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You are at:Home»ECONOMIX»Personal Finance»Seven habits of financially successful people
Personal Finance

Seven habits of financially successful people

Grocott's Mail ContributorsBy Grocott's Mail ContributorsAugust 7, 2020Updated:September 11, 2020No Comments3 Mins Read
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Some people are able to achieve financial security by the time they retire, but unfortunately the vast majority are not. The findings of a research project commissioned by a major financial institution revealed that there are seven habits common to those people who are able to enjoy their retirement in relative comfort from a financial perspective. These habits do not only apply to retirement, but to financial well-being as a whole.

The first habit is that successful individuals start saving early as possible, and for as long as they are able to do so. As they save, so their wealth multiplies through investment returns and the miracle of compounding, the so-called eighth wonder of the world.

Second, they save as much as they possibly can and resist the urge to spend their money on unnecessary purchases. An extreme example is the eighth richest person in the world Warren Buffett, who drives a modest car and has lived in the same house for decades, despite having a personal net worth in excess of seventy billion dollars.

Third, they do not only invest in their company pension or provident funds, but also in a spread of investments, such as unit trusts, share portfolios, voluntary investments and business interests. They also take advantage of the various tax saving opportunities available to them from products such as retirement annuities and tax-free investments. Importantly, they do not access any retirement savings before they retire.

They make sure that they have sufficient life, disability and dread disease cover and belong to a good medical aid. They do so to ensure that their most valuable asset, their own lives, are insured against life’s eventualities, which could derail even the best-laid plans. They also ensure that their estate plans and wills are reviewed on a regular basis and kept up-to-date.

Successful people have the habit of striving to find ways to continue to earn an income after they officially retire at their designated retirement age. By so doing, they delay the need to draw funds from their investments, as well as remain busy and active.

The sixth habit exhibited by successful people is that they ensure that their money keeps working for them even after they retire. Instead of switching to ultra-conservative investments such as bank fixed deposits and money market accounts once they retire, they ensure that part of their investment portfolio remains invested in growth assets such as equities. As a result, their investments are able to keep pace with inflation over time.

The seventh habit is that most successful individuals make use of the expertise of a professional financial planner to assist them to navigate the road to their financial security.

It is never too late for you to adopt these seven habits, whether you are starting out in your career, nearing the end of your career or even in retirement. Doing so could make the world of difference to the quality of life you are able to lead in your golden years.

Rands and Sense is a monthly column, written by Ross Marriner, a CERTIFIED FINANCIAL PLANNER® with PSG Wealth. His Financial Planning Office number is 046 622 2891

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Grocott's Mail Contributors

Grocott's Mail Contributors includes content submitted by members of the public, and public and private institutions and organisations - regular and occasional, expert and citizen, opinion and analysis.

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