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11 tips to increase your wealth

11 tips to increase your wealth. Source: Yahoo Finance

As I ran my eye over what the average Aussie likes or dislikes about their bank, it became clear to me that younger Aussies, who don’t have money-mentor parents, need some understand guidance.

I agree with the comedian/actress, Sophie Tucker, when she observed: “I’ve been rich. I’ve been poor. Rich is better!”

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So I’m offering 11 tips for anyone who likes the idea of being richer:

1. Work out what bank, building society or credit union you want to work with

Many years ago, I was unhappy with banks and started banking with (what was then called) the University Credit Union.

They charged no fees and when we created a company for our media contracts, we became their first business customer. One manager even called on Christmas Eve to say she’d cleared a cheque we needed to pay business bills before going on holidays!

2. Create a plan to build wealth

Our plan was to buy the worst house in the best street in an up-and-coming suburb and renovate it by learning to do a lot of the work ourselves.

We’d then sell it, capital gains tax-free, and trade up to a better house, which was again the worst house in the best street.

Of course, the “best street” was a goal and wasn’t always achievable but we went for ‘OK to improving’ streets and the strategy worked.

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3. Make sure your super is in a good performing fund and that you aren’t paying more than 1% a year in fees

If you ignore this advice and have an expensive and poor performing fund over 40 years of work, you could lose hundreds of thousands of dollars from your nest egg when you retire.

Think holidays in Rome, Paris and Santorini versus a caravan park in Burke!

4. Put your spending life under the money microscope

It’s called doing a budget. It sounds boring to even old people, so I call it the “money makeover master plan, Step 1”. This is where you find out where your money is going.

5. After you see where you’re spending your money, promise yourself that you’ll GST yourself!

This is Step 2. Put a 10% tax on your spending, so if you spent $50,000 a year, your goal would be to cut that by $5,000!

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6. Now you’ve got the money, decide how you’ll grow this $5,000

If you did this, say at age 25 and worked for 40 years and invested this $5,000, getting say a 9% gain after tax, your first $5,000 saved would roll over, doubling every 8 years until (at age 65) it would be $160,000!

And if you found $5,000 every year of your working life, you’d be a multi-millionaire when you stopped work.

How?

It’s called compound interest and your 9.5% compulsory super will give you a million but your $5,000 a year strategy makes you above average, compared to most Australians.

7. Learn about the stock market and easy investment products called exchange traded funds (ETFs)

You could throw yourself into learning about CBA, BHP, NAB, Netflix, Apple and even Nestle in Switzerland.

You could always wait until there’s a really scary stock market crash and that’s when you could buy the best companies in the world at bargain basement prices. If you did that during the GFC, you could have bought CBA at $27 and your annual dividend return now would be 18%!

It pays to become comfortable about stocks.

Exchange traded funds can be bought on the stock market. They have lots of stocks piled into one product. An ETF called IOZ has the top 200 companies on the Australian stock market in one buyable ‘stock’.

You could sign up with an online broker and buy some units and when you were driving home from work, if you heard that “the stock market was up 2% today”, you’d be 2% richer! It pays to learn about stocks.

8. Look after your stuff

We waste money by not repairing shoes, not painting the house or servicing the car, or even looking after our body, so we’re fit and brimming with positivity and someone every employer wants to employ.

9. Invest in yourself

Don’t be afraid to go to a personal trainer or do courses to make you smarter, richer and even more relaxed about life.

There’s a great book called Think and Grow Rich by Napoleon Hill that makes the simple case that you can think yourself into a space where you make better decisions — and the pay off is more success and more money.

10. Hang out with great, positive and success-oriented people

If you’re in business, find a great accountant. If you’re too busy to do your own financial planning, find a trustworthy adviser and learn from him or her. Join groups, go to conferences like those put on by Tony Robbins, read books on self-improvement and biographies of highly successful people.

11. Write down how you’ll boost your income, either from being the best employee in the country or via starting a business

This will be a work-in-progress effort but you have to see what the future path will be. You need to SWOT yourself to know your strengths, weaknesses, opportunities and threats. Then you need to get in your strength zone and make your weaknesses irrelevant over time.

These lessons will help you do it. You’re like a brand in the economy and you have to make yourself distinctive, competitive, competent and attractive. If you do that, you will achieve a lot.

You have to desire success and then do what’s needed to achieve it. That makes all the difference. Money is like applause from an audience. If you get your act together, the money will follow, like the clapping a great performer receives.

Let me finish with one of my favourite quotes from the tennis great Chris Evert and it’s something I’d love Nick Kyrgios to learn from. She said: “There were times deep down I wanted to win so badly I could actually will it to happen. I think most of my career was based on DESIRE!”

I recommend you write down these 11 lessons and ask yourself where you are with each one. That’s the starting point. Once a week, revisit these lessons and see how you’ve progressed. If you can’t make this first step, you might not want to get richer, or maybe you’re looking for a better way to build your wealth. If that’s the case, let me know what that way is!

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