Managing Family and Finances

Elise Ryan is an Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee

Everyone leads a busy life, but it’s important to take time out to think about your current finances and your financial future.

When you are planning or have a young family, there are a lot of important tasks that are on your mind. It is easy to let every day things like managing your finances fall to the wayside.

Paying the bills is quick and easy, but thinking about the big picture in 10, 20 or 30 years down the track can feel like a daunting task. Many people think retirement is so far away and that they have plenty of time before they need to start looking at planning for that phase of their lives. There is also the belief that it will just work itself out.

But you are reading this, so take the time now to think about your life in 30 years’ time.

You don’t want to regret not planning for your future.

By engaging an advisor, it forces you to take time out once or twice a year to chat about your goals and strategy and make adjustment where needed. This helps you to not only be aware but also re-evaluate what’s important to you and what your goals are year to year.

Research shows that by writing down your goals, you are more likely to plan and work towards achieving them.

By having a trusted financial advisor to look at your goals and create a tailored strategy, you will have to spend less time thinking about your financial future, and you will be in a much better position in the future.

At Income Solutions, we place a lot of time educating our clients on our investment philosophy so that they walk out of their meetings with complete understanding of what their strategy will be and how it will help them reach their financial goals.

It’s never too late to re-assess your financial position and change your strategy, and it’s never too early for your teenage children to start understanding their finances.

We run 4 events each month that will help you start making a plan, no matter what stage you are in for planning your finances:

Common Sense Investing

Common Sense Estate Planning

Kickstart: Your Financial Future

Pivot: Choose Your Financial Direction

We urge you to have a look at our website – www.incomesolutions.com.au/events or have a chat to one of our financial advisors to see which event would help you to achieve your goals, for you and your family.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way
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Capital VS Income – Which is more valuable?

When we ponder our wealth, most of us immediately jump to the capital value of our assets. We believe that if we own things that are worth more than what our neighbour owns, we are wealthier. But are we?

 

Firstly, most of us believe our house is our greatest asset, therefore representing the bulk of our asset base. There is a stark distinction between a financial asset and a personal or lifestyle asset. Centrelink does not assess the homes we live in as financial assets because by definition, our house is a lifestyle asset. This is mainly due to the simple fact that our house costs us money rather than making it for us. Yes, if you use your equity wisely, you can purchase a financial asset, but more on that another day.

I want to focus on comparing capital and income.

Australian’s believe simply owning as many financial assets as possible is the key to wealth creation. The more they’re worth, the wealthier they are. I challenge this theory. Imagine I owned a financial asset base in retirement worth $1million, and this generated around $25,000 of income a year. You own a financial asset base in retirement worth $800,000,¹ which produces income of around $35,000 a year. I am $200,000 wealthier than you in capital perspective, however you’re $10,000 worth of annual income wealthier than me. Who is the wealthier person?

Let’s say our ideal retirement income is $35,000pa. I would need around another $400,000² worth of the financial assets I own, just to generate that much income. You only need $800,000. My balance sheet might have a higher bottom line, however, your income statement is stronger again. Which is more valuable? An asset base that you would need to slowly drawdown on to reach your ideal income level? Or an asset base which produces your ideal income level without needing to sell any of it? And, you did not need to save as hard for it.

If you need to sell portions of your capital base in retirement just to breakeven, you bring in avoidable and unnecessary risk you just do not need. You might hypothetically own a parcel of shares, that historically have failed to pay regular dividends, and thus, to make your $35,000 you need to sell some. What if this happens on the same day President Trump puts out a ridiculous Tweet, and in a knee-jerk reaction from the public, the market drops? (In reality I would tell you to buy more shares, because in this situation I like to say that they’re on special so stock up, similar to bananas at Coles) What if this also happens on the same day the RBA raise the cash rate by 50 basis points so the offer to buy your investment property gets revoked? You cannot chip off a couple of bricks or sell the spare room to pay for your annual flights to Bali. Not to mention that whenever you sell shares or a property, you have to fork out relatively high transactional costs and in the case of property, wait around 90 days to see the cash in your account. And once you do sell your shares or property, you do not want to leave too much of the net sale proceeds in the bank, because 2% interest rates are not helping your income situation too much.

Income is spending power and spending power enables us to do the things we want to do. We do not want to see the retirement finish line on the horizon, to suddenly realize we are riding a truck full of assets, but are income poor. At income solutions, our definition of wealth is an absence of financial worry, an income stream you cannot outlive, and a meaningful legacy for those whom you love. This definition is deliberately ambiguous enough for anyone to apply his or her own situation to it.

I now ask you if the financial asset base you are slowly building meets this definition?

If you would like to organize an informal discussion about you and your financial situation, please do not hesitate to contact me at danny.archer@incomesolutions.com.au or alternatively at 03 5229 0577.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product.
¹Assuming a growth asset base earning 4.35%
²Assuming an asset base of cash, earning 2.5%
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Tap & Go -A Disconnect-

Gareth Daniels is an Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee

 

Budgeting has always been a watch word for people who want to plan for a successful financial future.  At times it has even been a  bit of swear word for some as it has implications of being restrictive, a list of things that you can’t do if your serious about saving for a house, a holiday or just putting away for a rainy day.

As a planner I have always been more inclined to regard budgeting as a positive action, I need to know where my money is going in order to ensure I can keep enjoying my today whilst I build for my future.  This concept of staying on top of cashflow has never been easier or more difficult.

Apps such as Pocketbook; TrackMySpend; MoneyBrilliant; and Goodbudget mean that rather than having to keep receipts, take note in a book or fill in columns on a spread sheet you can link these apps’ to your bank accounts so they automatically track your cashflows by picking up the transactions that take place.

This is incredibly powerful particular if you really engage with the app’ as by categorising transactions (such as phone and groceries) they learn what those expenses are going forward meaning it has never been easier to see where your money is going.

And then comes the down side; the disconnect being how much you are spending and the ‘tap happy habit’ meaning it has also never been easier to spend

Talking to an older client the other night she spoke about how powerful it was to her to physically spend paper notes; she hated ‘breaking’ a $20 as she would then run the risk of frittering the rest of it away.  It was a reality check to actually take a note or even coins out of your purse or wallet and hand over your hard earned in order to buy something.

The reality is that people’s budgets don’t only blow up because of spending on big ticket items; it’s the odd $20, $10, $30, $10, $20 here and there.  And that is now a very easy thing to do without realising.

The ability to simply tap a card to complete a transaction has created a disconnect between the reality of what is being spent and the understanding or perception of what is being spent.

http://www.abc.net.au/news/2017-07-26/cash-usurped-by-credit-and-debit-cards/8744024

So what to do?  Well take the good with the bad…

  1. Understand what you earn; know your take home pay
  2. Use a cashflow management tool (like an app’) to track your outflows specifically identifying
    1. Non-negotiable expenses (rent or mortgage, utilities*, petrol, groceries etc)
    2. Set savings
    3. Discretionary spend (enjoying yourself!)
  3. Make informed choices about where your savings should go
  4. Draw a connection between how often you’re tapping and what that means for your true level of expenditure

Knowledge is power and power is control; you’re working hard and its your lifestyle; be in control of what your spending and enjoy life today while building for your future and don’t get sucked into spending too much just because the banks have made it easier to spend!

*You can make some strategic decision here too around what you ‘need’ to spend on your mobile phone and internet packages versus what you want!

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product.
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Generations of Wealth

Alison Adams from Income Solutions

Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee 

 

Sometimes financial advice is not about dollars and cents but instead becomes more about goals and objectives.   As Financial Advisors, in the business of building wealth for our clients, we felt it was important to define “wealth” What is wealth   The concept sounds simple enough, and in many ways it is simple. We like to quote John C Bogle, the author of The little book of Common Sense Investing, “simple but not easy”.  Often, the “not easy” part involves the goal of leaving a meaningful legacy to those whom you love.  We find this is a common theme amongst our clients. It is one thing to invest for your own future but once you have successfully taken that journey, commonly thoughts turn to making sure your hard work benefits your children and grandchildren. So, what is needed?  Successful estate planning takes an investment of time, careful consideration of your desired outcomes and the assistance of a quality Financial Advisor and specialist Estate Planning Lawyer. Did you know that your superannuation account balance and jointly held assets are not administered by your Will?   For estate planning purposes, these types of financial assets are called “non estate assets”. For the majority of people, their superannuation account is likely to be one of their biggest assets. Another contender for biggest asset may be the family home, commonly jointly owned.  In summary, the two assets often representing the bulk of an individual’s wealth may not be dealt with by their Will.  What about if the bulk of your financial assets are deemed “estate assets” and in the event of your death, these assets will be distributed to your loved ones in accordance with your Will. That should set them up for a financially sound future, right?  One of the biggest destroyers of wealth is the transfer of wealth from generation to generation. Consider your own family circumstances. Even if your family has so far been lucky enough to have escaped the statistics around relationship breakdowns, gambling or drug addiction, how do you know what the future holds for your children or even for your grandchildren?  There are ways that a quality Will can provide a regular income stream to your loved ones and at the same time, protect their inheritance.  David Ramsay, founder and Principal Financial Advisor at Income Solutions likes to say “you love your children and grandchildren; at best, you hope to like their partners”. Here’s some food for thought, consider these scenarios:

  1. Sadly your father passes away and in accordance with his Will, you and your brother inherit the family home. The home sits in prime real estate, with upcoming re-zoning changes making you and your brother think it’s a good idea to rent the house out for a couple of years and sell when all of the changes have passed, holding out for a bigger profit. It’s currently worth $1m, however you believe your strategy could triple that value. Your father had a very simple Will and the home passes to you and your brother, held jointly at 50% each (currently a $500,00 inheritance to each brother). Both you and your brother are married, with young children.  3 months later, you unfortunately pass away in a car accident. Your Will makes provisions for your wife and young family.  Your wife meets with the lawyer and lists all of your assets, including the $500,000 share of the inherited family house. Her Lawyer tells her that unfortunately a jointly held asset is not governed by the Will, and by law, the surviving brother is now the sole owner of the inherited family home. Your wife and children have no legal claim over your share of the house.
  1. 6 years ago you met your second wife, married and now have 3 beautiful girls together. You believe that your family is complete; you have your 3 girls and also 2 sons from your first marriage.  Your ex-wife lives nearby and, although you’ve had rough patches in the past, your 2 sons come and stay every other weekend and because you live nearby you are able to attend their various sporting and school events and enjoy a good relationship with them. The boys have a good relationship with their step sisters, however as they are entering their late teens, lately the relationship between your second wife and the boys is often strained.  Your motto is that things will improve once they get through their teenage years. Unfortunately you have an industrial accident at work and pass away.  You have a current Will which makes provisions for your current wife to inherit the majority of your assets, with smaller amounts distributed to all of your children.  You’ve had discussions with your second wife about how you would like her look after all of your children, and upon her passing, distribute your assets evenly. These wishes were reflected in her Will, drafted at the same time you drafted your Will. Your second wife is advised that, following your death, her existing Will is invalid and she makes arrangements with her Lawyer to draft a new Will immediately. After all, she’s the only parent left for her girls.  The new Will is drawn, making provisions for your 3 daughters but excluding any provisions for your 2 sons.
  1. You have worked hard and sacrificed through the years to build a sizeable investment portfolio. The portfolio derives enough income to support your lifestyle and consists of growth assets that should continue to support both your children and grandchildren when you pass.  You have never been in the business of spending money “for the sake of it” and when you hear about DIY Will kits that you can purchase for $69.95 at the local newsagents, you go for it. After all, it’s pretty simple – you want your kids to inherit it, don’t touch it and live off the income, just as you have. When they pass, you want their Will to provide the same directions to their children. You’ve even sat all of your kids down and told them as much and they all agreed.  You pass away a contented man, proud of your life’s achievements and the way you’ve provided for your family’s future. Only problem is:
  • Daughter number 1 has a marriage breakdown 2 years after you pass away.  She directly inherited your assets in her own name, meaning they formed part of the divorce settlement. Half of your inheritance has now been distributed to her ex-husband, who, truth be known, you never really liked anyway.
  • Son number 2 has never been good at managing his money. Before you passed, you asked your other children to keep an eye on him, but they’re so busy with their own lives that they can’t keep track of him as well.  A few ill advised investment decisions later and he’s lost at least 3/4 of his inheritance.
  • Son number 3 is self employed and just prior to your passing, he ran one of the biggest engineering businesses in town (a great source of pride for you). Unfortunately the majority of his business involved supplying and servicing the machinery at 2 local car manufacturers. Since those manufacturers have closed down, he’s put on a brave face but in truth, new business has proved too hard to find and he’s just about to declare bankruptcy.  The only thing that can save him is your inheritance but due to a quirk of bad timing, he is forced to use the inheritance to pay his debts and close his business. He’s not in debt, however he has no business and no inheritance.

These 3 scenarios are fictitious, however similar scenarios are happening each and every day.  Sadly, they are preventable. Advice from a good quality Financial Advisor and specialist Estate Planning Lawyer would ensure sound investment strategies could accompany estate planning protections. The outcome being that the transfer of wealth through generations can successfully be achieved.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.  Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product.

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WOMEN – Professional Self-Taught Jugglers

Spotlight on Women - WEbsite SizeWhether you are single or in a relationship, one thing we all have in common is that we are juggling many roles all at once. I learnt quickly that once you begin to add little munchkins to your clan, the number of balls that you are juggling dramatically increases. When I thought I had achieved some rhythm to my new found skill of juggling, it was time to return to work. I had no idea what I was in for in regards to the level of organisation it would require trying to fit in my own personal time, setting goals for now and later, while continuing to run a house!

Returning to work is a big decision. For some it is financial and for others it is to assist with self-fulfilment. Whatever the reason, finding the right work life balance is crucial. There is no right or wrong level of work life balance. The solution that works for your family is individual.

Following returning to work, I began to experience guilt. Guilt for not being able to spend more time with my little ones, that I wasn’t completing as much at work as I had (in comparison to my old, full time employed, child free self), that the house wasn’t as tidy as it used to be and the list goes on! I had to find a way to put a positive spin on what I was doing and the reasons as to why I had returned to work. I realised it was to achieve my goals! Our goals often take second place to day to day activities, however even without realising it, it is another one of those balls we are juggling. Understanding and knowing why I was back at work and the benefits my employment brings to myself and my family was very important, empowering and motivating. Without goals, it is easy to question why. It helps you stay on track towards reaching those goals which are important to you. Also, it is hard to know if you are on the right track, if you don’t know where you are heading.

Goal setting doesn’t just end with the things you want to do in the next 12 months. Goal setting should include what you and your family want to do in 5 years – family holidays, education for your children, a new car, when it is that you and your partner would like to stop work or wind back into retirement. As far away as these milestones may seem, without having an active plan in place, time will continue to fly by. Without a solid plan our goals rarely materialise.

Planning your exciting goals and aspirations doesn’t have to be a weighted time consuming ball that you have to learn to juggle along with everything else. It is easier than you think if you work with someone who can help you plan and keep you motivated. It is very rewarding when you realise you are actually living and experiencing the achievement of the goals you wrote down.

We use systems all the time without realising. Just like we put systems (well try to!) in at home to make our home life easier, it is vitally important to establish systems that ensure your money is working for you, and your family.   Something as simple as structuring your banking correctly can have a big impact on how hard your money works for you.

Now that you are back at work and earning additional money to put towards your household, it is important to ensure that all the sacrifices that have been made to earn this money have not gone to waste. You need to ensure that your hard earned money is working for you.

I have written about my own personal experience, as a Mum working part time. In my professional life I am a Financial Planner with Income Solutions.   I regularly hear stories just like mine, which provided me with the motivation to create a tailored presentation for women which provides some examples of the impact receiving financial advice can make to your day to day lifestyle as well as your long term goals. For more information, book a one-on-one meeting or a workplace Income Solutions for Women session.

Invest in yourself – it could be the best investment you’ll ever make!  

Jess Hall, Financial Planner

 

Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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Why Income Solutions?

Even as a young child I was quite good at putting aside money and saving for things rather than, as most children do, getting my pocket money and spending it on lollies or other sweets.

Throughout my primary and secondary school years I enjoyed maths and problem solving. When I was in year 11 and starting my VCE studies, as one of my electives I chose to study accounting. I also started part time night studies to complete a Diploma of Financial Services, at The Gordon (TAFE). Once I completed VCE studies, I changed to full time at TAFE and before I knew it my Diploma was complete.

I was having trouble finding a job when a friend suggested to me that I give my resume to David Ramsay at Income Solutions. I was a bit unsure of giving a resume to them, as I had not done much study in Financial Planning. However I was lucky and was asked to come in for an interview. It was my first job interview and was very nervous, but David took me ‘under his wing’ and provided me with the opportunity to study a Diploma of Financial Planning. With the assistance of David and the Team at Income Solutions I successfully completed the Diploma.

Even though I’ve always been a good saver, I have learned so much from working here. Income Solutions taught me to invest in myself through study and hard work. I am also building my wealth and on my way to securing a financially stable future. Income Solutions can also do this for you. I know how much effort our staff put into helping clients reach their financial goals and how important it is to provide a valuable ongoing education to our clients. So, why Income Solutions? We think that this “ongoing education” is what sets us apart from other Financial Planning firms in Geelong and Melbourne.

Want to find out more about us and how we can help you? We hold regular information sessions every month – so head to our website and register for one of those, or book in for a free appointment with one of our fantastic Financial Planners.

Are you looking for a job or know someone who is? Why not have a look at our careers section?

Ash Irwin, Associate Financial Planner

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A BIT OF A GAMBLE

A friend came to me the other day asking about shares and to look into a new ‘share trading’ app he had seen advertised on Facebook. He explained that by investing in shares he could turn $250 (the minimum deposit requirement) into $900 in a matter of hours!

This had me thinking, do many people my age see investing in shares as a get rich quick scheme or a way to make a quick buck? From various conversation with friends and family members it seems that they do.

I believe this is the wrong way to think. Shares should be seen as an investment which is held for the long term, providing regular dividends and long term capital growth. We, as young adults, don’t need to find the next speculative stock which share price may double tomorrow.

We have so many years ahead of us that we should be more concerned about creating good saving habits, establishing a sound financial strategy and investing in the right kind of shares. These ‘right kind of shares’ will grow in the background without the need to regularly log onto a share trading app to see if your investment has double (or halved in value) and then quickly sell at the right time. These ‘share trading’ apps sound a bit like gambling to me!

We should be buying the right kind of stocks, holding them for the long term and reaping the rewards of compounding. The information evening that we host at Income Solutions every month (called Common Sense Investing) is a great place to start your long term journey and perhaps hear a new point of view.

If you’d like to hear more, register NOW!

Patrick Dwyer, Associate Financial Planner

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BRIDGING THE GAP – FINANCIAL EQUALITY

Recently our very own Alison Adams wrote the below article for RUBY magazine. The message is just too important so we thought the article should also feature as blog post:

get riled, it irks me, it makes me cringe.  Do we really need events specifically targeted at women? 

As a woman, I have had a successful career which has allowed me flexibility and choices and sees me treated with respect in my workplace – I’m treated the same as any male counterparts in an industry that has traditionally been male dominated.  As a mother of two young girls I don’t feel like there are any limitations or restrictions to their future just because they are female.

So if this is how I feel, why is it that:

  • Women remain behind men in the pay scale, earning an average annual gross income of $67,000 compared to men who are paid about $82,500 per year.
  • The Association of Superannuation Funds of Australia tell us that in 2011-12 average super balances were $82,615 for men and $44,866 for women.

I feel equal but these statistics don’t feel equal.  Combine this with the fact that:

  • Women have a longer life expectancy than men.
  • Women are more likely to have breaks in employment or work part time, either caring for children or elderly parents.
  • Women could spend 30+ years in retirement. Put another way, on average a 65 year old woman will spend 25% of her life in retirement.

OK, I don’t like to generalise, however we have noticed a trend where women have a tendency to avoid seeking financial advice.  This trend doesn’t seem to discriminate – it applies to single women, women in relationships, divorced women, professional women and stay at home Mums.   Women are great at being busy.  We juggle a lot of roles.  We also tend to be competent at managing our households – we definitely seem to have day to day finances under control.  The same can’t be said for long term planning – and it’s long term planning that can make the world of difference.

All of these factors seem quite grim.  So I’m going to earn less, save less and need to fund a longer retirement.  On top of that I’m going to ignore the situation and not seek advice.  Situation hopeless, right?  Wrong.

In direct response to these issues Income Solutions have developed a targeted presentation for women, helping to break down the issues and provide solutions.   There are so many things that can be done to bridge this gap.  Every woman should feel empowered to take control and make a difference to their future financial fitness.  I’m going to quote on of our advisers, Gareth Daniels “It doesn’t matter how much you earn, it doesn’t matter where you are in life – you can make some informed decisions and sensible choices.  You really can design a lifestyle that you are passionate and excited about”.  Gareth’s comment wasn’t particularly female focused but boy, his message hits the nail on the head!  Ivana Trump once famously said “Don’t get mad, get even”.  She was of course talking about making her soon to be ex-husband pay dearly in their divorce.  Think about it though – getting even is exactly what we want to achieve.  Financial equality…….and we can show women how they can create it themselves without the need to marry and then divorce the rich husband!

How can women get started if they don’t know where to start and are not likely to seek help?  In developing Income Solutions for Women, we’ve made sure the presentation is portable.  We know Geelong is full of great businesses and inside these great business are owners and managers that care about their employees and their future.  After all, that’s just smart business.  Our philosophy at Income Solutions has always centred around education – it is the key to empowerment.  As a result Income Solutions for Women is now available as a work place session. Come on employers, its history in the making!  To book a session or to talk about Income Solutions for Women or any of the other information sessions in our range, give us a call on 03 5229 0577, drop us a line to events@incomesolutions.com.au, or visit our website.

Alison Adams, Business Development Manager

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OPENING UP TO A NEW WORLD

Before I started working at Income Solutions in January of this year, I had absolutely no idea that I could invest my superannuation in shares, or that having a Financial Planner could help me in the slightest – when I had almost nothing in the bank. My super sat in a “cash hub” for years as I happily watched it slowly grow every time my employer made a contribution. For a few years I worked at universities, where I enjoyed 17% super contributions, and I remember thinking “how great is that, 17%?” It was pretty good, but it would have been even better if I had been educated on how to invest it.

According to mainstream society I should be married with a couple of children, have a mortgage, be taking the kids to music lessons or sporting games, and be drinking wine with other mothers reminiscing about the 1990s and how great it was in our 20s.

But what if you find yourself (happily I might add) single, childless, living alone with two cats, with just a little in the bank, and with a history of being a terrible saver and a serial mover? In the past twenty years, I’ve lived in almost ten cities and have started over again more times than the average person my age. I never paid much attention to saving money and I didn’t think about my super and how living overseas for 10 years would affect it.  I also didn’t think about getting old; retirement was so far away that there wasn’t much point giving it a second thought.

What I’ve learned in the past nine months from working at Income Solutions is that you can be any age, with a little or a lot of money, with some knowledge of Financial Planning or none at all – and you will still benefit from professional, expert advice that can get you on the path to saving money, growing your super, and investing for the future. There is also no need to feel guilty for not owning your own home. In fact, it’s actually not the right path to take for everyone and you could be better off investing in other ways. Wow. Now I feel better – because I previously felt the pressure to get that home loan.

So what does a woman like myself need to do to get her finances in shape?

  1. Find a Financial Planner who understands you as an individual
  2. Make sure you have a bank account with a “money tracking” facility to help you budget simply and effectively – it’s actually empowering to discover where your money goes!
  3. Work at having a “buffer” amount in your bank account at all times
  4. Work with your Financial Planner to invest your super to help it grow
  5. Get the right insurance in place to protect yourself
  6. Listen and take on board the advice you receive from your Financial Planner – you’ll most likely learn much more than you thought you would

So, whether or not I’m a gypsy or a “crazy cat lady” (or both), I am now on my way to securing my financial future and feel safe in the knowledge that I will retire in 25 years or so with more than enough money to live on. When I stop working and wish to travel some more (or move interstate), I most certainly can – but much more comfortably than before.

Want to learn more about what Income Solutions has to offer women? We run free workplace information sessions called Income Solutions for Women in the Geelong region. We’ll come to you. Tell your colleagues, boss, or HR manager about us and book a group session via our website. Coming soon to this blog section – a fabulous article (recently featured in RUBY magazine) by our Business Development Manager Alison Adams. You’ll learn how statistics show that we can be disadvantaged due to breaks in employment and lower super balances – but luckily there are ways to fix this!

Rebecca Lee, Marketing Manager

 

 

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Mini money management

Aug blogOne Saturday morning whilst having a coffee, my mind wandered back to my childhood. I remember my sister and I often asked our parents for money, to which the usual response was, “Do you think money grows on trees?” If we persisted though, we usually had our way.

Looking back now, I realise this was probably not the most effective method of teaching us money management. My parents must have done something right though, as I grew up with a great sense that money is in limited supply and I must to be careful managing it.

Teaching children to manage their own money is very important. The Government’s Money Smart program provides some great school-based resources to assist children with managing their money. There are also some terrific ideas for around the home.

Here are my top 3 tips for children:

1. Start Early
Always remember it is never too early to start teaching your children about money. Show them how much they can buy with a small amount of money by taking them to the shop to buy the newspaper. Talk to them about the difference between ‘a need’ and ‘a want’.

2. Encourage Them To Save
Sit down with your children and write a list of what they what to buy. Discuss with them how much pocket money they need to set aside each week, and how long it will take for them to have enough money for the item on their list.

There are two ways this can be done:
• Encourage them to put their savings into a clear jar, so they can see their savings grow.
• Open a savings account for them and take them in to the bank to deposit their money.

3. Budgeting
Budgeting is an important skill for everybody to learn. It doesn’t mean you need to draw up a formal budget. Some tips given by Money Smart include:

• When giving children pocket money, give a combination of coins and notes. This will assist them in learning how to handle different sums of money, and will also allow them to put some coins toward their savings straight away.

• Give them a small amount of money at the shop counter and let them check if the change is correct.
• When they are a bit older, tell them what you need, send them to the shop with a set amount of money and let them keep the change. This will make them consider different brands, prices and, in some cases, bulk buying.

Money Smart also has many great tools and calculators to assist in teaching your children about saving and budgeting. It doesn’t matter which method you choose to teach your children about money management, the important thing is to start early. Like many things, looking after money becomes a habit, and once learnt it is not forgotten.

By Ash Irwin, Associate Financial Planner

Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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