by Greg Carroll www.attitudefinance.com

In my profession I come into contact with a lot of different people, some who are struggling just to get by and some who are well on their way to building a substantial asset base and securing their financial future. The interesting thing to observe is that the people who do have a high net worth are not necessarily the people with the highest income. In fact in some cases it's the complete opposite, with some of these people are just above minimum wages.

Most of us have a perception that to get ahead we need a higher income - "Once I'm earning X amount then I'll be able to start building some wealth". The problem is people get to this higher amount, but then shift their lifestyle up to match it - a bigger house, more expensive furniture, the bigger television, more expensive car. So at the end of the day there is no more left in their bank account. And so their wealth plans never really get started.

Or the other one is that people say "We'll pay the house off first and then start investing". While this is great in theory, things tend to arise that push this time frame out - renovations, a new car, moving house. Before you know it another 5 or 6 years have passed and your plans haven't really progressed very far at all.

What I've noticed with the people who do get ahead is that they make a decision to do something and just get on with it. In other words they realize that the time to start their wealth building plans is now. Certainly they do their research and they get professional advice (which is critical), but ultimately they just make a decision to do something. I think the reason they do this is because they know if they take action today the benefits will return to them down the track. And delaying action is only delaying the inevitable returns.

Look at the share market for example. Certainly it has its peaks and troughs, but over time it has continued to move above its previous highs. If you had made the decision to buy BHP Billiton back in 2001 when everyone was leaving the market in droves you would have picked it up for around $9.80 a share. It's now sitting at around $30.43. Even within the last 12 months it has been as low as $15.52. 

For the record I'm not promoting the share market as the only option. I am fortunate enough to hold BHP and other shares, and have also bought property so I'm not locked into a particular type of investment. Importantly before you undertake any investment strategy you should obtain independent advice to ensure the strategy is correct for your circumstances and risk profile.

In my experience the biggest risk you can take is to do nothing at all.

This information is provided in good faith but is not intended to be comprehensive and does not constitute advice. The above information is an example only and does not take into account market fluctuations or individuals specific circumstances. The ability to access the rates shown is dependent on individual circumstances and specific lenders policies. The Home Loan Spot accepts no responsibility or liability for anyone relying on this information.