Scott Francis has provided commentary towards an article written by Alex Tilbury and published in Monday's Courier Mail - 27th October 2008 - Tips for saving money in your 20s.
In the article, the following comments were attributed to Scott:
Scott Francis, a financial planner from independent advisory A Clear Direction at Milton, says the difference between financial success and failure might be as little as $20 a week.
"If someone saves $20 a week through their 20s, and invests in some sort of balanced portfolio, they can expect to have somewhere around $30,000 by the time they turn 30," he says.
Conversely, someone who spends $20 a week more than they earn is likely to have around $30,000 in debt.
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Francis says the 50 year return from Australian shares to the end of June 2008 has been 12.2 per cent a year, while inflation has been 5.2 per cent a year.
So he says if someone put aside the equivalent of $1,000 (in today's dollars) 50 years ago would now have an amount of $29,500 today - that's a 30 fold increase in purchasing power.
That's the "miracle of compound interest" which means the sooner money is invested, the sooner it is working for you.
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Francis says the 50 year return from Australian shares to the end of June 2008 has been 12.2 per cent a year, while inflation has been 5.2 per cent a year.
So he says if someone put aside the equivalent of $1,000 (in today's dollars) 50 years ago would now have an amount of $29,500 today - that's a 30 fold increase in purchasing power.
That's the "miracle of compound interest" which means the sooner money is invested, the sooner it is working for you.
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Francis recommends 20-year-old start now and save a small amount of your income every week (even $20 a week adds up over time)
"Stay away from the lure of credit cards and high interest loans - spending money that you don't have now only means that you have to pay more (because of the high interest) later," he says.
"Challenge the idea that greater consumption leads to greater happiness: there is no evidence for this everywhere, yet it is what every advertiser wants us to believe"
