Ah, the simple little housewives whose husbands make all the money and pay all the bills. I see them regularly. They’re great at spending money, but have no clue how much comes in or goes out. He takes care of everything now, but if he dies or you split up, you’ll have no income, a mortgage to pay, and no clue about how all the money comes and goes. Then, you’ll give new meaning to the term Desperate Housewives. Get a clue!!
On the other end of the spectrum, I met a very unique twenty-something Irish migrant whose dad taught her to start saving while she was very little. He taught her, “if you don’t have it in your pocket, don’t spend it” and about the art of “selective spending”. She has great habits, but strangely, not really any plan or goal for it all. Whats up with that? Interesting mix.
Do you know either of these ladies?
If your banker is anything like me, and actually cares about your financial future, there’s one thing that particularly irks him or her.
My pet peeve is when my middle-aged to pre-retirement customers insist on using fixed-term deposits as a long range investment tool. It’s like watching while someone insists on using a 2-meter ladder to climb over a 4-meter wall. You just know it won’t get the job done.
Term deposits can be great for time periods shorter than 2 years, but make terrible long-term investments. Yet I see people roll them over and over, clinging to the security of a cash investment. However, if you factor in tax and inflation, the real rate of return on a TD would only be about 1-2%p.a., even on a TD advertised as 7-9%p.a. Shocking! And a lousy way use of your time and money if you prefer a comfortable retirement to a stressful one.
If you aim to actually grow the money you’ve worked hard for, and have years of time still to save– then spare your banker some grief and go have a chat with a financial planner before signing up for yet another TD.