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That's punting for you

I know it’s akin to a mortal sin to preach against the virtues of punting, being so close to the racing section in the Saturday Tele, but wealth building should not be a gamble.
Unfortunately, for many Australians, that’s exactly what is it. However, this is the worst road to riches.
The simple steps to wealth most Aussies never achieve start with a dream followed by a plan that goes after quality assets held for a long time.
The cocktail of great assets over time really goes down well and never ends up in a hangover.
A Paddington-based real estate agent this week told me that the suburb’s long-term average annual return was around 14 per cent. That’s not bad for assets that are both easy to flog and lease.
The first money book I wrote, which was really a rewrite of the US book — The Complete Idiot’s Guide to Getting Rich — had a table there that proved the value of quality assets over time.
It showed if someone saved $2000 a year between the ages of 22 and 30 — nine years — they would save $18,000. And if it was rolled into a super fund returning 9 per cent on average by age 65 there would be $579,468.
On the other hand, if someone starts late at age 30 and put in $2000 for 35 years until age 65 — that’s $70,000 — they would only wind up with $470,249.
Of course, if the early starters sticks with the $2000 saving until 65 they would end up with over  a million dollars.
No greater present can a parent give their youngsters than to convince them to commit to a steady saving plan into super, property or quality shares.
Sure compulsory super has us saving 9 per cent of our income but the experts say 15 per cent is needed to ensure a comfortable retirement.
This steady quality approach to building wealth should become our mantra that we preach to our kids and ourselves. We shouldn’t get sucked into the get rich gambles.
I’ve been looking at the tips from experts for the stock market year ahead and was surprised at the calibre of companies tipped.
Many of the experts recorded negative results last year despite the fact the stock market went up by over 11 per cent. On the other hand, one did over 100 per cent.
That’s punting for you.
One guy from the Australian Psychics’ Association did 19 per cent but his crystal ball simply selected banks and names like Qantas, BHP Billiton and Rio Tinto.

We all need quality crystal balls and financial plans. 

Published on: Saturday, January 03, 2009

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