Why A job Isn’t Enough: Financial Tips That Will Help You Retire Younger
Co-founder of Binvested.com.au, Nathan Birch, explains how six money tips will help you ditch the rat race earlier and with more money in the bank.
The era when dutifully putting away your nest egg for 40 years would allow you to live out your days in comfort is over. When I was a teenager, I decided that slogging away my adulthood and scraping through my old age on what I’d saved up just wasn’t for me.
I’ve generated multiple income streams, gone into business for myself, and become a property specialist to build a portfolio that delivers a passive income on which I could comfortably retire on by age 24. Applying some financial smarts to both your income and your equity can set you up to retire younger and wealthier.
Here are six ways you should be looking to sure up your financial future.
1. Generate Multiple Income Streams
Research on millionaires from author Thomas Corley found that 65 per cent of self-made millionaires had three income streams, 45 per cent had four streams, and 29 percent had five or more streams. It sounds obvious, but the best way to have more money is to earn more money.
Focus on not only having one income stream, but several. The fastest way to wealth is to have multiple income streams, and where possible passive incomes.
Whether it’s from investment properties, shares or a side-hustle, there are many ways to increase your income. This should be your top priority; working your day job alone won’t get you there anymore.
2. Consult or Freelance
If you’re great at what you do, and have the passion and drive to do it for yourself, consider taking it outside the 9-5 and going into business for yourself. Often you can make a better salary by freelancing your skills to several clients rather than a single employer.
If you’re not ready to take the plunge and go into business for yourself, you should be thinking about how to monetise your other skills. Maybe you designed your own wedding invitations – freelance design work can be really lucrative, and failing that, you can even just upload your work and sell it on Etsy.
Are you a great writer? Do some freelance work writing the copy for someone’s website or blogpost. Odds are, if you’re great at something and you’re willing to dedicate the extra time per week doing it, someone will be prepared to pay you for your services.
Whatever it is that you do, become a specialist in your skill set or area. There may be hundreds or even thousands of people who do what you do, but the more skilled you are, the more your employer or clients will pay you to do it.
Become the go-to person in your workplace for something. Spend an hour each day educating yourself on one area of focus and become the best at it; the best in the business earns a better salary.
4. Generate Passive Income Through Property
I’ve built a property portfolio worth $50 million with a passive income which allowed me to retire at 24. With average house prices in Australia rising 10-14% in Sydney, Melbourne and Brisbane in the past year alone*, it can be tempting to just get in anywhere you can.
But if you believe that buying a couple of negatively-geared investment properties will turn you into a property millionaire, you’re dreaming. Do your homework, buy below market price, and make sure the rental value will cover more than the cost of your repayments.
Have a long-term goal for your property investment that will generate a passive income that increases with each acquisition.
5. Network with High Income Earners
If you want to be good at something, surround yourself with people who are already good at it. Find networking events with high income earners, successful business owners, investors, and people who have generated their own wealth.
By being around the people who have succeeded at what you’re aiming to achieve, you’ll start to learn about their strategies for wealth, their habits, and the mindset of financial success.
6. Automate Your Finances
This last strategy is so simple you can, and should, do it now. Most of us use Internet banking for our day to day already; use the scheduled/recurring payments settings to automate all your finances.
Your phone is on a plan, your rent is the same amount and the same day each month, and you know when your salary comes in. Set it up so your expenses are taken care of automatically and your savings are transferred out of your main account on payday. Have a budget that supports the amount being automatically transferred to savings, so you aren’t tempted to dip into it.