Ideas of financial freedom are closely linked to questions around retirement.
Freedom – in the most pure of terms – is ultimately about doing what you want, when you want. This is why considerations around financial freedom are so varied. Each person’s idea of freedom, of what it is to be free, is so different.
For some, financial freedom might involve retiring early, for others it could involve finding a job that they love (and never retiring), and for others still it might simply involve not needing to think about their finances again.
Such considerations are vitally important as they will impact how you save, invest, and more generally: how you approach life. Let’s unpack some of these ideas further.
The Average Retirement
As we wrote previously, on average, there is a gap between the retirement age super balance and the amount of super a couple or individual needs to retire comfortably. While this doesn’t apply to everyone, it unfortunately applies to many.
This means that investing – whether you take a DIY approach or take advantage of options like ready made Smart Baskets – might be a great way to fill that gap. Ultimately though, whatever approach you take, the lesson is the same: invest early, invest often, and invest consistently.
Retire Early
In recent years the financial independence, retiring early movement or FIRE, has grown dramatically in popularity.
FIRE is all about retiring early by saving and investing aggressively, often in the realm of 50-75% of one’s income.
Typically there are two key parts to FIRE.
One involves aggressively cutting your living expenses. Whether that’s making your coffee at home or going on one less holiday. The aim here is to reduce costs so you ultimately have more money left over.
The second part of FIRE focuses on generating more income or growing your money aggressively – through saving and investing.
Unlike the average retirement, a focus on retiring early involves sacrificing more in the short term and potentially investing more aggressively and taking on more risk. Smart Baskets like High Growth AU or High Growth US could be worth exploring for this type of investor, though they certainly aren’t suitable for everyone.
Don’t Retire
For some, retiring isn’t actually the end goal of saving and investing, rather, it’s about finding a career or pursuit that you love.
It’s undeniable that most of us will spend a significant portion of our lives working. Given that reality – in an ideal world – it makes sense that doing what we love all that more important.
In fact Warren Buffett – who is billionaire many times over and still working at the age of 92, who said:
‘There comes a time when you ought to start doing what you want. Take a job that you love. You will jump out of bed in the morning. I think you are out of your mind if you keep taking jobs that you don’t like because you think it will look good on your resume.’
In practical terms, for the investor who never wants to retire, generating a steady stream of income might be one important consideration.
With Smart Baskets you can easily find a collection of ETFs and stocks – aligned with your investment time horizon, risk tolerance and investment style, including income generating high dividend Smart Baskets.
Discover more about our Smart Baskets product and how they could fit into your financial goals, today.
Get Smart about Achieving your Goals
How and why you invest will be radically different based on who you are and where you are in your life. For shorter term goals income-centric products such as bonds might be something worth exploring, while for longer-term goals stocks might be more suitable, depending on how much risk you are willing to take on.
The flip-side of this equation is someone who doesn’t know what their goals are. For this person, lining up their ambitions with their investments can be difficult and even confusing. This is where Syfe’s Goals feature comes in, which allows you to set, track and invest against your biggest goals.
With Syfe’s intuitive goals feature you’ll be asked four key questions to help you define and put you on the path to achieving your goals:
- Choose and define a goal spanning: Financial Freedom, Retirement, House Deposit, or set a Custom goal
- Choose a dollar amount you want to assign to your chosen goal
- Define the time period you want to achieve your goal in
- Decide how much you want to invest on a monthly basis + your initial investment amount
- Link your Goal with your investments (Smart Baskets or choose from 12,000+ stocks & ETS)
By making specific goals, you get closer to your aspirations; letting you match up your investments with your ambitions – setting you up for success – in all aspects of your life.
Smart Baskets are pre-packaged orders formulated according to investment attributes of the underlying securities/ETFs (such as geographic and industry exposure, historical dividend yield, and historical capital appreciation), and do not take into account your personal circumstances, risk appetite, and goals. Past performance figures are based on information provided by third parties and may not be accurate. Past performance is not indicative of future performance. The information provided does not suggest or imply and should not be construed as any guarantee of future performance, or as investment advice or strategy. Each Smart Order comprises several separate orders for ease of execution only, and should not be construed in any manner as a managed discretionary account or a managed investment scheme.Investing involves risks, including the risk of losing your invested amount. We do not provide personalised advice or recommendations. You should decide if the orders to be placed are suitable for you. Any information we provide is general advice and current at the time written. Please speak to your financial or tax adviser for personal advice.
