your retirement plans? We often delay thinking about the lifestyle we would like to lead after retirement and the amount of money we will need to fund it.
You will need to speak to your financial adviser about constructing a financial strategy to help you work out how long you will be in retirement and the funds you will require to achieve the lifestyle you want post retirement. Financial strategy guides provide a clearer understanding of want you should be doing and saving now to ensure a secure and enjoyable future.
Mistake 3: When your average return isn’t ‘good enough’ you pursuit high investment returns.
Thousands of Australians lose their life savings pursuing high return through speculative investments. If an investment scheme promises you between 5-20% more than an average return on assets, chances are it’s ‘too good to be true’ and you should seek financial advice before entering into any agreements.
You money could easily and more effectively be invested into other things without the high risk attached to it.
Robson Partners would suggest never entering a high risk investment with money you can’t afford to lose. When investing you should make an appropriate timeframe and discuss your options in detail with you accountant and financial planner.
Never enter into an investment without adequate research and knowledge of what you are investing in as you may come unstuck when it is too late.
To discuss your financial future with our Financial Services Director please contact us today!