We've all heard the doomsday messages about where our economy is headed if things don't start looking up soon. But that doesn't mean we should just pack up our kits and go home. It is still possible to build wealth in a sluggish economy; you just need to know the right way to go about it.Invest In Property
Real estate, particularly commercial property, will always provide reliable gains when correctly managed because people always need places to live and work. The CBD is a great place to start, but anywhere near the central hub of any major city should provide good returns.Commercial real estate in Melbourne is booming at the moment, so if you're lucky enough to snap up a prime location, you'll be able to sit back and watch the dollars roll in. Enlist the help of a professional if you're unsure as to what you need to do to succeed in this department.
Open A Term Deposit
Term deposits can be dangerous as they stop you from having access to a large amount of your savings if you really need them. However, if you're confident in your ability to maintain your lifestyle with what you have available in the bank, then put the remainder in a term deposit.You'll make far better interest on an account like this than you would be simply storing the money in your standard savings. And each time you roll the balance over without removing accrued interest, you'll see a larger return on investment.
Pay Off Any Outstanding Debts
Credit cards and other loans can seem wonderful in the moment, but they're not so great when it comes time to pay back what you borrowed (plus interest). It can be tempting to just make the minimum repayment and get on with the rest of your life, but by dragging out the term of your loan, you're actually increasing what you have to pay back since the interest compounds each cycle.If you can't pay them all off in one go, your best bet is to consolidate your debts with a low-interest loan and work on getting rid of it as quickly as possible. Once you're debt-free, you'll be able to transfer the money that you were paying out to your savings each cycle and grow your wealth incrementally in this manner.
Put Money Into Your Super
This one is certainly a more long-term strategy, but your future is just as important as the present. Not only will devoting extra income to your super fund set you up for a better retirement but it will also help you build good saving habits as watching the balance of one account increase will motivate you to boost the amount saved in others. If you’re managing your super yourself, consider speaking to an SMSF accountant to ensure you’re getting the most bang for your buck.
This may sound simple, but it is something many people struggle with. As our wages increase, we tend to experience "lifestyle creep." In basic terms, this means that as our income goes up, so too do our expenses. If you stick to a budget and live within or below your means, you can prevent this from happening, leaving you much better off in the long run. Of course, you should feel free to treat yourself and live your best life. Just make sure you're putting away as much of the extra income as you're spending.Building wealth in a sluggish economy is definitely harder, but it's not impossible. Employ these tips and watch your bank balance grow.