But by getting a little more clued about these 7 key money matters, your pockets could be jingling to a much happier tune!
Put down those shoes! Instead, invest five minutes of your time reading these essential money tips from Barbara Turley, Founder & Wealth Strategist for Energise Wealth, a wealth strategy and coaching business for female entrepreneurs who want to get their money pumping to fuel their life vision and feel more alive. This five minute investment could make you a lot more closer to financial freedom, your life goals and a happier $$ outlook. You’ll never have to freeze a credit card again!
1: Understand Why Women End Up With Less Wealth Than Men
It’s constantly reported that women in certain fields earn less than their equally qualified male colleagues, which is downright discriminatory, but there are other less obvious causes that contribute to women generating less wealth than men over the course of a life time. Many mums happily take time out of the workforce to have children, but it’s still important to understand how this affects your long term wealth. “There’s a range of financial effects,” explains Barbara. “Women take time off to have children during the crucial career years, when your salary and wealth are usually starting to accelerate. This has a compounded effect over time because you are not receiving the salary, the growth, the savings, or the superannuation during that time. So 20 years later, when you are 60, that money hasn’t managed to compound and grow. The more money put into your Super in your 30s and 40s means the more money you’ll have later. The outcome for most women is that they end up with less wealth long term than men.”
2. Don’t Shy Away From Your Finances
Many loved-up couples share their domestic responsibilities, with the more money-savvy partner looking after the bills and finances. But the fact is statistically, women live longer than men. “This means the chances of a woman having to make financial decisions on her own at some point in her life are very high,” explains Barbara. “Also, with divorce rates high, women are ending up without a partner or alone for a long time, so it’s important for them to understand how to build sustainable wealth and remain independent.” And this doesn’t mean handing over your money and financial future to an adviser – don’t leave yourself susceptible to the bad financial advice out there. “You need to understand where you are investing your money, and where you are building wealth,” explains Barbara. “Get comfortable learning about money, and the basics about how money works. It’s actually quite simple. Start thinking about things like what interest rate you are earning on your bank savings account. If interest rates are high, it’s a predictor that you could be better leaving money in the bank. If they are low, a higher return could be found in other assets – shares, properties, options further down the risk spectrum. But a lot of women won’t look further than a savings account.”
3. Practice mindful Spending
Oooh it’s so tantalisingly tempting to invest in a sexy new stiletto, jacket or lippie, but is it really an investment? “To manage your money better, ask yourself if what you are spending your money on is getting you closer to your grand vision for your life, or taking you further away,” suggests Barbara. “While a beautiful pair of shoes may be lovely to have, they are probably taking you further away from financial freedom in the long run.”
4. Understand The Power Of Compounding
Einstein famously said, ‘Compounding is the eighth wonder of the world.’ “He said this because of the exponential power that compounding has over time,” explains Barbara. “The human brain actually struggles to understand the magnitude of this concept fully but it is an essential element to grasp in the game of wealth building.”
“Basically it means that when money is invested and earning a return ever year, like interest on savings for example, it grows at an ever faster rate the longer you leave it invested. The reason for this is because the return calculated every year includes the return from the year before so you are earning a return on a growing number every year.”
5. Get Clued Up On Self-Managed Superannuation
It’s the new buzz phrase, Self-Managed Super, but why, and how can it help you? “A self-managed super fund allows people more freedom to use their superannuation money to own or invest in almost any asset that they have an interest in,” explains Barbara. “For example, if you are a business owner, you could buy your principal place of business inside your self managed super fund, and then lease the premises back to the business. You can also borrow money from the banks inside a self-managed fund, for investments.” The catch? “It can be cost prohibitive,” explains Barbara. “There are set up costs and then running costs to consider every year so you need to weigh up if it is the right vehicle for you”. However you can combine your super with your spouse, other family members or business partners which can make one a more viable option”.
6. Don’t Buy Property With Your Heart!
It’s easy to fall in love with a house and dream about it being yours, but it’s also easy to pay way more than your should based on these emotions. “The numbers never lie,” explains Barbara. “People get caught up in the emotion of buying a property, but you need to work with the numbers. Ask yourself why you are buying the property – is it an investment property? Is it because the area is going to boom? Remember, property doesn’t always go up in price, so do your research, stay unemotional and remember that the numbers never lie.”
7. Grow Your Business
The freedom of being able to work when and where you like is a big draw card for many people who start their own business. And if you look at any of the rich lists, the majority of people have made their money through their own business. “The greatest way to create wealth is through business, but to do this you need to be extremely strategic and have a scalable business model,” explains Barbara. “That means working on the business rather than in the business. It’s not a true business if you are working in the business all the time. If you want to reduce your working hours, you need to think about every process that you have in the business – every activity, and what can you streamline, automate or delegate, or all three, otherwise you will never grow it.”
8. Don’t Delay Your Retirement Plans
Yes we know, retirement sounds so far away, but stop thinking like this right now! “Instead of thinking about retirement, think about super as your investment fund,” suggests Barbara. “Just because you can’t use that money now, doesn’t mean you can’t learn about investing and putting that money to work. The earlier you get interested in it, the quicker you’ll become financially free.”
“There’s no get rich fast scheme,” explains Barbara. “But if you get focused, committed and master your education around money, in five to seven years you could be wealthy and have other people working for you. It’s about generating wealth through business and investing.
Barbara Turley from Energise Wealth
About Barbara Turley
Barbara Turley is an angel investor, a wealth strategist and the founder of Energise Wealth – a wealth strategy and coaching business for female entrepreneurs who want to get their money pumping to fuel their life vision and feel more alive.
During her 15-year financial markets career she was a trader for some of the world’s largest investment banks, successfully traded her own money, managed relationships with some of Australia’s largest wealth management businesses and became a major shareholder in a $3 billion asset management business and several other high growth companies.
She is also an adventure lover and a self-confessed idea junkie with a passion for inspiring women to step into their power, overcome their resistance to money and embrace it as the ultimate tool designed to enable our greatest visions.
You can catch her at www.energisewealth.com or join in the wealth conversation on Facebook at facebook.com/EnergiseWealth and Twitter at @EnergiseWealth
