Paul’s verdict: Life is short and family time is precious

You have earnt your choice to purchase a “want” and not invest the money far more sensibly

Grace, I have been wanting to do this for decades, but the complexities of money and our lives usually means I need to rattle on about a stack of trade-offs before giving a cautious answer. But here my opinion is black and white. After all these decades I can give a threeword answer. Build the pool.

Having enjoyed that moment, let me take you through my logic. Money is important because it gives us choices. We all have fundamental human needs: clean water, food, clothing and shelter.

Then we move to a second set of needs, things like medical support, education, a job and transport to that job. We could have a never-ending debate about when needs become wants, but it is certainly fair to say that a pool is a want and far away from a need. This decision would use a chunk of your personal loan and, of course, future cashflow to repay it.

The pool is certainly not a wealth creator. Sure, it will add value to your home in central Queensland with its hot summers. But pools cost money to run and maintain.

One of the many happy moments in my life was downsizing after the kids left home and we moved to a new home closer to the city, without a pool. Our pool was just wonderful until the kids got closer to 18. When they were aged between about 18 and 25, we sold the house, and about the only loving thing to use the pool was our gorgeous beagle Winston, who fell in while I was cleaning it. Mind you, we live in Sydney; you live in a much hotter climate, making a pool far more usable.

So, I was glad to see the end of the pool. So why would I suggest you use your hard-earned cashflow to service the personal loan to invest in a dud asset, compared with other options?

The answer is that life is short and family time is precious. Looking at your ages, I see many years of terrific family time with you, your kids, family and mates splashing in the pool as you cook a few sausages on the barbie. This is worth far more than money.

Also, you have earnt your choice to purchase a want and not invest the money far more sensibly. Let’s look at this.

First up, you own two properties. These are valued at some $1.8 million with relatively small levels of debt against them. You have a very impressive $400,000 in super between you, and well-paid and secure jobs. For a couple in your early 40s, financially you have made a serious effort to convert your good incomes into assets. I’ve been around the world of money a long time and despite my best efforts to get spenders to spend less, and at times savers to spend more, the reality is we are either savers or spenders and it is hard to break either habit. You are savers and you always will be. If you were spenders with limited assets, I would be strongly opposed to the pool. But you are well on track to financial independence by the time you finish work.

Not having a pool and paying down the personal loan would certainly progress your pace to financial independence, probably by a year or so.

If you would like to test this, you could use one of the free online guides such as the MoneySmart retirement planner. I like MoneySmart; it is government funded, so not trying to sell us anything, though to be fair, there are quite a few good ones out there. You may find your super fund has one.

My back-of-the-envelope estimate simply looks at your super contributions over the next two decades, growth in your super, growth in value on your two properties, continued savings and the ability to save a lot more in your last decade of work once the kids are adults and you are on a good money track.

So, I’m voting for family over money. A pool, in particular in central Queensland, sounds like a really good thing for a young family.

Savers like you benefit greatly over time as they get more life choices. The “problem” is it is really hard to break the savings habit.

So, what becomes really obvious is that savers die far too rich. Yep, the kids get a great inheritance, but like winning the lottery, that is often a poisoned chalice.

Getting the timing right to enjoy the benefits of your work and saving is not simple. But in this case, for you and your family, the pool is the right call.