Spring has sprung and the start of the Spring Selling Season! That means working round the clock, early rises and weekends focused on selling all your listings.
The payoff for all your hard work is the commission cheque on a successful sale!
And what to do with it?
Well pay yourself … in a way that will pay dividends to you in the future.
Super boost yourself!
Subject to your personal situation, Super can be a tax effective way to save, as it’s only taxed at 15% if you make a before tax contribution. That means if you are on a higher tax rate, you can save in a way that helps you be more tax savvy. Plus you’re contributing to making your future retirement more comfortable.
So using a tax refund to grow your retirement savings can be a smart move.
Given the power of compounding returns, the more you contribute now to super, the more likely you’ll have for retirement.
The other consideration is, if you are on a commission-based salary, then you won’t necessarily be contributing to your super in a way that is reflective of your earnings or lifestyle you would want to keep in retirement!
So making it a habit to deposit a large contribution or a set percentage with each property sold, will help you to consistently be growing your super wealth.
Reduce bad debt
If you have debt that is charged with high interest, then start paying off this debt first, and aim where possible get this down to nil. The less you are paying high interest rates, such as your credit card, the more you get to keep in your own ‘savings’ account!
‘Just in Case’
Do you have a ‘Just in Case’ Fund? This is an emergency fund - just in case! Do the sums quickly, what are your expenses for a month? Mortgage or rent, bills, petrol, food? Add them up and multiply by six.
This is how much you should have in your ‘Just in Case’ Fund ? Enough to cover your expenses for six months. Making sure you’ve got this money in a separate, yet higher interest account if possible, where you can’t access it on a daily basis will help keep your emergency stash safe from yourself and reserve it for when you really need it.
Happy Selling Season!
P.S. It’s super important that you also talk to your financial advisor or accountant to make sure any financial decisions you make are relevant to you with all the necessary circumstances particular to you taken into consideration.
Disclaimer: The information contained in this article does not constitute financial product advice. However, to the extent that the information may be considered to be general financial product advice, REI Super advises that REI Super has not considered any individual person’s objectives, financial situation or particular needs.