All that glisters is not gold.” (William Shakespeare, The Merchant of Venice)
1. Cash ain’t king
Let’s cut to the chase: cash is not optimal for long-term investments. While it is the safest asset class, shares, property, and commodities generally produce better long-term returns. Unit trusts work well in diversifying asset classes.
What’s more, cash can be easily accessed and may lead to reckless spending habits. Cash and money market unit trusts are well-suited for emergencies and short-term goals, like your annual holiday, but they’re not the answer to long-term wealth creation.
2. Prudence over Ponzi
Have you ever been tempted to invest in a Ponzi scheme that promises mega returns within a short period of time? If it sounds too good to be true, it almost certainly is – even if Dylan from Pinetown assures you otherwise.
Good things come to those who wait. Growing your money and net worth requires patience and consistency.
3. Wants vs. needs
If you’re quick to swipe your credit card for luxury holidays, flashy parties, or the latest designer gear, but hesitate to invest in your retirement annuity or unit trusts, you may be using debt the wrong way. Borrowing to fund a lifestyle you can’t afford means you’re not just paying for the item, you’re also paying hefty interest.
Be cautious of debt traps like balloon car payments or overpriced home loans. Lenders may convince you that you can “afford” it, but can you really? Would you rather look wealthy or actually be wealthy?
4. Put in the hard yards
If you want to be good at something, you have to put in some time and effort. That’s why it’s essential to read books on finance and subscribe to financial planning newsletters. These resources will help you make informed financial decisions and provide you with insights into areas such as the latest tax laws, as well as medical and retirement fund deductions, combined with Tax-Free Savings Accounts, which can hugely reduce your tax burden.
5. Your money has no map
Some people invest because they’ve been taught that it’s the right thing to do, without putting much thought into what they want to achieve with said investments. Your money needs a map, if you want to reach the retirement destination of your dreams. As the saying goes: fail to prepare, prepare to fail.
The bottom line
If you recognise bits of yourself in this article, don’t stress. We’re here to help. It’s never too late to become financially literate, and there’s a plethora of information to help you achieve your investment goals.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact us for specific and detailed advice.
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