Making sure the boom doesn’t go bust
Tony had heard about the mining boom in Western Australia from friends and he didn’t want to miss out. He had a heavy vehicle licence and plenty of experience working in the coal mines of the Hunter Valley, NSW, so he packed his bags and headed out west to make his fortune.
After securing an underground mining job, Tony consulted a financial adviser. He intended to work in Western Australia for five years and was confident he could earn between $150,000 and $200,000 per year thanks to a combination of experience, expertise and the current demand for his skills. He predicted that after five years he would have built an investment portfolio that could set him up for the rest of his life.
As well as putting in place a comprehensive investment strategy, Tony’s adviser suggested he also take out an insurance package, including income protection insurance. Because of the nature of his employment contract, Tony purchased an income protection plan with a 30-day waiting period and insurable benefit up to the maximum of $10,000 per month (as per his ‘C’ rated mining occupation).
An unexpected interruption
Tony was a keen bushwalker and loved to go bush on the weekends to pursue his hobby. One Sunday he was bushwalking alone in rugged terrain close to the mine when he lost his footing on a narrow cliff track. He fell several metres down the cliff face, landing on a rocky ledge.
His injuries included a variety of cuts and bruises, along with a badly broken right ankle. But thankfully Tony’s mobile phone still worked and he was able to call 000 for help. An emergency crew were at the scene within an hour to rescue him.
However, Tony’s injured ankle required surgery and several pins needed to be inserted. He was airlifted to Perth, where he spent a week in hospital. And it was almost three months before Tony made a full recovery and was able to return to the mine.
Tony received sick leave pay of four weeks from the mining company. Then, after four weeks, his income insurance payments allowed him to pay ongoing living expenses for the last two months of his recovery.
The good news was that despite being off work because of the accident, Tony’s wealth creation strategy was able to continue.