iscover 
Supercharging your financial position isn’t about keeping your fingers crossed for a major windfall or working five jobs. Rather, it involves smart decisions that make your money do the hard work for you and compound over time. To do that, you’ll need to master these:
1. Solid foundations
Building anything strong and sustainable needs to be done from strong foundations. And your wealth is no exception. The five financial foundations for a healthy, wealthy life are:
- Emergency fund: Readily accessible cash (not credit!) you can access in a hurry. Make sure it’s in your own name and is only used for genuine emergencies. If you do use it, replenish it.
- Spending and investment plan: Demonstrating where all your money is, comes from, and goes to.
- Insurances: Covering your physical property, income, health, and life.
- Superannuation: Get the right structure, investment mix, risk profile, and tax benefits for your situation.
- Estate planning: An up-to-date will, beneficiary nominations, executor(s), tax-effective structures, custodianship and guardianship arrangements, letter of wishes, etc.
2. Secure housing
People who own at least one property are statistically far better off in retirement than renters because:
- They have a large asset besides their superannuation.
- Property owners can leverage equity gains to further invest without using their everyday finances.
- Home owners aren’t forced to move with just a few weeks’ notice.
- Most people have paid off their home by retirement, meaning housing costs are minimal.
Even ‘rentvesting’ (renting where you live and owning an investment property somewhere more affordable) gives you the benefits of property ownership plus a fallback place to live.
3. Avoid the ‘it won’t happen to me’ mindset
Divorce, chronic illness, accidents, redundancy, a partner’s premature death, domestic violence, natural disasters, elder abuse, scams… there are so many things that can go wrong in life. When they hit, they usually catch people off guard.
Sudden expenses and/or reduced incomes can force you to go into debt, sell off investments prematurely, or dip into your super. The lights stay on short term, but longer-term problems bubble away.
Instead, expect the unexpected by:
- Developing backup plans.
- Diversifying your investments.
- Safeguarding your income.
- Using multi-factor authentications.
- Being proactive to identify problems.
If the worst does happen, you’ll be able to respond accordingly and limit the financial damage.
4. Dodge bad debts
Remember the old saying, “You’ve got to spend money to make money”? This is where debt comes in. Essentially, good debts are ones that:
- Help you make money.
- Let you invest in assets you can’t afford using just your own income, but which should earn you a profit even after their costs are factored in (like a business loan or rental property mortgage).
- Are generally tax-deductible.
Meanwhile, bad debts are ones used to live beyond your means. They are usually:
- Expensive (high interest rates, fees, and late payment penalties).
- Leave you with little to show for (e.g. credit cards and buy now, pay later shopping apps).
- Can easily get out of control.
- Looked at unfavourably by lenders when you apply for good debt.
5. Get good advice
Seeing a financial adviser for help in managing your money and an accountant to manage your taxes is like seeing a doctor to manage your health. Yet many people try to DIY their finances, often leveraging social media or well-meaning family.
When it comes to advice, you get what you pay for. The expertise of someone who is suitably qualified, registered, and experienced in the field should net you far more from mistakes avoided and opportunities embraced than their costs. Free advice is on par with someone guessing this week’s lotto numbers.
6. Invest in you
A healthy you isn’t a nice-to-have – it’s an essential investment. This includes your:
- Health (mental and physical): Healthy people have lower healthcare costs, can earn an income for longer, take fewer sick days, and make better decisions (including about managing their money).
- Relationship: Divorce is a guaranteed destroyer of wealth – except for divorce lawyers. Singles also lose out on economies of scale (it costs less per person to feed and house a couple than a single).
- Professional development: Qualifications, training, and professional memberships can boost your income and progress your career faster.
7. Start now
The best ideas and plans count for nothing if you don’t put them into action. And the sooner you do, the more time you have for investments to grow and compound.
You can always start small and build up as your confidence grows if needed. But sitting on the sidelines or waiting for ‘the right time’ to start is a great way NOT to supercharge your wealth (and even send it backwards). So, hop to it!
Helen Baker is a licensed Australian financial adviser and author of the new book, Money For Life: How to build financial security from firm foundations.