In this article:
One of the best pieces of financial advice I received was when I was 20 years old. The advice came from Don Alford who was my first boss.
He told me: ‘Buy a unit in Potts Point. They are only about $40,000. Get the loan. Be smart.’
Obviously $40,000 in 1984 was a lot on money but given what that unit is worth today, I should have bought 100 of them!
Don had bought his first house in the 70’s on about eight credit cards (or so the story goes). You obviously can’t do that today but he understood the benefit of having a piece of real estate as your own. He was adamant that you could still have a good time, party, go to the pub – do all the things a 20-year-old wanted to do and be smart with some of your money as well. Turns out it was the smartest advice I was ever given… AND DIDN’T TAKE!
For me this advice I didn’t take is a painful reminder of a dumb decision. Now every single day in every single newspaper those same units are now a million dollars plus each. Remember this advice predated the ‘boom’.
I thought having a loan would ‘cramp my style’ (not realising you had to have a style to cramp in the first place). It was 1984 and I wanted to be ‘free'. I wanted to able to go overseas, live where I wanted and have no responsibilities. I had no concept that ‘free’ is actually easier (long term) if you are financially wise. I didn’t see the big picture benefits of buying into the market. I just saw it as a millstone.
Now, I use it as a cautionary tale for anyone who doesn’t at least listen to advice they are offered which may come from anywhere. It doesn’t need to come from an ‘expert’ to be valuable. People older than you have lessons to teach. Sure, some advice is bogus and there is also a talent in knowing which advice is which.