On February 16, people throughout the world will be celebrating Chinese New Year as we say goodbye to the Year of the Rooster and welcome the Year of the Dog. According to Chinese legend, there are five gods of wealth, and to invite financial good fortune into their lives, the Chinese give each other gifts of money in red envelopes.
Rather than relying on luck to bring you more money in the coming months, here are some proven ways to set yourself up for prosperity and invite wealth into your life.
Alison Fischer is a CERTIFIED FINANCIAL PLANNER® professional at Crosbie Wealth Management, in Newcastle, NSW. The firm focuses on creating peace of mind for each client by providing holistic financial advice strategies. Here she gives her top tips on creating wealth and attracting prosperity.
Alison Fischer’s top five tips for wealth creation
1. Prioritise
Decide on the most important thing that you want to work towards, be that saving for a holiday or a house, or investing for your retirement.
“When thinking about this, it’s also good to consider what are non-negotiable lifestyle expenses and what you can do without. For example, an annual family holiday might be important, but the destination might not be as important, so you can choose cost effective alternatives,” says Fischer.
2. Save before you spend
In the words of Warren Buffet, “do not save what is left after spending; instead spend what is left after saving”. It sounds simple but it’s surprising how little it is practiced.
Once you have an idea of what your living expenses are, make sure that the amount allocated to saving is put aside as close to payday as possible, in something that can’t easily be accessed.
3. Consider investment options
There are many investment options available that are easily accessible: including investing in your own home; investment properties; shares or managed funds; lifestyle assets; and variations of the above.
With cash interest rates at all-time lows, it’s worth considering other investment options. In doing so, you’ll need to consider how long you wish to invest for and how much risk you are willing to take.
Many people use financial planning professionals to help them with these decisions, but regardless of whether you are a DIY investor or use help, doing your own research into what makes sense for you will stand you in good stead.
4. Talk about it
Talking about it “keeps the dream alive,” says Fischer.
“Whether it’s talking to your friends or family, they’ll be more understanding if you are making sacrifices for your longer term goals. They’ll also be the ones to keep you honest and ask how you’re going with that goal. If you have a partner, deciding on your priority together will help you both stay on track.
“You can also use the help of an expert, such as a financial adviser, to provide additional insights into what might work.”
5. Slow and steady wins the race
Unless you’re lucky enough to win lotto, there aren’t many genuine “get rich quick” schemes around, so it takes persistence.
Fischer says working at increasing your wealth little by little “doesn’t necessarily feel fantastic at the time, but after a longer period you can see what a difference it makes, and it’s incredibly satisfying to tick off your long-term goals.”
More expert tips on creating wealth
CERTIFIED FINANCIAL PLANNER® Professional of the Year in 2016, Tony Sandercock of We Talk Money on the Sunshine Coast in Queensland, elaborates on these points in a blog for his company’s website.
Spend less than you earn
Sandercock says this one is so simple he’s almost embarrassed to say it. “But simple doesn’t always mean easy. Not enough people get this right.”
Maintain some type of a budget
He introduces the concept of what he calls the “anti budget”. This involves working out how much money you want to save every month, pull that amount from the top, and then live on the rest.
Keep a lid on costs and taxes
Costs might include purchase costs or redemption costs, which means that you might pay money either going into or coming out of an investment. In addition, many investment funds have ongoing expenses which come out of your investments.
Pay attention to your three biggest expense categories
“These are your home, your car or other transport and your food,” he says. Read more on how to save on your three biggest expenses.
Make savings automatic
Automatically pull money from every pay into retirement accounts, savings accounts or additional debt payoff. “The more that you can automate these savings, rather than doing it manually, the more likely you are to stick to your plan,” says Sandercock.
The dog days are over
The Chinese regard the dog as an auspicious animal and if a dog happens to come to a house, it symbolises the coming of fortune.
But rather than relying on a dog to come to your house, which may or may not symbolise the coming of fortune, if you follow some or all of our experts’ tips you can start attracting wealth and prosperity into your life now, which will also guarantee you don’t have “a dog of a year” in this, the Chinese Year of the Dog.
