Maya Fisher-French

CityPress - - Business And Tenders & Auctions -

In a nut­shell, too much of our money is go­ing to dayto-day ex­penses and not enough into as­sets that can grow and pro­vide us with in­come and cap­i­tal in the fu­ture.

With the sub­stan­tial in­crease in the cost of liv­ing such as gro­ceries, elec­tric­ity and school fees, it is un­der­stand­able that we have less to put into sav­ings. But what lit­tle we do have, we need to in­vest cor­rectly.

Take a house and car as an ex­am­ple. There are some house­holds that will spend money on a lux­ury car, but con­tinue to rent their prop­erty – pay­ing the land­lord in­stead of boost­ing their net wealth.

It is of­ten only once we have bought that car that we re­alise that those re­pay­ments, in­sur­ance and petrol costs im­pact our abil­ity to bor­row money to buy a home.

When we do in­vest, we tend to avoid high-growth as­sets such as funds that in­vest in the stock mar­ket, pre­fer­ring the “safety” of cash. What we don’t re­alise is that cash is any­thing but safe – it un­der­per­forms in­fla­tion and will never help us to cre­ate wealth over time.

If you want to im­prove your house­hold net wealth and see your house­hold bal­ance sheet grow over time, you need to start in­vest­ing. Whether it is by in­creas­ing the con­tri­bu­tions to your re­tire­ment fund, open­ing a debit or­der with an in­vest­ment fund or putting a de­posit down on a home, you need to make your money work harder than you do.

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