The Need To Make Investments

The Need To Make Investments

It is vitally important in this current day and age for all of us to begin taking control of our financial situation and commence planning for our future, as well as the futures of our children.

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We can no longer rely on the government to hand out an aged pension once we retire. We cannot take for granted that at the end of our operating life we will be taken care of monetarily.

The world population is ageing, because of the baby boomer generation, and within 30 years there will be so many senior citizens, compared to the number of working age people, that it will be economically impossible for the government to provide any reasonable source of monetary assistance for the elderly.

The government has realised this, and that is why they introduced the compulsory employer compensated superannuation scheme and are even now beginning to give financial incentives to Self-Funded retirees.

Most of us have never sat down and even considered the particular ramifications of why the compulsory super was launched and for many of us it is a down to too little too late. Even for the young women in our society who have a full working life ahead of all of them, they still cannot be assured of a comfortable retirement.

Why is this? It is because that unfortunately despite having contributions at the current amount of less than 10%, someone on an common wage who works continually for 30 years, is still planning to find themselves trying to survive with an income equivalent to less than $20,000 per annum in today's earnings.

You will notice that I said continually working for 30 years. This is one other reason why women are particularly disadvantaged. Firstly because they usually have to take up to ten years leave from the workforce to raise children, secondly because women generally earn less than their male counterparts and thirdly due to the fact an enormous proportion of females in Australia, for example, will never have received any superannuation contributions, prior to the compulsory superannuation being introduced, and will consequently not have had contributions made over their entire working life so far, giving them even less to fall back on by the time they leave the workplace.

Many women may previously not have access to thought of lack of superannuation contributions like a problem, as their husbands could have been contributing to super since they first began work. Unfortunately though with the high number of divorces in this country, it is unwise in order to rely on the fact that your partner's superannuation will be there for you in your retirement years and even if the great majority is awarded in a pay out that it will be sufficient to sustain a comfortable retirement for any period of time.

All of these factors are the reason why women now more than ever, have to begin taking action to build up a source of ongoing income, which will grow to such an degree, as to be able to provide a secure and happy future for their own reasons and their children.

It needs to be a source of income that is unrelated to physical work...that is money that is generated from earnings producing assets and not from your personal efforts.

One of the best sources of creating this ongoing earnings stream is to begin creating an investment property portfolio, additionally aptly paraphrased as bricks as well as mortar.

We need to start investing in revenue producing assets now, so they will have time to grow as well as develop so that we will be economically independent for our retirement many years.

The most important concept to grasp with regards to building wealth for retirement living and for creating finances that may be directed toward charities, or assisting your family is that of Compound interest.

In mathematical terms 72 divided by Compound Interest of Return = Many years for Money to Double in Value.

Therefore if you have $1,000 invested at 10% curiosity, then the number of years that it will require your money to double in order to $2,000.00 is Seven. It will quadruple inside 14.4 years and be well worth 8 times as much in only over 21 years.

If the money is invested at 7% attention, then it will take approximately ten years to double in worth. If it is invested at 5% it'll double in just over fourteen years.

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The two most important aspects associated with compounding are one: rate and 2: time. The higher the rate and also the longer the time something is left to compound, the greater the end result will be. This is why the sooner starting investing, the better.

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