wealth creation

What Does Tennis Have to do With Wealth Creation?

How following the strategies of a tennis champion
can make you Wealthy

How did Roger Federer win the Australian Open and what does he have to do with wealth creation? He’s 35, had knee surgery 12 months ago, was ranked 17th and had to play 3 top ten players, just to get to the Final.
How about, Roger knows how to take care of business. He doesn’t wait until the second Set to win. He starts from the get-go.

Let’s look at some stats;
• Roger Federer won the first set of Every Match he played in the Australian Open.
• For the first three sets of every match, he won either two or three of the sets.
• Out of Seven games, he only played three five setters.
Basically, he doesn’t wait to win. He gets on with the job from the first serve. Sure he has some resistance from better players, especially in finals. But by winning the first set he sets the tone of the match, he controls the game. By moving early, Roger Federer gets the advantage.
Physically he is at an advantage because he doesn’t have to work as hard as he is playing less sets over the course of two weeks. At 35, each set adds up – especially come the Final.
Psychologically, he forces his opponents into a defensive position, where they have to adjust their strategy to compete with him. He is able to maintain composure throughout the Match, as he is always in front.
So how does this translate to being wealthy? Well, unless you’re a tennis pro this exact strategy probably doesn’t translate directly. But if you’re an average punter, there is an important lesson here.

Start Early.

Get ahead sooner rather than later. Don’t wait for the right time. Just do it. Wealth creation is a long term project.
Let’s look at a financial example. Sarah and Dave contribute $2,400 pa into an investment. The only exception is that Dave is going to start 10 years later. Now obviously, he is going to have a smaller balance at age 65 when they both retire, but how much is the scary part.

wealth creation

Just do it!

Sarah gets to retirement with a whopping $419,000, whereas as Dave only has $215,000.
That means $204,000 is the cost of delay!
Even crazier, the end balance for Sarah is generating $23,000 pa, compared to Dave who is pulling in just $12,000 pa. Sarah will get paid twice as much for her wealth creation in retirement as Dave will, just because she started ten years earlier.

Two key takeouts from our lessons in tennis.
One -If you want to be the local tennis pro – finish your games early (in time for a quick beer or maybe a round of golf in the afternoon) and give up the five setters (your knees will thank you for it).
Two – if you want to make money through investing, start early. Delaying a wealth creation plan will only cost you.

It's your future

What Value do you Put on Planning for Retirement?

We often come across people who know they should be thinking about the future, but are caught up in day-to-day life and not planning for retirement. They cannot see beyond the present and into the future and as such find it hard to comprehend what the future may hold.

Have you ever wondered why it is easier to buy a car than it is to save for retirement?

We know that the second a car rolls off the lot it significantly reduces in value. Compared to that your super is likely to actually increase in value over the life of the vehicle. Why then do people find it easier to buy a car?

Because of immediate gratification – we get something straight away.

After you’ve signed the paperwork and handed over a huge amount of cash, you get to enjoy your Brand New Shiny Car – all for you.

Sure your money is gone, but look at the car…

How do you feel about your shiny new car a month later? Or a year later?

You probably have gotten to the point of washing it once a month (yes, driving through a thunderstorm counts as cleaning), letting the kids eat in the back and you don’t mind if someone gets a bit of dirt on the upholstery. By this time the new car obsession is gone.

You see buying a car might provide satisfaction in the here and now, but it rarely holds value (in our minds and in the marketplace) for more than a year and is it really the best place for your money?


Planning for retirement

Planning for retirement on the other hand doesn’t usually give you immediate gratification, but it is a prudent place to invest.

We think that if we save a little more and add it to our super we’ll be right when we get to retirement age. But that’s the problem, we think we’ll be alright, but we don’t know.

With a new car purchase, we know exactly what we are getting and receive our car as soon as we hand over some cash. We have certainty. But with retirement (being so far into the future) we have no idea what our retirement will look like.

So, how do you get the best of both worlds – gratification and certainty?

We approach this by showing you your future financial position using your current situation and alternatives. We make it possible to see what your retirement looks like, 10, 20, 30 years down the track. We do this so that when you make a contribution to your super fund or decide to purchase an investment property, you know that this will ensure you can enjoy a comfortable retirement.

This regular review process allows for us to provide greater certainty to you and hopefully greater peace of mind. It allows for you to draw the connection between depositing funds to super and the benefit you will receive (albeit in the long term future).

Most importantly though, planning for retirement provides a sense of gratification today for making progress towards your long term future prosperity.