Flicking through the TV channels recently I happened upon a televised poker tournament.
What immediately took my attention was the age of those at the table, every player at the table looked like they weren’t old enough to shave yet – except one, who looked about pension age.
The conversation at the table turned to the $8.9 million winner’s prize.
Several of the baby faced players figured that $8.9 million would last them a few years, yes, you did read that right – a few years!
The older guy sounded slightly more frugal, suggesting they could easily make that money last their entire lifetime through buying tax-free municipal bonds (unfortunately not available in Australia).
My investment antennae immediately sprung up, someone at a poker table was talking about bonds and how to make the winner’s prize work for them.
I checked up on the old guy in question, Dan Harrington, finding he was a successful investment manager and an extremely thrifty person.
Apparently so thrifty, when he visits a new location he immediately searches for the cheapest place to eat!
This contrast in discipline between Harrington and his younger opponents is often something reflected in the media.
The suggestion is those in their 20’s want it all now, spend too much and have too much debt.
Hopefully perception isn’t reality, but if it is, turning the situation around early could lead to better financial security later in life.
Discipline has to start somewhere and if you’re in your 20’s, or if you have children in their 20’s, it’s important to remember monetary habits developed early in adult life will often stick.
Savers will have compounding working for them, while borrowers will have compounding working against them – a good reason to cut the debt and start saving money as early as possible.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL / ACL 224543. This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re Australia’s top financial adviser.
