Barber Chair Musings

While getting my hair cut the other week, I was talking to my hairdresser about what I do for a living, which even my wife still has trouble explaining! I explained that, in broad terms, I help people with super, insurance, investments, and managing money.

As with most people, her ears pricked up to investments. I mean most people don’t see super as anything to think about until they are 60 and insurance only costs money, right?
Anyway, she asked the age-old question of how much I need to start investing. I tried to explain you can start with as little as a few hundred dollars but the real key is to make it a regular investment.

Most people have heard of compounding interest, but rarely do we really think about it, and then rarely consider how a small contribution each week can increase that value exponentially.

For example, if you invested $1,000 in a growth asset, and assume a return of 8% per year on average, you would have $2,220 to show for it in 10 years’ time.
Doesn’t really sound like it’s worth the effort, does it? If we were then to make a regular contribution of $100 per week, after 10 years you suddenly have $81,496.

Then we got into a sticky conversation about the cost of seeing an adviser. For anyone in the industry they’d be well aware that there is a huge amount of compliance with advice, so generally speaking, helping someone invest a few hundred dollars really isn’t viable.

What I do like to remind people is if they were happy for me to complete a holistic review, so can help in other areas, generally speaking, our fees are a lot more reasonable as there is a lot more value for money.

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