The one gripe that makes my blood boil!

70% of you will never achieve the wealth you desire.

I don’t know who first said it to me, but one quote has stuck with me.

“There are two ways to grow rich. You can spend a little, or earn a lot.”

All too often, whether it’s an overheard conversation in the pub or a discussion with a new client, I hear the following line a lot.

“I work hard to earn all this money and then at the end of the month I have no idea where it goes.”

Advising client’s for many years, this one frustrates me the most.

Most of us work hard for our cash. Yet we have no idea where we spend it, or we might have a rough idea.

Isn’t this the wrong way round?

Shouldn’t we take more of an interest in knowing where every cent of our hard earned cash goes?

So, why don’t we look at our outgoings? Lots of reasons!

We’re just too busy living life. If you’re a couple with kids and are both working you are just too busy to take notice, you have school drop-off, work, shopping, taking the kids to activities, preparing dinner and just plain keeping the house going.   There’s no time to look at where that hard earned cash goes.

The world wants it! Everything around us is geared towards consumption. We’re bombarded with messages about what to buy and how to spend our money. It’s been made easier and easier to part ways with it, to the point where we don’t even have to see the money leave our wallets anymore. It’s as simple as clicking a button and never leaving home.

No plan of attack or no game plan. This is the biggest issue more often than not. We are sailing through life with no real direction, or the direction we have is where life is taking us and the days, weeks & years are just passing us at a rate of knots. As Alice in Wonderland was once told, “If you don’t know where you need to be, it doesn’t really matter much where you are”

It’s hard though, right. Sometimes boring. Sometimes confronting. A problem without a simple solution.

Fair enough, but the information about what is coming in and going out is ammunition for good decision making. When I’ve sat down with clients, it’s almost always guaranteed we find expenses that don’t add any value and are then directed elsewhere.

Do you really want Foxtel, or would a holiday to Vietnam be more entertaining?

Give yourself permission to spend, just make sure it’s on the things you value the most, cut the ones that don’t add any value in your life.

The list of questions, trade-offs is endless. Happy to share some of the most common if you’re interested.

There’s a second issue here, ready to undermine you.

Who doesn’t want a great house, expensive car and the expensive lifestyle?

Sure, there are some who can afford this and do, but the majority of us need to find the balance; what we want with the reality of what we have to fund it.

The truth is your consumption is designed to make others rich. Ironically, our society has evolved to a place where it’s the over-consumption of everyday people that maintains the lifestyle of the wealthy.

What a turnaround…

Social commentary aside, the reality is you are living a lifestyle you will regret later in life.

Warren Buffet still lives in the same house he has for four decades, well not quite, he has recently listed it for sale, but hey he’s pretty wealthy now, so I think it’s within his means now!

Read the “Millionaire Next Door”, they live next door, lead a great life but you wouldn’t know it. They live within their means, don’t over consume, save and invest often.

There are countless other successful people who have avoided the trap of constantly wanting more things they don’t need.

So, back to the complaint about not being able to get anywhere.

You know what, sometimes there comes a point where you have to decide to take on reality. Take control of the situation and achieve financial freedom on purpose, instead of by accident.

If we could all do this and leave the past behind us, each one of us would be armed with a new future where you can live life on your terms.

If you would like to discuss any of the above feel free to contact Glenn at gdoherty@exelsuper.com.au or on 0401 253 729 to book a free 15min phone appointment.

Written by Glenn Doherty CFP – Financial Organiser/SMSF Specialist

 

 

 

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