Mar 08, 2022  | Tags: wealth, wealth management, strategy

Our insights

Many of the world’s richest people start with absolutely nothing. Forbes reports there are now 2755 billionaires in the world.

Research from Wealth X uncovered that an incredible 68% of them are self-made. They started with nothing but a plan and the discipline to follow it. Who says you can’t do that too?

Whether you’re young and burdened with debt or perhaps have lost everything after a divorce or other circumstances, it’s never too late to turn things around!

Here’s where to start when you’re building from nothing.

Mind over matter

The first thing you need is the right mindset. It’s time to stop living from pay packet to pay packet and start developing some good financial habits. Change the way you think about where you’re at and where you want to get to.

Write out your financial goals and put them up somewhere you will see them every day – perhaps in your phone or write them on a note on your fridge.

Stick to a budget

Even millionaires budget and they stick to it rigidly. It sounds simple enough but the key is to earn more money than you spend.

Sometimes, that means going without that something you really want to get where you want to go.

That means you’ll need to live BELOW your means. And THAT means, you have to spend less.

You can do that by: 

Eating out less – Cook at home more instead of blowing $100 on dinner at a café or fancy restaurant.

Expensive coffee – That coffee a day you buy is costing you $5 a day, $25 a week and $1300 a year. Maybe settle for one from the office kitchen or bring one from home.

Designer clothes – They are a real luxury but you can still look great. Wait for the sales before buying or shop more frugally at the department stores.

Look for discounts – Use all the coupons and discount cards at your disposal, whether it be on petrol, groceries, online shopping or whatever. And if you are buying a big ticket item, it doesn’t hurt to ask for the best price.

Impulsive buys – These really make it hard to budget because they just aren’t in your budget. Spending your money this way is transferring your wealth to someone else.

Create multiple income streams

The average millionaire has seven streams of income.

These may include but are not limited to:

- Core business or job

- Part-time job

- Side job or interest

- Share dividends

- Interest from savings or term deposits

- Rental income

- Capital gains from property

- Capital gains from shares

It’s also a good idea to try boosting your current income by asking for a raise. If you’re a good worker with runs on the board, your boss should consider the idea. If they don’t, consider finding a new job that pays more.

The road to success

The path to building your wealth is made up of three key planks: Paying off debt, investing and saving. The only other thing you can do with your money is spend it and that’s what we’re trying to avoid! 

Paying off debt – This is absolutely critical. There can be ‘good debt’ like taking out a loan to buy property. You want to get rid of the bad debts – for example, credit card debt! This has to be the first to go in any wealth strategy. You’ll never make it if you keep strangling yourself with exorbitant credit card interest rates.

Invest your money – Just like it’s a good idea to have multiple income streams, it’s also good to spread your investments. And you don’t need a lot of money to start. Shares and real estate are all good ideas. Talk to us and we’ll point you in the right direction.

Save for a rainy day – Now you’re underway, you can think about putting some money away for a rainy day. It’s a great idea to have three months of expenses put aside in cash for an emergency. You could lose your job or find yourself confronted with a big expense - maybe some car or home repairs. If there’s money there, it saves you from having to borrow it which puts you back to square one with that credit card debt.

Educate yourself

Invest in your own financial future by making an effort to understand the mechanics of the industry.

Learn about the share market, understand Australian property investment fundamentals and trends.

We’re here to guide you every step of the way but taking an active interest in money and how people make it will help you reach your goals that much faster.

Do your research and get inspired. Buy a book on how another self-made millionaire built their empire, learn from the experiences of others.

Get advice today

Whatever your age, if you’re serious about creating wealth, it’s important to set goals, create a solid strategy and stick to it.

Talking to an experienced financial adviser is one of the best investments you will ever make.

Contact us today to talk about how to make your wealth goals a reality, no matter where you're at.

This article is written by Kerryn Shaw at Calder Wealth Management.

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial adviser and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.

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