REIF's 5 wealth creation tips for young adults
Updated: May 18, 2022
Let's face it, creating wealth is something that almost everyone wants to achieve by some stage in their life. Young people are often under the impression that wealth creation is a messy and far fetched goal. As per usual, REIF are on a mission to bust that myth and prove that the sooner that you can start implementing actions to support your financial future, the sooner you can reap the benefits of those actions.
REIF's team of property and finance specialists are assisting a great number of millennials with structuring their finance to support their financial future. In this article we're going to share our five biggest wealth creation tips for young adults. We aim to prove that financial freedom can be achieved for all!
1. Track your spending habits
How often do you open your banking apps and check your income vs. expenditure?
If you aren't doing this weekly, as a bare minimum, you need to take action... Like now!
We cannot stress the importance of understanding your finances enough!
The more regularly that you view your bank account, the more that you can understand what you need to do to accumulate wealth and not fall behind with your finances. Doing so will also allow you to identify the necessity items and the non necessity items that you're spending your money on. Furthermore, allowing you to make calculated decisions on where you choose to spend your money.
2. Understand how taxes work
REIF are firm believers that everyone should know how taxes work. Educating yourself on the Australian Tax System will allow you to understand where a percentage of your income goes. If you're a tax payer, it's incredibly important that you know your taxable income threshold and what percentage of payable tax that you'll be required to pay the ATO each year.
There are various tax calculators available to help you establish how much you will be required to pay in taxes each year. There are also some which can help you determine what you can expect in terms of refunds at the end of each financial year. Below are some great resources to help educate you on taxes.
3. Create passive income
Did you know that the average millionaire has seven streams of income?
Passive income is something that we absolutely love! Property investment is our favourite form of wealth creation. This is because it requires a minimal amount of effort to be put in.
The brilliant thing about property investment is that you can tap into any current property you own to use its equity to fund an investment property. REIF will then work with you to acquire a property that can make you $100 to $250 per week, per property. On top of that, we use a negative gearing strategy with tax write offs to produce client's an additional $5,000 per property every year.
To learn more about this, check out our article Eliminate Tax & Bolster Your Financial Independence.
4. Learn self control
This one can be a little bit of a struggle for most. Though, when you master the art of self control it becomes like second nature.
Although it can be tempting to spend $5.00 every morning on a coffee; when you think about the $1300,00 you're spending each year on this habit it reveals a lot. Identifying these spending habits and finding ways to protect your finances is important for long term wealth.
5. Establish a war chest
A war chest, otherwise known as an emergency fund, is something you've probably heard us talk about many times before. This is an allocation of savings that you should have in place for a rainy day. Life is full of unexpected turns and the last year has been a great example of that.
You can create a war chest by putting aside a certain allocation of funds or income each time that you get paid. These funds get distributed into a separate savings account. If you want to learn more about war chests, be sure to check out this article: Why You Should Have A War Chest.
For more information
For more information on how you can fast track your finances to support you on your quest with wealth creation, we're always happy to help. REIF have plenty of free resources to make early financial freedom a reality. Reach out on the details provided.
Ph: 1300 130 932