Financial Strategy. Do You Have One?

By Jason Fittler

Strategy; everyone knows the meaning of the word but few people have a clear and concise strategy of how they will live their life and achieve their goals. When it comes to financial matters most people’s strategy is as follows:

“Make as much money as possible, buy the best lifestyle possible with the money you have. Retirement is too far off to worry about”.

Creating wealth is not about how much you make but in fact more about how much you spend and what you do with your surplus income. Everyone knows the story of the Hare and the Tortoise, but when asked what the moral of the story was most will say, “Slow and steady wins the race”. This could not be further from the truth, the Hare lost the race because he did not use his time efficiently, he had no strategy.

An effective strategy is what allows you to win and achieve your own personal goals. An effective strategy is one which needs to be reviewed constantly to make sure it is still effective when circumstances change.

When you are looking to Grow your Wealth, you need a strategy.  Without this you will be lost. So where do you start?  Below are a few ideas to get you going.

1. Budget, spend the time and work out a budget. This does not need to account for every dollar spent but should detail how much surplus money you would like to save each month. Remember a budget is about things you will not buy. For more details on budgeting go to archive articles on the website.

2. Decide what is the most effective use of the savings
, pay down debt, investments or put into super.

3. Look for professional help, you will need a coach or someone to help you set and maintain your goals. Look for an advisor whose income is directly related to your investments growth.

4. Review your strategy regularly
to make sure you are still on track or review when there is a change in your circumstances which will affect your surplus. I would recommend at least every 6 months.

5. Know your end goal
, write it down and place it somewhere you will see it every day.

Here is the key; there are two types of people who will read this email. The first group will read this and understand the advice but will not actually go and write down their budget or goals. I will guarantee that this group will be no better off next year then they are this year.

The second group will right now set a time to sit down review their budget and write down their strategy and goals. I will guarantee that these people will be better of financially in 12 months. Unfortunately only around 2% of the population falls into this category.

Which group do you fall in?

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