Get Rich Slow: Start Now, Start Small to Achieve Real Wealth

180 Pages·2013·3.06 MB·English

by  Sarah Riegelhuth

Get Rich Slow: Start Now. Start Small.
Achieve Real Wealth.
Table of Contents
About the author
Acknowledgements
Preface
Part I - Let's get real
What are you waiting for?
An ancient lesson
Common mindset traps
Accepting responsibility
My wake-up call
Life lessons
Being financially independent
Moving forward
Get rich slow
Striking gold?
Luck plays no part
The formula that will work
We’ve been doing it all wrong!
Aiming for ‘nothing’?
The debt spiral
Your age favours the bank
Dreaming of zero
Counting the cost
Minimum repayments don’t shift debt
Shift your thinking, shift your debt
My brush with debt
Making it happen
Getting it under control
How does credit history work?
Pay those bills!
Good debt, bad debt
Borrowing effectively — the basics
Borrowing thumbs-up
Gearing up
The 30 per cent benchmark
Sustainable debt
Borrowing to build wealth — home loans
First save the deposit
Set your borrowing limit, and stick to it!
Borrowing for shares
Keep gearing levels low
Borrowing thumbs-down
Do you deserve it?
Using a credit card effectively
Beyond financial benefits
Beware of the annual card fee
Using interest-free finance
Using credit card balance transfers effectively
Borrowing to purchase a car
The never-ending car loan
So what’s the alternative?
The right debt
Start yesterday
Now is the time
The power of time
High-interest savings accounts
Share portfolio or managed funds
We have the power!
Part II: Let’s get smart
Many roads to wealth
Understanding investing
Capital
Income
Risk versus return
Liquidity
Investment 101: asset classes
Investing in cash
The bonus of interest
Volatility and risk
The effects of inflation on cash
The power of compound interest
Ways to invest in cash
Fixed interest
Investing in shares
Active versus passive investing
Value versus growth investing
Volatility and risk
Starting small
Dollar cost averaging
Ways to invest in shares
Investing in property
Capital gains tax
Renovator’s delight
Volatility and risk
Ways to invest in property
The only way is up
Investing in you
Invest in knowledge
Ask for a pay increase
Review your pricing model
Start a business
Get a second job
Sell stuff
Follow your passion
What about tax?
The great tax return debate
Preparing in advance
Salary sacrifice
You are the reason to love your money
Don’t forget about retirement
Superannuation 101: what is it?
Types of funds
Basic industry funds
Standard industry or retail funds
Comprehensive retail funds
Self managed superannuation funds
We get what we pay for
Tax benefits
Did someone say tax-free?
Don’t plan too late!
Superannuation contributions
Limitations of superannuation
Increasing your retirement savings
Government co-contribution
Salary sacrifice
Non-concessional contributions
Part III: Now . . . let’s get going!
Psychology of money
What makes us tick?
Family values
Approaches to money
Learning from experience — some advice for parents
Ideally, lead by example
Failing that, do as I say, not as I do!
Some age-specific approaches
Bad habits
My bad habits
Identify your bad money habits
Some common bad money habits
It’s my shout . . . always
I never bother to check the bill
What parking signs?
I’ll pay them when I have time
Overdrawn again
Missing out on early bird specials
A timely validation
The swapping strategy
My secret weapon
Take stock
Where are we now?
The golden rule
Completing a budget
Looking for something more tech-savvy?
Choices and compromises
Completing a financial position assessment
Assets and liabilities
Outcomes
Effective cash management
Goal setting
Setting goals keep us motivated
Start daydreaming
Reaching for our goals
Option 1: If we have the discipline to repay our credit card and
not use any more credit
Option 2: If we don’t think we have the discipline needed to get
our credit card spending under control
Allocating savings to each goal
Prioritising our goals
The bucket approach
Protect yourself
The problem of underinsurance
So what could Claire have done differently?
About personal insurance
Life insurance
Trauma insurance
Total and permanent disability (TPD) insurance
Income protection insurance
Putting a quality plan in place
Remember, you are ‘applying’ for insurance
The Black Saturday tragedy
Seek and share advice
What is your time worth?
Experts add value
Keeping you accountable
Selecting an adviser
Involve your friends — open up
Share your wealth creation journey
Just do it!

First published in 2013 by Wrightbooks an imprint of John Wiley & Sons
Australia, Ltd 42 McDougall St, Milton Qld 4064
Office also in Melbourne
Typeset in ITC Berkeley Oldstyle Std 11/13
© Sarah Riegelhuth 2013
The moral rights of the author have been asserted
National Library of Australia Cataloguing-in-Publication entry:
Author: Riegelhuth, Sarah.
Title: Get rich slow: Start now. Start small. Achieve real wealth. / Sarah
Riegelhuth.
ISBN: 9781118406168 (pbk.)
Notes: Includes index.
Subjects: Finance, Personal.
Dewey Number: 332.024
All rights reserved. Except as permitted under the Australian Copyright Act 1968
(for example, a fair dealing for the purposes of study, research, criticism or
review), no part of this book may be reproduced, stored in a retrieval system,
communicated or transmitted in any form or by any means without prior written
permission. All inquiries should be made to the publisher at the address above.
Internal design by Peter Reardon, pipelinedesign.com.au
Cover design by Paul McCarthy
Author image © Karen Woo
Printed in China by Printplus Limited
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Disclaimer
The material in this publication is of the nature of general comment only, and
does not represent professional advice. It is not intended to provide specific
guidance for particular circumstances and it should not be relied on as the basis