Building Wealth Early

Spend less, Save more while you're still young

The time in our life where we have the most capacity to build wealth is also the time when it is probably the last thing we are thinking about! When we first commence full-time work, it is common to have a high capacity to save, and a low desire to do so.

Most young Australians are staying at home longer, generally due to the ever-increasing cost of housing. This is keeping their cost of living quite low, resulting in a reasonably high disposable income. The problem is that most young people are not utilising this cash flow surplus to build wealth or achieve medium to long term financial goals. Who can blame them?  The last thing I was thinking about in my early 20’s was my financial future.

Starting early provides a number of advantages. Compound interest is very powerful and sees investments increase exponentially if invested for a long period of time. If you can get ahead early, generally you will get further and further ahead.

Furthermore, once a saving habit is formed, it is easy to maintain. Consistent savings over a long period of time is the secret to developing wealth.

In our early 20’s, when many have very few expenses but are earning reasonable income, it is easy to save without having to sacrifice too much. A large portion of our money is discretionary spending so sacrificing a small portion of this for the medium or long term is unlikely to affect lifestyle to any great degree.

Salary sacrificing $20 a week from age 20-30, if invested in a balanced fund that averages ASIC’s estimated 7.2% pa return, will be worth of $260,000 at age 65. This will make a significant difference to retirement. $20 pre-tax is likely to have very minimal impact to ongoing lifestyle.

Saving $100 a week into a high interest bank account earning 3% pa will see you accumulate just under $30,000 in 5 years. This would see you well on your way to saving for a home deposit.

If we are able to start building wealth before we start accruing financial commitments that make saving difficult, we will be on the front foot financially.


If you are in the situation where you have high disposable income due to having low financial commitments, starting to build wealth will really help to secure your financial future.

Author; Alex McKenzie Categories: Future Financial Services Blog

About the Author

Alex McKenzie

Alex McKenzie

Owner at Future Financial Services


  • Paraplanner at Zammit Partners Investments
  • Unit Trust Administrator at Colonial First State


  • University of Western Sydney
  • Penrith High


As a Financial Planner I help people to achieve what they would like in life. This involves helping you to identify the things in life they would like , developing plans to help achieve them and strategies to protect what you already have. We do this by providing Financial Advice to guide you through your life stages.

The financial planning process involves determining a clients current situation and financial objectives and tailoring strategies to assist in best achieving those objectives.

I am an expert in superannuation, investments and insurance, these are tools we use to help you achieve your goals.

I aim to use my knowledge of superannuation, taxation and Centrelink to efficiently use your assets and income to achieve your financial goals.

Retirement and pre-retirement planning, wealth creation, asset protection, insurance planning and estate planning are all areas of advice that I provide.

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