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Putting Your Surplus Income To Work – Cash Money Lessons Issue 02

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1 of 1|Illustrated by Adrian Hogan exclusively for D'Marge

Welcome to Cash Money Lessons, where we take complicated money matters and make them easy for you to understand. Think useful stuff like: ‘How do I make more cash money to afford bottle service at the club?’ Enjoy.

Ever been told that if you took the few dollars you spend on coffee over 30 years and saved it, you could’ve had enough money to buy yourself a Ferrari?

The reality is there’s a lot of non-coffee drinkers who aren’t driving around in Italian supercars! Accumulating wealth requires a commitment to actively putting money to work as part of a long term investment strategy.

“It might seem daunting, but you should look at investing in shares like you think about property.”

The first thing you need to do is get your situation sorted. Pay off high-interest consumer debt like credit cards and personal loans and set up an emergency stash for the unexpected. There’s an abundance of online savings accounts that offer high interest rates and no fees.

These are great places for small amounts of money but remember that it’s a low risk/reward game and inflation will always be chipping away at the real value of your money.

Higher risk/reward alternatives are endless, but people often start with property and shares. Property requires a sizeable deposit upfront but almost anyone can start in the share market with a relatively small amount of money and add more as you go.

It might seem daunting, but you should look at investing in shares like you think about property, as a 5 or 10 year or even longer exercise, and like all serious financial decisions, consider your options and get some professional advice.

This is general advice and you should consider it in light of your personal circumstances.

Luke Laretive is a Senior Private Wealth Adviser @ Shaw and Partners. This is general advice and you should consider it in light of your personal circumstances.

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