Parents should consider investing now on your child’s behalf (even towards university fees) e.g. $5,000 invested at age 3 would double approximately every 10 years if earning an average of 7% in interest per annum.
Assuming the account grows by 7% pa (not taking into account inflation, taxes or fees), $5,000 would grow as shown in the table.
For the youngsters: In your free time, take in extra paid chores around the house e.g. cleaning, painting, gardening, lawn mowing (all the jobs that parents hate!) or even part-time work.
Aim to save at least 20% of your gross income. Seek our advice when you have $1,000 to invest for the longer term.
Aim to save at least 10% of your gross income starting from your first pay packet. Have your pay paid direct into a cash management account with no entry or exit fees (interest on daily balance) with a cheque book.
These strategies can have a large impact on your wealth and financial security. This is partly why some clients on moderate incomes accumulate more than those on double the income by retirement age i.e. ‘they pay themselves first’ and with sound financial advice, they make their money work for them – 7 days a week, 365 days a year’.
By starting early you will enable your money to compound for a longer period, e.g. an extra 10 years could see your capital double