14th Dec 2015
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Noel Whittaker’s life lessons
Author: YourLifeChoices
Noel Whittaker 25 years of whitt and wisdom

For 25 years Noel Whittaker has been advising us how to keep our finances on track and to celebrate the milestone, his book, 25 years of Whitt and Wisdom brings together the questions he’s been asked over this period, and the sage answers he’s given.

Noel has also taken the time to share with you the three important lessons he has learned, all of which make perfect sense to us.

Lesson one
The biggest lesson I have learnt over the last 25 years is the power of what I call ‘the guaranteed secret of wealth’. In a nutshell, it means that most people pay their commitments, such as rent and loan repayments, spend what is left over and are broke on payday.

It therefore follows that the best way for most people to get ahead financially is to make investment their first spending priority. We never miss what is taken from us. For example, when I was a young bank officer I requested to be taxed as a single person – this meant I paid a higher amount of tax each pay but ended up at the end of the year with a nice fat tax refund cheque. This is why I am totally opposed to people with rental property losses signing a form requesting that the tax is deducted from their pay, the reduction being applied in anticipation of a tax loss. They are much better off to pay their normal tax as they go and then use the tax refund cheque for further investment.

That's also the reasoning behind my strategy of paying house loans fortnightly and not monthly. Think about a couple that is paying $2000 a month – if they changed to $1000 a fortnight, they end up repaying $26,000 a year instead of $24,000 a year. That's an extra $40 a week that they’re unlikely to miss.

Lesson two
The next lesson I have learned is that negative headlines in the media are the investor’s worst enemy. If the market falls it is reported in billions – for example $90 billion wiped off superannuation. However, if the market rises it is reported in points – markets rose 90 points today.

It is my view that shares are the investment most suited for the average investor. They are the most flexible as they can be cashed in, whole or part, on short notice, and provide unique tax benefits in the form of frank dividends. The price we pay for all these benefits is volatility – history tells us to expect four negative years in every 10.

Far too many people quit the market when it is down, thus turning a paper loss into a real one. The secret of investing is to agree with your advisor on a set asset allocation percentage and stick with it through thick and thin. It is time in, not timing, that gives the long-term results.

Lesson three
Finally, we should never forget our greatest asset is our health. Certainly a serious health problem can strike suddenly but most people's lives could be improved by a wise exercise and diet regime. It's a bit late to start when the problems come.

So there you have it, three invaluable lessons of which we’d be well placed to take note. And if you know of some who could do with the gift of wisdom, or perhaps it’s a gift you should give yourself, then Noel’s latest book is the perfect Christmas present.

Priced at $49.95, you can purchase from Noelwhittaker.com.au 





    COMMENTS

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    Adrianus
    15th Dec 2015
    10:46am
    I like your lesson one Noel!
    We all have creditors or regular important bills which need to be paid. But many of us choose not to include the most important? Themselves, the one who earns the income. In my opinion should be on top of the list.
    FrankC
    15th Dec 2015
    12:01pm
    The old adage that you should put aside 10% of what you earn , for yourself. Take home pay, that is.
    Adrianus
    15th Dec 2015
    1:12pm
    Yes , you could call them Frank dividends. :)
    Peterrj
    15th Dec 2015
    9:37pm
    Or Frank in sense?

    15th Dec 2015
    12:39pm
    Read and practice lesson one and have patience and you don't have to read the other two lessons - and you'll save yourself $49.95.
    don
    16th Dec 2015
    12:56am
    I always paid single mans tax, my wife is the house wife and looked after the kids . It was because when tax time came it was a hard ship to pay more tax at the end of the financial year. Two years ago I went to the accountant to get my tax forms done and was told that the single mans tax was finished as my wife is supposed to get a job so no tax cheque anymore. Where we live in the country there are no jobs and if there were who is going to employ a 62 year old woman.?? To say I was unhappy is an understatement.
    Strummer
    16th Dec 2015
    6:44am
    I've always considered shares a better investment than property. No maintenance, no feral tenants, always know their market value and I can buy/sell any time I choose. Plus I get a big, fat tax refund every year.
    Soapbox Diva
    16th Dec 2015
    11:19pm
    When I first started work my mother insisted that I bank a third of my pay, give her a third as board and the remaining third was for me to spend as I pleased. My salary at the time was $74 per fortnight. When I tried explaining the concept of saving first to my children, all they heard was "a third of my pay to grandma as board" and were horrified. One earns a very good wage but barely makes it to next payday and saves nothing. The other doesn't earn near as much but always banks something.
    Adrianus
    17th Dec 2015
    8:29am
    Soapbox Diva, I like to think I had some success with my 2. This is something we discussed years before their working adult life. They were to replicate the Superannuation system of forced savings but they themselves decided on the amount which was to be similar to the SGC level. Once having decided they would commit to keeping that amount for themselves. That was their real reward for working. Not the transient feeling of shouting the bar on a Friday night. We have not talked about this now for a few years. But every now and then one of them will mention how their wealth has grown and without the pain of sacrifice. Kids need to be taught this mindset before they get their first pocket money or first after school job. They are both very generous with their money in case you're wondering. :) But not with their "mine to keep" amount.
    "This small portion is mine to keep" strategy has helped buy a first investment property at age 21.
    KB
    27th Apr 2017
    10:41am
    I am with you on this one. My daughter still lives at home, She has to spend money on board invest some into an account and save for a house deposit. Young adults need to be taught that they will have to budget ans spend money on rent and utilities and put money away their retirement and for a r rainy day. Needless to say my daughter is generous with her board money. I do not call it board money just contribution expenses
    KB
    27th Apr 2017
    10:34am
    I agree however health is your best investment so should be number one priority in order to be able to work and save money.


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