INTERNATIONAL – As the long month of January heads to a close and consumers anxiously anticipate their most awaited paycheck of the year, Financial Consultant Eric Streso offers some professional advice for making savvy financial decisions in 2019!
When it comes to making money, specialised financial advisers offer skilled assistance to see your wealth moving in an upward trajectory. But, the decision to start managing your finances ultimately starts with you.
Here are some key tips on how to stop wasting money and build your personal wealth:
- Start to save as soon as possible and regularly.
- The sooner you start saving with even a small amount, the sooner the effect that compound interest has on your investment.
- If you start saving R500 pm for 30 years at 10% yield, your payout will be R1 139 662.
- If you start saving R1 000pm for 20 years at 10% yield, your payout will be R765 696.
- If you start saving R2 000pm for 10 years at 10% yield, your payout will be R413 104.
- Make sure you do an annual and monthly budget for your household and keep track of unnecessary spending.
- Avoid using credit cards to buy goods that you don’t really need. Rather save for such items and buy them cash.
- Pay off your debt as soon as possible. Most loans have interest rates considerably higher than any investment return.
- Insurance policies could be amended or revised to save money that could be utilised for savings. This applies to not only short-term / household insurance but also life-insurance.
- Make sure you understand all contracts you conclude with companies or providers. I.e. your cellphone provider, security services and banks. There are penalties involved in the cancellation of contracts. Likewise, with bank charges that add up to become rather costly if not monitored carefully.
- Invest in diversified portfolios to reduce the risk of losing capital. Losing capital at crucial stages in your lifetime is damaging on your efforts to save.
- Have a lookout for products that offer enhancements or additional allocations. These benefits offer lucrative advantages for the investor. Be sure to also inquire as to the investment costs and penalties for early surrender.
- Make sure your savings are tax efficient with contributions and yield. The extra 30% plus you are getting a return can make a big difference to your ultimate investment return.
- Employ a Financial Adviser. By getting someone who understands the markets, products and risk is an important boost to your return and portfolio. Be sure, however, that your adviser has the experience to deliver on that promise.