But wait... there's less!

Could investing $13,000 be better than investing $70,000? In this case, the answer seems to be yes. In Making Money Made Simple , Noel Whittaker compares two hypothetical investors: Person 1: Invests $ 1,000 a year from age 18-30. Person 2: Invests $ 2,000 a year from age 30-65. You might think that person 2 would be better off, but here's how it goes (in chart form): Person 1 stops investing at 30, but their investment keeps growing. At that point, person 1's yearly growth is more than person 2's yearly contribution. That's why person 2 never catches up. Person 1 ends up about $ 150,000 ahead, despite investing about one-fifth of what the person 2 invested. What if growth isn't so good? These calculations assume 10% growth. What if it isn't that high? Fair point. I've run the numbers at lower rates of growth. At 9%, person 1 is still better off. At 8% it's close, and person 2 comes out slightly ahead. But that's not really the poin...

Author Noel Whittaker says two things are needed to be wealthy. Knowledge of what to do and the discipline to do it. He gives you plenty of the first in his book Making Money Made Simple . This book covers a broad range of topics; saving psychology, loans, insurance, real estate the stock market, tax, superannuation, inheritance, and more. It's a cross between a mini-wikipedia of finance with medium-length articles on different topics; and a journal of helpful money advice that an older (money-smart relative) might give. Here are some of my highlights (though far, far more was covered). The 7 things that make the difference Only 8% of people make it financially, says Noel - meaning they can retire on a liveable income. Why not more people? He list 7 "drawbacks" that prevent a lot of us from achieving better. Lack of knowledge Lack of foresight "Must have it now" mentality Borrowing for things that lose value (eg cars) No goals and no plan Confusin...

People in the superannuation industry will say you need millions to retire. But it doesn't have to be that way. The Barefoot method If you've got millions in retirement good for you. But if not there's another way as outlined in book the Barefoot Investor . It's quite an effective strategy especially for those of who have had low income, variable income, or who are retiring early. The idea is, by 67, to get your superannuation balance close to the maximum you can have before it starts reducing your pension. Assuming you don't have other significant investments, at this point you can get the full age pension, plus some handy superannuation income. (Barefoot Investor also suggests some very-part-time work to boost it even more.) How much are we talking? Depending on your situation, you could get 50% more than the age pension. For instance (as of June 2020) a single homeowner gets $22,375 age pension. At 67 a super balance of $225,000 would provide additional i...

"What am I meant to do with my life?". Whether you're choosing a career, changing career, retiring, or reaching financial independence and no longer need to earn a paycheck; discovering your purpose is key. This is where Jeff Goins' book The Art of Work can help. He encounters hundreds of stories to discover the common characteristics of people finding their vocation / calling / life's purpose. He identifies several key themes and illustrates them with stories of real people. At the end there are exercise and questions to help you along the path to find your purpose. Here are some of the key points I took away from reading this. Why it's more important than ever We live longer than any generation before us. Generations ago, men "rarely got to see life beyond careers" . Even our parent or grandparents usually worked for several decades to pay the bills before getting the chance to consider their calling. Only 13% of workers are engaged in th...

It's not often a company admits their customers are stupid, but here's one . Greg likes big things No matter how costly, useless, wasteful, or dangerous to his health. Greg seems to buy as much as he can. Buying an ice-cream as a kid? Get one so tall you can't start licking it without spilling the entire thing. Getting a hair-do in the 80s? Make you hair enormous by spraying 2 parts hairspray to 1 part hair. Going to the movies? Buy a popcorn serving the size of a small table. The movie will finish before you've eaten 4% of it. Going on another date? Impress your lady-friend by ordering a basketball-sized burger. Nothing says romance like leaving with 5 litres of food in your belly, bursting to get out (one way or the other). Why does Greg never learn? Apparently Greg "knows" that bigger is better. No amount of spilt ice-cream, boxes of leftover popcorn, or dates ruined by regurgitated burger can convince him otherwise. Perhaps that can of hairspr...