How to plan for your financial future in your 30s (Part II)

In our previous blog, we started to look at how you can plan for your financial future in your thirties. This included saving a percentage of your salary every month, harnessing the power of compound interest and spending less than you earn. Today we take a look at two further ways in which you can build wealth my making wise decisions in your prime earning years.

Don’t be too conservative with your investments

According to the findings of a recent poll conducted by one of South Africa’s major investment companies, up to 80% of working urban individuals between 31 and 39 years old will consider investing bonus checks and salary increases in a savings account, fixed deposit account or money market account.

However, if your aim is long term wealth creation, cash accounts like these aren’t necessarily the best option, since it rarely yields returns that beat inflation. It makes for a good ‘parking spot’ for your savings, but an investment in a solid shares portfolio is much more likely to yield noteworthy returns if you are able to invest your money for three years or longer. In your thirties you are perfectly positioned to invest for a substantial amount of time so you are able to bridge potential weakness in the market.

TOP TIP: The best way to decide which type of investment is best for you is to discuss the matter with a financial advisor.

Be clever when it comes to debt repayments

Start with your smallest debt and work your way up to the larger ones. It doesn’t make sense to put more money than required towards your home loan when your credit card (which has a much higher interest rate) is maxed out. Rather keep up your scheduled payments on the home loan and use any extra money you have available to settle short-term debts. In the end snowballs – once you paid off the smallest amount you can use the extra money you have available to tackle the next, and so on.

Following these guidelines, as well as those that we discussed in Part I of this blog, will provide you with the means to have your money work for you, instead of the other way around. In the meantime, feel free to reach out to a knowledgeable member of the Libertine Consultants team if you would like more information on our debt services and credit services, and how we can help you turn things around if you are feeling overwhelmed by your monthly debt repayments