How to get richer: six ways to make 2024-25 a money winner

Will 2024-25 put you on a fresh path to riches? Here are some strategies that have made many money winners for decades.

Examine ways to make the new financial year a money-spinner. Picture: iStock

It’s party time for finance nerds as we celebrate the start of the 2024-25 financial year and wish everybody a happy new one.

But rather than recovering from a big New Year’s Eve bash, we’re busy on calculators and studying investment reports, property data and economic statistics.

Sound exciting? Obviously not, but you don’t need to be a numbers nerd to have a happy new financial year.

You just need to start doing something to put yourself in a better wealth position when 30 June 2025 rolls around.

1. KNOW YOUR SPENDING

Before beginning any wealth-building activity, it’s worthwhile knowing what things are sucking money from your life unnecessarily.

Many of us spend through habit rather than for enjoyment or any real reward, and eliminating this wastage is an easy step to get more money.

Check bank account and credit card statements to see exactly where your money goes and whether there are recurring expenses you’ve forgotten about or don’t really need. Then cut the fat.

2. PLAN YOUR FUTURE

You don’t need to see a financial planner to have a financial plan, and planners are in short supply these days and professional advice costs an average $4000.

However, there’s a pile of free tips, tools and advice on financial institution websites and other sites including moneysmart.gov.au. Write down some targets you want to achieve – you can’t reach a goal if you don’t know exactly what that goal is.

3. AUTOMATE YOUR SAVINGS

Good money habits are easy to stick to if you make saving and investing automatic.

This can be done by organising direct debits on payday into a designated account, or setting up salary sacrifice into super where you put some cash every pay into your nest egg and get tax benefits for doing it.

Automation means you money flows into wealth-building before you get a chance to spend it.

4. INVEST FOR GROWTH

Investing in anything beyond bank deposits, which are safer than houses because they’re government guaranteed, is scary for many people because there is a risk of losing money.

However, diversifying across a range of asset classes such as shares, property, fixed interest, infrastructure and alternatives means you won’t lose everything unless the whole world collapses. Quality assets have always risen long-term, and you can diversify within asset classes too.

5. PLAN FOR PROPERTY

Your home is both a roof over your head and a brilliant capital gains tax-free investment, and should be the number one finance goal of everyone.

Heading into retirement as a renter means you will constantly need to find money to pay ever-rising rents, so the sooner you get a foot in the property door, the better.

Obviously this is tough for today’s first homebuyers amid soaring property prices, high interest rates and tough bank lending criteria.

So examine all options – including government homebuyer incentives, the bank of mum and dad, teaming up with relatives or friends, and making your first home an investment so tenants help pay your mortgage.

6. EMBRACE COMPOUND INTEREST

The process of earning interest on your interest, on your interest, and so on is the most powerful way to get richer, but it takes time.

It’s why superannuation works so well, because investment returns stay in your fund and multiply over many years.

Learn about compounding, and play with the moneysmart.gov.au compound interest calculator to see just how powerful the impact can be.

Originally published as How to get richer: six ways to make 2024-25 a money winner