31 Jan 2017
Eight money tips for good fortune and prosperity
The Lunar New Year is a time to celebrate and sort out your finances to ensure an auspicious start to the year. Here are eight money tips to help build wealth and bring you good fortune and happiness in the Year of the Fire Rooster.
1. Set your financial goals
Create your own good fortune by taking charge of your finances this year. Work out your financial goals and priorities and put a plan in place to achieve them. Whether you want to reduce your credit card debt, increase your savings, pay off your home faster or boost your superannuation.
2. Map your journey with a budget
Just as a journey begins with a reliable map, the path to wealth starts with an accurate budget. A budget helps you see where your money is going, and where you can make changes that will help you build abundance this year.
3. Get a better deal on your loans and insurance
Make sure you're not paying too much for your mortgage, personal loans or insurance policies. Shopping around for the best deals could save you thousands of dollars over time. Talk to your lender about whether they can give you a better deal to keep you as a customer. If they won't help you, don't be afraid to switch your mortgage or loan to another lender. Before you renew your insurance policies, check whether your current insurer is giving you the best value. You might be able to get a better policy for the same or lower price.
4. Improve your knowledge of investing
Knowledge is the key to good fortune. Before you commit to any investment opportunity, make sure you understand the product's features, fees, benefits and risks. Check if it fits with your investment plan. Never invest in something you don't fully understand. Arm yourself with as much knowledge as possible by reading investment magazines, following investing experts and use ASIC's MoneySmart investor toolkit. You can also test your knowledge using the investing challenge.
5. Keep your money safe by managing risk
If you invest wisely, the returns you earn can build your wealth well into the future. But all investments involve risk - and the level of risk increases with the amount of potential return. Before you invest any money, take the time to understand the link between risk and return.
One way to manage risk is to diversify your investments. By spreading your money across different asset classes and industry sectors, you are less likely to be affected by an economic event, like a drop in real estate prices, a fall in the share market or in a particular industry.
6. Be alert to investment scams and bad deals
Investment scams are professional, slick and hard to tell apart from real investments. Always be cautious if someone offers you an investment opportunity - even if they are a close friend, family member, or acquaintance. If the return is high or seems too good to be true, be suspicious about the investment. Many people have lost thousands of dollars investing in schemes they thought were a great deal because they didn't do their research.
There are things you can do to protect yourself before you invest. Check if the company is licensed on ASIC Connect's Professional Registers. It is also a good idea to get independent financial advice before you invest. Then you'll know from an independent source that the investment is sound.
7. Use your red packets well
At this time of year it is traditional to receive new year wishes and good luck in the form of red packets from friends and relatives. This wonderful tradition can make a difference to your financial fortunes if you use it wisely. You could use this money to build an emergency savings fund, clear your debts, contribute extra to your super or start investing.
8. Watch your money closely
Make sure you stay on the path towards good fortune by monitoring your progress towards your financial goals over the year.
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For the full original article click here, content from ASIC Money Smart, 8 Money Tips for Lunar New Year, Jan 23, 2017.