Planning: Start-up Strategies

What are some strategies for people with few assets?

Most people below age 40 do not develop financial plans, mistakenly thinking that you’ve got to wait until you have wealth before you need to see a financial planner.

This attitude is incorrect because a detailed financial plan can get help increase the size of say a deposit on a home, then get control of the home debt more quickly.

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Other matters relevant to younger people include:

• how to set up a realistic budget to control cash flow?
• how to reduce the negative impact of credit cards?
• what are the pros and cons of debt consolidation? (credit cards, car loan, personal loan, etc)
• purchasing a home: how much can you afford? What deposit is required? 
• is a margin loan strategy appropriate?
• how much to pay into super? Should extra be salary sacrificed?
• should they use debt recycling strategy?
• should they protect their income?

Here are basic calculators addressing some of the above matters:

• ASIC calculators: Budget Planner; Credit card calculator; multi-loan calculator

The main secret to increasing wealth is simple: spend less than you earn!

Set up a realistic budget: the more spent today = the less to spend in the future (and vice-versa).

In summary, the sooner a person develops a detailed financial plan, the better off they can expect to be later in life.