Financial adviser on investing tips to get a $700,000 balance

They have 21 times the average Aussie investment portfolio. Now a financial adviser reveals how a new group of affluent investors have so much money.

Most people think that being successful with money comes down to finding good investments. Choosing good investments is important, but it’s only half the battle.

If you focus on only choosing good investments, you can end up leaving a heap of opportunity (and money) on the table. It’s also possible to choose good investments that actually end up not being the right move for you.

Research recently released by Finder shows the average Australian investment portfolio size is $31,613 but there are growing numbers of Aussies who are managing to invest more and build their wealth faster. Data from one of Australia’s largest investment platform providers Netwealth shows there are a growing number of ‘emerging affluent’ investors who have an average investment balance of $716,352.

This reflects an investment portfolio more than 21 times larger than the average Australian. So what are these investors doing differently? And what are the things you need to know to invest more money and grow your investments faster?

If you want to be truly successful with money, there are some things you need to be doing and thinking about beyond ‘just’ finding good investments.

Making choices in isolation

One of the most common questions I’m asked as a financial adviser is: “I have $10,000 to invest, what should I do with it?” And I never have a good answer.

The reason I don’t have a good answer for this question is because the right move for you depends on you. It depends on where you’re at now, what’s coming up for you, and what you want to achieve and what’s important to you.

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There is no right answer to how you should invest $10,000.

If you only think about choosing an investment that will make you money, you can end up with an investment that doesn’t fit in with your bigger picture plans.

For example, you buy a property that grows strongly in value but doesn’t fit in with your other lifestyle goals. It could be that you want to take some time away from work to start a family, change careers or launch a business.

All these lifestyle goals might be really important to you, but not fit well with making mortgage payments on a property. In this case, even though your property might be growing in value, it can be a total disaster for you.

When you invest, ensure your investment fits in with the other things going on in your life and financial world. This will help make sure your investment move is actually a good move for you.

Investing without a budget

I get it, budgets are boring and probably the least sexy part of your money strategy. But what a good budget and savings plan gives you is clarity on how much money you have to work with, and how much money you can confidently invest.

Investing without sitting down and making a budget is your first mistake. Picture: iStock

When looking to invest, look at your budget both today and for the years ahead. Then think through what might change and what it means for your money. Then, when you make your investment choices they’ll fit with your situation today and with what’s coming up.

Not being aggressive when you should

Building your investments to a level that can replace your income is a big undertaking. It takes some work, it will take some time, and it needs you to be committed to following through to get results.

I talk to a lot of people who have ‘dabbled’ with investing, taking some action and making some investments because they know they should invest, but not really taking the time to fully understand their investments. The outcome is a lack of confidence, and when you don’t have full confidence it’s hard to push to the level you could or probably should.

The ultimate result is that you continue to dabble, and you can make some progress, but it’s always to a level less than your true investing potential.

Ideas without action are meaningless

Thinking through and planning with your investments is important, but ultimately it’s action that drives results.

It’s common for would-be investors to spend a lot of time in the planning stage, and then become stalled before turning ideas into action. But it’s action that drives results, so if you fall into this trap, all your effort planning and strategising will be wasted.

As you’re doing your research and preparation, you should be focused on the steps needed to confidently drive action and ultimately the results you’re looking for. If you end up confused or overwhelmed, think about getting some professional help to push through the inaction trap and get your investing kick started.

The wrap

Investing can be hard. It can be confusing. And it does take some work. But the results are worth it.

Take the time to ensure your investment choices fit in with your bigger picture plans, your budget, and build your knowledge around investing and your investments. In turn, you’ll get the confidence you need to take action and build your investing momentum.

Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth www.pivotwealth.com.au, and author of the Amazon best-selling book ‘Get Unstuck: Your guide to creating a life not limited by money’.

Ben has just launched a series of free online money education events to help you get on the front financial foot. You can check out all the details and book your place here.

Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.