FLOURISHING AFTER 50: I grew up poor but have managed to pay off my mortgage at 53 through sheer hard work. Now I have lots of spare cash. What should I do?

Hi Vanessa,

I grew up in poverty and as a result I have a very risk-averse relationship with money.

I am 53 years old and through hard work I have achieved my long term goal of being mortgage free.

That means I now have a lot more money to spend – about $4,000 a month – to save or spend.

My friends advise me to buy an investment property, but the idea of ​​getting into debt again – even if it is ‘good debt’ – scares me.

Should I just put $2,000 of my monthly disposable income into my retirement fund and put the other $2,000 in a savings account that I can access at any time?

I don’t want to buy shares, I prefer the safety of a savings account, even if the return is lower.

Thank you,

Kaat.

Send your questions to Vanessa at floringafter50@dailymail.com.au.

If you want to learn more about identifying your life goals and how to spend your money to achieve them, check out my mini-course Design your dream life here.

Hi Kate,

Firstly, congratulations on achieving your goal of becoming mortgage free – that is an incredible achievement! Many people in their 50s are still struggling with debt, and the fact that you have worked so hard to get here is a testament to your determination. You should be very proud of what you have achieved.

You have a good question and I would like to share a story about someone I know who was in a similar situation that may help you in the next phase of financial decision making.

Let me tell you about my friend Sarah. Sarah grew up in a family where money was always tight. Like you, she worked her way up and made it her mission to pay off her mortgage. She was determined never to feel the insecurity of debt again. By the time she was in her early 50s, she was mortgage-free and had extra disposable income for the first time.

Like you, Sarah’s friends were all for the idea of ​​investing in real estate or stocks, but she couldn’t bear the thought of going back into debt—even when everyone told her it was “good debt.” After so many years of playing it safe, Sarah was risk-averse and didn’t want to lose the sense of security she’d worked so hard to build.

This is what Sarah did. She didn’t ignore her friends’ advice, but she also didn’t rush into something she wasn’t comfortable with. She split her extra income the same way you plan to do it: half into her superannuation and the other half into a high-interest, accessible savings account. This gave her the best of both worlds: growing her wealth over the long term through super, while having the peace of mind of knowing she had the money to hand if she ever needed it.

But before you make a decision, I’d like to share what my friend Natallia Smith, an independent financial planner who specializes in helping women with Truwealth Advice had to say about your question:

‘Before you make any decisions, it’s important to stop and think about your financial goals – both short-term and long-term. What do you see for yourself? Maybe it’s that well-deserved vacation, or maybe early retirement? Your money is simply a tool to help you achieve those dreams, so it’s essential to keep them in mind.

‘Setting aside $2,000 a month in a savings account gives you a reliable safety net for emergencies or unexpected expenses, which can provide a real sense of security. It’s also a great way to save for any short-term goals you may have. Given your background, it’s completely understandable that you’re wary of riskier investments like real estate or stocks, which can feel overwhelming.

‘While growth stocks, such as real estate or equities, can potentially offer higher returns over the long term, they do come with increased risk. They are often better suited to those who are more comfortable with uncertainty and have a longer time horizon.’

Financial planner Natallia Smith of Truwealth Advice specializes in helping women achieve their financial goals

‘However, your consideration of contributing to superannuation is an excellent idea. It is a powerful way to build your retirement savings, with both tax benefits and the potential for long-term growth. Superannuation typically involves growth assets, but you can choose an investment option that suits your risk appetite. It is always a good idea to review your super fund’s investment option to ensure it aligns with your retirement goals.

‘If you feel uncertain or uneasy about these decisions, you are not alone. It is perfectly normal to have reservations, especially when it comes to your financial future. In this case, seeking tailored professional financial advice can provide clarity and peace of mind.’

Do what feels good

Ultimately, the best financial decisions are the ones that keep you sleeping at night. Sarah thrived by sticking to what felt right for her while taking baby steps to grow her wealth. She never regretted her choice because it fit her comfort zone, and she is still financially free.

We’re sending you a copy of my book The Breakfast Club for 40-Somethings for asking such a thoughtful question. I hope it inspires you even more on your journey.

And if you have any questions about money or life after 50, please feel free to write. There is no one-size-fits-all approach to finances and I am happy to help you find the path that is right for you.

Vanessa.