Just because you are income wealthy does not mean you are set up for life.
There’s an old saying, look after the cents as the dollars will look after themselves. This means, watch the little purchases – these quickly add up.
In our experience, we’ve often seen the greater the income, the more unaccountable people are with their spending.
Their expectations can be out of kilter from their reality. They often overspend. Their spending may be knee jerk reactions, unplanned, or they regularly purchase items that are not required.
For many of these high income earners, they have clarity around their business and its expenses – yet do not incorporate this clarity into their personal affairs.
What we’re saying is that because they’re receiving a great income, there’s a lack of accountability with regards to their own saving and planning. And why not? Their income meets all their needs and then some! They’re now used to living a certain lifestyle and everything is fine!
They see no end to this level of income or lifestyle. This may be true, however, they often, are not implementing anything to future proof their lifestyle.
Wealth can make some people do strange things. Common mistakes include taking gambles with financial decisions, listening to [and taking action on] a mate’s recommendation, falling into bad spending habits or regularly spending on impulse.
Your strong income does not protect you from ruining your future.
What heavy lifting are you doing to future proof yourself? If you want the lifestyle that you have now, to continue in the future, you’ll need to amass a huge capital base to sustain this.
High responsibility vocations often are associated with higher levels of stress. Longevity in some roles may not be something that can be sustained over the longer term. Of course there are a range of other [unforeseen] factors that can see your income drop – illness, company failure, fatigue, career change and many, many, uncontrollable, outside forces.
So if push comes to shove and your income drops by 50%….. How will you survive?
Perhaps you can rely on your partner’s salary? However, they may also have been busy in their work. Like you, they may not have given themselves the opportunity to gain a clear understanding of where they are heading with their money.
Enjoying a great income, fine lifestyle and want it to last? Take action – today.
Independent Financial Advisor
Joe Stephan graduated in 2002 with a Bachelor of Business (Fin Plan) under the tutelage of his father (Program Leader of Financial Planning at RMIT University).
You will hear Joe bandy about the idea of “pure financial advice”, which is given objectively and focused around the needs of individual and not the internal needs of the business providing advice.
Joe is realising his vision every day through his Independent Advice Firm which he owns and operates with his brother James. Joe also spends a portion of his time teaching tomorrow’s Financial Planners at various Melbourne Universities including RMIT & LA Trobe.