Over the past month or so, I have had the opportunity to meet a large number of people at various events we have spoken at. As always, it is the ultimate honour to share time and skills with people who are wanting to make shifts and changes in the direction of their finances.
Reflecting this, on my flight home on Saturday, one of the common themes I came across was that many people are literally living week-to-week, pay cheque to pay cheque. It was a long flight and gave me a lot of time for reflection!
In the past, certainly say 2 years ago, this was not the case, people were generally more flush and of course willing to both spend and invest, to varying degrees. So what has changed and how can it be fixed for every day people out there?
Warning: These answers are shocking and may upset you
Looking into this, I have noted that BT and Ernst and Young conducted a survey of 5000 Australians recently and here are some of the findings:
56 PER CENT are unable to save as much as they would like to
More than 30% do not believe they will have a financially secure retirement
48 PER CENT say they rarely or never make contributions to a super plan
Nearly 20% are unable to find between $500 and $1000 if they needed it in an emergency
Just 35% have a financial plan to help them toward their goals
Pretty sobering reading and perhaps accounts for why so many are living week to week, all of which is compounded by the ever rising cost of living.
When to build Plan B
One phrase that I thank my father for, each and every day of my life is “dig the well before you need the water” – something he always reinforced into me. However, human nature is such that when things are going well, the prospect of developing a Plan B, perhaps a second source of income, is fairly unlikely – why bother because things are going well, right?
Unfortunately, the broader environment out there is changing and having a job – event a “good job” lacks the stability of the past. So sure, things may be going well now, but what if all that comes to a sudden halt?
How long can you and your family last if your salary stopped today?
Tough questions to be asking and no apology – better to ask tough questions and work on a fix, than ignore the elephant in the room and instead of tough questions be faced with tough times, just like the survey above.
Step 1 When is the best time to start investing?
In reality that was probably 20 years ago – the second best time is right now. Sounds like a cliché but very sage advice. Not putting it off and getting started is the only logical, intelligent or emotional response that can be arrived at. Why wait – afterall, do you really think the Government will look after you, when it comes time to retire? Trying to scrape by on even less that we have to scrape by on now?
Australia – the latté society!
A couple of years ago, a coffee was a $2 outlay – that is in a nice cup and at a nice café. These days, the same experience is $4.50 or thereabouts – at least where I live – could be more, could be less for you.
What will a cup of coffee cost by the time you are planning on retiring?
Instead of an everyday, run of the mill, normal experience, going out for a coffee will be a treat – a luxury for some people, as they struggle to make ends meet or have failed to adequately plan for retirement. How would you feel if that were you? Looking with envy as the tanned, relaxed sit on the other side of the glass, enjoying an extra shot or Soy milk as a $4 optional extra?
Many people are too busy creating a “lifestyle” and forget to build a future
Inflation is the silent killer of retirement income – and hence why investments like cash and bonds underperform in an environment of rising costs. Take a 3% return on cash, less tax and less inflation – probably closer to -0.8% a year in real terms. Instead, in inflationary times, assets such as shares and property provide a hedge against rising prices, by rising themselves.
As such, the time to start is now, not putting it off, until the stars are lined up and all is well with the World – there is after all no perfect time.
Step 2 – The best investment without question
Often I get asked “what is the best investment to start with” and my response is universal – in yourself.
Successful investing requires three things – Knowledge, Confidence and Timing. Gaining knowledge is a great and critical starting point – afterall, we don’t know what we don’t know!
More importantly, to take action and do something you need to be confident. It is unlikely you will be confident in something you don’t understand. Hence again, investing in you – in your knowledge is critical.
That said, there are plenty of places to get information to learn – however piecing it together on your own can be a challenge. As such, that is part of the reason why at Australian Investment Education, we don’t just provide education, we seamlessly link that education with our coaching and mentoring program. Afterall, many companies out there get you to a bootcamp, pat you on the head at the end and let you loose on the market – which as we all know doesn’t work that well.
Post bootcamp and training is really where our work, here at Australian Investment Education, with you helping you to build your knowledge in a robust and practical way and, most importantly, with the confidence to apply it.
Why not just open an account and give it a go?
Just opening a trading account and “giving it a go”, doesn’t work – even if you did make money, chances are you wouldn’t know how or why, making it practically impossible to sustain over a period of time.
Get educated – and lets face it, say you has a $100k in your Super, and have started to manage it, allocating a few grand to learn what not to do, as well as the sorts of things you could or should be doing is priceless.
And think about it – starting an account with a few thousand and seeing how it all goes, before committing a few tens or hundreds of thousand is simply ridiculous!
Afterall, the strategies you will probably use for tens or hundreds of thousand will likely be very different from that which you will most probably do with a few thousand, right?
Cheese on toast and Ten course degustation meal
It’s all a bit like saying I will try and do cheese on toast on the grill, and if that works out alright, I’ll invite 8 people over for a ten course degustation meal.
Lean the skills and be guided into how to manage your portfolio properly right from the beginning and your confidence, as well as your knowledge will be a rock solid foundation that will last you a lifetime.
Step 3 Fast Track your journey
One reading this, I hope this is giving you some food for thought. For some readers, perhaps is giving you the catalyst to get started, while for others, hopefully some motivation to start budgeting to kick start your investments.
Week to week is hard. I have been very blessed in that its something I haven’t experienced for more the 20 years, but thinking back on that long flight last weekend, it brought back a wave of emotion for me. In 1992, I was living week to week – I wanted to change that, I committed to changing that and I did.
What frustrated me then, as it probably does for you now, is that getting off the week-to-week merry-go-round is hard. Trying to save and build up the savings – the capital to be able to do something always seemed just out of reach.
What has 20 years in this Darwinian world of trading taught me?
One of the biggest lessons is that life only rewards action takers. These days, managing my various businesses and investments, I realise that week-to-week became a lifetime ago, but only after I committed to learning and then following through and taking action on what I learned. It set me free, mentally and financially, and I want you to save yourself 20 years and potentially fast track your escape from week-to-week.
Whether I am in an exceptionally good mood – well I am escaping the cold and taking my Wife to Europe this week – or whether it be a moment of introspection, I talked to my product development team at Australian Investment Education today and have convinced them to help you fast track your journey.
If you are truly wanting to do something, but cash flow and money is stopping you from becoming a member – perhaps you are in the week to week trap, then click here and the team will be in touch with what I know will be the most outstanding opportunity and offer we have ever given.
Life and markets only reward action takers
So, you have just three steps to take that may just help you avoid the pain of living week-to-week.
Step 1 – the best time for you to start is right now
Step 2 – invest in yourself first
Step 3 – fast track that journey
If you don’t register you wont even know what we have for you – if you do, I look forward to personally welcoming you to our family. CLICK HERE