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My life lesson: the four rules

Pauline Vamos reshaped her life after her mentor shared his simple approach to wealth. By Sylvia Pennington.

Four rules of managing your finances

1.     Buy a property and pay it off

2.     Contribute as much as possible to superannuation

3.     Always pay off your credit card every month

4.     Insure yourself.


After contending with a mountain of divorce-induced debt, Pauline Vamos turned to the father of a friend for a straightforward strategy for steering a steady course as a single parent.

Recently retired from a long-time gig as the chief executive officer of the Association of Superannuation Funds of Australia, Vamos is one of the most influential and well-respected female executives in Australian financial services. A former corporate lawyer, her CV includes a senior role at the Australian Securities and Investment Commission and a stretch running her own insurance brokerage.

Back in 1992, she was a newly single parent, about to start a new job and looking for advice on rebuilding her position and achieving financial security for her two young daughters.

“My ex-husband left me in a bed of debt – I was in a bit of a mess,” Vamos says. “My good friend’s father was the CEO of a large business. I had only known Syd for a couple of years but he had become my mentor. He was a lovely guy, not a member of the family, not a financial planner, but a guy who was successful. I used to just go and see him.”

The question of whether she should seek professional assistance arose during one of their chats and drew a blunt response to keep things simple.

“I said to Syd, ‘my finances are in a mess, I’ve been able to negotiate out of the debt, I have enough for a deposit on a house, I need a financial planner, I need to do something’,” Vamos recalls.

“He said, ‘Pauline, don’t complicate it. You’ve got a steady income. There are only four rules to finance. Try to get a small property and pay it off as quickly as you can, put as much as you can into superannuation because of the tax benefits, always, always pay off your credit card monthly and insure your most valuable asset – yourself’.”

Vamos followed his advice to the letter and the benefits have compounded as the years have rolled on.

“The most important thing Syd said is that following these rules teaches you to do without things today, to save for tomorrow,” Vamos says.

“I look where I am, I look where a lot of my friends are and I’m glad I didn’t buy everything I wanted, I’m glad I was very careful with my money and I just made sure those four things were done first.

“My daughters, this is exactly what I say to them – follow the four rules. Pay off your credit card balance and if you have extra money, put it into your super and pay more into your mortgage. Get that equity behind you and don’t have that crushing burden of debt.

“A lot of financial management is habit. It’s like getting up and going for a walk or doing exercise in the morning. Once you do it, it becomes a habit and once you stop it’s hard to start again because you enjoy that extra 20 minutes sleep in!”

This is a series from ANZ Women asking leading Australians to share important financial advice that has changed their life.