Premium Finance Stories

Now the following is just my opinion and not to be considered advice of any kind, or representative of the policies of Premium Finance, but do soak it up.

The 1980’s saw a strong socialist style government that started to look forward 20 years or so and something quite astounding became apparent.  The baby boomers were approaching retirement.  This at close review brought about a massive problem.  Inspect the following and make your own observations, but here are mine.

The Baby Boomers grew up from a family environment that generally stemmed from 4,5 or 6 kids.  Those X generation kids then went to start their own families of 1,2, or 3 kids.  Those Y Generation kids are now moving into the none to 2 kids environment.  Now rocket science does not play a part in this because obviously there is now more people leaving the workforce than entering it at the bottom end, so where are the taxes going to come from to give pensions to those baby boomers, the numbers don’t add up any more.

Hence, along came compulsory superannuation, very small in the beginning but now 9%, but only contributed from the employer, nothing compulsory from the employee.
If you retire at 60 and live to 80 with a massive $500.000 of super will you be sitting pretty for your retirement?  No way Jose.  Think about it and do the sums.  If you are lucky you might receive $25-30K per annum, but just a little more than the pension.

So the government of the 80’s wasn’t so crazy after all.  They created a system where the employer now paid the pension rather than the government.  However, how many people will have $500K of super, very few.  Most will be lucky to have $200K and that means if they get $15K from super, then the government only has to tip in another $10K rather than the whole $25K.

Well that’s it from me.  Premium Finance has my vote when it comes to giving people other opportunities rather than just relying on Superannuation.
Catch you next time
Paul

One of the amazing things that keeps cropping up here at Premium Finance Services is when clients come in and let on about who they give credence to when it comes to taking advice.

Let’s take a closer look at the obvious.

So many people always try to find a reason to delay making sound financial decisions.  Many times the effects of procrastination lead them to never making those sound financial decisions at all.  I need to talk to my mother, father, brother, sister, uncle, neighbour, work mate or boss.

What vested interest do any of those people have in your own financial future?

Amazingly we continue to place value on the opinions of others before trusting our own gut instincts.

How many of the people we confide in are actually within the 5% of the population that are self funded and have substantial real wealth.  Instead we ask advice of people close to us that have made all the same stupid mistakes that the rest of the 95% of the population have made that had lead further from a sound financial retirement than closer to it.

Why are we asking the poor how to be wealthy?
Why are we paying attention to all the people that will be struggling in retirement?
Why do we place more emphasis on their opinions rather than cold hard facts.

The facts are by the age of 65, of 100 25 year olds:
59 will be broke with nothing
24 will be dead11 will be with home and debt free, but with no discernible income
5 will be self funded
1 will be wealthy

Now you don’t need to be Einstein to decide who of the 100 you should be talking to.
Don’t just think about it, Act on it.  Premium Finances can definitely help and is.

Cheers for now.

Paul