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Why getting (the right) financial advice when you’re young is a good idea

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Seeking financial advice at a young age means that you can really reap the benefits. Here’s how.

Around the beginning of the pandemic, another strange virus began to take over social networks. “Finfluencers” have appeared everywhere, scattering colorful memes full of clear financial advice with a share of positive psychology.

These financially influential people want to pave your way to wealth and early retirement, but unfortunately most of them have to come up with a “don’t try it at home” warning.

Australian Securities and Investments Commission (ASIC) recently issued a warning financial influencers and companies that involve them in promoting their products.

“Finfluenser can collect rewards from multiple sources at once,” says ASIC Commissioner Katie Armor. “They may earn revenue from clicks or views of content, which can lead to conflicts of interest or lead to parades that do not meet the interests of consumers.”

The Commissioner also mentioned that financial influencers are often not licensed to provide financial advice and may be involved in “swing and reset schemes”. Here the influencer buys the company’s shares and then uses its social networking platforms to cause a stir to “pump up” or increase the share price.

Yes, it’s fair to say that getting your financial advice on Instagram and Tik Tok is probably not what’s best for you. But don’t let financial influencers give up financial advice altogether. They are not the same.

Here’s how to get good financial advice when you’re young can have a big impact on your long-term wealth.

Early retirement, anyone?

The government raises the official retirement age to 70, but many of us would would like to disable a few years before that.

Unfortunately, the ever-increasing life expectancy in Australia means that this goal may be unrealistic. More time in retirement means more money needed to fund our lifestyle as we age.

A study by the Financial Services Council found that a 30-year-old who seeks professional financial advice can conservatively save an extra $ 91,000 under 65 compared to someone who doesn’t. Which can affect if you want to hang boots.

For those starting at 45, the benefit falls to $ 80,000. While a person who is 60 years old will only have $ 29,000.

So for people who want to retire comfortably and carefree – maybe even a few years earlier – advice can make a difference.

Time is on your side

Young people are in a better position to benefit compilation of income on their investments, which over time may indeed increase.

According to Fidelty, 30 years before December 2020, the Australian stock market yielded an average of 8.55 per cent per annum with dividend reinvestments. This means that investment in an index of $ 10,000 in December 1990 rose to $ 177,299 by December 2020 – a good egg.

A financial advisor can help young people make the most of this opportunity by creating a long-term investment plan.

Young people have more free money

Young people tend to have fewer financial obligations than those who struggle to raise children, pay the mortgage and keep up with the Kardashians.

Australian Institute for Family Studies estimates that raising two children costs just over $ 340.14 a week. Or $ 17,687.28. Constance evaluation that the monthly mortgage payments average on a new home loan are $ 2,697, or $ 32,364 a year. And keeping up with Kardashian costs about eleven billion dollars a year.

So it makes sense to save and invest as much as possible at this stage. Before all these annoying and expensive commitments become a reality.

It’s never too early to start planning

When you’re young, a lot of great things happen there. From finding a Togo to building a career and traveling the world, it can be a roller coaster trip.

So it’s understandable not to spend too much time thinking about things like investing, retirement or insurance.

But life goes pretty fast. No one knows what’s around the corner. So it is never too early to plan for the future.

Getting financial advice when you are young means approxn remove all these sad but important things. Then you can focus on more relevant, exciting and no less important things in life.

So if you are at this stage of life or at any other stage, ignore finfluencers. Instead, find a reliable and a reputable source of licensed financial advisorse to run the ball today.

You will thank yourself later.

https://www.ymyl.com.au/early-financial-advice/

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