BEWARE THE FINANCIAL TSUNAMI COMETH!

No one wants to hear what I'm about to say, but bugger it, I'm going to say it anyway.

We have the mother of all financial tsunami's approaching and it is not going to be pretty.

Despite our record economic boom times I believe that the real Australia and by that I mean you and I being the people who earn a wage and have bills to pay each week are not the ones doing that well. I don't know about you but last time I checked in my money cupboard I didn't have a bloody great iron ore or gold mine in there.

Sure we may have the trappings but at the same time we are so hocked up to our eyeballs in debt that we are literally about to explode. Five years ago the total amount we all owed in Australia (credit cards, personal loans home loans etc) was $425 billion now it is just over ONE TRILLION dollars!!! Yikes! It seems that the "got it now bug' has seriously bitten each and every one of us!!!

Oh, did someone say explode a second ago? Just look at the number of home repossessions and you'll see what I mean. Since 2004 they have risen from 1,750 to close to 4,000 this year. And with talk of a further rate rise (in addition to the 3 in the last 12 months) more and more families are going to put under serious pressure. Sure every 0.25%pa increase may sound like a relatively small amount but if you add them up together with the relatively small increases in our petrol prices, road tolls, the costs of water and so on. Sooner or later all these increases creep up forcing us to breaking point. And let's face it, wages haven't risen any where near the percentage increase needed to cope with our exponential increase in expenses. Luckily we still have our jobs.... For now!

Every day, I'm seeing the signs of this impending financial tsunami. 

It's all over the news, in the economic data and from clients of mine. We just need to take off the rose coloured glases.

Unfortunately, the quake has already happened many miles off the coast of Australia and now it is only a matter of time before it hits our shores. Therefore, I definitely believe that it is time to start being smart about things and rather than spending like a drunken sailor we sober up and take action now.

Clearly we need to kill off the "Got to have it now bug' quick smart before it's too late. Recognising this now and making a few simple changes will make a world of difference when the tidal wave hits.

Phew! There you have it. My ten cents worth. A little bit scary I know but it's how I see things.

What do you think am I being too much of a worry wort or do you agree? I am very interested to know your thoughts. If you have a few minutes please share your thoughts with me in the space below.

Greg Smith
September 2007

So what do you think?

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