Yahoo Finance ‘Pay the price’: The ONE threat to your wealth
What is the greatest threat to you getting rich over time? That’s a simple question and the answer is YOU!
Once upon a time, Australians used to admit that their top New Year’s resolution was to either lose weight, get fit or give up smoking, but in recent years “getting my money life in order” has become the number one goal for a new year.
However, the great tragedy about a New Year’s resolution, often made with a champagne in hand and a belly full of booze, is that our history of breaking these promises to ourselves before January is up is legendary.
So if you’re one of those who has promised to get money smart this year, YOU will probably be the greatest threat to your noble, material goal. To be emphatic, you’re highly likely to let yourself down in getting richer.
We recently had a potential financial planning client, who underlined how he was the greatest threat to his goal of building wealth.
Also read: 'Paying too much': Expert's interest rate warning
Also read: Vaccine news helps stocks. What’s the money lesson?
He was in his early 50s and had made a litany of financial mistakes. His super was small, he didn’t own a house he lived in but he had investment properties, which were OK but hadn’t gained much in value, like so many homes owned by many Australians.
He was quoted $6,000 for a financial plan and 12 months of ongoing advice, which is cheap by financial planning standards. Most advisers charge 1 per cent of funds under management and in the past if you got a cheaper plan that was often offered by banks that put you into bank products, so they made money out of you indirectly!
Those practices have been outlawed in recent years.
Anyway, this guy, who said he knew he needed advice and who’d lost and wasted piles of money over 34 years of work and poor investing, thought $6,000 was too much to pay.
So this is what we said to him:
“Advice is important, you’re right. I read this many years ago and it’s how we operate our business and financial affairs:
Work out what you want.
Work out the price
Pay the price.
We’ve never taken commissions and our clients know what they’re paying in a transparent way.
When we spoke, you said that you and Jane needed a solid strategy to grow your super. That’s what you’re paying for.
You have time up your sleeves to get that strategy in place and actively working for you but let me leave you with these two questions:
If not Switzer, then who?
If not now, when?
I sincerely wish you both all the very best.”
I’m not pitching for your business but I am underlining how our cheap ways leaves us without guidance. If you aren’t prepared to do the work to become an amateur adviser to yourself, you could end up being like this guy who’s in his 50s, with a poor level of wealth and not smart enough to do anything about it.
Many people could advise themselves to be wealthier but they’d have to do the work to get money smarter. Going to this website is a good start but if you know you won’t embrace money knowledge, then you’re better off paying for advice to change you.
Being on TV, I know I have to keep my weight under control and when I need to lose a few kilos I go to a great dietician who makes me stick to my weight-loss plan.
I know what I want. I know the price. I pay the price!
I’ll leave this with you.
Signing up for the six-week challenge? Join the conversation at The Broke Millennials Club on Facebook.
Follow Yahoo Finance on Facebook, LinkedIn, Instagram and Twitter, and subscribe to the free Fully Briefed daily newsletter to make 2021 your best (financial) year yet.
