You have finished your degree or traineeship and now find you’re in your first full-time position and would like to do something sensible with your newfound income other than travel and partying. So what should you do with your financial situation?
The most common scenario we come across with young professionals is that they have the big goals and objectives to get into the property market as either a property investor or as an owner occupier. However, due to the transient nature of today’s employment market, often young clients aren’t ready to commit or settle in one particular location and commit to large debt. And to do so would mean a big impact on their lifestyle expenses and travel – which is not a popular option (and no more smashed avo). So what are the alternative investment options?
- Put the money in the bank.
- Start a business.
- Start an investment portfolio.
- Contribute to the First Home Super Saver scheme
With interest rates at record lows it has never been a worse time to have large amounts of cash just sitting in the bank. If you aren’t willing to try your hand as an entrepreneur or business owner, your only remaining option is to consider an investment portfolio. The advantage of these, is that you can start with this little as a couple of thousand dollars and add to the investment on a regular basis. This can be an effective way for younger clients to build up their savings while earning a better rate of return than the ‘cash-sitting-in-the-bank’ option. BUT you do need to be prepared to be invested for five or more years.
The First Home Super Saver scheme started on 1 July 2017, and is an option worth considering for someone who is committed to purchasing a property in the next couple of years and there are some tax benefits in doing so. You can find out more detail at the ATO website.
Other areas where young professionals require advice, is generally the area of superannuation consolidation, cash flow management, personal debt repayments and personal insurance. Often young clients end up with multiple superannuation funds which hold multiple insurance policies which you may not need. A quality income protection policy is always worth considering for someone earning their first salary. Just make sure you don’t have additional policies that you do not need.
At Kelly Wealth Services, we have a specific tailored package for Young Professionals who are keen to get started on the right track. Making great choices now, could possibly see you retire earlier
Get in touch if you would like to book an initial obligation free meeting to discuss what is involved.