Get Rich Slow: Start Now, Start Small to Achieve Real Wealth PDF
Preview Get Rich Slow: Start Now, Start Small to Achieve Real Wealth
Get Rich Slow: Start Now. Start Small. Achieve Real Wealth. Table of Contents About the author Acknowledgements Preface Part I - Let's get real What are you waiting for? An ancient lesson Common mindset traps Accepting responsibility My wake-up call Life lessons Being financially independent Moving forward Get rich slow Striking gold? Luck plays no part The formula that will work We’ve been doing it all wrong! Aiming for ‘nothing’? The debt spiral Your age favours the bank Dreaming of zero Counting the cost Minimum repayments don’t shift debt Shift your thinking, shift your debt My brush with debt Making it happen Getting it under control How does credit history work? Pay those bills! Good debt, bad debt Borrowing effectively — the basics Borrowing thumbs-up Gearing up The 30 per cent benchmark Sustainable debt Borrowing to build wealth — home loans First save the deposit Set your borrowing limit, and stick to it! Borrowing for shares Keep gearing levels low Borrowing thumbs-down Do you deserve it? Using a credit card effectively Beyond financial benefits Beware of the annual card fee Using interest-free finance Using credit card balance transfers effectively Borrowing to purchase a car The never-ending car loan So what’s the alternative? The right debt Start yesterday Now is the time The power of time High-interest savings accounts Share portfolio or managed funds We have the power! Part II: Let’s get smart Many roads to wealth Understanding investing Capital Income Risk versus return Liquidity Investment 101: asset classes Investing in cash The bonus of interest Volatility and risk The effects of inflation on cash The power of compound interest Ways to invest in cash Fixed interest Investing in shares Active versus passive investing Value versus growth investing Volatility and risk Starting small Dollar cost averaging Ways to invest in shares Investing in property Capital gains tax Renovator’s delight Volatility and risk Ways to invest in property The only way is up Investing in you Invest in knowledge Ask for a pay increase Review your pricing model Start a business Get a second job Sell stuff Follow your passion What about tax? The great tax return debate Preparing in advance Salary sacrifice You are the reason to love your money Don’t forget about retirement Superannuation 101: what is it? Types of funds Basic industry funds Standard industry or retail funds Comprehensive retail funds Self managed superannuation funds We get what we pay for Tax benefits Did someone say tax-free? Don’t plan too late! Superannuation contributions Limitations of superannuation Increasing your retirement savings Government co-contribution Salary sacrifice Non-concessional contributions Part III: Now . . . let’s get going! Psychology of money What makes us tick? Family values Approaches to money Learning from experience — some advice for parents Ideally, lead by example Failing that, do as I say, not as I do! Some age-specific approaches Bad habits My bad habits Identify your bad money habits Some common bad money habits It’s my shout . . . always I never bother to check the bill What parking signs? I’ll pay them when I have time Overdrawn again Missing out on early bird specials A timely validation The swapping strategy My secret weapon Take stock Where are we now? The golden rule Completing a budget Looking for something more tech-savvy? Choices and compromises Completing a financial position assessment Assets and liabilities Outcomes Effective cash management Goal setting Setting goals keep us motivated Start daydreaming Reaching for our goals Option 1: If we have the discipline to repay our credit card and not use any more credit Option 2: If we don’t think we have the discipline needed to get our credit card spending under control Allocating savings to each goal Prioritising our goals The bucket approach Protect yourself The problem of underinsurance So what could Claire have done differently? About personal insurance Life insurance Trauma insurance Total and permanent disability (TPD) insurance Income protection insurance Putting a quality plan in place Remember, you are ‘applying’ for insurance The Black Saturday tragedy Seek and share advice What is your time worth? Experts add value Keeping you accountable Selecting an adviser Involve your friends — open up Share your wealth creation journey Just do it! First published in 2013 by Wrightbooks an imprint of John Wiley & Sons Australia, Ltd 42 McDougall St, Milton Qld 4064 Office also in Melbourne Typeset in ITC Berkeley Oldstyle Std 11/13 © Sarah Riegelhuth 2013 The moral rights of the author have been asserted National Library of Australia Cataloguing-in-Publication entry: Author: Riegelhuth, Sarah. Title: Get rich slow: Start now. Start small. Achieve real wealth. / Sarah Riegelhuth. ISBN: 9781118406168 (pbk.) Notes: Includes index. Subjects: Finance, Personal. Dewey Number: 332.024 All rights reserved. Except as permitted under the Australian Copyright Act 1968 (for example, a fair dealing for the purposes of study, research, criticism or review), no part of this book may be reproduced, stored in a retrieval system, communicated or transmitted in any form or by any means without prior written permission. All inquiries should be made to the publisher at the address above. Internal design by Peter Reardon, pipelinedesign.com.au Cover design by Paul McCarthy Author image © Karen Woo Printed in China by Printplus Limited 10 9 8 7 6 5 4 3 2 1 Disclaimer The material in this publication is of the nature of general comment only, and does not represent professional advice. It is not intended to provide specific guidance for particular circumstances and it should not be relied on as the basis
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