A Firstline Securities Limited Blog by: Maxine King
There is an old adage which states that “when one door closes, another opens”, but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us. That is indeed a truism, but we must recognise that we ourselves must open those doors to explore what is possible and available for us.
I will never forget that eventful day on September 8th, 2006, when BWIA WI Airways Limited announced that it would be shutting down on December 31st of that same year. In retrospect, it was a traumatic time of self denial, where I felt I was keeping it all together and handling it well, until I received my “letter”. I must admit that I was surprised at the sum, but at that point all my thoughts conflated. Should I….
I had no immediate answers, so I organised a structured approach to dealing with my current and impending financial situation.
I researched the Income Tax Act to determine my taxation liability. My investigations revealed that sums above $300k were subject to taxation, so I accounted for that to determine my net proceeds.
I must admit that I struggled with the idea of what was a priority at that point in my life cycle. I boiled it down to taking a long, hard look at my financial situation, within the context of my age, my family circumstance, and my general life goals. I laid out everything that had financial implications: my property, my savings, my investments, my income streams, my debt, my accrued liabilities, my financial commitments to my children’s education, (for example, I determined my net worth). In fact I did several iterations, including and excluding the mortgaged property, the educational commitments etc. and I came up with what I felt was a reasonable representation of my true state of financial health.
I recall that one of the EAP counsellors who was hired by the company gave advice that one should never prepay a mortgage. I did not necessarily agree as she did not explain about fixed and variable mortgages, prepayment penalties, notice periods and benchmark rates, so my approach was to look at the returns on my investments, comparing them with the interest rates on all my debt, inclusive of my long term mortgage debt.
The first debt that I decided had to be repaid, was from my credit card, which bore the highest interest rate: way above that of any of my returns!
The second was a consumer loan which was priced higher than my investment yields, but I kept my mortgage, because of its time to maturity, its annualised rate and its terms.
Certainty surrounding the closure of the company centred around the receipt of a cheque. Employment in a position befitting of my knowledge, experience and qualifications remained an unknown, so at the time I decided that I would put aside, based on my financial self analysis, 6 months of mortgage and other living expenses, just in case I became unemployed or did not land any contracts to provide services.
At onset, I knew that it would be foolish to plan for any major expenditure, and that investment was absolutely necessary.
As I went through the process of calculating, debt repayment, contingencies etc., my investment sum worked itself out. At that time, my profession was primarily accounting and finance, and therefore the process of investment allocation and general investment advice had to be sought from an expert in that core function.
I selected Firstline Securities Limited as the place to invest some of my funds along with another institution of solid repute. Both places have not failed me.
Twelve years of working in finance, treasury, accounting, as well as procedures and audit, brought me to the realisation that my experience and qualifications lent themselves to a new avenue of financial advisory, sales and investing. I have never looked back, but ahead at what that foundation did for me in current position.
In the final analysis however, do not forget your years of hard work and sacrifice.
It is acceptable to treat yourself or your family to a gift, a trip or something memorable as a well-deserved reward…within reason of course!