Ways Young Australians Can Invest In Their Future
As a result of international border closures, there is a huge opportunity for young Australians to rethink how they invest their money and time to help them create a desirable future.
Here are some tips for young Australians who are hungry to achieve their financial goals.
Avoid Overpaying Tax
You should always be mindful of what tax deductions you are entitled to and make sure you never have to pay more tax than what you have to.
It would wise to; Keep records of your work-related expenses and claim them in full, especially when working or studying from home due to covid-19, don’t automatically use the ATO’s shortcut method it may not cover your full expenses, make sure you claim depreciation on home office equipment such as computers, phones and desks.
It would also be a good idea to seek professional advice to claim legitimate deductions and tax-effective strategies you may not be aware of. Fees for both accountants and financial advisers are generally tax deductible too.
Go Where The Income Is
Covid lockdowns have made it clear that jobs can be fleeting. Unfortunately, young people have been hit especially hard as result of travel, tourism and hospitality jobs being hard to find.
However, at the same time, over the duration of the pandemic there is now a huge demand for delivery drivers, supermarket workers, virtual assistants, and call centre operators. You can even work temporarily using online platforms such as; Airtasker and Fivver until you can go back to working in your original pre-covid employment role.
Furthermore, future employers will be impressed with your flexibility and diversified skills.
Invest In Yourself
Self-education might be a short-term cost, unless it is paid for by your employer. However, those extra skills and qualifications will enhance your earning power over your working life. It could also possibly be tax deductible.
Furthermore, you will be commanding that higher income sooner rather than later.
Keep Track Of Your Super
Your money is important and it is never too early to start preparing for your retirement. It’s your money, so take an active interest as soon as you start accruing it:
It would be wise to super funds for fees and services. Each super fund isn’t the same and the cheapest is not always the most appropriate for your life situation.
It is important to know where your money is invested and to examine your risks. When you are young you have greater time to make up any losses, so you can afford to take some bigger risks, which may deliver bigger returns over the long term.
Get Insured
Insurance is something that very few young people consider. However, it is a good idea to take it more seriously.
Most types of insurance including those that are attached to your superannuation, such as; life, disability, and income protection are usually cheaper for young people.
However crucially, eligibility can be more difficult the older you get.
It is important to remember that by taking out policies when you’re young, you should receive more favourable terms for the life of the policy. This means that by the time you reach the age of 50, you will have far better cover than someone else your age taking out a new policy and more likely to have a claim without exclusions.
Start Investing At An Early Age
There is no such thing as investing too early. If you earn an income or have money in the bank, you can invest.
The earlier you decide to start investing, the longer you have for those investments to grow in value. Remember your high school maths: compound interest is your friend. But it’s besties with young people.
Consider Owning Property
Owning property is a fantastic way to increase your earning power. The property you purchase doesn’t have to be anything extravagant. However, as time passes, you’ll build equity that can be leveraged for other things. Property ownership alone has a huge impact on your quality of life in retirement.
When you are still young, you’re better able to do renovations yourself, improving the property’s value while keeping costs down.
