There are some big changes on the horizon, fundamental changes for us, for our money. If you’re in a town, in a community that depends on coal, this post is for you because what’s coming is the end of coal. Pretty dramatic statement, I know, but whether or not you see a place for coal, whether or not you like it, the change is coming.
The word on the street
I just had a 6 monthly financial progress meeting with one of my long term financial planning clients. He’s in the coal game and we were talking about the future.
His comment was “mate, I make good money and I always have from working up here, but I’m glad I’m on the way out. I reckon it’s got 10 years left”. I thought that was a really interesting insight from a guy who has spent over 30 years around the mines.
What the experts are saying
You might say it’s just the view of one guy, but it just so happened that the following week the cover of The Economist was this … “Making coal history” calling for the end of coal.
The change is coming
Whether or not you see a place for coal, whether or not you like it, the change is coming. It’s coming with popular pressure, with renewables, with solar and battery technology. Quite simply, when it arrives, it means fewer jobs and lower-income for those that remain.
What do you need to do?
Before you start to worry too much, it’s coming, but it’s not here yet which means there’s still time to make the changes you need to make if you start now. Putting a strategy in place now, planning for the changes now, takes the pressure off, some of the panic out of the end result.
Why? You’ve already thought about it, planned for it, taken the steps you needed to which means that you’re in a really good position financially. It means your family is safe and secure, it means smaller mortgages, bigger super balances and more investments providing you with passive income, and ultimately more choices.
Below are foundations worth considering for a strategy to deal with this change.
Three practical steps you can take:
1. Set up a budget
Decide where you want to spend your money before you get it
Once you’ve decided where and how to spend it, make things like extra investment or extra debt repayments automatic in your online banking. With everything we have going on it’s really easy for things to slide. If it’s all automatic, if it’s all set up, you can leave things to tick along whilst you spend more time on the good stuff
2. Tackle your debt.
Debt makes your finances fragile – so reduce it.
Start by setting a date you want it gone by. Rates are low at the moment, so now is a great opportunity to get more bang for your buck – less of ever extra dollar paid goes to the bank, more of it goes to repaying debt. By reducing your debt you have a better ability to cope with surprises. You also have more ability to draw on what you’ve stored up for a rainy day.
3. Boost your investments
More investments, means more choice
The more we have in our investments, the earlier we start adding to them the better. Why? Compound interest – get it working for you. The beauty of the super system is that if we tip a bit more in, we could be in line for a tax deduction. On top of that, we know it’s locked up safe and sound for “future you” to enjoy. Whilst it’s in there growing it is likely to pay far less tax on the growth – which means it grows more quickly – and when we get to the right age we can invest 100% tax-free. At the moment we can have up to $1.6 million in a tax haven that the government encourages us to use.
These are three practical steps you can take so that come what may you have more choice, more wealth and a brighter future. Along the way, you will worry less because you know you’re doing what you can for you and your family.
If you prefer video, check out these two short videos on Sandringham TV: