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Great Financial Habits: Saving 10%

Editorial Savings & Investments 29 Jun 2018

Albert Einstein called compound interest the 8Th wonder of the world. The longer you engage it, the better off you will be. This is why Platinum Adviser Kane Jiang wants you to change your habits and start saving 10% if your income, starting right now!

Plus 10 Percent – what is it?

No, I am not talking about Australia’s extra GST on Ebay or online purchases today (although it would make a pretty good topic too).

And no, I am not talking about the accepted social norm of a certain Southeast Asian government in getting things done, either.

I am talking about saving money. And by the end of reading this article, I want you to save 10% of your money religiously.

The world of instant gratification

Most people ‘feel’ that when they save money, that they ‘lose’ that money. That is, if you save 10% of your income, then you don’t get to enjoy that 10%.

You would probably say “you only live once, so may as well enjoy it”. I think this is the most insane concept ever! If this is your life motto, you are living in the world of instant gratification.

I don’t blame you. With so much credit products offering you “0% interest”, and “same day credit approval”, our society has been inundated with such spirit for some time.

Why you need to save 10% now

Well, firstly you need to save because the bible says so (maybe that is one of the many reasons the church is one of the wealthiest institutions in the world?)

But on a serious note, you must realise, everyone has an expiry date.

During the last world war, our life expectancy was around the mid 60s mark. When I was living in Zimbabwe not so long ago, life expectancy was around the 50 mark.

But now it is expected that baby boomers (people in their late 50’s – late 60’s), will live until their mid 80s. And if you are in your 30’s, you can expect to live to 100, thanks to stem cell technology and all sorts of advances in the medical profession.

Our government seems hopeless in managing our tax dollars, and they understand that demographically we will have more old people to support than the number of taxpayers in the not too distant future. The days of Centrelink benefits may be numbered.

This is why, to me, when you save 10% of your money, it is not a loss, or negative of 10% to you, it is a positive 10%. It is a plus (+) 10 percent to you!

If you are still not convinced

Feeding your dog a slice of your pizza is not that much of a loss..

If you still consider that saving 10% is a loss to you, then picture yourself feeding your dog a slice of your pizza.

It is not that much of a loss at all is it? A slice of a pizza is more than 10% of a pizza, by the way.

If you think you won’t have enough to pay your bills, you will have enough. Humans have an amazing ability to adapt to new situations, when they must adapt. Humans have survived through the ice age, hunting & gathering periods, a few world wars, the industrialization age, now the globalisation age, and there will be many more to come.

So trust me, you can survive a 10% drop in spending.

The Small Picture

Let’s stop and not get too big on the big picture, like retirement as discussed above (you would say “my employer is paying into my super” anyway right?).

Let’s not get into cheesy goals like Machu Picchu holidays, buying a new car, or leaving legacies to your kids.

Do you have 3 months’ worth of your monthly expense in your bank account? It’s called “The Rainy Day” fund. It’s the piggy bank that comes in handy if you had lost your job, had an accident and unable to work, or for helping families in need. If you do not have this Rainy Day fund, then you need to save 10% ASAP!

For those of you who do have enough for rainy days, congratulations. But still, get into the habit of 10% now anyway. I promise you it will not hurt, at all. If not for anything else, I just want you to get into the habit of it. Just to get into the habit will make a lot of difference, especially if you understand Einstein’s concept of “The 8th Wonder of the World” – compound interest!

So start saving, make your positive 10 percent, today.

Kane Jiang is a Platinum adviser from AA Financial Planning, servicing Canning Vale in Perth. Kane has 46 Client reviews and an average client rating of 97%.

To see the value of compound interest over time, check out the compound interest calculator on the moneysmart website. You might just be amazed to see the effect of compound interest in the later years of your saving and what saving 10% now could do for you!

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Adviser Ratings & Great Financial Habits: Saving 10%, Comments Section:


"I was advised of this 10% rule a long time ago and it has set us on the path to prosperity. Once you get into the routine, you readjust your priorities and spending habits and don't even know its missing!"

Easy A 14:32 on 29 Jun 18

"The most valuable asset you have is time. Once spent you can never get it back."

Andrew L 14:23 on 29 Jun 18

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