Notes to a younger self

If there’s one lesson to be learnt about money and investing, it’s that the sooner you start the better

The Best of the Best is our most popular issue of the year – it provides us with information that enables us to save thousands of dollars. It’s certainly a valuable issue, but you’ll find value in every Money magazine.

Personally, I have learned much from our contributors this year.

Greg Hoffman, Scott Phillips, Steve Johnson and Marcus Padley have provided share information and tips that have helped me invest wisely and profit from their knowledge.

Thanks for this month’s tip not to waste money on cheap clothes, Steve Johnson!

There have been several share tips this year that I have followed based on these experts’ advice in the magazine, including the February issue, which gives the top 50 property and share investments. And we’ve had letters to the editor saying that over the years readers are finding themselves in a much stronger financial position.

Banyantree’s Max Riaz and Zach Riaz have kept me informed about managed funds. Rainmaker has also allowed me, through its tables in Databank, to keep on top of the performance of the top funds.

Paul Clitheroe’s answers to questions posed by our readers have given me food for thought and also confirmed that when things are complex, seeking professional advice is good advice.

The magazine confirms the good old themes: spend less than you earn, compound interest works magic and if it sounds too good to be true, it probably is.

The advice I’d give a young me, although I’m not sure I could have made young me listen, is to put even more money into super. When you’re young and an extra few dollars a week makes a bit of a dent in your spending money, it’s hard to think of the joy it will bring as you near the date for accessing your super. I always feared the government would tamper with the rules before I could access my money – and it has tinkered with super over the years – but I thought it was a good risk to take. Build your nest egg when you’re most able. Enjoy the compound interest that will keep it growing with no further effort from you.

The second piece of advice I’d give a younger me has been reinforced during lockdown and my newfound obsession with watching home renovation and selling television programs. I’ve come to believe that the extra you spend on a property now will be a little less extra to spend if you want to upgrade later. Looking at the crazy Sydney market around me, I feel that I’ve missed the boat in moving to a more expensive suburb – if I were to do it now, it would cost a lot more and come with more sacrifice and hardship than if I’d decided to do it earlier when the differential was less. Of course, the key is making sure not to create an unbearable burden, or a debt that would be crippling if interest rates were to move upwards, which they will. I’ve also noticed through my own property research that people are willing to pay a premium for a fully renovated home they can move straight into without having to do any work. This has not always been the case, but it has certainly become the trend in recent years. The third piece of advice to younger me would be to have enough money to always have choices. These could be the choice to travel (when restrictions lift), work less, live in a particular area, buy what we like, eat what we like and be with whom we like. Don’t spend all you earn, don’t lock up all your savings for a too distant future and don’t leave yourself short when you might need it; set aside a little cash to take advantage of good investments. And, finally, listen to the experts who have a strong track record and invest in areas you understand. Don’t succumb to FOMO (fear of missing out) – someone will always miss out, but you won’t have only one opportunity in life.

Investing doesn’t have to be all about the stockmarket, property or other asset class. A good investment is often in yourself and your ability to maximise your earnings, improve job satisfaction, strike a work-life balance or expand your horizons. In the future, you may not be working in the same industry as you are today. Investing in your education and skills is something that has potential to pay off handsomely.

And when you’re not investing in yourself, investing in professionals who can, at the very least, stop you making early mistakes can also be money well spent on the way to building your wealth and reaching your goals.