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September 26, 2011

Get a Life

Filed under: Financial Advice — Tags: — Moneymax @ 1:50 am

Get a Life

Following recent financial crises, there is a growing realisation in society that friendships, family and hobbies are more important than money. People are slowing down; they are making less money but having more fun. There are lots of ways this can be achieved. Here are a few examples of strategies that work:

 

  • Ask your employer to be more family friendly.  Many companies now have a documented policy for being a “family friendly workplace”, so if yours doesn’t, ask for one!
  •  Set up your own business. Women in particular have chosen this option for increased flexibility in work hours and the ability to work from home.
  •  Manage your time better to reduce your work hours, for example by reading on the train and cutting back on non-work related activities (eg personal phone calls) during work hours.
  •  Change your work hours. Work the same hours but in fewer days so that you can have one day off a week or maybe just work fewer hours for less pay. Some couples have found that if they each work reduced hours they still have an adequate income but more leisure or family time.
  •  Review your priorities. Don’t try and achieve everything at once. Do you really need a bigger house, a new car and an overseas holiday all in the same year?
  •  Downsize your life. Buy a smaller house with a smaller mortgage, make do with your old car for a couple more years and send your children to a good public school rather than paying for a private education.

 These are just a few of the ways in which people are succeeding to balance their lives. You can choose to work long hours and feel as though are going nowhere, or you can choose to get a life.

September 19, 2011

8 Steps to Financial Freedom Part 2

Filed under: Wealth Creation — Tags: — Moneymax @ 1:44 am

Financial Freedom Part 2

Last week we looked at the first four steps you need to take if you want financial freedom; something that most Kiwis aspire to. They were: (1) Spend less than you earn; (2) Join a subsidised superannuation scheme; (3) Pay off short term debt and (4) Set up an emergency fund. Here are the last four steps that will help you be financially free:

 

Step Five – Buy at least one house

To have a comfortable, secure retirement, it helps if you own your own house. The sooner you buy one, the more time you will have to pay off your mortgage.

 Step Six – Pay off your mortgage

Your mortgage usually has a lower rate of interest than other debts, so focus on getting rid of your high interest debt first. Pay off your mortgage faster by making fortnightly rather than monthly payments, voluntarily increasing your repayments and making lump sum payments.

 Step Seven – Set up a savings and investment portfolio

You’ll need two streams of saving; one for short and medium term goals such as holidays, a new car or home renovations and one for longer term goals such as retirement. Although strictly speaking it is better to pay off your mortgage than invest, it is good to get into the savings habit early so that once your mortgage is paid off, you find it easier to save.

 Step Eight – Protect your wealth

It’s important to protect the wealth you create from adverse events that might destroy it, such as premature death, illness, relationship breakdown and taxes. As well as insurance, good estate and tax planning will help preserve your wealth.

 Achieving financial freedom is not rocket science, it just requires determination, focus and a commitment to follow these eight simple steps in a logical sequence.

September 12, 2011

8 Steps to Financial Freedom

Filed under: Wealth Creation — Tags: — Moneymax @ 1:38 am

Financial Freedom Part 1

Living from payday to payday is nobody’s idea of an ideal life. What most Kiwis aspire to is to have a comfortable life free of financial stress. There are eight simple steps that will help take you on your way to financial freedom and here are the first four:

 

Step One – Spend less than you earn

The ability to spend less than you earn is the one thing that separates wealth creators from those who stay trapped in the cycle of living from payday to payday. Decide how much you want to save each payday to achieve your goals, and set a budget that will enable you to live on what is left.

 Step Two – Join a subsidised superannuation scheme

One of the best returns you will ever get on your money is to enrol in KiwiSaver. You will be eligible for a $1,000 Government kickstart, a tax credit of up to $1,040 per year and an employer contribution. Some employers offer subsidised schemes that have equal or greater benefits when compared with KiwiSaver.

 Step Three – Pay off short term debt

Short term debt, such as credit or store card debt, usually arises because you either have unexpected bills or you are spending more than you earn. Stop paying interest and make getting rid of short term debt should be one of your top priorities.

 Step Four – Set up an emergency fund

Life doesn’t always go according to plan. Setting money aside for unexpected events, such as a drop in income through redundancy or sickness or increased expenses such as car repairs and dental bills, will help you keep out of debt and avoid paying interest.

 Next week we look at the final four steps that will take you to your goal of financial freedom.

September 5, 2011

Five Secrets to Happiness in Retirement

Filed under: Retirement — Tags: — Moneymax @ 4:41 am

Happiness in Retirement

 

The average person spends about a quarter of their life in retirement so it’s worth thinking about how to make those years enjoyable. Here are five simple principles that can help you find happiness and avoid misery in what should be the best time of your life.

 Retire slowly

These days, most people choose to work less for an extended period rather than retire. There are some real advantages with this approach. Firstly, you can gradually adjust to a lower income rather than going ‘cold turkey’ from full pay to a pension, and secondly, you are able to save more money for when you are no longer earning.

Don’t be afraid to start spending

After a lifetime of saving, it can be hard to flick the reverse switch and start spending. Being over cautious with your money can detract from your ability to enjoy your retirement. Plan to use your retirement capital as well as the income you receive from the capital. If you don’t spend it, your kids sure will!

Find enjoyment through friendships

The best indicator of happiness in retirement is not the size of your bank balance but the number of people who come to your birthday party! Being happy is not about money, it is about having friends.

Get sorted and simplify your affairs

Get your affairs in order (wills, trusts, powers of attorney) so you don’t have to worry about paperwork at an age when it becomes confusing. Simplify your investments or get someone to look after them so you can be free from worry.

Look after your health

Being in good shape is one of the most important contributors to an enjoyable retirement. Exercise, diet, keeping active and having regular medical, dental and eye checks will help you live a longer, more enjoyable life.