4 signs you will be financially successful
Arguably, your financial success is more determined by your behaviour and attitude about money than your income. So, what are the signs that you will be financially successful?
1. You make yourself a priority
As soon as it’s pay day, you should pay your own savings and investment accounts first. Why is this a good idea? Firstly, it converts your saving money from a ‘want’ into a ‘need’. Your savings and investment accounts become a bill that must be, and therefore will be, paid every month. Secondly, people who try to pay for everything first and then save, often find they have nothing left. But, if you save first and then pay for everything else, you are forced to find a way to make it work.
2. You understand the power of 50
According to Statistics NZ in 2015, more than half of New Zealanders aged older than 15 are in debt. Of those with debt, the average person has debt of a little more than $79,000. Paying the minimum on your credit card can keep you in debt for years as well increasing the total interest you will pay.
The table below compares someone paying minimum repayments on a credit card with a balance of $3,000 and an interest rate of 18%, and someone increasing their payments by only $50 a month.
|Payment each month||Months until paid off||Total interest paid|
3. You’ve started investing early
If you are in your early twenties, you may think investing can wait. But if you wait, there is less time for your investments to grow.
Let’s compare two investors; Emma who invests $2,000 per year for eight years and then stops, and Mia who waits eight years to begin her $2,000 yearly investment contributions.
As shown in the graph, by investing early, after 16 years, Emma has an investment balance that is $28,788 greater than Mia’s, even though they both contributed the same amount!
4. You have a plan
People in control of their money not only have a goal but also have a plan to achieve their goal. Plans guide your management of money by determining how much to save and spend to achieve a goal. Everyone has different goals and, therefore, require different plans.
Get in touch with one of our Authorised Financial Advisers for a personalised financial plan, so you can get on track for financial success!