3 Tips to Beat Financial Depression
Feeling depressed, confused, and overwhelmed by finances is incredibly common, but there’s no need to feel this way.
Wealth and wealth accumulation should not be just for the wealthy or the elite.
Everyone from a young uni grad to a single mum or to a couple that’s just ready for retirement all deserve security, financial freedom, and of course, wealth.
I would like you to know that with very few small changes, you can find wealth.
For the most part, a person’s health and mental wellbeing are influenced by their genetics. We all know those annoying people who have hit the genetic jackpot; they stay slim no matter what they eat, they don’t do any exercise. But for wealth, everyone can hit the jackpot.
Many people in finance like to make everything very confusing and very overwhelming so that only the elite can have that wealth advantage. But getting that advantage should be, and can be, for everyone.
With some minor changes and a few little moves, everybody can partake in this wealth. Everybody can have a six-pack of wealth, as I like to say.
So, what are three of those small tasks?
1. Declutter your finances.
When I take on clients and go through their finances, the first thing I see is an enormously complex financial world.
As somebody involved in finance on Wall Street for over 25 years, I have the most straightforward portfolio; I could tell you my portfolio in one or two floors of an elevator ride.
But for the average Joe or average Jane, their financial world is very complex. So, I say consolidate.
Clean out the loans. Don’t have three credit card debts, a debt on your car, a personal loan, and a house loan. Consolidate it so you only have one loan you’re paying back, usually at a lower interest rate.
I also see people with loads of super accounts. There’s no need for that. Consolidate your super. You can do this easily through the MyGov site.
As part of decluttering, you should also consolidate your spending. There are loads of online tools which can help you simplify your spending.
You can also start decluttering with just a piece of paper.
Do a quick little audit, write out what you’re spending on, and I guarantee you’ll find that you’re spending on something you didn’t realise and something that you don’t need.
2. De-risk your investments.
Everyone, over time, will have built up unnecessary financial risk. It’s just a fact of life.
What might seem like a great investment at the outset might now be very risky. That’s life.
But what we can do is look at our investments, and say hey, am I taking on unnecessary risk? I’ve said this before. I see many people who believe that they’re stable and diversified, but they’re actually nowhere near it.
These people believe that they are diversified but are actually triple leveraged in Australia. They’ve got a big loan out to the bank; maybe it’s a mortgage. Their super is invested in Australian banks, and they are employed in Australia.
That’s triple leveraging.
But you can diversify your investments by accessing different markets. Different markets in different countries.
3. Build your finances.
This is where we look for opportunities. Now that our loans, spending, and investments are really simplified, we can build from that.
One of the best places to build is actually through debt. Paying off a high-interest credit card is a good example. If your card is at 30% interest, you may get 30% per annum back for every dollar you spend paying off your credit card.
But there are other places, of course.
If you invest for the long term on the stock market and get 10% returns, you can end up with quite a lot of money, even if you invest only small amounts. Another favourite of mine is building savings through compound interest.
Once you start implementing these tips and building your wealth on your terms, you should hopefully feel less stressed and overwhelmed about your financial future.
If you are feeling financially depressed, remember:
- Consider contacting a mental health professional—depression may not only be linked to your finances, and you may need other help.
- Consolidate your loans and your superannuation—consolidating loans will save you money on interest and simplify your financial world.
- Assess current investments for new risks—what may have once been a good investment might now be losing you a lot of money.
- Diversify your investments—consider investing in other markets to create a safer investment strategy.
- Pay off debt—paying off high-interest debt will always be a great move.
- Build your savings—placing money into a high-interest savings account can give you great future returns (and with the right account, for no fees).
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This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.
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Who is Paul Atherton, That Wall Street Guy?
An ex-Wall Street advisor who worked with major players in the global financial industry for over 30 years, Paul’s mission is to help regular people reclaim their wealth and financial security.
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