I was always taught in relation to saving and investing that it is not the amount that counts, it’s where you put it – it’s allocation.
Time is an investor’s best friend, and understanding the power of compounding interest, and other minor tricks can be the difference in turning
a little into a lot. The median wage in NZ when annualized ends up being about $49,900,
take away student loan payments and Kiwisaver, add rising rents, potential other debt (credit cards, HP’s, etc.), and this can be a heavy load
to carry for an individual already, let alone trying to spare cash for savings and investments – which in many cases, the
low-risk ones such as bank savings rates aren’t even keeping up with inflation! What do you do?

Financial planning

Financial planning and your prudence around this topic will be the key
to getting ahead, particularly if you are younger and have time on your side. Beginning with a suitable budget and planning the use
of your net income is important. Looking at your gross-income is utterly useless in this scenario, as you can only invest what ends up in your
hand. One method that seems to work well is treating your savings as your most important expense. This means that from your net income, you pay
yourself first (usually a portion such as 10% of everything you earn), and then distribute the balance to your expenses. Wealthy individuals invest
first, and then spend what’s left; it is the poor who spend first and then invest what’s left – a simple change in strategy can be the difference
between poverty and wealth. Aside from
this, you...