So my wife told me we were going to do a renovation to our home and as you might imagine, I was very cautious but excited at the same time.
Excited, because my wife was right about the family deserving an upgrade to our living environment. Why? Because many years ago we purchased ‘the worst house in a fantastic area’ and for the last 8 years we have shared a bathroom with our kids, barely had enough cupboard space and we have nowhere to work at home, which is difficult for two entrepreneurs. Our bedroom is also a thoroughfare to our kids rooms which is why our architect who designed our new home described our existing house as a ‘rabbit warren’.
Cautious, because when I co – founded The Money School my wife accepted that as an entrepreneur, I needed enough runway to get my business off the ground. In other words, we’d need to spend a lot less on lifestyle to give my business a real crack at succeeding. Now, because she has been such a team player for so many years I knew that I was under real pressure to deliver on my side and make the house happen.
What to do? I did what all good Money Coaches would do. I set up an appointment to meet with our financial planner. I explained to my wife that since financial freedom is a core value in our home, I’d be happy to seriously consider renovating our house as long as we understood how it affects our freedom – the freedom to travel, to see our kids, to spend time with each other and to help others. You know, the kinds of things that money buys.
Long-story-short; we went through our families spending plan together – we thought about the big future costs that are coming our way like our kids escalating school fees, whether or not we’d want to contribute or buy our adult kids cars one day, the kind of lifestyle my wife and I aspire to enjoy when we’re much older and put a monthly price tag on it.
We gave these numbers to our financial planner to do what they do and we received the good news! We were told that up till now we had done fairly well and the reason why is because we believe that we already live a very blessed and great life. The bad news however is that we would need much bigger assets one day if we wanted to live the way we do without working. So, although we were proud of what we had built today, it was very clear that we needed to invest a lot more money into our future.
Where did this leave us?
Our options were simple. We could invest more or live more. We decided to do what we know we’re good at – working as a team. We decided to do both and knew it was just a timing issue.
You see, I wasn’t prepared to take our investible income and just splash it on a house, so I proposed we hire a great architect and get going on the plans immediately. This way the fun could start straight away because we also knew that designing a house and processing the plans through council would take up to a year, so we had time.
In the meantime the goal of seeing this come to life would drive us to work harder and smarter to make more money whilst reorganising our spending. This way, we’d take the leap to a new lifestyle level the way wealthy people do it; with a plan that’s focused on building and protecting our wealth.
You must develop a good relationship with your financial planner. You will be very surprised that they wish more of their clients would do what my wife and I did. It means that they will be able to work with a client that will actually be able to achieve financial goals and be a loyal long term customer because the planner was there when you needed them for your big game-changing decisions. This is what they are trained to do. If you want to get focused on building wealth, get in front of a qualified financial planner and let them crunch the numbers for you. Even if you can’t execute the plan right now, it will become a work in progress, for you and the planner.
Author: Gary Kale, Money School Coach