- Invest and Diversify
Once you are financially stable, have a savings account and no longer live paycheck to paycheck; investing is a great plan. Investments can appreciate over time and eventually provide for you. This can be in the case of a workplace accident, retirement or stint of unemployment. When investing, however, it is important to diversify investments across several different industries and opportunities. This way, if one market takes a serious hit, your other investments can cover the difference. Most Australian banks also offer several different investment and retirement accounts. These can be useful, as they make it easier than ever to develop an investment portfolio, plus they require very little work.
- Avoid Getting Emotional
With investments and other financial matters, it can be tough to not react with emotions. These can be either positive or negative, both can be detrimental. For example, you read the morning news on your phone and realize several of the stocks that you have invested in have taken a massive hit and depreciated. Without thinking, you pull your money out of these assets. If you had let those stocks recover, your investment portfolio would have remained on track. Instead, you lost money as you pulled your costs out as a result of stress. Conversely, pretend that your investments are doing fantastically. So well, in fact, that you buy an expensive new car with monthly payments. These monthly payments may be eating into your dividend, possibly at a rate that is greater than you are appreciating value. In these cases, you can eat into your investments so much that they are almost worthless.
- Ensure Your Income
TradeRisk is an income insurance provider that specializes in helping tradies protect their income. They understand the unique dangers and risks that come with trade work. This company offers different protection plans depending on your trade, so you don’t pay for any unnecessary excess. Income insurance is a great way to protect your income and provide for your family, especially when the worst happens. Unfortunately, trades can be dangerous. Sometimes, even when all the proper precautions are taken, injures can occur. Income protection companies can help you get paid, even when you can’t work.
- Try to Minimise Income Tax
Sometimes, we pay too much in taxes. By reading carefully through tax codes (especially when they are updated) you may find that there are ways that you can pay less income tax. By doing this, you are essentially giving yourself a pay raise. In Australia, this is more difficult to do than it would be in other countries, although it is still possible for many. Unfortunately, there have been tons of cases where employers have not been contributing their fair share to your super, so always check this when evaluating your income. Super is a great way for Australians to both protect their current income, as well as ensure that they will be financially stable later in life.
- Be Patient
It takes time to develop investments and protect your income. If you check your dividends, super or other investments daily, you are going to get a little crazy about it. Don’t do this. Take one day a month to look over your long-term financial investments and opportunities, to ensure everything is on the right track. Remember that these things take time to grow and won’t be fully developed overnight.
Saving money should be a key priority for everyone. In the unfortunate event of an injury on the job, you could be out of work for weeks or months. While income insurance and other protections will provide help, a solid savings account can help you bridge the gaps. It can also help you when unforeseen expenses come up, like car problems or Christmas gifts.
- Side Hustles and Other Incomes
Side hustles and passive income allow you to diversify your revenue streams in order to protect your incoming cash flow. For tradies, there are several skills that you likely have that can be developed for side hustles, passive income or both. Try to look for opportunities that you are excited about, as this makes the extra work easier.