A letter to my children

Hi kids,

Attached to this letter is a Savings Account form. I’d like to you to fill this out and open an account.

Why? Well, a few reasons. Let me explain.

If you pay any attention to the media (no, not Facebook, I mean the news) you’ll know that its getting harder and harder for people in this country to buy their first property. So much so, that the government put in place a First Home Buyers Grant to try to help people get the deposit for their first property. As a nation, we’ve become pretty crappy at saving money. We spend more than we earn and have record amounts of individual debt.

On a more personal level, you don’t have to look far to realise this is true. My parents and many of their friends worked hard all their lives; and what do they have to show for it? In many cases, an average house in the outer suburbs, still not paid off by the time they die.

Many people my age, including me, have a big mortgage and too much credit card debt. They’re living in a house they don’t really like but can’t afford to fix it up or move to a better one, driving a car that is getting too old and haven’t taken their family on a proper holiday in years. Like them, I’ve made some poor decisions, spent too much time focused on the wrong things and been too afraid, lazy or uninformed to be in a better position than I currently am.

I’m not saying money is all there is to life. Far from it. There are lots of other things in life we should be grateful for, but financial security – having enough to live the life you want without having to stress about money all the time – is important too.

I’m writing to you because I want you to have the benefit of that experience and not make the same mistakes.

I met today with a financial planner who works with property investors and many high net-worth individuals. We had lunch and a long and interesting discussion about finances, investments, money management, taxation strategies and similar things.

Then he said something really interesting: most people don’t think. They live their lives going to work, paying the bills and going back to work.

That certainly got me thinking. He gave me some good advice on questions I had. Then we got talking about you and I learned that some of the banks have special accounts to encourage young people to save for their first property. The accounts reward good saving behaviours and will help you build financial security and own your first property faster.

Some of the accounts allow you to put the money you save into superannuation if you decide you don’t want to buy a house. Superannuation is a long term saving strategy to help you have enough money and live the lifestyle you want when you decide to retire.

I want nothing more than to see you happy and financially secure so you don’t have to stress about money and sacrifice your lifestyle like 90% of the population does. What’s amazing is, that it’s actually not that difficult to set yourself up for life – as the saying goes. Most people just put it off because they’ll “start next year” or “haven’t got enough time” or “haven’t got enough money yet” or whatever other excuse they come up with. Here’s the thing. Time is finite. We only get so much of it, so what’s important is what we choose to do with it.

I’m not going to push you or remind you or harass you, but I’m happy to discuss this with you at any time. I hope you are mature enough to give this the attention it deserves.

To help you, here’s what I’m offering to do. I’ll contribute an amount equal to the average balance of your account every six months. If the balance of your account is $1,000 or above for six consecutive months, I will contribute $1,000. If the average balance is $5,000 I’ll contribute $5,000 and so on until you are in a position to buy your first property.

I suggest it would also be worth starting to understand the benefits of saving, investing and property ownership, depreciation and tax benefits, capital growth – as a starting point – so you begin to realise how much of an effect this will have on what the rest of your life looks like.

I’m happy to speak with you about it any time, or otherwise, apparently there’s this thing called the internet…

Love you,