Andrew McCombe:
Hi guys, Andrew McCombe here from LeadWell Global, I’m with Suren Pather, he’s the Head of Wealth at LeadWell Global. Suren we discussed in the first video the overriding concept at the moment that there’s a lot of turmoil going on in the financial sector. And obviously in other sectors. We also talked in video two about the cause of that on a deeper level. And obviously in other videos we’ll talk about even more depth to that. But for the mum and dad investor out there, the everyday person who’s being affected by the current situation, what would you say the solution is?
Suren Pather:
Thanks Andrew, well look as much as I talked about the overall macro economics, it does come down to the individual and I think firstly not to panic about the overall, you know, activities, you know, beyond your individual self. So what individuals should do is to ensure, number one, the most important thing is a certainty of income to ensure you have certainty of income. Because with certainty of income, you can decide what track you take, in all of this confusion and chaos that’s happening out there. The first thing is to ensure you have a good buffer of savings.
The second thing is to ensure that what debt you’ve taken, or extra debt you may have taken for the short term illiquidity you might’ve had, that you can service. Because my concerns are if when things get better and rates move up and you cannot afford the interest cost in the loans you’ve taken, you will be in trouble. And you know, maybe well they may well be a conspiracy theory of that of why your credit is so much easier and it’ll eventually be good for the banks in any case. But I think once you can understand how to service your debt, then the question is what should you do as an individual in terms of making sure you become financially free in the time frame you set for yourself? So you need to understand all the asset classes out there, the time frame you have to to get to that goal post and what income stream that you will need to call yourself rich. Now when I say rich, my definition of rich is simple. It’s when the income streams from passive assets exceeds your needs, or your spending, you are rich. So everyone has different levels of wealth and needs and it’s important to understand what your goalposts are and how you get there.
Andrew McCombe:
Okay, so one is a short term strategy. Look after where you are now and really try to, I wouldn’t say bunker down, but be making sure that you’re okay. And then longterm strategy is finding out that financially free strategy that’s different for everyone and and start to work towards it once things settle down. Is that what you say?
Suren Pather:
Yes, there’s lots of strategies out there, and there might be some speculators out there and if you’re in a position to speculate and one needs to look at that differently, but if you’re not, then one has to take a longer term view and not panic. The worst thing people can do right now is to panic and then fire sell assets and later on regret it. Because you know, as with all things, what goes down also goes up and vice versa.
Andrew McCombe:
Well it’s an interesting concept isn’t it? Because things change, right? Things die, and things are born every split second, this is another, or is this another one of those and will the financial system change after this exogenous shock?
Suren Pather:
Look, I think it will. I think what has happened, as I said since the global financial crisis, is that there’s become a huge disparity between different income earners and people. I think the rich have gotten richer, the poor have gotten poorer and the middle-class have been squeezed down. And that I believe is caused most of the issues in the first place. That inequality in allocation of credit, that’s led to a big dislocation between income earners. And if you look at corporate executives, their incomes have increased significantly more than the average worker. And that’s why you’ve seen issues in Chile, issues in Hong Kong, issues all around the world caused by an economic disparity.
Andrew McCombe:
Suren what is this balance you talk about?
Suren Pather:
I refer to balance as removing the disturbance of money and it’s all about the disturbance of money. And you’re disturbed because of expectations you set and are worried about not achieving those expectations. So balance must be between balancing lifestyle with money and therefore the assets you choose enables you to balance money and your lifestyle while removing the disturbance of money.
Andrew McCombe:
Well guys, interesting information. If you want to know more, go to www.LeadWellGlobal.com and Suren would be more than happy to help. Suren, we’ll obviously have more videos from you and about maybe looking at this new financial way of being in the future and thanks very much for sharing your information today.
