This uni student thought she was being smart with her cash but then she realised she had made a mistake that had lost her thousands.
It’s everyone’s wildest dream to become an instant millionaire with absolutely no effort on your part.
In this week’s Cashed Up course, news.com.au financial pro Ben Nash took us through how to do exactly that.
He had one simple word for us millionaire wannabes: Investments.
There’s no point twiddling your thumbs and hoping you win the lottery.
The time is now to start playing the market so you can get passive income, which is where you sit on your butt and do absolutely nothing but still get extra cash on top of your normal salary.
Luckily I’m only 22 years old so I have plenty of time to start getting my investment portfolio in order.
However, according to Mr Nash, I’ve already lost thousands in potential passive income because I should have started investing straight away.
Instead, I invested my life savings in a fund which turned out to be a bit of a dud.
Here’s how you can avoid my money mistake.
“If you had started investing with no savings and invested $1000 per month, your money could have turned into $180,000, $600,000, $1.56 million, or $3.84 million over the last 10, 20, 30, or 40 years respectively by just investing into the Australian share market,” Mr Nash said in his weekly column.
If there was a way to read this while looking guiltily at my feet, I would have done so.
I have certainly not been investing $1000 a month into the Australian Stock Exchange and I’m sure you haven’t either.
This nifty calculator designed by Mr Nash tells it all.
Even just putting $1000 in every month could make you a multi-millionaire in 30 years’ time because the share market rises by an average of 8.7 per cent, a lot higher than interest rates in your bank account at the moment.
Now, back to my money mistake.
I thought for a then-18-year-old I was being smart with my money.
Contrary to what you might think, I didn’t just let my cash gather virtual dust in my bank account.
When I finished school, I put most of my life savings into a term deposit, which is where you physically can’t access the money for a period of time, so the bank pays you higher interest rates because they can use your cash whenever they want without having to worry about you asking for it back.
Because interest rates were low at the time and, let’s be honest, it wasn’t a huge amount of savings I’d put in, I made a piddling amount of money.
For six months, I couldn’t touch those savings. I finally got a letter saying the interest I had made was going to be transferred into my account.
I think it was something like $100.
What I should have been doing, was adding instalments into the share market and now I’d have thousands more to my name.
However, instead, I kept putting my money back into that term deposit for another three years.
I was scared of entering the stock market and didn’t want all my cash to disappear…
Read More: Cashed up money challenge: How to start investing in the Australian