Skill in working on finding work
AN older tradie should still be able to get a job in the building boom. He needs to work out how to capitalise on his experience, says Scott Pape.
Barefoot Investor
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AN older tradie should still be able to get a job in the building boom. He needs to work out how to capitalise on his experience.
RENEE SAYS: I didn’t know whether to laugh or cry when I read your answer to “My Dream Home” (January 31). You told Jody that her husband’s wage of $45k “isn’t going to cut it”. Well, after 39 years’ earning a decent wage as a tradie, my husband was made redundant two years ago. He now works for a car dealer and earns only $43k. How do you suppose, at the age of 56, he increases his income? No one is interested in employing someone of his age. Or if they are, they’re only offering the same miserable wage.
BAREFOOT REPLIES: If you and your husband were out to dinner with me and my wife, and we were having this discussion, my wife would’ve kicked me under the table, given me “the look”, and empathised with you on how hard it is for older people to get decent paying jobs. (She gets social niceties like that). That part of my brain is missing. So let me dig myself a little deeper. If you’re husband has worked as a tradie for 39 years, why is he working in a car dealership for $43k a year? We’re currently living through the biggest building boom in history. If a tradie with four decades of experience can’t swing a gig for at least $60k, I’ll bare my backside in Bourke St. Strike me handsome! You say: “No one is interested in employing someone of his age.” That is simply not true. Stop saying it. The average age of my staff at the Barefoot Investor is 50-plus (and that’s a funky, internet advice business). He’s got 10 years of good work left in him at least. He needs to work out how to capitalise on his experience, and exploit the superannuation tax lurks while he can!
MOJO ... NO GO?
KATH SAYS: I have a query about building up an emergency fund of three months’ salary (Mojo). My partner and I earn roughly the same income. Do you recommend that we both have the equivalent of three months’ salary in an emergency fund ($40k combined) or do you think it is OK to just have one three- month salary amount ($20k) in a fund to cover for either of us if needed.
BAREFOOT REPLIES: It’s not “three months of salary”, but “three months of living expenses”. The idea behind having a Mojo account is that you only draw on it in an absolute emergency. Seeing a Thermomix on sale is not emergency. Having your house burn to the ground with everything in it is an emergency. When you’re forced to use your Mojo money, you spend it carefully, making every cent stretch until you’re back to normal. Now, if you and your partner are getting married, do the following: work out how much you could both live on for three months, then open an online savings account in joint names (nickname it Mojo), and start saving till you get to your joint goal. If you’re not planning on getting married, or sharing your finances, you’ll need to save three months of living expenses on your own. Remember, a Mojo moment that could crop up is breaking up with your boyfriend.
BABY DEBTS
CHRIS ASKS: We’ve just got married, and are looking to start our family quick smart (we’re both 35). However, I’m concerned about servicing our current debts. We have three units valued at $400k, $550k and $800k and owe $250k, $250k and $600k on each. We can do this at the moment and put money away however when my wife has a baby, her income stops, and she is the main breadwinner. She earns $140k and I earn $90k. Should we sell something? I’m completely overwhelmed!
BAREFOOT REPLIES: Without seeing details of your household expenses, the income you receive from your investments, and the condition of your properties, it’s hard to give a specific recommendation. However, if you’re planning on supporting your family and being on hook for the upkeep of three investment properties, for an extended period — on $90,000 — that sounds ... ambitious. The good news is you’re asking questions at the right time. You’re moving into a new, very expensive stage of your life. Things won’t go back to “normal” for 15 or 20 years. So, sit down with your wife tonight and discuss your “new normal”: how many kids will you have? When does she see herself going back to work? How much will childcare eat into her wage? Would you consider being Mister Mum? Dude, talk to your married mates, and ask them if they wished they’d had a conversation like this before they both found themselves up to their elbows in nappies. You’re on the right track.
HISTORY LESSON
BEN ASKS: I’m 33, a consultant in relatively solid employment and have had some recent solid years of income. The immediate future also looks bright. I have $500k in cash and would prefer to keep my cash liquid, out of the property market and in a mixture of medium to high-risk stocks and funds. Am I best to lump the entire amount into a mid-strength fund at 12.5 per cent to 15 per cent? Or should I diversify and go 80 per cent fund and 20 per cent shares. Oh, a little bit of Mojo, too, I guess? I am a natural risk taker!
BAREFOOT REPLIES: I’ve never heard an investment labelled “mid-strength”. Sounds like a beer. All kidding aside, you shouldn’t label yourself “a natural risk taker” until you’ve watched the value of your investments fall by 50 per cent. Everyone sees themselves as a risk taker until they lose money. (Warren Buffett has watched the share price of his company, Berkshire Hathaway, decline by 50 per cent three times in his investing career. He never sold once). Yes, you should have three months of living expenses in a Mojo account. Yes, you should also have a home. If you’ve got both of these under your belt, I’d be investing directly in shares: either via low-cost Listed Investment Companies, or building a portfolio of individual companies. The bottom line is that you’re young and rich — and you’ll end up richer: if you’d invested $500,000 in 1980, it would have grown to be worth $18 million today. History doesn’t repeat — but it sure does rhyme.
The Barefoot Investor holds an Australian Financial Services Licence (302081). This is general advice only. It should not replace individual, independent, personal financial advice
Originally published as Skill in working on finding work
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