Broke or broken? How is your financial wheel of life?

Broke or broken? How is your financial wheel of life?

Since the ’80s, we’ve all been shown work-life balance tools such as the “wheel of life” more times than we care to admit. Work-life balance is a great idea, but how do we do it? If you are like most, your wheel of life looks more like a broken wagon wheel. And chances are that your investment or finance area is an area that is sadly underdone.

According to data from the National Savings and Debt Barometer conducted by Rabobank, 46% of Australians have one month’s income or less in savings and 20% have no savings at all. In short, 60% of Australians are broke.

Furthermore, these people have very little chance of retiring without relying heavily on receiving a small government pension. Now you might be saying that this will not happen to you: you earn very good money, or you own your own business, which is your retirement nest egg.

My answer to that type of thinking is firstly, the statistics don’t lie and, in my experience, those who earn the most are often the worst at planning their financial future. Secondly, those who rely on their business to provide their superannuation in retirement are travelling down a very high-risk road. Let me explain….

Recently I spoke to a couple who have worked in their very successful business for the past 40 years and lived a very comfortable lifestyle. They did not put much money into super or other investments as they thought they would simply sell their business for a large sum and retire with the same lifestyle. Sounds all good in theory, however, today they are fighting against going into administration. They have no money because they have used everything they had to keep the business going. They are both in their 60s and staring down the barrel of defeat.

I would suggest that this story not uncommon and has not only been played out numerous times in the past five years with the GFC, but numerous times each decade. So what can you do?

Human nature dictates that we focus on what seems urgent rather than what is important. Hence our broken wagon wheel of life. At an early age, a wise person said to me that I need to create multiple streams of income; it has been a focus of mine to do just that. If one income stream disappears, others will step up or at least cushion the blow. This may seem a simple concept but it is very powerful.

For one moment, imagine you lost your job today or your business went broke. How would you survive? Could you survive for at least six months? Creating financial security does not need to be hard or time-consuming. You just need to focus on it a little. After all, your future is important. Over the next few months I will be giving you hints, tips and strategies on how you can get the finance/investing spoke of your wheel of life rolling so you don’t become a statistic.


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