3 ideas to help you grow your wealth

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You can build wealth in many ways. You might choose to buy and live in your own house and enjoy the capital gains later on in life – great, that’s fine, however, here are 3 more ways to grow your wealth over time.

Rentvesting

Simply put, ‘rentvesting’ (renting + investing) involves renting in a location you want to live and buying a property in another location that may be more affordable or provide a greater return on your investment.

One of the key advantages of renting is that if life circumstances change – you welcome a new baby into the family and need a bigger house or need to move for a new job – renting provides more flexibility. But the major downside of renting is that you miss out on making your home a part of your wealth growth strategy.

Owning a property in a location that better suits your budget means you’ll be able to capture any capital growth in the value of the property while continuing to live in a location you prefer. Depending on your personal circumstances, there may be tax benefits to investing in a property while continuing to have flexibility in renting somewhere else.

Managed funds

If you are time-poor and don’t want to invest hours-upon-hours into picking the right stocks to buy on the Australian Securities Exchange, managed funds are a financial product that sees fund managers pool together money from multiple people and then they invest this on your behalf.

There are many managed funds out there and many of them have different investment strategies or will invest in specific things. From choosing to invest ethically in Australian and international companies or investing in new renewable energy projects, chances are there are funds out there that will pique your interest.

Start comparing funds today. Always read the product disclosure statements from the funds and pay particular attention to the fees the fund charges.

Superannuation

An additional 9.5% of every weekly, fortnightly or monthly paycheque is paid into a superannuation fund when you work in Australia and if you have had multiple jobs in the past, you might have multiple superannuation accounts lying about chewing through administration or insurance fees.

You can register with the Australian Tax Office through MyGov that will tell you if you have multiple superannuation accounts. If you have multiple accounts, pick one and then roll funds from all other superannuation accounts into your selected fund.

Don’t forget superannuation is the money that you have earned. Taking greater control of your superannuation now will mean you have a better outcome when it comes to thinking about retirement later on in life.

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