Your Age and The Full Passage of Time


I’M IN MY 40s … and well behind where I want or need to be. My career has stalled and the marriage is shaky because we’re constantly arguing about money. This is probably because my partner never returned to serious paid work after we had the children.

We’re far from making any dents in the mortgage. In fact, it’s actually rising slightly each year, what with the kids’ secondary education to pay for on top of all the other demands on our single income.

What’s Worse?

To add insult to injury, my superannuation has been slaughtered, so there’s no way I’ll be retiring at 55. Supposedly, I’m due to retire in 18 years time (when I’m 65). But with my nearly 70-year-old mother’s chronic health issues and associated bills, where’s that going to leave me and my retirement?

This is a fairly typical situation and one full of financial distractions.

Is my mortgage really a problem? After 18 years, the payments will fall as the balance falls, and even if it doesn’t happen quite that that way, inflation will to reduce the balance in real terms.

This means the real value of the mortgage is ‘shrinking’, and consequently inflating our property’s price, creating a bigger gap between debt and equity. Why? Because we’re doing nothing.

As for my superannuation, I can start treating it seriously and begin reviewing the fees and the advisor commissions I’m paying. By taking an entirely new and sensible approach to my investment strategies, and with so much adding to it from my wages each month, over the next 18 years that balance will increase and compound in plenty of time.?

The Real Cost of Living

My cost of living over the next six years will start to fall as the children finish secondary school and move onto university and out of home (hooray). Knowing this means I can stop being distracted by it. And I can plan to maintain a neutral cash flow over that period, after which we’ll have a solid base to grow from.

After that, and hopefully with my partner retrained and back into the work force full time, we’ll return to a positive cash flow again.

This means we’ll be adding to superannuation with our property’s value and mortgage gap growing steadily. With 12 years of this, and the ability to take on other investments, we’re really looking like we’re right on track.

While planning to retire earlier may not be an option, reducing my hours to three days a week when I reach 55 certainly is.

And finally, what does it matter? A good friend became seriously ill recently, and one of the senior managers at work suffered a major heart attack. When I think about that, I realise that none of these financial distractions really matter when it’s all said and done.

Bottom Line: Spending time with family and friends is what really matters and that costs me nothing at all.