"Stay the same or risk change? This will help."

By James Reynolds

I was chatting to a friend over coffee at The Drop in Noosa earlier last week. We talked politics (same sex marriage and all the things we like/don’t like about Australian political parties), the media (how sometimes we don’t get the full picture) and how a daily or weekly routine gives us purpose.

Last time we spoke, she mentioned that having a debt-free home is great for so many reasons, but she wants to sell hers. Then, she wants to use the funds to invest into different businesses which will give her (a) an income that grows over time and (b) an investment that grows over time.

She wants to do more with her life. She wants more freedom. She wants more choices. She wants to see more of Australia and Europe. She wants to experience life. And more income would help.

Her home being debt-free is an achievement worth celebrating, as for most people it’s a 20+ year exercise. However, the value of the property is effectively unusable, other than for shelter. It just sits there. Of course, she could organise a loan against her property, and use the funds to pay for personal expenses but she doesn’t want to do that.

It’s not an easy decision. Some of her friends have been quick to tell her she’s crazy. And that’s pretty much what society tells us - things like: 

  • “once you’re out of the property market, you’ll never get back in”
  • “what about changeover costs like removalists, stamp duty and legal fees”
  • “you’ll be a renter” (which means ... )
    • “it’s dead money”
    • “if the owner sells, you’ll have to move”
    • “you can’t decorate or renovate – it’s not yours”
  • “you’ll pay a huge amount of tax once the funds are invested”

Most (all) of their feedback though, doesn’t take into account what she wants to do. It doesn’t consider possible alternatives. It’s a shame her friends are doing that, as it makes it tricky for her to make her mind up about what she wants to do. But, it therefore shouldn’t be a wonder why most people don’t talk about their plans or goals to friends or other people.


There are consequences to every scenario, including the one we’re already in. These consequences generally fall into two categories. The tangible, which is something that a number can be put to, like a cost or a return. The intangible, which is something that a number can’t be put to, like an emotion or a feeling, or something not happening. Having tangible and intangible information increases the possibility of achieving the goal but also encourages a conversation about the risks.    

In my friend’s current scenario, by owning her home she’s already outlaying money – there’s a financial cost: rates, body corporate fees, insurance, electricity, water, home maintenance costs each year, renovation costs every few years. The financial cost for her current position is $12,550 per year. To put that into perspective, over the next 10 years my friend will outlay $125,500 just to own the home she lives in.

In my friends current scenario, relative to her goals, she’s not doing what she wants to be doing (traveling, receiving more income to experience life) – this is more of a “not living your life” cost and it’s tricky to put a dollar figure to this cost. At the end of the day, if she’s not living her life, whose life is she living?

Wouldn’t you want to know if there were alternatives?

By clearly understanding what her current situation is and what her goals are (which includes what she wants to have in her life and what she wants to avoid), she has a starting point that she can use to compare other possible scenarios.

For example, she could sell her home and use the funds to:

  • Start a term deposit.
  • Purchase bonds (debt issued by a government or company).  
  • Buy an investment property (residential).
  • Buy a commercial property as an investment.
  • Buy real estate investment trusts (part ownership of a group of properties such as office towers, shopping malls, the property that large corporations like Bunnings or Coles use).
  • Buy shares (part ownership of large corporations such as banks, telecommunication providers, insurers, property developers, grocery chains).
  • A combination of the above.
  • Other possibilities that come from whiteboarding her situation.

There are pros and cons to all of the above. Different tangible and intangible consequences. Understanding and discussing these, for each scenario and then comparing them side-by-side with the current scenario, is one very good way to improve decision-making.   

PS. One of the scenarios above, would have her $100,000 better off over the next 10 years. 


When discussing new topics with people, we usually end up talking about how once you know something, you can’t “un-know” it - whether it’s good or bad. And stay the same or risk change is one of those concepts that you can’t un-know.

Either way, you’re making a choice and it has consequences. Over time this has a direct influence on what happens in your life. Where your life will end up. What choices you have.

If you’re at a fork in the road and you’re weighing up whether the change is worth it, make sure you have a good look at what the consequences are of staying right where you’re at.

In the long run, I’ve found that it’s worthwhile having a look at what you’re doing financially, at least on a yearly basis, to make sure you’re heading towards where you want to end up. Even if nothing changes, at least you’re talking about your goals every year.

Along the way, this is going to give you a greater possibility of being happy as you’re heading towards your goals. Sounds pretty good, yeah?

If this is something you want to hear more about, email me james@totemwealth.com.au - let's have coffee and start a conversation.


Got a topic you'd like us to write about? Got a question for us? Get in touch at james@totemwealth.com.au

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