I’ve just started full-time work. How do I start building wealth?

I recently graduated from university and am now working full-time. I have a good salary, and also live at home so I’m saving a lot on expenses and can save a big chunk of my income. I don’t know a lot about investing or property, but I want to build wealth for the future while I’m saving so much money. What’s the best way for me to get started?

I like to simplify personal finance into four main buckets: earn, save, invest and protect. For many, having a job tends to be the main way they ‘earn’, although it doesn’t have to be limited to that.

Starting work for the first time can feel like you’ve got a lot on your plate, but taking the time now can set you up well in the future.Credit: Simon Letch

The next part, ‘saving’ is about putting some of that income away before it has a chance to be spent. The purpose of savings is two-fold: (1) future spending and (2) investing (which in some sense is also done for future spending, but longer term).

So, you’ll want to have a parcel of savings that is specifically dedicated to bigger-ticket purchases in the medium-term future (e.g. a holiday next year, a car in 2 years etc), whereas the savings you earmark for investing should be money you are happy to not touch for at least 5 or more years.

If you just put all your savings into investments, you risk having to sell-down your investments to fund unforeseen purchases. Next, on investing. My recommendation for beginners is to start by getting a good grasp of your superannuation, because you’re already investing via super.

Spend the time to understand things like: what portfolio are you in, what do the different asset allocations mean (ie. growth vs defensive), what factors impact which kind of asset allocation is right for you (i.e. generally people who are younger and have less financial responsibilities can afford to take on more risk and may choose more growth-oriented allocations), what are the different fees for, what is your super money invested in etc.

Career and financial success are not always related,though we like to assume they are.

If you can take the time to understand your super, it will give you the confidence and skills to start investing outside super as well, since the basic principles all still apply.

I’m finishing high school, and I’m not sure what I want to do next. I have worked retail jobs during my senior years, so I have a little bit of money saved up. I feel a lot of pressure to go to university, but I don’t have a specific career path I’m sure about. At the same time, I want to set myself up for financial success in the future, and I’m worried I won’t have good job prospects without a university degree. How can I set myself up for future financial and professional success, given I don’t have clarity on what I want to do?

Career and financial success are not always related. We like to assume that if someone is successful in their career and earns lots of money, they must also be financially successful. But you can be professionally successful, and at the same time, financially unsuccessful.

Being financially successful requires more than just making money. Earning money is only one part of the equation. The other part is knowing what to do with that money. That is a different skill set to earning and being professionally successful.

This means you need to separate the two goals. To set yourself up for financial success, spend time learning the skills required to manage money well. Learn how to save well, invest well, and protect your assets well. Those things aren’t taught in the majority of university degrees (unless it’s a finance degree, and even then personal finance will not be a primary focus).

In terms of professional success, honestly, many who go straight to university out of high school do so with little understanding of what they are really signing up for. Years later, they may feel ‘stuck’ in a career they don’t enjoy but feel they’re ‘too far in’ to change. It’s a huge time and financial investment to go into, with such little clarity.

Today, there are alternatives that can help give you more clarity at a fraction of the time and cost. There are short courses, internships, international work opportunities, that can all give you a better understanding of what work you like.

If you spend the next year doing a handful of short courses while doing part-time jobs or internships in areas of interest, you will be in a better position to make that longer-term commitment to a university degree from a position of confidence.

Long term, this approach will likely save you a lot of time and money, by reducing the likelihood of investing in a degree you don’t end up enjoying or making a career out of.

Paridhi Jain is the founder of SkilledSmart which helps adults learn to manage, save and invest their money through financial education courses and classes.

• Advice given in this article is general in nature and not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

Expert tips on how to save, invest and make the most of your money delivered to your inbox every Sunday. Sign up for our Real Money newsletter.