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Getting the basics right

One goal most of us share is to become financially independent. We want to have enough money so that we never have to worry about money again. Sometimes, creating and growing wealth starts with simple things.

At Apex we want to help you protect and grow your wealth. Sometimes, creating and growing wealth starts with simple things. If your goal is to be debt free, for example, then we will try to help you get there by helping you pay off your mortgage faster, but also sharing with you valuable information that goes beyond that. This is about using your money efficiently and making it work hard for you. Putting money into a savings account every so often will not make you financially independent, you need to have a plan.

Through out many years of working in financial services, and with many clients, we've learned a thing or two that can help you. Some of it might seem obvious, but we do find from time to time that we can help our clients with a golden nugget of financial knowledge.

So here are a few things to help you get the basics right:
  • Get rid of dumb debt. It is called dumb debt for a reason – this is when you are paying a very high interest rate. It is especially dumb if you are paying it on depreciating value items like entertainment. Some of the most common high interest rate debt are credit cards, hire purchase and personal loans. Find out more about getting rid of debt in this article. 
  • Don’t buy things you don’t need or that you can’t afford. If you want to be financially independent, but you still have debt, you can’t really ‘afford’ a new car or a new pair of shoes. They will just put you off track to achieving your goal. In the same sense, there are very little things you actually ‘need’. Occasionally, we will all break this rule if something is really important to us, but it is a good starting point. Creating more debt and buying things you don’t need are just burdens you will have to carry on your path to financial independence. 
  • Never gamble to get richer. To achieve financial independence you have to be in control of your wealth. Gambling and playing lotto not only gives you very poor odds for your hard earned money, but you are also handing over control of your financial destiny – you will only become rich if you are lucky enough to win. 
  • Stock up when things are on sale. This only applies for items you use regularly and that will keep for a long time, like a can of baked beans. If they are on sale and you know you use at least one every week, stock up. However, sales are not an excuse to buy another handbag just because it is ‘buy two and get the third one free’. You must apply this philosophy in all areas of life, whenever presented with savings on an item you already use. It minimizes both the time and cost of shopping. 
  • Make the most of technology. Why would you waste time and risk late payments? Set up automatic payments and free your mind for other more important wealth creating exercises. 
  • Pay off your mortgage faster. The longer the term of your loan, the more interest you pay your lender. Although having a home loan to purchase property can be a good way to get ahead financially, it pays to have a sound strategy to reduce your mortgage as much as possible. 
  • Save for retirement. Financial independence also means being able to enjoy your retirement. Do you think NZ superannuation will be enough? Don’t wait until it is too late, start planning for retirement now.
We can help you set up a financial plan so that your financial dreams become a reality. We are firm believers that to get ahead, you have to think ahead. Contact us on 0800 500 510 or advisers@apexgroup.co.nz.
Image courtesy of hin255 / FreeDigitalPhotos.net