I love to use regular life lessons from my life, and the lives of others, to explore in my articles.
To keep things relevant.
One thing I know is relevant to us all is money.
SO relevant.
It is almost as powerful, and has the potential to spiral our emotions up or down, as the thing called LOVE.
And it ticks me off a bit that it was never taught in school.
Imagine being taught from an early age about how to make a budget, how to save money, and the enormous power of COMPOUNDING INTEREST.
Or dispelling beliefs that are not true or useful, like “money is the root of all evil” or “riches are for the other people” or “you have to work hard for money”.
The last one is not useful IMHO, as it does not have CONTEXT.
There is working HARD, and then there is working consistently and intelligently.
So, money is a “thing”.
And all of us have had our fair share of “issues” with money, including the FEAR that goes with its lack.
Perhaps you are even experiencing this now.
In today’s lesson, I am going to share with you my disastrous financial actions (or inactions) and what I think we can learn from it.
The very first mistake was thinking I knew best (bugger!!!).
It started in late 2001 after I retired from the Army.
I thought I knew more than the employees of the Military Superannuation Fund, when it comes to investing.
So, thinking I knew better, I withdrew a portion of my Superannuation, and put it into a Self-Managed Super Fund (SMSF).
Just writing that makes me laugh.
I – who knew very very little about investing – was going to “self-manage” my money.
Hilarious!!!
LESSON #1: It is inherently dangerous when you THINK YOU KNOW MORE THAN YOU DO (in any subject).Seek quality professional help when you are an amateur in an important subject or decision making.
This is sort of unfunnily funny
I left the Army at the end of 2001, and took a security consulting contract for the 2002 Winter Olympics.
Which lead to 5 years consulting on Olympics and mega events, plus earning great money.
I was saving a bunch.
So, I wasn’t paying too much attention to my SMSF, “assuming” it was just ticking away and making me more money.
I won’t bore you with details, but at about the 15-year mark, when I decided to have a peak at how it was doing (i.e. really look), I realised it was doing “sh#t”.
LESSON #2: ASSUMING things will work out, and paying no attention to whether they are or not, is a REALLY BAD Strategy.
As Dr Joe Dispenza says: “Hope is for beggars“.
In this context it means that if I just “hope” that things work out, without taking intelligent action, I will make myself poor and/or stressed.
Once I realised that the SMSF was doing crappers, I cycled back to a repeat of Lesson 1.
I tried to figure it out myself…which went nowhere in a hurry.
So, I cycled back to Lesson 2, hoping it would re-right itself.
Eventually, and this is how life works, the PAIN of the situation got to the point, it caused me to do “something”.
And this time, something different.
I sought help (aka: Lesson #1).
And now it is time to for good belly laugh.
Do you want to know how much interest I earned “self-managing” my Super Fund over 20 years???
Are you ready for a good belly laugh?
$80 (and that is not USD, that is AUD)
$80 increase in 20 years!!
SO bad!
And just to torture myself a bit (and have a bigger laugh), I checked on how much Compound Interest there would be at a measly 4% interested over 20-years.
Not surprisingly, it more than DOUBLED!
LESSON #3: The awesome power of COMPOUND INTEREST. It not only applies to money, but to daily health rituals (e.g. breathwork, meditation, Tapping, exercise, eating healthy, time in nature, tech-free time, etc.). And the earlier we start, the better the outcomes we get over the long-term.
And here is another lesson that is valuable for all of life.
LESSON #4: The enormous value of having a good SENSE OF HUMOUR when things go south.
In Summary
Firstly, I hope you cut yourself some slack if you think you have messed up financially, because you are not alone, and there is the possibility to turn things around with the right professional help.
A sense of humour is essential for loving life.
Self-managed financial education is a worthy investment (read a book or listen to a podcast to increase your knowledge bank).
Compound Interest applies to not only money but other positive habits in your life (it is about starting ASAP, and being consistent).
Don’t assume things will work out – burying your head in the sand is a really bad Strategy.
Talk to Professionals, whether it is about money, health, relationships, strategy, etc.. (I found my financial professional through a trusted friend, who knew a qualified professional – personally and professionally – and had his own money invested through his advice).
My Parting Words
I mainly wanted to write this article because I thought it was HILLARIOUS that I made only $80 over 20-years.
I am a fan of laughing, rather than crying.
Plus, I find airing my biggest screw-ups feels good in a few other ways:
1. It gives someone – like you – a chance for a good old belly laugh at someone else’s (offered up) expense.
2. It reminds you that no-one has got all of their sh#t figured out, so you take it easier on yourself (self-compassion).
3. You might learn from my mistake (and decide to have a closer look at something you may have been putting off).
4. It reduces the “negative” feeling of the experience (maybe like a problem shared is a problem halved).
So, let’s all look at putting our bad financial experiences behind us.
And look towards how you can improve things, moving forward.
The sooner you start – compliments of Compound Interest – the sooner real growth occurs.
Also, for the parents out there, I encourage you to teach your children about the power of Compound Interest.
Maybe even read I book I read called “The Compound Effect” by Darren Hardy (who is action-oriented).
Hopefully there was some specific message for you, in this little adventure.
Maybe it’s about taking a closer look at your own financial stuff (which I know is often not fun).
And consider seeking professional help if you are confused.
(For those in Australia, the crew I found – Allied Wealth – are one of the rare “independent” financial advisors, and have been great for me so far, so I figured they were worthy of a plug, which I am doing without their knowledge or any incentive).
And for your final challenge, go out there and see if you can beat $80 in 20-years!
Ha ha ha ha.
Have an outstanding day and week where you start the compounding process on the stuff that counts.
Take care.
Carl
Quotable QUOTE:
“IMPORTANT LESSON: It is inherently dangerous when you THINK YOU KNOW MORE THAN YOU DO. Seek quality professional help when you are an amateur on an important subject or decision.“Carl Massy
(Author of 18 Ways We Make Life WAY Harder Than It Needs To Be)
PS: Have you read or listened to this book yet? 18 Ways We Make Life WAY Harder Than It Needs To Be
