(03) 9020 2905Bruce Brammall
Debt Man
It’s here! Woo-hoo! June 30 – the end of the year. In financial terms, today is the big one for all matters finance. Slate gets wiped at midnight.
Today’s a rush. Pay bills urgently if you need the deductions, push back or pull forward income, depending on whether you want it this year or next.
That’s the traditional advice. And look, if you have free time today, sure, go shopping and buy some tax deductible stuff. Increase your tax return. Decrease Treasurer Joe Hockey’s.
But today … I want you to take a different approach.
Spending a little on deductions … well, it’s nickel and dime stuff. It’s important and I’ll probably do some myself, but it’s simply changing whether you get money back in August 2014 or August 2015. It’s not particularly big picture, is it?
I’ve got a better plan. Big picture stuff. The stuff that lets you make big decisions.
You’re going to love it. Because it starts with getting drunk tonight! Yeah!
Sure, it’s a school night, but it’s New Financial Year’s Eve! You’re going to make some resolutions! And I don’t care whether it’s December 31 or June 30, ends of a year (calendar or financial), really big resolutions and getting stonkered go hand in hand, like, well, Ellen DeGeneres and Portia de Rossi.
Before you crack a tube … stick with me … you’ve got to earn it.
Get some paper and a pen.
Here goes. You’re going to write down at least one massive improvement you’re going to make to your family’s finances over the next 12 months. You’re going to take a risk. You’re going to divert some time and money to a financial project that will eventually make a difference.
The change might not lead to much positive 365 days from now. That’s hardly the point. It’s a start. It’s hard work. It involves sacrifice. And sometimes the payday will take years.
It might be June 30, 2017. Or 2020. Or 2025.
But, for sure, if you continue to delay things … all of a sudden you’ve turned 65 and you’re collecting the old age pension, wondering “How did I turn 70 this poor? Should have listened to Debt Man back in 2014”.
So, time to promise yourself you’ll do something big for your finances. This year. Big and positive. It will improve your chances of exiting the rat race early, protecting your family, or owning home sooner.
Not sure where to start? Here’s some I prepared earlier. Sorry, I’m going to get a bit passionate and fitness-coach like. Language could get terse.
Start buying some quality assets: I don’t care whether it’s an growth-oriented index fund, a listed investment company (such as AFIC or Argo), or a diversified portfolio of blue-chip shares. Just do it. Set up a direct debit so that you’re adding to to your portfolio AUTOMATICALLY over time. How much? Stupid question! It doesn’t matter! Start small if you’re nervous. Increase it later.
Protect your loved ones: Insurance. What would happen to your family if something happened to you? Insurance is actually about love. If you don’t love them, don’t insure yourself. Would you like me to tell them, or will you?
Increase mortgage repayments: Make it hurt, soldier! Pay an extra $200, $500 or $1000 a month. An amount that will suck out excess blown spending. It’ll save you years and get you investing faster.
Consider geared investments: Are you under 50, happy to take a risk, and able to hold your nerve through wobbly times? Consider adding gearing to your investment portfolio. It’s not for everyone, but if you can commit to a 10-year shares or property investment plan, and you can think you can ride through some rough patches, some investment debt could be for you.
There’s four for a start. Pick one. If you’ve got real ticker, pick several. Mark ’em down! Read ’em over and over. Put them up on the fridge door, or your office wall. Somewhere you’ll see them daily. Tell someone about it – that will make it harder to back out.
Right, now you have a free pass to get on it this evening. Any issues with your partner, give them my email address.
It’s too early to start drinking now. Unless you’re a shift worker. But if you’ve done the above and you’re fired up … cheers.
Bruce Brammall is the principal adviser with Castellan Financial Consulting (www.castellanfinancial.com.au). E: bruce@castellanfinancial.com.au.