Many Australians grow up believing that building wealth is something reserved for “other people”—high earners, business owners and those who were fortunate enough to inherit money. It’s a belief that comes up at family BBQs, in workplace conversations and even in the minds of clients who are otherwise doing perfectly well financially.
But here’s the reality: you don’t need to be wealthy to start building wealth.
And believing that you do often causes people to delay taking action.
Why This Myth Persists
When we think of “wealth,” we tend to picture the finish line. We imagine the big super balance, the investment portfolio or the financial freedom that comes later in life. Because we only look at the destination, we assume it must take huge resources to get there.
But almost all wealth is built the same way: small, consistent habits repeated over long periods.
The Power of Starting Small
A clear illustration of this is compounding.
If an investor puts away $5,000 a year and earns around 7.5% annually—a rate consistent with long‑term balanced or growth portfolios—they can end up with more than $500,000 after 30 years. No inheritance. No windfall. Just disciplined, repeated saving.
An even more powerful example:
- Person A invests $5,000 a year from age 25 to 35, then stops.
- Person B invests the same $5,000 a year from age 35 to 65.
Even though Person B contributes three times the amount of money, Person A ends up with more thanks to starting earlier and letting compounding do its work.
“But I Didn’t Start Early…”
The good news is that it’s never too late. Whether you’re planning for retirement, wanting to help your children or saving for a major life change, the same principles apply:
- Start today
- Be consistent
- Give your money a purpose
Ten or fifteen years of steady saving and investing can still dramatically improve your financial position.
Why It’s Easier Than Ever
Today’s investment landscape is more accessible than ever:
- Lower minimum investment amounts
- Automated contributions
- Easy‑to‑use digital platforms
You no longer need $100,000 to get started.
For households with above‑average incomes, this accessibility is especially powerful because you can direct meaningful amounts into long‑term strategies without compromising lifestyle.
Simple Steps to Begin
1. Automate your savings.
Set up transfers that occur automatically each payday. If you don’t see it, you won’t spend it!
2. Use the 50/30/20 rule.
ASIC’s guideline is simple and effective:
- 50% needs
- 30% wants
- 20% saving or investing
3. Make wealth‑building “lazy-proof.”
Remove friction. Keep the process boring and consistent.
The Bottom Line
You don’t need a high income or a head start to build wealth. You need time, consistency, and a plan that matches your goals. Your starting point is far less important than what you choose to do next.
At CommonCents Financial Planning we excel at facilitating comfortable productive conversations through clear and genuine illustrations of why doing it is so important and the potential risks of not doing it.
Contact us to chat about how you can take a step toward comprehensive financial security that spans generations.
