Recession proofing our lives

Our resident Financial advisor spoke to us last time about how we are all responsible for the recession and he compared Orwell’s 1984 novel to our greedy lives today John Clarke continues to explain the main differences between today’s ‘have it all now’ nations and our parent’s generation:

So now who’s ready to jump in the time machine and just take a step back? Although in some ways time travel is just not possible:

We earlier spoke of 1984 and how things have changed because of big bang and big brother, and how then it was possible to go to a bank and sit with an under manager and look at how things were progressing in your life, you’d sit down for maybe an hour or two (most of us even got our suit on to go see the under manager, and woe betide you if you went to see the bank manager and you were not in your Sunday best).

Now here comes the time travel in 1984 you would sit with that person and discuss in depth what way to progress everything financial, be it your first cheque book and overdraft, your need for life assurance (we all had a small endowment), mortgage requirement, pension and saving for the future and so many other things which at the time seemed to be normal.

Not once during that 2 hour discussion did he look at his computer because he did not have one, except the one between his ears. His 2-4 Mb computer was housed in a building the size of a footy field and was only for accounting services and yet here are some startling facts, Worldwide

1. As a percentage of salary people carried larger amounts of life assurance around 3 time’s salary.

2. The indebtedness ratio was lower and default on loans was less

3. Less than 10% carried even 1 credit card and indebtedness was limited by law

4. Less than 10% of adults had non-interest bearing chequing accounts.

Many more things were better covered and easier to handle.

So where is the lesson in our short trip back to 1984, Here it is Big surprise

GO TALK TO AN EXPERT ABOUT YOUR FINANCES.

We all like to think we can do things ourselves but in truth we are too busy running our own lives to take really good care of our own financial life .John Lennon said (Life was something that happened when we were busy doing other things) same with finances I am afraid

There are experts out there and all of them cost in one way or another, some take commissions, some charge fees and some a blend of both.

What you must remember though is the old term Buyer bewares, before you accept the services of a wealth Manager / Financial Planner etc. make sure you check out two things.

Firstly DEMAND that they refer you to some of their previous clients or clients handled by the firm they work for.

Make sure they are properly qualified and the qualifications to look for are, CFP, AFP, AWM, CII, BIB etc.

Please do not buy into something which is inappropriate for your needs , after all what’s the point of buying something for 25 years if your desire or need is for something lasting 10 years .and make sure charging structures are transparent . If you are a speculative investor, speculate sensibly with small amounts.

Next time I will look at debt and how it can be made to work for you and how limited speculative investments can balance a portfolio.

Contact us for a list of certified financial professionals.