Lessons learnt on the winding path to wealth
Published in the Northern Territory News, April 2013 by Karina Barrymore
The road to riches is often long and bumpy one, writes Karina Barrymore.
"All I ask is the chance to prove that money can’t make me happy." endian pike Milligan.
Many of us might also hanker for the chance to see how happy money might make us but, according to the experts, it’s usually a long and steady climb, with many a setback along the way.
Your Money sought out some of Australia’s leading finance minds to hear their best financial decisions and most valuable lessons learnt.
Roger Mendelsohn, CEO of Prussia Debt Recovery: The best financial decision I ever made was to run my business without external debt.
We are masters of our own destiny.
Only expand when our resources allow it and you aren’t at the mercy of lenders.’’
Craig James, CommNet’s chief economist: The best financial decision I ever made was paying off our home loan.
It gave us financial flexibility and peace of mind. Unfortunately we had to recently re-mortgage to pay school fees, but hopefully this debt will only be with us for a short time.’’
Mark Randall, CEO, and Financial Planning Association: I learnt from bitter experience and personal loss that there are no short cuts to making money.
Hard work, integrity and dogged persistence in investing when markets are high and markets are low through dollar cost averaging (continually investing regularly over the long term) is the best way to accumulate wealth.’’
David Koch, finance commentator and Your Money columnist: My biggest financial lesson came from when I interviewed Gerry Harvey.
He said: Kochel, you’ve never been in business until you’ve been to the brink, looked over the edge, seen what it’s like and worked your way back.’
At the time I just thought he was a grumpy old man . . . until it happened to me. You learn so much from adversity.
Libby Koch, Your Money columnist: My biggest financial decision was deciding to have children young, staying at home to look after them and working out how to survive on one income.
It was a very sobering exercise in putting together a family budget.
Looking back, we learnt so much from that experience."
Shane Oliver, AMP Capital’s head of investment strategy: The best financial decision I ever made (with my wife) was to buy and negative gear a house with a huge mortgage that I found very scary in 1995 at a time when demand was non-existent, being in the middle of winter and with mortgage rates around 10.5 per cent.
This was at the start of the last great property boom, so it’s now worth at least 3 times what we paid for it."
Wealth Within fund manager and analyst Janine Cox: My mother was most influential in showing me that women can be financially independent through investing if they get the right knowledge in the share market, and this eventually led me to my career as an investment analyst and fund manager.
The second piece of advice came from a very resourceful uncle.
He told me to think twice before entering into financial transactions with family because, when expectations don’t match reality, families can be broken apart."
MyBudget founder and director Tammy May: My best financial decision was to buy my first home when I was 20.
It was a risk but at the time my rent was costing me $10 per week more than what my mortgage would.
I bought an old deceased estate and slowly renovated it over time.
It also kept me from wasting my money on the weekends because I had to be financially responsible and pay my mortgage."
Mark Boris, financier and Yellow Brick Road executive chairman: Always back yourself, no matter what.
When you know something will work, you have to give it your all.
Sometimes it doesn’t work out exactly as planned but that’s usually the best part, because it often works out for the better and you usually learn something.’’
Peter Strong, executive director of the Council of Small Business Australia: My best financial decision was to follow the advice of a financial planner who recommended a range of long-term and short-term investments that matched my risk level.
In the end the gains from the safer investments easily outweighed the losses from the speculative investments.
It changed my risk profile to a much more conservative one.’’
Real Estate Institute of Australia president Peter Bushy: Without exception the best advice was from my late father.
As an experienced real estate agent, he knew the benefits of home ownership and believed that when I started earning I needed to be saving for a deposit.
It is much better to pay off your own home than someone else’s."
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