What does your future look like? Have you ever stopped to consider what you will be doing when you retire?
How you spend your money is entirely up to you. Your future is unique, just as your experiences have been. You deserve to be happy and enjoy a long and satisfying retirement. After all, haven’t you worked for the majority of your life, earning money and paying taxes? Why shouldn’t you finally enjoy the fruits of your labour?
So what do you want to do? No more getting up when the alarm clock goes off, that’s the first thing. You get to choose what you will do each and every day. What about a round of golf? Maybe explore around Australia or travel overseas. Perhaps give back to the community by volunteering your time and expertise? You can do anything you want and it is probably going to be the most exciting time of your life. You think it’s been good so far, just wait to see how good it can get.
As long as you have enough money that is.
That’s the kicker. You can do almost anything you want if you have enough money. I think everyone understands that the pension is only enough to survive on. It won’t feed a dream. Only you can do that. Only you have the capacity to make sure that your future is as strong and safe as you want.
To achieve a sound future you have to secure the present. What you do today will determine your tomorrow.
Someone told me once that the odds of winning the Lottery are similar regardless of whether you buy a ticket or not. What they meant was that the odds are so heavily stacked against you that it’s not worth even trying. I tend to think that having the ticket makes more sense than not. Buying the ticket means I COULD win it, but if I don’t buy it I can NEVER win. I’m not suggesting that you should base your future on winning the lottery but I do believe that you have to DO something to GET something.
So what are you DOING right now to invest in your future?
Realistically, we should invest in the future all the time. Some people are already doing that by planning now. They are looking at making sure today looks after tomorrow. Sometimes that plan can involve small increments, repeated over and over. I read somewhere that $20 per week for 40 years invested in simple compound interest will make you a millionaire. Sure, a million may not be worth as much then as it is today, but it’s still a million you didn’t have.
Some people don’t bother to invest for the future and there are many reasons for this. Some are ready to invest but get scared by the reports they hear on the news or stories retold to them by their friends.
Listening to this type of dialogue does little for your confidence.
I’ve heard people say they only live for the moment but they still buy enough food for the rest of the week. They still book holidays for their next vacation. The trouble with the future though is that it doesn’t make any demands of us in the present. Time moves on and the future is always there in front of us. It doesn’t command us to act nor does it frighten us enough to do something to change.
The Future has some friends close by called Fear and Procrastination. Next door to them lives Diversion. It’s an interesting neighbourhood. Whenever our thoughts turn to the Future we inevitably end up listening to Fear because we haven’t done anything constructive to address our situation.
Fear ultimately hands us over to Procrastination because it’s easy to do nothing when you can’t make a decision. Since it’s so hard to decide we are finally lulled into a comfy chair next to Diversion. Inevitably we find something else to think about that is far more pleasant than the Future.
Right now we have plenty of diversions. There is a lot of noise out there giving anyone who cares to listen plenty of reasons to stop trying to secure their future. Unfortunately, this noise isn’t going to stop. You will hear a lot from the various media outlets about the problems facing people who want to invest. It’s important to remember that the Media is all about generating advertising for their clients so getting people to hear their message is very crucial for their business model. Naturally then, they make a lot of noise about things that most people are sensitive about. In fact, the media is big on Fear and most reporting is about making people feel anxious.
Let’s take a closer look at some of the things in the news lately.
Property Bubble/property crash – This topic gets airtime on a regular basis. It’s a popular subject because it speaks directly to everyone who has a home or who are looking to buy one. As such, it attracts a lot of attention and is usually accompanied by local or overseas experts giving their opinion. Most of the time though, these reports have little substance and typically provide no timeframes for the supposed collapse or bust. Once the initial hysteria wears off the story is usually forgotten. Clearly, the fundamentals that drive property in Australia are still sound and are underpinned by a lack of supply in the areas that matter most.
Election – for some reason an election always slows down the economy. Typically, people will wait to see what the result is before committing to a big purchase. Elections usually cause delay and that eats into confidence. The number of auctions slow during this time while people wait to see what impact the election has on their situation. Political parties make grandiose statements at election time and the sweeping changes promised in the lead up can make investors nervous. Whether any political party actually follows through with any changes will be most interesting to follow.
Negative Gearing changes – Both major parties announced potential changes to Negative Gearing recently and this issue by itself would grab any investors’ attention. Negative Gearing is often labelled as a drain on the economy because investors seemingly take advantage of taxation benefits. The flip side is that these tax benefits encourage investment which is good for any economy. The by product is an easing of the demand for housing which the Government would be unable to provide for. Negative Gearing in itself is not a valid reason to invest in property. Remember that you have to make a loss to get the Tax Benefit. Also the longer you hold the property the less benefit you will receive. Rents generally go up over time along with the property price so eventually the property will become Positive Geared. Realistically you should be planning to create wealth, not focused on a loss making tax benefit strategy to make money. Property is a sound asset class that has performed strongly over decades. Even without Negative Gearing, property is a worthy investment.
Obviously these are the most recent topics that have attracted our attention. However you can be sure that if it isn’t these issues making headlines there will be something else to take their place. What is critical to your success is understanding that the noise is there just for the sake of it. It’s simply a diversion from what you should be focussing on. The issues will change but the noise won’t. Look at it as a test of your commitment to your future. Learning to filter out the news you need from the news you hear will allow you to maintain your comfort zone when all the noise says you should be panicking. Understanding the fundamentals will give you confidence.
Understanding comes from education. The more you educate yourself about investing the less noise will make it into your world. There is no rule that says you have to accept the doom and gloom reporting. You can stop listening. It will still be there only now it will have little impact on your actions, or rather, lack of action.
We pride ourselves on educating our clients by holding specialised workshops aimed at informing you about what is happening in the market right now as well as analysing it from a number of different perspectives. You should attend one of our workshops if you are serious about creating wealth.
There are plenty of reasons for not doing anything but I can only think of one reason why you should do something. It’s your future.
What do you want it to be?