Highlights in this issue:

*** Will you ever reach your dream of retiring in style…?
*** These 6 solutions will help you unlock your real wealth potential…
*** Uncovered: The 7 secrets of the fabulously rich… and more…

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From the pen of Karin Iten

Dear Investment Academy Reader,

The average South African will never reach their dream of building wealth, being financially secure and retiring comfortably. It’s not because they don’t have a rich, recently deceased, long-lost uncle. It’s because they’re making one or more of these six money mistakes.

Are you endangering your future by making these mistakes too? Cast your eyes below. If you answer no to any (or all) these questions, fear not. I’m going to tell you how you can fix each problem to get yourself back on track to financial freedom.

So go ahead, ask yourself… Do you have:

#1: A 30 year bond?
Where do you find the money to build wealth? Try looking at your bond.

Millions of homeowners think nothing of paying off their loans over a 30 year period. Yes, they’re the safest option, but they’re also the most expensive. Did you know with a 30 year bond you’ll pay around two-and-a-half times more than the price of the home you bought? That’s ridiculous.

Solution: Opt for a 15 to 20 year bond instead. You’ll pay a higher amount each month, but you’ll save big money on the interest.

#2: Control of your own money?
Are you involved in the day-to-day finances of your family? Even if your spouse handles all your payments, you’re putting yourself at risk if your spouse becomes seriously ill, dies or if you get divorced.

The same is true if you turn all your investments over to your broker or financial advisor.

Solution: Know the details of your finances, investments, debt, savings, etc. Get involved. Keep abreast of the situation. And never give total control of your money over to someone else.

#3:  Unseen spending habits?
Do you trickle your money away? Like a leaking bucket, even the smallest, barely noticeable amounts (like your daily R12 cappuccino) can have a huge impact on what you waste at the end of the day. Over time, the hole just gets bigger and bigger. By the time you notice it, the water’s gushing through.

But it’s a lot easier to plug a small hole.

Solution: Start a spending diary. Jot down every cent you pay in a month. And voilá… just like that you’ll know exactly how much you’re wasting on unnecessary expenses. If you’re going to accumulate wealth, you need to control your spending.

#4: Financial goals?
If you don’t have a map to Barbeton, chances are, you’ll never get there. To accumulate wealth, you need a plan. Like anything, motivation is the key. So if you’re saving, make sure you’re saving towards something.

Solution: Write down your goals. Visualise them. Whether it’s retiring early, an unforgettable trip overseas or sending all your children to university, your first step is to know where you want to go.

#5: Enough cash to last the month?
When you use this month’s salary to pay off last month’s spending, you’re in trouble.

Solution: If you have to buy something on credit, you shouldn’t be buying it at all. If there’s no way you can get around this, then ensure you don’t just pay off the interest every month. If you do, you’ll never get out of debt.

#6: Enough stashed away
Have you cashed out some of your retirement money? If you have, you’ve put a huge dent in your ability to be wealthy. But it’s not too late to fix things.

Solution: If you save between 10% and 15% of your income starting today, you’ll be well on your way to accumulating real wealth in later years.

In truth, wealthy people typically follow a lifestyle conducive to accumulating money. Here are the seven things they have in common:

1.    They live well below their means.
2.    They allocate their time, energy and money efficiently, in ways conducive to building wealth.
3.    They believe financial independence is more important than displaying high social status.
4.    Their parents didn’t provide economic “outpatient” care.
5.    Their adult children are economically self-sufficient.
6.    They’re good at targeting market opportunities.
7.    They chose the right occupation.

So there you have it.

Here’s to your financial freedom,

Karin Iten
For the Investment Academy