Why We Fail Financially

My work focuses largely on how to create and build wealth. I know it can be done and I have dedicated myself to providing you with the tools to do it. What we don’t talk about very often is how few people actually achieve it. In fact, most Australians will never achieve financial wealth. The harsh truth is that most people fail — which is a fact that becomes even more devastating once a person reaches their retirement years. In this post, I want to talk about why people fail and how to avoid it for yourself…and your loved ones.

Statistics Prove a Harsh Reality for Australians.

Federal statistics show that a tiny percentage — just 3.4% of Australians over the age of 65 — will achieve a combined income for couples greater than $35,000 and that 80 percent of this same demographic rely, at least in part, on the Age Pension. For two people in today’s economic climate, $35,000 a year is not an easy budget to manage on and it certainly can’t be called personal financial success.

So where do the rest end up? With so few people making it into the $35,000+ range it’s not surprising to find that over 80% of retirement-age Australians earn a combined income of less than $15,683 which happens to be below the Federal government’s official measurement of poverty.

It’s truly disturbing that the majority of the population is spending their retirement years barely scraping by with a bare-bones income.

Poor Planning

This extreme deficit of wealth in our retirement age population stems from several different sources, but most of it comes down to poor planning. Most Australians run out of money just six years after retiring. The primary cause of this is the failure to adjust standards of living to new income restraints and applies across all income brackets. It also proves that relying on a single source of income and a retirement plan alone is not enough. Making smart, active investments is a crucial part of maintaining long-term, sustainable wealth.

Relying on Superannuation and the Age Pension

For most people, their superannuation arrangements will not provide the necessary resources to support them through their retirement…and we know it! Very few people feel like their fund will have enough money to cover their needs, and studies show that they are right. Professor David Knox of Melbourne University has conducted an in-depth study on superannuation and points out that for the vast majority of Australians, the system ultimately fails to provide adequate retirement benefits.

Like a lot of government pension plans, the age pension is meant to be just a safety net…certainly not your go-to option for retirement. With our population demographic shifting to being older overall, it is no secret that the government will be unlikely to provide the support our aging population will need.

It’s worth saying that these shouldn’t be your financial go-to options anyway. Both of these systems should really be positioned in your mind as a baseline or a safety net, not your final financial destination.

A Better Way

Luckily the situation is not hopeless and there is plenty of money in the world to support everyone who is willing to work for it. Personal wealth is obtainable by anyone who is prepared to learn the lessons of wealth generation and put in the time and effort.

It is essential that you begin building your personal wealth today. Whether you are just starting out or you’re in the middle of your career, it’s never too late to begin building wealth for yourself.

Proper planning is half the battle won when it comes to wealth management and simply pulling your head out of the sand and paying attention to what you have and what you need is the best place to start.

Wealth Building for Everyone

The creation of wealth is available to anybody prepared to learn the strategies of wealth generation. Even for those people on a limited income, wealth generation is not out of reach. I am acquainted with a gentleman who spent his entire working career as a gas fitter. Though the application of the basic principles of wealth accumulation, he has built a portfolio of blue-chip shares worth over $10 million. The secret isn’t in a prestigious or high paying job, but rather in the intelligent application of money. The ability to build wealth is available to anyone who is ready to learn the lessons and apply these techniques appropriately.

Conclusion

It’s time we all wake up to the real damage done by a lifetime of ignoring our personal financial future. If you believe that you deserve to live well throughout your life and into retirement and aren’t prepared to remain with the bottom 80% of the population, then you’ve already made the conscious decision to commit to a better financial future. If you’re ready to begin building your wealth in a real, sustainable way, then the information is all here for you. We’re ready to begin.

What do you think? Leave your comments below and follow me on my blog and social media to learn more about the lessons in building wealth.

Resources

https://melbourneinstitute.unimelb.edu.au/__data/assets/pdf_file/0005/2540471/Poverty-lines-Australia-June-2017.pdf

https://www.sbs.com.au/topics/life/culture/article/2017/11/14/how-childhood-poverty-affected-me-adult?cid=inbody:the-truth-about-poverty

https://www.kiplinger.com/article/investing/T047-C000-S002-steps-to-building-more-wealth.html