In the past I’ve advised anyone who wants to be their own financial adviser to treat themselves like they’re a business.
Imagine you ran a business. What questions would you be asking to make sure you made profit and avoided going broke?
These are good questions to ask of yourself, if you’d personally prefer to be richer as time goes by rather than poorer. I reckon that covers most of us who are sane and rational.
I promised to survey the cheapest loans and best-term deposit rates as well as the top super funds.
When you think about it, the business approach to getting richer has to be:
Earn as much income from working as possible.
Make sure you pay the lowest costs (interest rates, fees etc.) possible on your loan products.
Get the best interest rates on your savings.
Be in the best-performing super funds being mindful of the fees/costs you will be charged.
Be always on the lookout for potentially great investments outside of super. This could be the property you live in, the investment property you invest in and say the stocks you accumulate.
The ‘business’ we’re talking about could be called ‘Me Richer’ and the 5-step plan is a solid start to your business/financial plan. Diligent business owners try to maximise income and minimise costs. They don’t set and forget these important things, instead they regularly monitor these makers or breakers for their business.
Let me show you what I found in under 30 minutes:
Normal people don’t think there’s a big difference to their material life if they pay 1 per cent more for a home loan, where you might be paying 4 per cent rather than 3 per cent. But let’s just test that out for a $500,000 home loan.
Over a 30-year period, if you were on a 4 per cent home loan, you’d pay $859,347.53 in total. However, if you were always vigilant (like a smart businessperson should be) and you researched and got a 3 per cent rate for your home loan, the total cost of the loan would be $758,887.26.
So that little bit of professionalism that you’d expect of a wise businessperson, applied to your money life, would save you close to $100,000!
That’s 100,000 reasons to stop living your life in amateurish money chaos and should convince you that being businesslike, when it comes to money, really pays off.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, economy, property and work news.