Paul Kelly was right: from little things, big things grow.
The best place to invest your money for the long term, regardless of your age, is super.
My 15 per cent super strategy is time-tested. It’s totally tax-efficient. And it works. Once you do it, you’ll forget about it. After a few months, you won’t even notice it. Only problem is that most people never actually get around to doing it.
Here’s you: Dude, I already have super—my employer pays it.
Here’s me (as I casually eat a mandarin, throw it on the ground, get right up in your grill and scream …) BUT IT’S NOT ENOUGH! (Little pips and bits of citrus hit your face, and you recoil in disgust.)
Yes, it’s true, your boss puts 9.5 per cent of your wage into super. But you are being set up to fail (though not if you follow the Barefoot Steps, of course).
I want you to put 15 per cent of your gross wage (that is, pre-tax) into super. (The official term is for making pre-tax contributions is ‘salary sacrifice’, but that phrase just makes me think of Elton John.)
Remember, your employer is already chipping in 9.5 per cent, so you only need to bump it up by a further 5.5 per cent to reach 15 per cent in total.
The government understands that the future is going to be expensive—that’s why they bribe you with tax cuts. If you’re earning $80,000 a year, you can slash your tax bill by more than half by diverting money to super!
That’s why super should be the centrepiece of your long-term investment program, and why it’s the ultimate way to automatically build your wealth.
To learn more about my strategies for building wealth, including how to start a share portfolio, check out my brand new book, The Barefoot Investor: The Only Money Guide You’ll Ever Need. Order your copy here.