ARE YOU KEEPING UP WITH THE JONESES?
In a society driven by social media and an ever-increasing conditioning of us to “keep up with the Joneses,” it can be tough not to compare yourself to others.
Social media would lead you to believe that every person you know is going on overseas holidays, buying new cars, doing renovations, eating out and buying new things. Over summer, when everyone is on holidays, the effect is magnified.
Take everything you see with a grain of salt!
Think about it this way… Someone earns $300,000, spends $300,000 and has no investments and nothing in the bank. They’re living rich and will die poor. Contrast that with someone earning $85,000, spending $65,000 and investing the rest. They are living within their means and will be rich from creating huge wealth for the future.
When it comes to comparing yourself to others, always remember, looks can be deceiving!
Hopefully you can see in the above example that wealth is a relative number. For example, think of someone who has $4 million in the bank but spends $1 million a year… they have only accumulated enough wealth to sustain 4 years of financial freedom. However, someone who has ‘only’ $800,000 in the bank and spends $50,000 a year has 16 years of financial freedom accumulated.
I’m betting the person with ‘only’ $800,000 is feeling a whole lot more financially secure than the big spender. Just pause for moment and think of all the celebrities you’ve seen over the years who earnt a fortune and then blew it all… it does not matter how much money you earn, if you do not save some of it and invest, you have no wealth and wealth is what matters because it’s wealth that buys financial freedom.
When you get this right, you get two for the price of one… when you save a percentage of your income, you are reducing the amount of money you live on. This then means you need a lesser amount to achieve financial freedom and be able to stop working.
The reality for most Australians is they spend too much to ever be able to achieve financial freedom. Most people who overspend their income do so in one or a combination of these ways:
1) too much house,
2) too much car, or
3) too much entertainment.
No one wants to be told that they are spending too much. But my job is to tell people what they need to hear, not what they want to hear. If you hired a personal trainer for your fitness, you’d be surprised if they said, “Do less exercise and eat more processed food.” It’s the same with getting someone in your corner when it comes to financial fitness.
Get financially fit and you will get results that mean you will have so much more to spend in the future because you got things right NOW.
If you’d like to find out more about how INDEPENDENT financial advice could help you manage cash flow, pay off the mortgage faster, get the most out of super and invest wisely, then get in touch on 0411 484 464 or head to wealthtrain.com.au.
Daniel McGregor is the man behind Wealth Train and is a member of the Independent Financial Advisers Association of Australia. This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided are general advice only.