Podcast: Your financial weak spots

The below letter from one of our listeners stopped us in our tracks. So often we have no control over the course our lives would take. The challenge is to ensure our finances are in a position to sustain crises. In this episode, we talk about how to spot our own financial weaknesses and how to recover from a financial disaster.

I have always been a HUGE fan of property.

About eight years ago I was doing, I thought, pretty well. I had a high-paying freelance gig (very much the norm in my line of work).
I bought four investment properties and was comfortably funding the shortfall between the rent and the bonds, levies, maintenance and other expenses. That was my road to financial freedom, or so I thought.

Then, just like that, the high life ended. I was called into the head honcho’s office one afternoon and told they were changing direction and not to worry about coming in the next day. After 10 years, I was given 24 hours’ notice.

Back then I had never heard of income protection and I ended up losing everything. The investment properties, our cars, the house my wife, kids and I lived in. Everything. It was so dire that we had to move back into my parent’s house. You have no idea how humiliating that time in my life was. I felt like the biggest loser and failure on the planet.

We slowly started picking up the pieces. We found a small flat to rent, we managed to buy a small, old second-hand car cash. It’s been a very long road and we are nowhere near where I want to be financially, but I am pretty proud of what we have been able to achieve over the last year.

For the first time ever, I am going into a new year with a small, but growing, emergency fund. I also now have income protection in place. Another first, I have paid one of my kids’ school fees upfront for the year, thanks to you guys mentioning it on the podcast. That decision will save me 8% on his fees this year. It’s been a slog but I finally feel like I am starting to get my head above water.

I also managed to invest a fair amount over the last year for what I planned to be a deposit on a home for my family. We have been desperate to own our own home again and it has been burning my ass ‘paying off someone else’s bond’ as is often said. It’s the one thing about this whole process that has been eating away at me.

I started listening to your podcast late in 2016, so just missed the property one. Thanks to that specific podcast, I’ve changed the way I look at it and now I’m ok with not owning. I also realise I’m probably better off as there is no way we could afford to own a similar house in the area we’re in if we were to buy. We would have to downscale significantly and move quite a distance from the schools our kids are in.

Thanks so much for sharing your experience with the Fat Wallet community. I think we can all learn a lot from your situation. Massive kudos for picking up the pieces smarter and better!

Kris