Have you ever wondered what it is wealthy people do to become wealthy and stay wealthy?
This article may go a fair way towards addressing your intrigue – and let me be the first to say the simplicity may surprise you!
To save you the trouble of sifting through the 24-page report – unless of course you’re interested in some light bedtime reading – we have done the hard work for you.
Outlined below are the key takeaways from the report, the ‘must-know’ characteristics of the most financially successful people in Australia; all of which are incredibly simple and easy to implement no matter where you are on your wealth creation journey:
According to the report, financially successful Australians are:
1. Aware of their goals
Whether they are personal or financial, being aware of your needs and goals allows you to plan for your future and make sure you are working towards achieving your goals. Financial goals tend to change over the stages of your life.
According to the Financial Planning Association of Australia, these are the most common financial needs and goals for each life stage:
Young to mid-life
- Buying your first home
- Paying off your HECS debt
- Getting married
- Having children
- Starting a business
- Investment Planning
- Renovating your home
- Income protection
- Retirement Planning
- Tax and debt management
- Debt elimination
- Family healthcare
- Retirement Planning
- Business exit strategy
- Wills and Trusts
- Protecting assets
- Aged care planning
- Estate planning
2. Confident about their financial knowledge
A common characteristic of successful and wealthy Australians is their high level of financial literacy. Now this doesn’t mean you have to keep tabs on every share on the Australian Stock Exchange or know what the current price of gold is.
According to ASIC, it more simply means “knowing about money matters and being equipped to utilise that knowledge by applying it across a range of contexts.”1
Wealthy people aren’t just born with money skills. They develop money skills across a lifetime by actively seeking out information and learning from people with experience. A great way to understand more about managing your money is to engage with a financial adviser who can not only help you understand your finances now but ensure you know what to do in the future to stay financially secure.
Over 80% of Australians that receive professional advice say it has helped improve their financial skills and knowledge as well as given them the confidence to make good financial decisions2. Start simple when learning about finances and the knowledge and success will follow!
3. Always saving, no matter what stage of life they are in
Financially successful people save when they are young, they save when they are working or paying off their house, and they tend to remain money conscious even when they retire!
Sometimes they are not saving for anything in particular but it seems obvious that the more money you save, the more options you’ll have later in life. When compound interest (often referred to as the 8th wonder of the world) is at play naturally the more money you put in, the more money you get out.
4. Planning for emergencies
It makes sense that wealthy people are organised and have planned their success. What is often overlooked is the amount of time spend preparing for a rainy day… or a rainy year as many people have unfortunately experienced in 2020.
Life is not always sunshine and rainbows, there are so many different unexpected emergencies that can affect your income or your savings such as a natural disaster, unexpected job loss, or an injury that may prevent you from working.
Sometimes, it’s impossible to know what’s heading your way but having an emergency fund or insurances in place can make all the difference to protect your life, to have peace of mind, and to feel safe even in times of great uncertainty.
5. Seeking out financial assistance
The 2020 CPA Report found that the need for financial advice is incredibly common. Most Australians know they need some help along the way but for a variety of reasons don’t take the most important first step.
Rather than believe they need to go it alone, wealthy people tend to seek out an experienced adviser to explain concepts, provide options, and to help them make smart, informed financial decisions that deliver comfort and peace of mind.
Notwithstanding the financial benefits of great advice, it has become clear that the emotional benefits – which can include improved mental and physical health, better personal relationships, and family life2 – are fast becoming the some of the biggest benefits of obtaining good financial advice.
Now that you know the secrets to financial success, it’s time to take action! People who achieve great success in life rarely do it alone. Lean on a financial professional and access the kind of guidance that can make a huge difference to your financial future.
1 Australian Securities and Investments Commission [ASIC]. National financial literacy strategy. https://download.asic.gov.au/media/1343576/rep229-national-financial-literacy-strategy.pdf
2 CPA Australia. The value of Advice: Research Report. https://www.cpaaustralia.com.au/-/media/corporate/allfiles/document/professional-resources/public-practice/the-value-of-advice-research-report.pdf?la=en&rev=2e5c346bc3b644608601df3da532d2a8
DISCLAIMER The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group and Sydney Wealth Advisers are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.