Becoming a Professional Money Manager

Am I saving enough for independence in my life?

That is, will I have enough for the fun things in life such as an overseas holiday, the latest technology or saving towards the bigger commitments such as a home loan deposit and building my retirement savings?

Wise money management habits developed early in your career and mastered over the years can be a source of power and freedom for your future. Confidence grows with every step as goals are fulfilled.

Learning Steps

Our education system supports two elements for our professional education –
STEM (Science, Technology, Engineering and Mathematics) and emotional intelligence. Sadly, money management is a crucial third element mostly neglected by the education system. The responsibility is yours.

Let’s get started by understanding the importance of vision, investment performance, and in this age, optimising trusted digital tools.

Your future vision

Exciting visions draw us towards our goals for we all want a quality standard of living – now, next year, and looking to retirement, even if it seems so many years away.

The Association of Superannuation Funds of Australia’s ‘retirement standard’ provides a useful insight into the income required by a healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living (1).

This broad understanding will help, even if you have an entire life before you.  However, it’s best to still focus on today, for the immediate steps taken may be the most important in getting you where you want to go and to help set-up your future.  Consider some options you may be able to bring into play  and invest part of your earnings into an untouchable account or making additional contributions to your super fund as soon as you are paid (2).

Make your vision motivating.

Commit to maximising performance

For your savings, your deposit allocation is a resilience strategy. Bank deposits bring certainty and reliability to the portion of your portfolio that has to remain 100% secure even under crisis conditions. The low risk nature of deposits highlights the need to find respectable returns.

Investment theorists and practitioners would advocate maximising returns on investments with similar risk characteristics, or in this instance, similar levels of safety. Allocating your defensive portfolio could be as easy as finding the best returns for each selected investment.

Every extra basis point helps. For instance, an extra 0.50% per annum can boost the gross final value of your investment by more than 10% (3).

For prudence, take into consideration your investment allocation to:

  • More than one bank,
  • More than one deposit term, and
  • Maximise, as much as possible, the overall interest you earn.

The task can be accomplished with little time, little effort and whenever you need by utilising technology and accessing digital tools.

Savour the results

Money earned through work and invested deserves to earn a respectable interest rate. Researching these rates is a fundamental responsibility you owe to yourself so take the opportunity to research thoroughly and connect with a digital provider that can help you optimise your investments.

Then experience the joy of watching your money grow with each investment. 

Dedicate a few minutes each month to review your wealth – and make it easy using your digital devices:

  • Check in and consider any term deposits that are about to mature
  • Are there any better offers available for the terms you want?
  • Do you have funds in an at-call deposit that you do not expect to need anytime soon; or
  • Could you invest the at-call funds for longer to earn more in a term deposit?

Try the Technology

Australian fintech Cashwerkz can help you on your way, providing a trusted, simple and secure online marketplace to seamlessly manage and transact your investments within a range of defensive assets offered from a variety of Australian banks and financial institutions.  In addition, it provides the ability to review options at maturity, and opt for a new term deposit at the click of a button, thereby streamlining the process to switch to a new provider.

Consider these 4 simple steps to transfer your money to where it will work for you to save towards your independence.

Then you are operating like a professional money manager and will reap the rewards throughout your life.

 

(1) http://(1) https://www.superannuation.asn.au/resources/retirement-standard

(2) http://www.superguru.com.au/retiring/how-much-super-will-i-need

(3) Pre-tax and pre-fees assuming a 40 year term and monthly contributions using a standard future value of an annuity formula. The choice of investment vehicle will materially affect the net after tax position.

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