Can You Answer These 2 Questions?
I’m always telling my clients that we need to focus on controlling the things we can control… Coronavirus is not one of them.
While it’s going to continue to dominate the headlines, we need to let things run their course because the worst things you can do with your money in a situation like this is panic. After all, you can only ever lose money on an investment if you sell it for less than what you paid for it.
As John Bogle, the founder of Vanguard said, "Stay the course. No matter what happens, stick to your program. I've said ‘stay the course’ a thousand times, and meant it every time. It is the most important single piece of investment wisdom I can give you."
Tune out the noise from the media (bad news sells) and focus on what we can control.
And when it comes to what we can control, can you answer the two questions below?
1. How much are you saving each fortnight?
There is one golden rule when it comes to getting ahead financially: Pay Yourself First.
We all spend significant amounts of our money paying everyone else and if you can get into the habit of taking something from your pay on the day you get paid and putting it towards your future, you will have paid yourself first. You can then safely spend what’s left over, knowing that you’ve already taken care of the savings part.
Most people do it the other way around, they try to save what’s left over at the end of the fortnight and that often ends up being nothing because they find something to spend the money on along the way.
How much are you currently paying yourself first each fortnight? If the answer is nothing, how much will you start savings from next fortnight onwards? Start small and build up from there.
And if you need help understanding where your money is going, use technology. There is a great app called Pocketbook which can help you track your spending and where your money is actually going, rather than guessing where it’s going. Understanding this will almost certainly give you the power to find savings!
2. How will you achieve your long-term financial goals?
I’ve written before about the need to set short, medium and long terms goals and recently wrote how studies have shown that writing down and reviewing your goals can help you make NINE TIMES more money.
We all have financial goals, even if we’re not really thinking about them. We all want to pay off the house and be mortgage free, we all want to get the kids through school, we all want to be able to have holidays, we all want to pay less tax and we all want to be able to one day be able to retire comfortably. You’ll have specific goals of your own in addition to these.
What’s your plan to achieve all of your goals?
Hope is not a plan! Yet hope is the plan most people are relying on… just hoping it will all work out, hoping it will all just fall into place. It’s not hard to see why so few people actually end up achieving their long-term financial goals. They never planned for them.
Without a plan, which of your long-term financial goals will you be disappointed not to achieve?
If you can answer the two questions above, then you’re well on the way to achieving long-term financial success.
If you can’t answer these questions, what the world is currently experiencing can be the catalyst for starting to find the answers.
Cheers,
Daniel
If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.
Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.
Daniel McGregor and Wealth Train are authorised representatives of Independent Financial Advisers Australia AFSL 464629