Quoting directly from a study commissioned by Credit Union Australia in June:
"Australians are neglecting to plan for their financial future, with more than half saying they have no financial plans in place and only one in seven having a comprehensive plan in place."
You know what they say, failing to plan is planning to fail.
But wait, there's more!
I know it's not good, but I can't say I'm surprised to hear that two-thirds of Australians in their 40's don't have a financial plan in place.
Nor did I bat an eyelid when I read: "42% haven't even thought about planning for their financial future."
In fact, less than just 10% of Australia's naughty-forties have a comprehensive financial plan in place, according to the findings.
All I can say is, thank heavens for the superannuation system.
But even that's not good enough (see below) to save everyone…
And while a younger generation may appear to have it made – they're twice as likely to have a comprehensive plan in place – their 'savings' might not be setting them up for a financially free future…
Instead of long-term investment plans, "they tended to focus on more short-term goals and assets like a car, or supporting their family" according to Jason Kriss of Bridge Financial Services.
Don't get me wrong. I'm not telling you to go out and meet with any 'ol financial planner – who is far too often incentivised to work in his or her best interests, and not yours.
But what I am telling you is $1 million in super won't be enough.
And if your 30 years or older, earning $60,000 a year, and only adding the basic contributions to super through your employer, you're not going to have enough.
In such a scenario, you'd have around $1.1 million by age 65.
But the bottom line is that relying on super alone isn't going to cut it, according to the findings of a report recently undertaken by Deloitte.
Women, who live longer, will need $1.76 million whereas a 30-year-old male must have $1.58 million.
You need to invest!
As a qualified – but not practising – financial planner, my top tip for building real wealth is to start investing early in life.
I do my bidding in the stockmarket over the long term because research has shown that's the best way to do it.
Indeed, history has shown that you too can enjoy average annual stockmarket returns of between 8% and 12%, by simply holding an index fund and reinvesting your dividends.
Or you can start doing it yourself by buying quality companies like Telstra Corporation Ltd (ASX: TLS), SEEK Limited (ASX: SEK) and Carsales.Com Ltd (ASX: CAR).
Who knows, a 30-year-old could retire with 150% more than the amount that super would provide relatively easily…
In the above chart, "Your strategy" tells us that if we started investing with just $500 a month, earning a return of 10% per year, a 30-year-old would have $2.65 million at age 70.
The "Alternative Strategy", however, starts 10 years later and would require us to invest $1,350 (2.7x as much) every month just to make the equivalent amount of money by age 70.
I know which strategy I'm going with.
Now, 10% annual returns might seem insane, but when you consider companies like Telstra are likely to pay a dividend equivalent to 5% every year, the share price need only go up 5% each year for you to meet the required return.
Moreover, the Australian stockmarket as a whole has returned 9.9% per year since 1970.
So by living below your means, exercising patience, investing just $500 a month and utilising a little bit of stock-picking prowess; you could be well on your way to making truly life-changing amounts of money from the stockmarket.
Just imagine if you could pick great companies and make returns better than the market?
Scott Phillips, lead investment advisor of Motley Fool Share Advisor (an investment service which tells you which stocks to buy and why), has a verifiable track record of market-beating investments.
