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Tips To Grow Your Wealth

According to the OECD, most Australian households have a net disposable income of roughly $100,000 with an average debt of $200,000, placing Australia fifth on the list of most indebted households globally. While over 60% of Australians are financially literate, living costs often make it hard to save enough money and add to their wealth. It also doesn’t help that the crushing weight of credit card debts and payday loans put them in a precarious position. But there is a way out.

There is no denying that making money is hard work, and piling bills and expenses does not help your cause. But by changing a handful of habits, you can steadily build wealth and pave a path to a comfortable lifestyle.

Therefore, to help you take a step in the right direction, here is what you need to know:

1. Look into real estate and property investing

For most real estate investing can be an intimidating venture. While it may not make you wealthy overnight, you can gradually add packets of cash into your net income once you figure out how the system works. When it comes to property and real estate, you need to mind four factors: the location, property type, design, and style.

To clue you in, houses outside of Sydney are much cheaper, averaging about $800,000, but those in Melbourne can go up to $900,000. Yet you’ll find most Australians gravitating towards Brisbane and Melbourne. Brisbane has always enjoyed a steady growth in population and is economically stable. The past few decades have been a property investment haven in this city, leading to long-term capital growth. Since Brisbane is a good starting point, you should contact the wealth management services within the town and build your knowledge of property investing and management.

2. Get rid of high-interest debt

High-interest rates make paying off your debts harder and claim a sizable chunk of your income. As a result, you’re not able to settle your debts. Here’s an example best illustrates this. Suppose you have $1,000 worth of debt on your credit card with an annual rate of 15% and a minimum payment of $25 per month. In that case, you will accumulate over $400 in interest. Consequently, it may take roughly four and a half years to clear off your dues completely.

Therefore, high-interest debts are a significant roadblock to your wealth, and you need to deal with them immediately. You can employ one of two commonly used methods to eliminate this financial burden. The first technique is the debt avalanche method, in which you prioritize clearing high-interest loans. Start by making a list of all the payments according to their interest rate. The highest rate will go to the top of your list. Once you have a ballpark figure, settle all minimal charges to prevent your credit score from getting damaged. Ensure you’re tracking all your payments and gradually building momentum.

Your other option is to get rid of smaller debts first. This is known as the snowball method. You will follow the same methodology as the avalanche method while making a list, except start your list with minuscule amounts you need to pay. While the snowball method takes longer than the avalanche method, your debt will disappear much quicker.

But if you’re still unsure how to manage your debt payments, consider a debt management plan. A DMP is the best choice if you can afford to deal with all your priority debts like a mortgage and have enough to keep up with the cost of living but find it hard to settle your credit card and loan payments.

3. Become a saving guru

As much as you enjoy splurging, you must start going easy on your luxury expenditure. Accumulating wealth takes time, but blowing up your paycheck right away will not help you achieve your goal. The best solution to your spending habits is to start an online savings account and transfer some of your money there. You can automate your savings by setting up a direct debit account, and when it’s time to get your paycheck, shift a certain amount to your savings. Ideally, try saving up to 30% of your total income if you want to fast-track your wealth.

Another way to become an expert saver is to reduce your grocery bills. The average food bill for a single-person household in Australia is about $104 a week, which is nearly $5000 a year. You can’t stop buying groceries, but you can start purchasing more generic brands or buying meals at a discount. These are cheap and give you access to various products in bulk. Frozen vegetables are far more affordable than fresh ones but have the essential nutrients you need. You can also grow produce at home even without a garden. A pot, new soil, and seeds are enough to start growing your food.

Additionally, by using power-saving bulbs, switching off unnecessary appliances, and adjusting your thermostat to the most efficient temperature, you can slash extra costs and funnel that money into your savings.

4. Start a side venture

According to the Australian Bureau of Statistics, around March of 2022, more than 800,000 Australians had more than one job. The rising prices, inflation, and cost of living are no longer sustainable on one income, and having a second job can supplement your income. But you don’t have to bounce from one similar job to another. You can always try your hand at side hustles. Side ventures are different from conventional jobs. Your skills and willingness to learn are far more helpful than your degree in these gigs. If you’re curious to know what your options are, here’s a short list:

Become A Driver. If you have a car and use it regularly to commute to work, you are in an excellent position to make money. People are always on the lookout for a sustainable transport option. Before you head out to work, you can drive a few customers around, charge them according to the mileage, and do the same once you get off. If you want to pursue this structured part-time job, consider registering with Uber.

  • Freelancing: Freelancing is the best side venture you can be a part of. Depending on your services, you can also become an outsourced worker, giving you various benefits, including a high salary. You can develop websites, create content, make videos, and also design logos for all types of organizations. Websites like Fiverr and Upwork are a great fix to helping you in your journey as a freelance worker.
  • Sell artwork and pictures: Consumers are always looking for an attractive painting or a unique picture. Try selling your artwork if you have a knack for creating art and can produce stellar pieces. Platforms like eBay can help you sell directly to a client or connect you with a local store that may be willing to help you sell your art.
  • Do pet sitting: Three in every five Australian households have a pet. If you are good with animals and could use the extra cash, become a pet sitter. Your job is relatively easy, but before you take the responsibility of watching an animal, the owner lets you thoroughly know about their pet. Some animals don’t react well to strangers. Seeing your unfamiliar face can agitate them, so clarifying the details with the owner is essential. A platform like Mad Paws can connect you with pet owners in Australia.

5. Invest in an exchange-traded fund

Exchange-traded funds are an investment that operates almost like a mutual fund. The only difference is that you sell your ETF shares on the stock exchange like the Australian Stock Exchange instead of selling them through a company. ETF shares are also highly affordable to buy from a brokerage firm. Their performance depends on the index, but these funds are straightforward to buy and sell.

Conclusion

Adding onto your wealth with time takes hard work and diligence. But once you experiment with different ventures and smartly handle your money, you’ll be rich in no time. You can start by getting involved in the real estate market and delving into property management. This can ultimately lead to a steady cash flow. Don’t prolong repaying your debts. Sometimes the cause of your financial distress is the pending repayments with high interests still lingering in your bank balance.

You may also try putting yourself through savings by cutting down on your bills and budgeting the cost of groceries. Likewise, get involved with side hustles if you have the skills and passion for doing more than a nine-to-five job. Finally, the stock exchange will never fail you as the perfect investment opportunity. If you’re worried about high risks, go for a minimal risk such as the ETF.

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FinanceGABhttps://www.financegab.com/
Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.

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