Wealthy & wise

With her basic principles of how to grow your money and keep away from scams, personal wealth educator LISA DUDSON takes the mystery out of investing.

- LISA DUDSON

Sorry to disappoint you, but I don't believe there are any real secrets to investing. Every year, though, millions of people around the world buy books and CDs, attend webinars, seminars and the like on a quest to find them. In fact, the secrets to investing are quite simply a number of basic principles.

These are:

1 Start early

I cannot begin to stress how important it is to start as soon as possible. If I had a dollar for every time someone said to me that they wished they'd begun saving earlier, I would have a large pile of money. Ideally, you should work towards saving a minimum of 10% of your income over your entire working life.

This is a principle of a world-famous book, The Richest Man in Babylon (1926), by George Clason. When you are younger, your savings could be part of your KiwiSaver contribution, or it could be saving for a home deposit. While starting early is very valuable, it is never too late; just decide to begin today, no matter how little you are starting with.

2 Pay yourself first

Most of us spend what we have. A good principle is to transfer part of what you earn directly into your savings or investment account as soon as you get paid. The saying "out of sight, out of mind" rings true. One could argue the reason most countries have a pension scheme is that the government figured out a long time ago that people can't budget.

3 Time in the market, not timing

Think long term. Far too many people try unsuccessfully to time the market. Don't wait for the best time to invest. The common saying, which is very true, is "Time in the market, not timing".