You won't get rich by splurging, or by being cheap
People were outraged when I wrote a story recently saying that tightwad Aussies might be holding back our economic recovery that should bring higher wages and more jobs, which I think you’d pretty well agree is a good goal to have.
The yarn came from the Chartered Accountants group who found a lot of people were getting smaller tax refunds because more people were doing it D-I-Y style rather than relying on a tax agent or accountant.
Sure, the accountants could have been doing some free ads for their membership but the stats were telling us that something was wrong with tax refunds, in as much as they were too low.
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Remember the last Budget promised millions of us a tax-cut refund boost of up to $1,080 but the latest tax stats say refunds are averaging only $250 more than the average last year.
However, the AFR reported that “the average refund sent to more than 6.6 million Australians is now $2,638… just $250 more than the average refund recorded through the first four months of the last financial year.”
The experts think our desire to save money by doing our own tax return is actually costing us money via smaller refunds.
There have also been “Tax Office crackdown” headlines, which might have scared those over-claiming on their deductions, but the ATO seems to do this every year.
I reckon it’s a tightwad problem, which I think is rife in Australia
It has been my experience that most of the time when I pay an expert to do something, it usually works out for the best: my greatest success losing weight was with a dietician who scared me into eating maturely and a 10-kilogram loss of lard.
My accountants have been great educators and I learnt more from paying them to do my tax than I did studying and lecturing at the University of NSW.
I see my financial planners explain ‘stuff’ to really smart, mature clients who have been business success stories, but when it comes to managing money, understanding super, the Tax Act and investing in stocks or property, my guys/gals really can help my clients save and make money.
Sure, there are bad experts — lawyers, accountants, financial advisers, mortgage brokers, etc. But there are also bad teachers, nurses and pharmacists, despite the fact these are generally wonderful professionals.
If you want to get richer, (aside from reading my new book Join the Rich Club) my advice is to save better than ever before, don’t splurge like a spendthrift who thinks he’s got two days to live and either spend time making yourself an expert of tax, super and investing or spending money on experts who can help you get richer.
That said, don’t just delegate all money-growing jobs to your expert without forcing yourself to understand what he/she is doing for you.
If you pay someone who helps you get richer, then do what I did and learn from the person who’s going all out to make you richer.
I always say “if nothing changes, nothing changes” and that also applies to you. The first change is to work out if you need someone to help you. The second is to decide to pay for it. And finally, commit to the process to get richer because it will be rewarding!
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