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The Formula: Spend less than you earn and invest the difference wisely

Summary : Building wealth and making progress toward financial freedom boils down to a single, simple formula that applies to everyone: Spend less than you earn and invest the difference wisely. Also, minimise debt and unnecessary tax. Your progress toward financial freedom is the inescapable mathematical result of how much your income exceeds your expenses and what you do with the surplus. Income, Expenses, Tax, Time, Debt and your average Investment Return Rate are the only factors that matter.
Recent posts

Passive investing 101 via the Stockspot blog

  Summary : Stockspot is a low-fee, automated way of investing in passive index ETFs. Personally, I prefer Vanguard Diversified Index ETFs  (even lower cost) but there are some extra features Stockspot provides (gold, tilts). However, the most underrated free service of Stockspot are the simple, reliably-correct explanations of investing wisdom on its blog. I have told many people to just read the blog and virtually none of them bother or know where to start. In this post, I will link to only the best articles and categorise them.

Should I buy stocks in individual firms or only index funds?

 Summary : Never buy stocks in individual firms unless you can prove you have a worthwhile, legal stock-picking advantage over professional fund managers (99% of people can't). Invest via a low-cost retirement (superannuation) fund or if buying outside super, use Vanguard index funds.

Regularly switch to the best electricity and gas offers

Summary : You can save hundreds of dollars a year on electricity and gas by switching to the best offers and, where required to get the discount, by paying on time. You'll need to re-compare offers and switch if necessary once a year or when your 2-3 year contract or fixed-price period ends. Gain : ~$200-500/yr. $300/yr @ 7% return = $4,145 after 10yrs and $12,300 after 20yrs. Time : ~2-3 hours/yr to compare electricity and gas on the relevant government website and call the energy companies to switch. Our Situation : Electricity is with Tango Energy paying $1/day supply charge and 16.467c/kWh. Our gas is with Origin paying 70.543 c/day supply charge with usage rates: First 65.75Mj: 2.2 c/Mj; Next 131.51Mj: 1.969 c/Mj; Remainder: 1.694 c/Mj. All prices include 10% GST. Flickr CCby2.0 - Uwe Potthoff