Adviser Insight: Megan Hodge
Megan Hodge is a financial planner at the Ipswich office. She is passionate about educating her clients and helping them to feel empowered around money. Clients love Megan for her approachable manner – no question is too silly, and she understands that money matters can be daunting.
We asked Megan to share her tips for building wealth. Here’s what she had to say:
Tell your money where to go instead of asking where it went
Another word for this is budgeting but I think this is a better way of looking at it! Keep your goals in mind when you are doing this. If you are saving for a home loan deposit allocate some of your funds to this. There will be the usual living expenses such as rent or mortgages, food, clothing, and transport but if you want to take that overseas trip include it in the budget. Doing this keeps your spending in check and your savings for the future on track.
Start small and start now
You don’t need to be the ‘Wolf of Wall Street’ to start investing. A small amount of money will still grow with compound interest. For example, if you invested an extra $50 a week into your super now, in 20 years’ time this could boost your super balance by an extra $66,000. Another great investment is your children’s education. You can start an education or investment bond with as little as $1,000 (with a regular savings plan) so when you suddenly find yourself faced with choosing the right school for your child you will have options!
Find ways to minimise tax
I always say that those words ‘gross pay’ on your payslip are exactly that! Seeing the difference between what we earn and what we get to take home can make us feel a bit ‘ikky’. When you are doing your year-end tax planning look for opportunities that can benefit you in the long term. It is always good to seek advice from your financial planner or accountant about the smartest ways to minimise your tax bill and maybe even boost your superannuation.
Stay in control of your debts
You may have heard the terms ‘good debt’ and ‘bad debt’ thrown around. Good debt is a loan used to finance something that will help you build wealth in the future. Investment property loans are an example of this, as over time you hope for the value of your property to increase and along the way it should provide income payments (rent). The same goes for borrowing for any other investment. If your investment is returning 7% and your loan interest is 5% this is ‘good debt’.
Bad debt is when you borrow money to purchase items that don’t provide a return on investment and usually depreciate quickly over time. Credit cards, personal loans and car loans will often sit in this category.
The key to staying in control with debts is to keep any lending within your means. This includes factoring in things like pesky interest rate rises or big life changes (like having a baby or changing jobs).
Get on the same page as your partner
Shared goals can be a game changer if you are looking to grow your wealth. If you and your partner have competing priorities it can stop financial progress. Get into the habit of reviewing your finances together and do it regularly. If you find it hard to stay on track find someone to facilitate your planning. It can be a trusted family member or your financial planner.
If you want to come up with a plan to grow your nest egg we can help. Get in touch.
General Advice Warning: The information provided in this article is general in nature and does not consider your particular investment objectives, financial situation, or insurance needs; we therefore recommend you seek advice tailored to your individual circumstances before making any specific decisions.
Dobbrick Financial Services (Gympie) Pty Ltd ABN 48 931 205 109 and Dobbrick Financial Services (Ipswich) ABN 86 100 184 521 & DFS Oakland ABN 64 340 527 395 and their advisers are authorised representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL 357306.
