How to kill a conversation – ‘lets talk about super’

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

Driving home from work last night there was a conversation the radio relating to super funds and how they perform relative to each other.

Many people would reach for the dial or press the button to change channels but the nerd in me resisted.

The item was a simple one; a firm has compiled independent research into the performance of super funds every year for the last five years and rates them accordingly on an annual basis.

The cynic in me listened intently for the criteria by which they had categorised the funds, but I had a bit of a ‘Wow!’ moment when they stated that they had looked at performance net of all fees and charges and had reached the overall conclusion that funds that charge lower fees typically outperformed funds that charged higher fees!

Further, in most cases, Australians would see a better performance from their super fund if they selected a low-cost index option that tracked the broader market rather than paying performance fees to active fund managers who fell short of the bench mark over the long-term.

Now I know I can be a bit sarcastic, but that ‘Wow!’ moment was genuine.

Simple, common sense advice can sadly be lacking in the superannuation space, frankly in financial planning in general. So when I hear it from an external source it jumps out at me and I realise that maybe we are not alone in our philosophies.

I downloaded the report that the firm produced, and a couple of key comments shouted at me from the pages;

Our research shows there is a clear correlation between high fees and long-term underperformance in super (The Fat Cat Funds Report Super Fund Guide 2018 page 3)

Poor fund performance comes predominantly from active management fees as well as higher administration and operating expenses than necessary (The Fat Cat Funds Report Super Fund Guide 2018 page 3)1

The funny thing is this information probably doesn’t surprise you. It is logical; it is common sense. So why don’t more of us follow it?

Like superannuation itself, the concept at the heart of following an index approach is BORING! We don’t want to talk about so its sits at the back of our minds. Over time we might not fully remember

why we are following that strategy anyway, particularly with the drip drip effect of other people’s opinions impacting on us. The reality is, what is there to talk about anyway?

Imagine the barbeque conversation;

“Yeah so I er um yeah paid no attention to my superfund again this year but as I track the broader Aussie market I got a nice steady long-term average return and I er um received a good level of fully franked dividends and I didn’t have to manage or worry about anything to get that…”

Well, that’s not very interesting is it? Not compared to the person who runs their self-managed super fund and trades shares daily and has a no recourse loan for the residential unit development that they are building up there in wherever and they had to meet with their accountant for three hours last week because there was some problem with the audit and now it seems like they might have to take that piece of art off the wall an put it storage because it “doesn’t really meet the sole purpose test after all”…. What?

Superannuation is an investment vehicle for you to set yourself up for the retirement lifestyle that you want. Research shows that a lower cost fund with an indexing approach will typically provide better long-term result than any other investment option. The point is that the more you pay in fees through more complex investment options the more likely that the long-term returns will be lower.

Our research shows that 96% of balanced super funds underperformed a simple low-cost index strategy after fees and taxes. This is consistent with research from Finalytiq4 which found similar results in the UK, and S&P Dow Jones whose SPIVA research shows that 80% of active Australian share fund managers have underperformed the index over 15 years. (The Fat Cat Funds Report Super Fund Guide 2018 page 35)

Why does superannuation need to be an interesting conversation anyway? Why does managing money have to be at all? Far more interesting is what you do with the time you have to enjoy life rather than worrying about money and what you spend your passive income on!

So how does any of this impact you? If you have made it this far through the article, then you have already met more than half of your required quota for paying attention to superannuation this year. Well done!

From here, check in with your adviser and (subject to your risk profile) determine your level of exposure to growth assets which should come via an index approach, balance that with your need for defensive assets and then ensure that you are on a fee favourable platform.

Simple but not easy I know; but it is common sense!

 

1 The Fat Cat Funds Report Super Fund Guide 2018 is produced by by Stockspot Stockspot Pty Ltd ABN 163 214 319 is a Corporate Authorised Representative (No. 453421) of Sanlam Private Wealth (AFS License No. 337927). They are a Robbo Advice firm and have no affiliation or connection to Income Solutions. We still believe that personal relationships are at the heart of quality financial advice, and have referenced the The Fat Cat Funds Report Super Fund Guide 2018 as an opinion piece.
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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Ladies, it’s time to take control!

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

I was reading an article entitled ‘More women will end up alone and managing their own money’ by Georgina Dent in The Age¹ and was astounded at the lack of confidence women have in their abilities.

It really struck a cord with me and I was trying to work out why and I think a quote from the article summed it up quite nicely

 

“women not only underestimate their own capabilities but they overestimate what is required to be financially involved.”

 

You shouldn’t need a man or spouse to provide you with a sense of financial security, your knowledge and understanding of your finances should be all the security you need. It can be as simple as understanding where your money is going and track your expenditures, it isn’t even hard these days you can do it on an app on your phone.

It is common in a relationship for one person to take the lead with the finances, like with a lot of household tasks. However, you are a partnership and should have an understanding of what is going on and not just leave it up to the other person so there are no surprises as to your financial position.

It is interesting that this trend is not changing with millennials, with the greater focus on women’s independence there is no trend in women stepping up and taking control of the finances, they are behaving quite primitively.

My experience from growing up is that the overall finances was a team effort. My Mum did the grunt work of paying the bills and banking but both Mum and Dad together with their Financial Advisor would look at the strategic side of things.

My relationship with my Fiancé is no different. James is happy for me to look after the day to day but he wants to be involved with the long term strategic planning.

Women should be paying more attention. We live longer, tend to have more gaps in employment and average lower pay throughout our careers.

This means that at some point in time we will need to be the ones in control and making the decisions.

Don’t know where to start, book an appointment with a Financial Advisor, find someone you can trust and identify with. They should help educate you and not make you feel dumb or silly for asking questions. Worrying about how much advice will cost or thinking that you don’t have enough money shouldn’t be a barrier for booking an appointment.

 

¹ The Age 17/06/2018, More women will end up alone and managing their own money, Georgina Dent.

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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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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Income Protection Insurance

Gareth Daniels from Income Solutions

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

Are you looking at purchasing your first home or planning on starting a family soon? If so this is the perfect time to look at getting an income protection insurance policy in place or re-evaluating your current policy.

Buying a new home or starting a family, or both, is such an exciting time and you’re probably getting lots of different opinions from family and friends on what you should be doing, so let’s break down the facts.

What is Income Protection Insurance?

Essentially, it pays up to 75% of your income if you are unable to work due to injury or illness. If you have debt, dependants, or both. We all know that whether your income is coming in or not, the bills still need to be paid. It is advisable to have income protection insurance to help pay those bills and support your loved ones in unforeseen circumstances.

When paying your income protection insurance, you have main 2 options, paying through your superannuation fund or paying directly from your income.

Paying through your super fund

If you choose to pay your income protection through your super fund, it will cover the premium giving you more money in your pocket to pay for other things. This strategy is useful if you are trying to pay down your mortgage or have school fees to pay as the premium is coming from your superannuation, not your wage, so there is more money in your pocket to pay down your mortgage or pay for childcare or school fees.

However, there can be some restrictions on claims, dependant on your policy, we advise that you speak to your financial advisor to clarify these specifics.

Paying income protection from your wage

Alternatively, you can pay your premium straight from your wage, and in many cases, this can prove a greater tax deduction compared to the tax rebate that will be paid into your super fund.

For example, take the average Australian wage of $60,000. This person will pay around 32.5% tax each financial year (not including the Medicare levy). If they pay their income protection insurance from their wage they will get back about 32.5% of that premium at tax time.

How do I know if I have the right cover?

These days everyone has a super fund, and you may have a level of income protection insurance by default, however this policy may not be right for your personal situation. So, feel free to grab your super fund statement and come in for a coffee and a chat and we can look at the right coverage for your current situation.

 

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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Myth #5: Now I have a plan, I am set

Blog - Linked In Size (1)For the final instalment of the Financial Planning Myth Series, I wanted to touch on a Myth that even some people who already engage a Financial Planner believe; that is “Now that I have a Plan in place, I am all set and can execute the plan myself.

A Financial Plan is not unlike a Personal Training or eating plan; you get much better results when you have a coach who holds you accountable to enact the plan and to stick to it! Like weight loss or muscle gain goals, achieving financial goals requires hard work and dedication. Getting successful outcomes is always easier when you have someone challenging you along the way.

Whilst our industry is full of people who recommend change for change sake (mostly when it is not actually required), occasionally there are changes to your circumstances that you might not realise cause ripple effects right throughout your Financial Plan. For example, consider the impact of a large home renovation, whilst this might not seem like a huge deal, have you considered things like:

  • Does your Will need changing to reflect your wishes and to equalise your estate?
  • Do you require higher sums of Life and Total & Permanent Disability Insurance?
  • Does your Home Loan need reviewing and could you get a better rate now you have more debt (hence more bargaining power with the Bank)? Perhaps you should contact your Mortgage broker or lending specialist.
  • Are there strategies you could use like Debt Recycling to reduce your Mortgage more quickly?

A good Financial Planner can give you the tools and create a Plan to get you on the right path, but even the best laid plans will require tweaking and adjustments over time. The value added through a long-term partnership with your Planner can be invaluable.

To quote Will Rogers: ‘Even if you’re on the right track, you’ll get run over if you just sit there.

Steven Nickelson, 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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Adversity and perseverance in every day life

In December, we Bec blog Jan 2016at Income Solutions held our End of Year Event in Geelong and Melbourne to say “thank you” to our wonderful clients. Every year we have a theme and this time it was “Adversity and Perseverance”. What does that have to do with Financial Planning? Well, in terms of “hanging in there”, quite a lot really.

In a complex world with billions of inhabitants, we often find ourselves needing to be tough in order to get by – and some have it much harder than others. One of our guest speakers at the event was Moira Kelly; an amazing humanitarian who thinks nothing of entering a war torn country to help sick and injured children receive adequate medical care and a warm bed. Her list of achievements and awards from 1986 onwards would make most of us feel incredibly guilty for complaining about a bad hair day or not having a nice enough car.

Moira is one of those special people with a very interesting psyche that not all of us are born with. As a little girl, she wanted to work with Mother Theresa to help those in need. At the age of 18, her wish came true. However, Moira made it happen. She willed it to happen, but also planned and took the necessary steps to make her dream a reality.

A timely example of this level of perseverance is Mr David Bowie and his rise to fame. This week I watched a documentary on his journey to creating the Ziggy Stardust character. I like to think I’m quite knowledgeable about music artists, as my preferred literary genre is the music biography. However, I wasn’t entirely aware of just how long it took Bowie to score a hit single and sell a decent amount of records. As David Jones, he formed his first band at 15, at 20 he released a strange novelty single that flopped, followed by a string of unsuccessful singles. It took Bowie ten years to become the huge star and incredible artist we know and love (and mourn) today. The level of belief in himself and his talent is what eventually made him one of the most influential music artists of all time. Most musicians would have given up during that ten year period.

So how does adversity and perseverance apply to you and I, in our everyday lives? We don’t need to be a Moira Kelly or a David Bowie to reach our goals. However, if we want to live a fulfilling life and do the things we love, we have to “hang in there” sometimes. Are you in the right job? Do you even like it, let alone love it? Would you consider going back to study to get a job you really want? Are you currently earning what you deserve? In terms of finances, is your money working for you? How (if at all) is your money and super invested?

So many questions to ask ourselves! Sometimes we have to change a few things in our lives to get on the path we should be on. Some of us will face adversity, most of us will need to persevere – but we only get one shot at life. At Income Solutions, we’re more than just financial planners – we believe that investing in yourself and doing what you love is the key to a happy and fulfilling life; and we talk to our clients about this every day.

Are you just starting out and want to find out about putting a plan in place to secure your financial future? Perhaps you just want to learn more about how your hard earned cash can be better invested? We have a range of free information sessions held in our Geelong and Melbourne offices which cater for everyone. It doesn’t matter how much you earn, or where you are in life, you can make some informed decisions and sensible choices to help design yourself a life that you can be passionate and excited about. So, get in touch!

Rebecca Lee, Marketing Manager

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Myth #4: My Adviser should get me the best returns

SN blog 2016With recent market sentiment being all negative, oil price concerns, China devaluing the Yuan and Australian Share markets at a 2 ½ year low earlier this week, it’s timely that I post the 4th Financial Planning myth of the series; My Adviser should get me the best returns.

A good Financial Adviser, in fact, should be brave enough to admit that they’re unable to control markets and manipulate your portfolio to time markets and ‘buy low and sell high.’ Likewise, adding value by ‘picking’ individual stocks or Fund Managers is elusive.

As John Bogle, Founder and former CEO of Vanguard puts it, ‘Successful Investing is all about common sense.’ ‘Simple arithmetic suggests, and history confirms, that the winning strategy is to own all of the nation’s publicly held businesses at very low cost.’

“So what does a Financial Adviser do, then?”

A truly great Adviser should assist you to build a capital base that produces enough income to enjoy the lifestyle you want to live in the future; all whilst juggling your short term goals such as building a family, educating said loved ones, paying for travel to give your family great experiences along the way, covering contingencies (in case life doesn’t go as planned) and allowing you work-life balance – so you can enjoy the spoils of your hard work.

Indeed, there are many roles an Adviser should play in your life; including educating you to make sound decisions with money, reassuring you during tough times, giving you recognition for your efforts and achievements, providing you with peace of mind, and offering a sounding board to bounce ideas off.

My favourite description is ‘an unreasonable friend’. As a coach and a friend, your Adviser will be someone in your life who gets behind you and can give you a nudge beyond the normal limits you have set for yourself in order to help you reach for something greater. Someone who will not simply tell you what you want to hear, but rather what you need to hear, and always put your interests in front of theirs. It sounds simple, but that is often very difficult to find.

To book an appointment with an Income Solutions Adviser, visit our website now!

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RETHINKING YOUR DECISIONS

Copy of Copy of Copy of Copy of JulyAs part of my current study I was required to research and analyse the Charter Hall Group. I am inclined to share some of my findings with you.

Charter Hall Group (CHG), is a property funds manager which, was founded in 1991. The group employs specialist intellectual property and advanced intellectual knowledge to manage property assets across retail, office, residential and industrial properties. These assets can be held in either unlisted, or listed property trust.

The Charter Hall Group’s intellectual property includes investment management, asset management, property management, transaction services, development services, and treasury, finance, and legal and custodian services as outlined in the Charter Hall Group Annual Report 2015. Consequently, Charter Hall consider themselves to be the upmost experts in property.

On the 16th of June 2006, the Charter Hall Group floated on the ASX, closing at $4.97.

On the 14th of December 2015, the Charter Hall Group closing price was $4.33. This demonstrates a loss of over 12%, in 9.5 years.

I ask you, taking into consideration the information I have just shared with you.

If the experts at Charter Hall are unable to make a profit in the property market, why do so many Australians invest their time, and expend their energy trying to turn property into profit?

David Ramsay, Founder and CEO

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HAVE A PLAN & REAP THE REWARDS

Elise blog Dec 2015As a young professional, retirement seems so far away. I’m busy trying to achieve the balance between work, study and a social life, so as to enjoy what many would call the ‘prime’ of my life.  Women are living longer than men, are still getting paid less than men, and are more likely to have gaps in employment due to taking on ‘carer’ roles. Consequently, we as women, generally have less superannuation and other investments. So although my retirement may not be in my immediate future, the financial planner within urges me to plan – especially because I am female.

Everyone’s plan is different but the basics are the same.

At Income Solutions we believe the best investment you will ever make is in yourself.  Further education offers you a great advantage over your colleagues. It can give you the confidence to apply for that promotion, or to request a pay rise and breach the gender pay gap.  Whilst working full-time and studying is not an easy feat, once you have achieved a balance it is definitely worth it.

Develop a budget.  I know budget sounds like a dirty word and no one wants to know how much they spend, but it is important.  It is not about not spending money, it is just about knowing how much you do spend.  It is one of the most important aspects of your plan.  Many of the banks now have budgeting tools in-built with your internet banking and this is a great place to start.  You can’t plan to invest in the future without knowing how much you spend.

Another vital part of your plan should be protection. People don’t question insuring their car or their house, but if you ask them if they have Income Protection they don’t understand why they need it. You are the money machine, and if you are not able to work and earn an income where is the money going to come from?  Insurance is important. It is no longer your partners or parents responsibility to safeguard your future.  You are an adult, and you need to take responsibility. Insurance is easily obtained and some of it can even be funded through your superannuation.

Now comes the fun part; planning.  Think about your goals.  Write them down.  The best way to keep yourself accountable as you are progressing towards achieving your goals is to have them written down.  My goals have always been to travel and I have been fortunate enough to see quite a bit of the world.  The downside to this is that the list of places I still want to visit keeps getting longer.  I know I am going to need to work hard and invest to have an income large enough to support this lifestyle.  Family is also important to me and I would like to have one of my own one day.  Due to this I know that I will fall into the same situation as many women who take breaks in their employment and work part time in order to raise a family.

One thing that is not on my list of goals is buying a house.  Many of my friends and family cannot understand this.  I hear the phrase from them ‘rent money is dead money’ all the time.  This is not true.  Interest is dead money.  I know I can rent a nicer place than I can afford to buy and will not be paying interest to the bank to do so.  I can invest the difference in what my rent is as compared to what mortgage repayments would be for the same house and build up my investments that way.  One day in the future my investments will be able to fund my travelling adventures.  My friends will own a house that is simply costing them money, not making them money.  I know this strategy is not for everyone and if it is your goal to own a house it just should be planned for and structured the right way.

When you talk to young professionals about financial planning, the common theme is that it is too hard and they don’t have time to plan.  It really isn’t that hard and a little bit of time invested now will pay dividends in the future.

Income Solutions have a variety of presentations – Income Solutions for Women, First Steps to Financial Success, Common Sense Investing, and Common Sense Estate Planning.  If you want to find out more about us and how we can help you, head to our website and register for one of our free information sessions or simply book a free appointment. By the way, our coffee is so good it’s worth just popping in for that!

This post also appears as an article in the latest RUBY magazine.

Elise Ryan, Financial Planner

 

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