5 The truth about creating wealth Flashcards
(44 cards)
What is the current weekly payment for single aged pensioners in Australia?
$335.95
This amount must cover housing, living, and other expenses.
What is the ASFA Retirement Standard estimated weekly cost for a modest lifestyle as of March 2009?
$374.60
This is the estimated cost for a modest lifestyle.
What amount is needed weekly for a comfortable lifestyle according to the ASFA Retirement Standard?
$725.36
This is more than double the current aged pension payment.
What percentage of persons living alone aged 65 and over rely on government pensions for their primary income?
76.3%
This statistic is based on ABS data.
What was one key reason for the introduction of compulsory superannuation?
To empower retirees to be more independent and less reliant on the pension.
What is the new entitlement age for the aged pension as announced by the federal government in May 2009?
From 65 to 67.
What is the key principle for creating sustainable lifetime wealth?
Spend less than you earn and invest what’s left over.
What does the secret to becoming rich emphasize?
How much of what you earn are you able to keep?
True or False: The majority of people end up poor in retirement because they didn’t earn enough money.
False
It’s often due to poor money management and spending habits.
Fill in the blank: The more dollars you spend that you haven’t yet earned, the longer you must work to _______.
repay the debt.
What percentage of pre-tax salary does the author suggest allocating to charity?
10%.
What percentage of pre-tax salary does the author suggest allocating to investing?
10%.
What is the recommended percentage of pre-tax salary to allocate for additional debt reduction?
10%.
What is the remaining percentage of pre-tax salary one should spend guilt-free?
70%.
What financial mistake did Jacquie make regarding her understanding of her salary?
She believed her salary of $60,000 was entirely available to spend.
What was Jacquie’s actual amount available to spend after deductions from her salary?
$41,700.
What two tricks can catch people out in managing their money effectively?
- Taking home less than gross salary due to tax and superannuation
- Equating joy of spending with effort of earning.
What was the main source of Jacquie’s financial troubles?
Her lavish lifestyle funded by debt.
What does effective money management require you to do?
Only spend what you earn, or preferably less than you earn.
How can translating the cost of an item into hours of work help in understanding spending?
It reveals the true cost of an item in terms of the effort needed to earn the money.
What is the relationship between consumerism and financial health according to the text?
Unrestrained consumerism leads to financial difficulties.
What is one effective way to avoid living beyond your means?
Calculate how much money you have available to spend after deductions.
What does the term ‘delaying gratification’ refer to in financial management?
Foregoing immediate rewards to secure better opportunities in the future.
What is the potential outcome of failing to master the habit of spending less than you earn?
Continuing to be the weak link in your investing efforts.
