(03) 9020 2905Debt Man column – The West Australian (Money)
For: June 14, 2010.
Bruce Brammall
Debt Man
Life seemed pretty simple in Bedrock. Neighbours with Fred and Wilma, Barney and Betty, with Pebbles and Bamm-Bamm chasing dog-dinosaur Dino around the yard.
Work usually involved some form of stone – you were either breaking it up at the quarry, writing on it, or making wheels out of it.
Contract law in the Stone Age was pretty basic and negative gearing hadn’t been invented yet, so the law and accounting can’t have been that complex. And while I’m sure mechanics existed in The Flintsones, how difficult could it be to fix a car made out of skins, sticks and stones?
In modern society, represent yourself in court and you’re a fool, do your own taxes and you’ll donate money to the government and you’ll need a degree to operate under your car’s bonnet.
You might be able to do one well.
But, around a career and parenting, most of us have only got time to learn one patch proficiently in a lifetime – teaching, finance, computing, sales, banking, etc. Some might learn two or three. But the second and third ones are likely to be hobbies, at best.
So, if you’re a plumber, actor, car thief, pilot, ex-footballer, builder or ageing porn star … how are your finances?
How’s the investment portfolio? How big is your tax return going to be? Have you acted to minimise your tax? How did your super fund go this year?
You don’t know? WHAAAAAT? Why? You don’t care about your finances? Are you crazy?
I know money doesn’t drive everybody. But so many people just throw easy money away every year. And even more refuse to spend a dollar to make three, five or ten.
I think we need to listen to the wise words of … Donald Rumsfeld.
Remember him? Yep, the ex-US defence secretary was not just George W Bush’s war dude and a dead-ringer for FBI Special Agent Bill Maxwell from “The Greatest American Hero”, but the man who gave us the utterly brilliant quote about there being “unknown unknowns”.
“There are things we don’t know we don’t know
Genius. People usually don’t know that they don’t know how little they know about finance. A good finance team will include an accountant, financial adviser, mortgage broker and lawyer.
Your team does not include your bookie or the newsagent that sells you a weekly lotto ticket.What do you know about reducing your taxes? Realistically, most of you will probably know less than me. I am one of those sickos that find tax time interesting.
It’s June. And every year, I look forward to seeing my accountant. As a former salaried employee, current small business owner and employer and a property owner and investor, I know my accountant is worth 10 times what I pay him, maybe more.
He also takes the stress of taxes off my hands. I give the stuff to him and he gives me hours of my life back.
My patches are financial advice and writing. I stick to those. I happily pay for accounting, legal and mortgage broking and general insurance advice.
Have you not used professional advisers in the past because of the cost? Might you have tried to save $150, not realising that it might have cost you $500 or $1000?
Rumsfeld’s infamous “unknowns” speech also spoke of “known uknowns”. “We know that there are some things that we do not know.”
Now, if you know that you don’t know about it … and it’s important like your finances … then there’s no excuse not to pay someone to do a better job of it than you’re currently not doing.
Good professionals – ask friends and colleagues for recommendations – are usually worth every penny you pay them. They’ll save/make you money and give you some of your life back.
And the more money those people are making/saving you, the less likely you’ll have to work until 75, the more time you can spend with the kids and the better you’ll sleep at night, knowing that things you know little about, and care even less about, are being looked after.
Life is more complex now than it was for Fred and Wilma. Now, excuse me, I’ve got to get my Bamm-Bamm and Pebbles off to creche.
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser. bruce@debtman.com.au .