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Smart & Simple Ways To Get Filthy Rich In Your Forties

Dirty thirties no more. Welcome to your filthy rich forties.

We’ve shown you how to get rich in your twenties and thirties and now that those decades are truly behind you, it’s time to clean up your fiscal act for good.

Besides being a professional chauffeur to midget leeches (children) or living it large and in charge as a high flying professional, there are still sound financial measures a man can take to ensure he comes out on top of the money pile during this decade.

“You could find yourself in a position where you owe more money to the bank than what your home is worth.”

If you’re buckling under the pressure of a growing family or having trouble laying down the foundations for a comfortable future, then listen up.

These are the five expert-backed tips you’ll need to weather the volatile economic times ahead. And possibly get filthy rich in the process.

Be Weary Of New & Increasing Expenses

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It’s not easy to dole out financial advice to every man in their forties, but assuming the common traits of a growing family and multiple outgoing expenses, there are proven ways to get around this.

Men in this decade will potentially be pulled in a few different directions. The biggest ones are of course school fees, mortgage repayments, and investing for your retirement.

Luke Laretive who is a Senior Private Wealth Advisor for Shaw & Partners explains that men need to have a plan on how to balance these conflicting priorities otherwise they’re selling themselves short for the best chance of financial success.

“If you’re feeling overwhelmed by more complicated financials in your forties, a professional can look at your personal situation and help you to implement a plan.”

“Vital money management tips for this age bracket includes maintaining your emergency fund, continuing to reassess your insurance needs, keeping an eye on expenses (reducing them where possible) and refinancing your mortgage to a better rate.”

A Pension Shouldn’t Be Your Plan A

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Most men in their forties talk and look forward to their retirement so much that they forget that a pension is only an assistance model. The Age Pension in Australia is designed to work in conjunction with a superannuation and will provide financial assistance if you don’t have the resources to support yourself.

More specifically it should be considered a safety net, not your plan A.

“The pension is income and asset tested, however the current maximum basic rate for a couple is $1,198.20 per fortnight,” says Laretive.

“If you don’t think this is enough for you to live the quality of life that you want in your retirement, then you need to ensure you are working towards building your wealth.”

Lower Your Risk Level During This Decade

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So you’ve made a decent bit of coin from the past few decades toiling the trenches. Nice work, soldier. Now it’s time to invest…but how, how much and how risky?

The general rule of thumb is simple: As your time to retirement decreases, your risk level should also be lowered.

“This will limit the likelihood of an event like the GFC wiping out your retirement savings the year before you were due to retire,” explains Laretive.

“If you’re currently 40, you still have at least 27 years until retirement age so you should still be taking on a moderate amount of risk.”

Those with a standing mortgage may find it difficult to know whether to contribute money to their super or pay down your home loan.

One way to help you through this is by jumping on ASIC’s Money Smart website which is a handy tool that can help show where your money will have the biggest impact.

Using Equity In Your Home

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This common practice may seem appealing to many but caution must be taken. Using the equity in your home is a financial strategy that can be great if done properly, or terrible if not.

“If you’re paying off credit card debt or personal loan with really high levels of interests then it could be a good idea to transfer the debt to your mortgage and pay it off with a much lower level of interest,” explains Laretive.

Equity can also be used to pay for important lump sum expenses such as your children’s school fees or for an investment, such as the purchase of an investment property.

“Some people, however, may take the money and buy a bunch of consumer items, like big screen TVs, that make them feel good in the short term but don’t add much value to their life,” says Laretive.

If a man chooses to take this risky route of spending the equity in their home, they also risk facing the unpredictable scenario of property prices falling and you needing to sell up.

“You could find yourself in a position where you owe more money to the bank than what your home is worth.”

Prioritise Health Over Wealth

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Health is the most significant factor as a man ages. Growing older brings with it the medical costs which can become one of your biggest expenses. There’s no easy way to stop this except via sound preventative measures, so keep fit, stay healthy and try to look after yourself if you want to secure your future quality of life.

Additionally, it’s recommended that men in their forties should teach their children about money so that they can develop financial skills from an early age.

Establishing good habits around earning, spending and saving money will help them as they get older and become responsible for their own finances.

Special thanks to Luke Laretive who 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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