What do The Biggest Loser and Financial Freedom have in common?

Did you know that around 62% of Australian’s are overweight!

Coincidentally just over 50% of Australian’s believe they won’t reach their financial goals!

Maybe there’s a connection between the two? Let’s explore that for a moment….

So, what’s The Biggest Loser all about?

If you ask me, it’s about men and women who have come to a point in their lives where they are either unhappy with the way they feel or realise if they don’t do something about their health that they won’t be on this earth long enough to enjoy life.

They have come to a tipping point and are reaching out for help.

But first they need to examine how they got to this point in the first place, is it a hereditary issue or has it been incremental bad habits that have creeped into their life which have compounded the problem over time.

Those little bad habits that seem insignificant now, however compounded over time, lead to bigger problems, making it harder to reverse.

I liken it to a rainwater tank! The day its installed its in good condition.  Over time without maintenance it gets small holes in it, which at the time don’t seem significant, however without proper maintenance over time it has now compounded into a bigger problem.  The rainwater tank ceases to retain water!

So what does this have to do with Financial Freedom?

In one word everything!

Given that over 50% of Australian’s realise they will not achieve their financial goals, and 90% of us don’t believe we are in the 50%, do we? That’s a big problem.

It’s the incremental bad habits that we apply to money that compound over time that means when we realise it’s time to do something, the changes required need to be drastic.

No different than the contestants on The Biggest Loser.

But you have a choice.

You can either make small incremental changes early in life that set you up to achieve financial freedom. What I call the easy road!

Or you can continue with your small incremental bad habits which will continue to compound over time that will lead to either you not achieving your financial freedom or having to make drastic changes that will have an impact on your life. What I call the hard road!

I know which one I would choose, how about you?

Here’s a tale of 3 people….

Sally start’s investing at the age of 25, investing $5,000 pa until the age of 35 and then stops. Sally invests a total of $50,000.

Harry start’s later, at age 35 and invests $5,000 pa until age 65. Harry invests a total of $150,000.

Then we have Chris who know’s that small incremental changes now will reward him over time. Chris decides to invest $5,000pa from age 25 until age 65. Chris’ total investment is $200,000.

So at age 65 where did Sally, Harry and Chris end up financially?

Sally started early and now has a balance of $602,070**, which amazingly is $60,329 more than Harry who started later but contributed $100,000 more (Sally was invested for longer overall).

Then there’s Chris the winner, the consistent small incremental efforts compounded over a longer time have led to an investment balance of $1,142,811**.

Like in the Biggest Loser you can choose to continue on the same course or make a conscious decision to change and implement good habits that will improve your health and wellbeing.

The same can be said when it comes to your Financial Freedom, it’s a matter of whether your money habits are good ones or bad ones.  If they are bad it’s likely you need a money makeover.

The good news is…..

Just like The Biggest Loser it’s not too late to change.

If you are patient, the small changes implemented and applied with intent and clarity should yield big RESULTS.

** The above example is for illustrative purposes only. The example assumes a flat 7% annual return.

 

If you’d like to fast track the process, feel free to reach out and I’ll share some of what I’ve learnt.

Book your 15min phone chat by giving Glenn a call on 1300 558 713 or alternatively on 0401 253 729.

Written by Glenn Doherty CFP – Financial Organiser/SMSF Specialist

This information is of a general advice nature only, and has been prepared without taking into account your particular financial needs, circumstances or objectives. All information is based on Exelsuper Advice Pty Ltd’s understanding of current law as of 4th April 2017. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. You should seek professional advice before acting on the information contained in this publication. Taxation considerations are general and based on present taxation laws, rulings and their interpretation as at 4th April 2017. You should seek independent professional tax advice before making any decision based on this information. Exelsuper Advice Pty Ltd CAN 080 419 holds an Australian Financial Services License 428272.

 

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