Why leave it to chance
Published in January 2009 by Dale Gillham
We all wonder how life might be different, if only we had a better job, partner, parents, education and many other things. We have also heard stories about people who have achieved amazing things from adversity and sometimes a little piece of us inside just wishes it could have been us. Recently I met a lady who after years of procrastination made the decision to be different and see if the grass was greener.
I would like to share with you her story and more importantly that triumphant moment when she realised how she could have taken action earlier but didn't because she was frozen by her beliefs.
We all have different experiences in life, which shape our beliefs. 'Julie' came from what she calls a 'traditional' working class family. Her mother stayed at home to look after the children and her father worked a 40-hour week.
The focus for the family was to spend time with relatives and friends on weekends and pay the mortgage on the family home over 30 years. The only talk in the family about investing to build wealth was around the stories of how Julie's grandfather had lost a lot of money in the 70s when the share market crashed. Her mother told her never to raise the subject with her grandfather, but Julie was curious.
She read books about the share market so that she at least knew how it worked before finally summoning enough courage to ask the questions. She recalled to me how frightened she was by his reaction. He told her "the share market will suck you in when everyone is making money; that is all you hear about, how much money they are making! But the day will come when they pull the rug out from under you. It's only the rich and people in high places with all the connections who know what is going on. Don't ask me about this again."
As Julie respected her grandfather she decided that he was probably right about the risks. However, she maintained an interest in the share market and attended seminars some years later. She continued to hold the belief that the share market was extremely risky and that if her grandfather couldn't make money from investing in shares, then how could she. This meant that whenever a conversation started between friends about investing, that annoying little voice inside her head stopped her every time.
Julie later married and did exactly the same as her parents. She and her husband Ken bought a house before starting a family and then focussed on paying down the debt as quickly as possible. In early 2007 they were just a year away from completely paying down the debt on their house, which had grown in value from $165,000 in the 90s, to around $780,000.
There was one major difference between Julie and Ken's financial situation and her parents in that Julie worked, which combined with compulsory superannuation by late 2007 they had a nice sum in their superannuation of $210,000 and $450,000 respectively. They also held the belief that this would support them in their retirement so they would not be reliant on any government handouts.
When the GFC hit the Australian share market in 2007/2008, Julie watched helplessly as the family super deteriorated before her eyes. Whilst this massive fall in her family's wealth occurred, in her mind she recalled what her grandfather had told her all those years ago. It was the pain of watching things deteriorate so much that allowed Julie to come to the realisation that she had permitted her Grandfather's words to stop her from pursuing her interest.
As a little tear filled her eyes, she told me that had she followed her intuition when she was young this would have helped her to prepare for the GFC and more importantly, be better prepared to manage the current situation. Julie is now taking back control and learning what she needs to do in order to protect her family's financial future. She is now telling all her friends and family to get educated and don't leave your financial future to chance.
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