Why Barnaby Joyce is all of us…
I can still remember my first full time job.
I was employed on the princely sum of $24,700.
And I was richer than the Pharaohs of Egypt.
This was in the days when the tax-free threshold was around $5,400 from memory, so I didn’t get all of that cash straight into the skyrocket, but seriously… I’d never seen so much money, and sure as hell couldn’t spend it all.
I mean, I had car rego to pay. And petrol. Plus insurance. And board (though I can’t say my wonderful parents charged market rent — thanks Mum and Dad!).
And we went out. Again, that was in the days of Thursday night ‘dollar drinks’ — a promotion which I understand is now banned — but still…
Then I got my first pay rise. I don’t remember the figure, but from memory, it was less than $1,000 per year. I was even richer. They were giving me more money, but I had no more expenses.
Could life get any better?
(And no, this wasn’t in 1945. That was a pretty average salary for the time.)
I mention all that because former Deputy Prime Minister, Barnaby Joyce was today quoted as saying he’s “struggling to make ends meet” on his parliamentary salary, reported to be $211,000 a year.
Now, Barnaby has made his share of personal and ideological enemies. Enemies who, this morning, we’re enjoying a little capital-S schadenfreude as they delighted in skewering the Member for New England.
Frankly, some of the delight might even be justified, given his party’s iron-clad refusal to increase NewStart and his suggestion that people should move to his electorate to enjoy a lower cost of living.
But I tend to dislike those cynical cheap-shots and have a pathological aversion to the classless display of schadenfreude. I’m not religious, but I think there’s more than a little value in observing the Golden Rule.
Instead, more of us should probably — to invoke religion for the second time in two paragraphs — live by something my old man instilled in me: There, but for the grace of God, go I.
There are few of us who don’t owe most of our current circumstances to a helluva lot more luck that we’d like to admit:
Where and when we were born. To whom. Our health as kids. Where we went to school. The teachers we had. The job classified ad we happened to read. The early job mentors. The fact that hiring managers and recruiting committees happened to choose us (and the ones we missed out on). The list goes on and on and on.
But back to Barnaby.
Should he be able to get by on 200-and-some gorillas? Of course he should.
But how many of us — myself included — fall victim to our living expenses (and expectations) rising with our incomes?
Couldn’t you have just one car? And an older one? One TV? A five-year-old phone? Do you really need that unused bedroom? Couldn’t you live another 20 minutes out of town? Another 60?
Surely a week at a caravan park would be fine, rather than the four-week jaunt to Europe? Do you really need that branded tomato sauce? Couldn’t those jeans and shoes last another six months?
Don’t mishear me, though. I’m not — for a second — criticising the choices of Barnaby or of you, dear reader. One man’s iPhone X is another’s X-Box or eXciting holiday (see what I did there?).
Trust me when I say I didn’t exactly keep my expenses at the level they were when I earned $500/week.
And I’m no skinflint. Another thing the old man used to say was that “Money was made round to go ‘round”. He was no lavish spender — far from it — and my parents worked bloody hard, but he knew you couldn’t take it with you.
I don’t live like a monk. Nor should you, unless that sort of thing really floats your boat.
But you and I know there’s a middle ground, don’t we?
And it starts with a little financial discipline. Notably LBYM.
Live. Below. Your. Means.
Or, more simply: spend less than you earn.
In the (decimalised) words of Charles Dickens’ Mr Micawber:
“Annual income twenty dollars, annual expenditure $19.95, result happiness. Annual income twenty dollars, annual expenditure $20.05, result misery.”
Except that doesn’t quite go far enough. Perhaps Mr Micawber had a more certain income than most of us.
I mean, I expect to be doing this job for many, many years, but who’s to say I don’t get a tap on the shoulder, and told my services are no longer required?
Or that illness or misadventure makes me unable to earn a quid doing what I’m doing today?
It’s not enough to say ‘Well, if nothing goes wrong, I’ll be okay”.
Because maybe you have a second family to support? Or have more kids. Yes, Barnaby this time I’m looking at you.
But it could have been anything else. For any of us.
I don’t want to be a hard case, but almost all of us are spending much more than we need to.
In short ‘expectations inflation’ is hurting our finances.
Oh sure, you like your car. And your house. And your suburb. And your new phone, jeans and coffee. You like your holiday, your new furniture and your club memberships.
I’m not here to spoil your fun.
But here’s what I am here to say:
If you’re paying for them, but don’t have a sufficient financial safety cushion, you can’t afford them.
You’re walking the tightrope, without a net.
No, don’t complain. Don’t say ‘Yeah, but…’. Don’t make excuses.
Either you have a financial safety net or you don’t.
And if you don’t, you’re lifestyle isn’t even close to being as affordable as it seems.
I hope that makes you uncomfortable. Because ‘comfortable’ isn’t a good state to be in, if your finances need an overhaul. Even a minor one.
They say you should never waste a good crisis.
In this case, it’s someone else’s crisis. They’re the best sort.
Don’t waste it. Make some changes. Today.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.