The number one reason your money isn’t growing!

Investing to become wealthy can be simple, but isn’t always easy

Most people make one common investing mistake until well into their lives.

Before elaborating on the issue, and its simple solution, let’s define the terms ‘simple’ and ‘easy’ with the help of an online dictionary:

• Simple: as having only one or a few parts, easy to understand or not complicated.
• Easy: something that can be done with ease, is not hurried, is not difficult, is free from anxiety or is comfortable.

Non-financial example: noting the definitions above, many people might agree that getting and staying in top physical shape is simple (by exercising regularly and eating healthy foods), even if many people don’t find exercising and eating healthy to be an easy process.

In the same way, growing wealth can be simple, just not always easy.

The issue

The number one reason most people’s money doesn’t grow – they don’t invest enough of it to start with.

The solution

The solution is simple, though not always easy – invest more.

Wealth-building example: the regulator of NZ’s financial markets says that when KiwiSaver Scheme providers make long-term assessments of how investments may grow, they should use certain rates of return. For a growth fund, that figure is 4.5% annually, after all taxes and fees. Look at how that yearly return works out for a KiwiSaver investor with a starting value of:

• A balance of $5,000 = $225
• The current average balance = $771
• A balance of $100,000 = $4,500

In other words, invest more and you’ll receive more.

(Before you ask, the most recently reported average KiwiSaver Scheme balance across all schemes is $17,130).

Learn more: the proven way to become wealthy.

Building wealth by investing can occur in a lump sum, or regular contributions – such as when you receive a pay cheque, or both.

Acknowledging the country is gripped by the early stages of a recession, even financially hard-pressed readers who are motivated enough can start taking steps to position themselves so that they can invest a lot more in years to come, perhaps by:

• Investing in themselves. This topped our recent list of the best investments in a recession.
• Saving more.
• Striving to make six figures, which can be a great career goal for many people.
• Changing to one of the 10 best office-based jobs for a post-Covid economy.

The bottom line

Growing wealth is simple, even if it can be far from easy.

If you’d like to have a complementary and no-obligation chat about anything related to this topic, including investing in non-KiwiSaver investments that aren’t locked in until retirement, then please reach out, it would be our pleasure to assist.

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