You may have already heard, but wages in Australia have slowed significantly over the last 10 years. So, the idea of working harder just to help you get ahead literally doesn’t make sense anymore. You have to find a way to leverage your time and money, so that it’s working for you.
If you aren’t investing yet into passive assets like websites, businesses, shares, property etc – then here’s some observations from our high net worth friends and mentors to get you inspired. (just click on the video below)…
It’s time to pay attention to the low wages growth trend
Matt: Hi everyone, it’s Matt and Liz Raad here. And we’ve just been having a chat at our kitchen table about a really interesting topic, and it seems to be quite topical at the moment. This is around the idea of low wages growth.
Low wages growth is happening worldwide, but also here in Australia. We’ve actually just read an article on ABC news about it. Also, we’ve been looking at some research coming out of the Australian Treasury Department, and there’s a few studies around this.
So basically, even here in Australia we’ve had no real wages growth. It’s been very low for the last 10 years and this is obviously a concern.
What does low wages growth really mean?
Liz: So, what about wages growth? You might have heard about it in the news. Basically, it means that the amount that you’re paid now in 2019 is not that much more than you would’ve been paid 10 years ago for the same job.
And what’s interesting is that the Treasury department is saying that’s regardless of whether you’re a high-income owner, a low-income owner, man, woman, white collar, blue collar – it doesn’t really matter. It’s across all industries everywhere that people aren’t able to get ahead. That basically means you can work really hard, but you just can’t get ahead.
Is it possible to work harder to get ahead?
Matt: Now, I know a lot of our clients start out with this – they’re swapping time for money. So, you can’t possibly work harder now to get ahead. Working hard is not enough to cut it in this day and age.
It’s interesting, I’ve heard one of our favourite all-time investors (and someone who inspires us) Warren Buffett, who’s been talking about this same topic. He’s been talking quite a bit about the growing divide between rich and poor in America, and it’s a real issue. He said basically you need to find a way to get leverage on your time in order to get more money. You just can’t do it otherwise. And that means investing in businesses, assets or real estate that gives you that leverage on time.
It’s time to find another way to get ahead with your finances – getting leverage
You need to be smart now. Just working more hours is probably not going to cut it. And we all know that has other effects.
Liz: And it’s also no fun if you’re just working all the time! So, we were thinking, “Okay well what can people do, what’s the solution here?” And certainly, getting educated is really important. Regardless of what it’s about.
Whether it’s in business assets, website assets, real estate assets, share assets. What you need to be doing is figuring out how can you get some money into a marketplace that is growing and take advantage of that growth.
Matt: One of our mentors pointed out, (he’s a very high net worth mentor we have, and a very successful businessman), and he said, “Matt, look back over the last 10 years. Think about all the successful business people you guys know, what do you notice?”
We know a lot of very successful business people and all of us have invested in either business, the share market, or real estate. And we’ve all done extremely well out of it and we’ve been able to get leverage on our time and money. Because the share market has gone gang-busters over the last 10 years.
Is it too late to get ahead?
Liz: So, the question is – have you missed out? That’s the problem.
Lesson: Make sure you start somewhere – invest in assets that can grow over time while you sleep
Matt: Well what he said was, “Compare that to the people who haven’t invested over the last 10 years into those leveraged assets. Life’s a lot tougher for those people, a lot scarier at the moment”. So, the message is, you’ve got to start now. Tomorrow’s a brand-new day. The sun is coming up, get into it. Don’t just sit there trying to think, “I’m going to get ahead by working harder.” Keep your job – but in your spare time, you need to be looking for ways to get leverage.
Liz: And so that’s really important to note. If you are on that pathway, then keep going – it’s really worth it.
I know when you first start out and you’re trying to do both – a job and the investment strategy, it can be tough. But it’s definitely worth it. That is what is going to get you freedom going forward, especially in this marketplace – which is a strange one, I don’t think we’ve ever seen before in history.
So, I think that is our main thing that we came up with, you’ve got to do this. You’ve got to get yourself educated and find a way to invest in a market to grow some other assets that give you leverage on your time (ie are passive and ideally make money while you sleep without you having to be there), as well as what you are doing as a paid job. So, congratulations if you’re doing that, well done and keep on it.