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


Let your head rule your investment decisions

SPECIAL FEATUREI’ve been watching the news with a heavy heart lately, as I’m sure the majority of people have.  The terrorist attacks in Paris have been shocking and the imagery of people being killed or injured going about their everyday lives, lives not so dissimilar to our own, really strikes fear in your heart.  We start asking ourselves whether we should start changing the way we live.  Questioning ourselves about attending large events.  Asking ourselves how normal life can go on.

The reality is we really don’t know what tomorrow will bring.  But one thing that I firmly believe is that life does go on.  History has shown us that no matter what terrible event happens in the world, normal life continues, the world keeps on turning.  Being part of a financial planning firm, we see people take hold of this fear and uncertainty in world events and they extend this fear to investment markets.  Sentiments like “markets are going to drop” and “the world’s in crisis, so investments will collapse” come to the surface at times like these.  As I said, nobody knows what tomorrow will bring.

The only thing we can do is look at the past and see how financial markets have previously behaved in times of trouble.  When we look at past investment market performance, we can see bumps in the road connected to various world events but in the long term we really don’t see any lasting impact.  If you are investing in the share market you are investing in the companies that we use on a daily basis.  What happened this week in Paris is horrific, just as the attack on the Twin Towers in New York was horrific and the London Bombings were horrific.  Even so, we are still using electricity each day, buying groceries, filling our cars up with petrol – life’s normal consumption of goods goes on.   The normal life that sustains the investment markets.

It’s my birthday today and being a child of the 70’s I grew up loving reggae music.  Bob Marley has a song called “So Much Trouble In the World”.  He wrote the song in 1979.  Clearly the song was written because, in Bob Marley’s opinion, there was a lot of trouble in the world in 1979.  In some respect I guess not much has changed.  One thing I know for sure though – I wouldn’t want to have let world troubles stop me from investing in the share market in 1979.   $100,000 invested in the industrial index in 1979 would be worth approximately $1.7m today and the dividends would be providing me with an income in excess of $70,000 pa.  World trouble can see you experience a whole range of negative emotions but let your head, not your heart, rule your investment decisions…and long live world peace!

Alison Adams, Business Development Manager

Myth #3: Financial Planning is all about Investing and Retirement

Steven Myth 3 blogThere is a common misperception that Financial Planning is all about Investments and Retirement Planning. Sure, the investment of surplus funds (spending less than you earn in case that is a foreign concept!) and Superannuation is a big part of what we do. However, a good Financial Planning relationship should extend well beyond simply advising on Investment and Superannuation products and strategies.

For example, your trusted Adviser should challenge you to get the best out of yourself in your career or business (what we affectionately refer to as your Purple Box here at Income Solutions) and push you to get outside your comfort zone (much the way a Personal Trainer does).

A solid Financial Planning Relationship is built on not just Trust, but importantly on a process of education. You don’t need to become an expert, but there is no doubt the better understanding you have, the more successful your outcomes. At Income Solutions, we run Information Sessions (including Common Sense Investing, Common Sense Estate Planning and First Steps to Financial Success) to assist you to gain knowledge in all things Financial Planning.

A good Adviser will also give you encouragement and the confidence to spend your Income on the things you’re passionate about; saving for a boat? Wanting the freedom to work part-time and travel more? Far too often Advisers get fixated on assisting their clients to accrue wealth, often at the expense of the very reason you sought advice in the first place, to be in a position to ‘live the life you want to live.’

Last but certainly not least, even when your Finances are in order and you are well educated, your Adviser should assist to facilitate the transfer of wealth to the next generation, embracing the responsibility to educate future generations to ensure the benefits of your hard work is reaped for generations to come, and not cashed in and spent in a heartbeat.

To learn more about the specific areas of advice we provide, find out more about our services here.

Steven Nickelson, Financial Planner

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