According to Conrad Burge, Fiducian’s Head of Investments, the global economy has been able to sustain moderate growth despite the implementation of tight monetary policy by most of the world’s central banks over the past two years in an attempt to contain inflation. The good news is that this has been proving successful, and inflation has been trending down over the past year or so.
However, Australians are still experiencing an increasing cost of living, with the Australian Bureau of Statistics reporting for the quarter to end-December 2023, the main contributors to the increased cost of living were insurance and financial services, housing, food and non-alcoholic beverages, alcohols, and tobacco.
While inflation remains above target for most economies, the International Monetary Fund (IMF) is expecting central banks to be able to begin reducing official interest rates in the second half of this year.
We have identified 10 financial tips that could be incorporated into your personal financial strategy to help you be better equipped to navigate the challenges posed by the higher cost of living in 2024:
1. Know your mindset as well as your goals
It’s difficult to remain inspired if you don’t know what you are working towards. Goals help you focus your efforts and give you a reason to manage your money better.
2. Pay yourself first
If you let wealth creation be your last priority you are guaranteed to fail. Make your financial goals a top priority.
3. Automate your success
Set up an automatic investment strategy, so you can forget about investing and focus on the more important things in life.
4. Harness the power of compounding
Time and compounding work together to increase wealth dramatically – and the longer you give that process time to work, the more your wealth is likely to increase.
5. Understand risk and select appropriate assets
Match your investment timeframe to your risk profile and investment strategy. Understand that risk changes over time.
6. Diversify
Your financial future is too important to be put in the hands of one property or one company share or even one managed fund. A Fiducian Financial Adviser will help to provide the diversification required to protect your wealth and increase your investment returns.
7. Invest in yourself
One of the best investments you can make is in your own financial education. Be aware of what’s happening in share markets and in your superannuation fund. The share market is complex and sophisticated, but the underlying principles are straightforward. Investing a little time to educate yourself could pay big dividends.
8. Don’t worry about the ‘right time’ to start investing
Don’t be paralysed by fear. Seek strategic advice, choose a sound investment, and start investing. A sound investment strategy considers changes in the market and your personal circumstances.
9. Stay on track
Review your investment strategy on a regular basis to ensure you are maximising your wealth opportunities.
10. Seek professional advice
Expert advice helps you to get ahead faster by making the right choices.
A Fiducian Financial Adviser can offer you professional, independent advice based on your unique set of circumstances. Find a financial adviser is your local area here.