Growing your wealth starts with changing your attitude towards money: Here’s how to get savvy with your savings.
Ever wonder how some people get all the luck, and others seem trapped in a lifelong struggle just to pay the bills? There’s no secret formula for wealth, but the right attitude to money is the key to financial success, say the experts.
I’m just not good with money
The Truth: It’s easy to learn.
Women in particular buy into the myth that some people just can’t acquire the skills to manage their own finances beyond their daily budget, says Deanne Carter, founder of the Womens Money Forum. On average, women earn about 18 per cent less than men, they retire earlier and they generally end up with less CPF savings. “We tend to be very good at managing day-to-day finances but lack confidence when it comes to bigger financial decisions,” she explains. Financial skills are easily learned; you don’t need to be good at maths, says Deanne. a financial planner can help you find the right team of professionals to advise you.
Super FACT! According to Central Provident Fund statistics in 2013, the median CPF savings for women aged 51 to 54 was about $90,000, and for males, $130,000.
You need money to make money
The Truth: You don’t need a lump sum to start building wealth.
A lot of people think they’ll be able to save more when they get a pay rise, win TOTO or get a decent tax return. “But what usually happens is, the more money you get, the more money you spend,” says Julian Noel, founder of social change organisation Shine Global. “it’s very easy to spend even more than you make, which is one of the reasons i refuse to have a personal credit card.” instead, he advises, decide now to set aside at least 10 percent of your money, no matter how much you earn. Think about how much of your hard-earned money goes towards unnecessary spending or buying stuff you don’t need, just because it’s on sale.
It’s rude to talk about money
The Truth: It’s a conversation we all need to have.
“Women need to talk more about money, and this is not something we do with our sisters and girlfriends,” says Deanne. “Most of us are operating from the same blueprint that served our grandmas, when the reality is we’re not going to be rescued from financial disaster by a man. it’s never too late to take control of your own future but the longer you leave it, the harder it gets.”
You can’t go wrong with bricks and mortar
The Truth: The family home won’t necessarily turn a profit.
A house represents stability to many of us – but the house you’re living in is a roof over your head, not a way to generate income. Many people spend 25 years of their lives working hard to pay off the family home, and by that time they will have paid about 3.5 times the value of the home to their lender, says Julian. “it’s in the bank’s interest for you to have a stable job and buy your own house, but i believe we’re all programmed to fail financially by believing that this is the best and only path to happiness,” he explains. “a lot of successful people don’t actually own the house they live in, but choose to invest in rental properties and have tenants help pay them off instead.” according to a recent Nielsen survey, the average Singaporean retiree has half or less of the fund they think would be sufficient for retirement. This situation could be remedied by rethinking our attitudes towards investment, and getting the right financial advice before signing on for a lifetime of debt. Word of mouth is a good way to find a money mentor who can demystify the concept of investment, so that while you work for your money, your money is also working for you.
There’s not enough money in the world for everyone to prosper
The Truth: There is enough for you.
The fear of never getting your fair share is a negative mindset that quickly becomes a self-fulfilling prophecy, says Julie ann Cairns, author of The Abundance Code: How To Bust The 7 Money Myths For A Rich Life Now. The misconception that there’s not enough to go round is high up on the list of money myths. “The underlying belief is that you yourself are not enough, which creates a void that some people try to fill with material things, even if that means going into debt for that bigger house or new car,” she says. “There’s nothing wrong with taking pleasure from material things but when you think you have to fight for your share of some fixed ‘pie’, you strive to be better, stronger and smarter than everyone else, putting yourself in an unwinnable competition.” Changing your fortune starts with you, says Julie, and may be as simple as changing the way you think, acknowledging your worthiness and understanding that there is, in fact, more than enough for everyone to prosper.
As long as my job pays the bills with a bit left over, I’m doing fine
The Truth: Your lifestyle today may not be sustainable forever.
“The biggest lie we tell ourselves is that we’re doing okay if we have a good income, a nice car and enough money for occasional holidays. in fact, we should be thinking about that time in the future when we no longer have wages coming in,” advises Deanne. “Unless you are actively building a retirement nest egg as well as paying off your home, you will not be able to afford to retire and have the same lifestyle as you do right now.”
TEXT: Larraine Sathicq/Bauersyndication.com.au / Additional reporting by Gowri Somasundaram