“WHAT we are seeing is a global financial meltdown – and Australia will not be spared”, my radio show co-host said somewhat smugly.
My blood was boiling. For the entire program this guy had talked impending doom and gloom – recessions, depressions, financial Armageddon. It was like sharing the mic with Tony Abbott.
It wasn’t that I necessarily disagreed − the eurozone (collectively the world’s largest economy) looks like it could soon implode. That’s serious. But what exactly can any of us do about it?
The fear mongers in the media, like my co-host, get a sense of power from scaring the daylights out of people. Which is entertaining – but you shouldn’t take them too seriously. (I’ve previously pointed to university studies that show the predictions of these so-called economic experts are often neck and neck with dart-throwing monkeys.)
Besides, New York Times best-selling author Harry Dent says there were more millionaires created during the Great Depression than at any other time in America’s history.
So while taking personal responsibility for your situation isn’t as sexy as tales of terror, you can turn crisis into opportunity. Here are three practical things you can do that will put thousands of bucks in your pocket.
Take a tip from Ray the Handyman
Firstly, you can control what you earn – even when you’re older. I learned that from Ray, a 70-year-old tradesman I hired to fix a few things at my house recently.
Ray: “You know what the problem with the world is?”
Barefoot: “The Kardashians?”
Ray: “No, it’s young blokes like you. You must have a bit of dough to live in this joint – but you don’t know your elbow from your armpit. Let’s be honest, you wouldn’t know what to do with a screwdriver, woocha?”
Ray was ranting (and besides, I can mix a cocktail with the best of them).
“It’s just a bloody tap for God’s sake. Come here, I’ll show you how to fix it − no charge.”
Feeling like less of a man by the minute, I could tell Ray was struggling with the customer service part of his job. Not that it mattered – the old codger has more work than he can handle.
“I could work seven days a week and still not fit it all in,” he told me.
He’s right. Economist Phil Ruthven from IBISWorld says: “This year marks the first time we will spend more money on personal outsourced services [think gardeners, eating out, cranky handymen] than we do on total retail sales.”
Ray’s no dill. Like many people of his vintage he’d retired without enough superannuation, but he’d had the good sense to go back to work. Ruthven reckons there’s still a projected 60 per cent growth in personal services by 2020, perfect for many older workers – like Ray – who need to boost their retirement savings.
While the manufacturing sector struggles with our version of the ‘Dutch disease’ (where booming commodities prices boost our Aussie dollar, making our exports ‘so-so’ and imports ‘oh yeah!’), fortune favours the bold.
You wouldn’t think it, but over 94 per cent of people in this country have a job. So if you don’t like the one you have now, this weekend:
Turbocharge Your Takehome
Do an asset inventory of your skills and abilities. Think about the roles you’ve performed, and what you do really well in your present position.
Go to seek.com.au and see what the market is paying for your skills.
Find out what you can do to make an investment in yourself – maybe by learning new skills or by starting a small service business on the side.
In short, stop bitching and start pitching.
Do the Post-it Note Challenge
Next, you can control what you spend. A survey out last week found that the average Aussie family has $3,772 worth of unwanted stuff they could sell.
Not only is it a cool way to clear your credit card (average balance $3,321) but, with less than 100 days before the fat man comes, it’s a cathartic experience.
Too much ‘stuff’ tends to suffocate. Before you know it you’ve become possessed by your possessions. If that’s you, here’s an action plan for exchanging it for cold hard cash:
Post-it Note Challenge
Pick a room, say the garage, or wherever you keep your ‘not now’ stuff.
Grab three different-coloured Post-it notes: green for stuff to give to charity; yellow for stuff to give a spit and polish to and start using; and blue for stuff to sell on eBay or at a garage sale.
Your mission, should you choose to accept it, is to make your room like a technicolour Post-it note Christmas tree. Hint: any CDs your Uncle Rick gave you for your birthday, half your wardrobe (I have shirts that make me look like a 70s cricketer), or anything bought from a morning television show infomercial, should now have a bright blue Post-it on it.
This exercise will only take a couple of hours – but decluttering your life will give you a huge return in mental clarity. Better yet, when you’re done, calculate how much you wasted on that ‘stuff’ – it’s the ultimate infomercial antidote.
We've got the fastest growing wealth letter in the country (find out why, here)
Make Some Mojo Money
Finally, you can control how much you save. I’ve always seen saving as a positive character trait. And it’s backed up by my real-world experience: every self-made millionaire I know is a systematic saver.
That’s why getting $2,000 Mojo money in the bank is the first step to financial freedom. There’s a reason behind this: one of the biggest stresses people face is a personal credit crunch.
I have thousands of testimonials from people telling me that getting some Mojo money behind them was the best thing they’d ever done. Cash is king.
And while you’re at it, here are three more things you can achieve through saving:
Sanity in any situation fund:
After you’ve got your Mojo, keep squirrelling away a little each month until you have three months’ worth of savings in a high-interest online savings account.
New for old:
I sit on my apartment building’s body corporate committee, and we have a fund to replace stuff when it wears out. Having your own ‘new for old’ fund (for your car, furniture, husband) is the easiest way to avoid crippling consumer debt.
A war chest:
Having savings in reserve will stop you freaking out about market movements. Even better, when everyone else is selling, you can buy – and that’s historically how great fortunes have been made.
I’m always an optimist, but the doom and gloom merchants in the media may actually be right this time. And if they are, what are you going to do about it?
Tread Your Own Path!