A reminder at Christmas Time

I am having an interesting night tonight. As happens every year, I am given an awkward reminder of another time, with a Brisbane landmark that brings joy to many.

The King George Square Christmas Tree



Here is the Christmas Tree from King George Square that is erected every year, oddly enough, at Christmas. It seems happy enough. Decorating it is a 'thing' and it is unveiled every year at an event, and carols are sung.

 

I don't consider myself a Scrooge at Christmas, and so what you may ask am I reminded of?

 

Well, my wife sent me this photo today. A colleague of hers took it, and she told me when she sent me the photo via text that her friend had taken it, and that she had told him about Russell. (Names changed and all that).

 

Going back a few years, he was the guy who put the tree up every year. He was a client of mine, and an interesting one at that. He inherited some money, but really took it, and made the most of it. He used it to really 'do' something. But then he died.

 

He rang me one day to check that he had trauma insurance cover. After some back and forth over a bad phone line, I confirmed that he did, and reminded him of how difficult it had been to convince him to take it. He said that he was glad that he had listened, because he had been diagnosed with a tumour the size of a grape fruit, that totally surrounded his kidneys, and had a major artery engulfed in it as well.

 

Two oncologists and a vascular surgeon had agreed that there was no point in operating, and chemotherapy was little value. He was given 6 months to live, and he proved them wrong, but only just.

 

As an adviser, I have had a number of clients who have been sick, and even died, but for some reason, this client and his circumstances give me what I feel is an irrational emotional response. He was not a friend or family member, although we spoke about personal information, and laughed at things a fair bit.

 

It may be because it was so sudden. It may be because he was too young - mid 40's. It may be because he had changed his life with the inheritance, and his future, and those of his staff was bright. It is probably all of those things, plus me being a bit sentimental.

 

Anyway, as much as I like Christmas, that tree is a sorry reminder.

You call that a wealth creation strategy?

I had someone say that to me once. We had spent an hour going through their Statement of Advice, and when we turned to the pages that outlined the recommended investments and their performance, they looked at the 'one year' returns, and said

"You call that a wealth creation strategy?"

Well I did as a matter of fact.

Now this was some years back, in around 2001. Those with a long-ish memory may recall that markets had NOT acted that favourably in preceeding years. However, there are two point that bear noting here. They are:

• short term returns are generally not that relevant in a long term wealth creation strategy, and
• returns are wholly irrelevant, if you haven't got anything to get a return on.

There is a bigger picture at stake that goes beyond what is happening over the short term, and even what is happening with markets in general. That is, step 1 of creating wealth, is to spend less than you earn. Step 2 is to do something smart with the difference.

There is no step 2, without step 1.

You may have a lump sum in super, or access to some equity, but it is the ability to direct free cash flow to the things in your life that are important to you, that will determine the outcomes of your financial strategies. It is that, that will predominately drive your position to the rewards that lie ahead.

 In the end, the strategy that I had recommended for the coupe included cash management, income and asset protection, debt ideas, an estate planning overview, asset allocation decisions and more. And yes, the recommended investment has gone up significntly in the ensuing years. But that is NOT the 'prize', it is merely the icing on the cake.