At every stage of your life, you should be able to put some financial planning into action to grow your wealth and protect your assets.
- moving out of home
- starting a relationship
- joining the workforce
- buying a home
When you’re young, healthy and just starting out in your career, your greatest asset is time. Since your investment horizon stretches out for the next few decades, you have the luxury of taking on more risk with your investments so you can potentially earn higher returns.
You’re setting yourself up for the future, so you might consider allocating most of your portfolio towards high-growth assets, like shares and property. This means you’ll be exposed to a higher level of risk, but your finances will have plenty of time to bounce back if you make a short-term loss.
If you’re in good health and you have limited financial commitments, you’re probably focused more on having fun than on taking care of yourself.
But just because you’re in decent shape, doesn't mean you don't need insurance. In fact, you’re more likely to indulge in riskier behaviour, like adventurous travel or extreme sports. From these kinds of activities, you could end up with a serious injury — or worse.
As well as getting private health insurance, it’s also a good idea to take out total and permanent disability (TPD) and life insurance, so you’re covered against the unexpected. You might also consider income protection or bill cover so you can stay on top of your expenses if you get sick or injured and have to take an extended period off work.