Plan 2 Prosper

The concept of degradation in performance is usually associated with cars. When your car is performing well, it is more enjoyable to drive, is more responsive and more efficient. Constant use, driving long distances over the holidays and sitting in traffic every day, day after day, takes it toll on your car. It takes such a toll that if you don’t schedule it in for a service or do some essential maintenance, your car will eventually break down.

That’s why every year, or after a set number of kilometres, we book our cars in for a check up. Expert mechanics complete a full inspection and safety report and make adjustments to ensure your car is back to its optimal functioning level.

Just like cars, our finances also have an optimal functioning level. After prolonged periods of constant pressure, our budgets, savings plans, financial strategies can also become sluggish and run the risk of becoming irrelevant to our changing needs. (more…)

The typical Australian family looks somewhat different in the 21^st century than it did during the economic glory days of the 50′s & 60′s, where the stereotype saw 3 children supported by a breadwinner dad and a stay-at-home mum. Since that era, Australians have tended to get married later, have fewer children and do so when they are older. Indeed, more than half the babies born this year are likely to be to parents aged 30 and over.

Regardless of the best intentions of parents, the reality is that children cannot be raised on love alone. While there is no actual fixed or absolute cost of a child – a range of variables will impact on how many financial resources any individual family dedicates to the task – some clear patterns have emerged from various research projects undertaken to examine the topic. (more…)

This morning at breakfast,  I had another one of those magic moments, where I had a strange sense of parental dejavu …. I’m sure you know, what I mean … one of those moments where if I could turn back the clock to when I was the child, I could visualise my father saying the very same thing to me that I said to my son - ”You know money doesn’t grow on trees, so …  No, it’s not likely you’ll get everything on your list for your brithday”.

 Within the many google news alerts I received this morning was an article by Gregory Karp, South Bend Tribune – Financial advice from Fathers which I enjoyed.

Apparantly, in America at the moment many retailers dub the coming time of the year “dads and grads”, a catchy phrase reminding you to buy gifts for Fathers day and imminent graduations. Gregory Karp combines some other catchy phrases we all may have experienced variations of over time in with this time of the year. Perhaps my own dejavu experience drew me to the article.

Many dads consider it their mission to educate their children in some of the rules of the real world. Helping their children to learn to tell themselves “No” or suffer the consequences. Overspending is a rite of passage of sorts for many people. The easiest way to say “No” is when you have a reason, so create money goals for something you want more than daily temptations comes forward … for example: saving for house down payment, paying cash for your next car or saving for wedding, travel or honeymoon.

In his article Gregory Kapp expands a little further on the following sage advice you may have received:

• Save for your future
• Save for a rainy day
• I’m not made of money … what do you think I am, a bank?
• Live within your means
• Would you jump off a bridge if your friends did? … Look before you leap

I know I found myself nodding while recollecting some of those very same words coming out of my fathers mouth over the years before his passing.

I’d be interested to learn what gems of sage advice have you absorbed from your family?  

Where to from here?

If you would like to discuss the topics raised in this post or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.

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Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.

Dan Smith and  Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 – 153 Miller St, North Sydney NSW 2060

No doubt for many of you the demands on your time and funds haven’t reduced since this time last year, but as the common saying goes “if we keep on doing the same things we are likely to keep getting the same results”.

Another client recently reminded me of an article I wrote in September 2008:

http://plan2prosper.com.au/articles/2008/09/wealth-creation-and-kershaw-gardens-what-is-the-link

They said despite the strong performance of equity markets since March 2009 there is still a lot of fear and uncertainty in many people’s minds. During their regular relaxing walk through Kershaw Gardens they felt comforted while reflecting on my view that the Kershaw Gardens story is very similar to what the story of wealth creation is like – if you let it be. Within the gardens, trees that were looking sickly prior to December due to environmental conditions have picked up considerably and were full of new growth with our recent rain.

It reminded me of a Chinese Proverb also about trees:

The best time to plant a tree was 20 years ago. The 2^nd best time is now.

The best approach for anyone contemplating further wealth creation will depend on his or her own personal and financial circumstances, but the key message is that you must do something! There are many strategies that wealth creators can access if they don’t have vast sums of money or other resources available to them.

It is important to regularly review your plan (equate this to planting your own tree). This helps you take advantage of any current or future opportunities created by:

• Your changing life situation and goals
• A changed economic or legislative environment
• Emerging investment markets and new products

If you have any doubts about your ability to do this, or you would like advice and assistance to guide you through the many options, act now to get the knowledge and mentoring that you need.

Where to from here?

If you would like to discuss the topics raised or if you would like more information, speak to your financial adviser or contact Dan Smith of Plan 2 Prosper on 07 49265 570.

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

This information is intended to only provide you with general information and, while the sources for the material are considered reliable, no responsibility is accepted for any inaccuracies, errors or omissions. Before making a decision based on this information, you must consider its appropriateness having regard to your objectives, financial situation and needs. We recommend you obtain professional financial advice specific to your circumstances.

Dan Smith and  Dancin Pty Ltd ABN 71 531 338 371 trading as Plan 2 Prosper are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, an Australian Financial Services Licensee, with its Registered Office at 105 – 153 Miller St, North Sydney NSW 2060

One of the greatest stresses that most of us face concerns our finances.

I have come to a realisation that many of the financial concerns people see me about are caused by the way they think, and that is what I need to work with them on reviewing. The way we, as individuals, think is something that can be controlled, as unlike the weather, the price of fuel or the short term volatility in global and domestic markets. (as an aside many an astute investor with cash available is buying back in at the moment – wish I had more available to contribute than I am currently).

The future belongs to those who are building a diversified asset base that creates passive income. Assets put more money in your pocket. Liabilities take money out of your pocket. As you’d likely know the only good debt is debt that is used to fund income generating assets (and even then its debt that we all wish we didn’t need to have).

One of the major goals we all have when creating wealth is to have your assets throwing off more money than your expenses. If the investments you have – the ones you don’t need to actively work in – are throwing off more “passive” money than your cost of living, then you are well and truly on the road to further wealth creation and real achievement of personal goals and objectives. 

Part of you may well be thinking; “It’s alright for you .”, “We could never do that”, “It’s different for us because ….”.

If that’s what part of you is thinking right now, then that is the first ceiling we need to remove in order to have the right mindset. Successful people in all fields and endeavours (not that you aren’t already successful, but with some disciplined income diversification strategies you could be even more so) don’t say to themselves, “I could never do that, I could never afford that, it could never happen to me”.

Interviews with many successful people reveal they think, “How could I make this happen, in what ways could I afford this, what do I need to do today to start moving towards it?”

Hopefully the other side of your mind is saying, “Well what if this is true? What if I gave it a go?”

It’s a simple enough process requirement but human nature doesn’t allow us to make it easy to establish your budget, confirm your income and expenditure, assets and liabilitities – although these are all things you’d likely have good control of.

Then its all about implementing a smart cashflow management system to capture any spare cashflow on a regular and disciplined basis and harnessing it toward assets that will produce more passive income. Over time, the idea is that these assets will grow and produce more and more passive income so the cycle of passive wealth creation can continue evolving.

As a guide we could implement a regular investment plan in diversified managed funds with as little as an initial investment of $2000 and ongoing regular investment of $200 per month.

Please have a think about it. If you’re interested I’d be happy to set aside more time to explore in more detail the positive outcomes, potential opportunities and allay any concerns relevant to your own situation.

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and is for many families their trusted Financial Planner based in Rockhampton. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

Have you as parents ever considered what would happen if you weren’t there to make important decisions about your childrens welfare, upbringing, lifestyle? Would your childrens guardians (assuming you have thought about this also) know what you wanted for them?

You may have provided for your children’s needs financially through an estate planning process including such solutions as life insurance and preparation of wills. Whilst I applaud you for having done that much, there is much more to your children’s welfare than just the $$$.

During a recent visit to my own solicitor I collected a brochure with information for parents about a “Guideline for the Guardians of your Children” document. This document contains a set of guidelines or instructions for those whom you as parents – or as sole single parent – appoint as guardians of your children. It ensures that those who have responsibility for the care and nurturing of your children to adulthood will know what you want for your children – if you are not there for them yourself. (more…)

An email received from a friend today served such a stark reminder of making the most of what you have today, that I was compelled to share it with you. I made a few adaptations for local flavour: 

A boat docked at Rosslyn Bay near Yeppoon.
A tourist complimented the local fishermen on the quality of their fish and asked how long it took him to catch them.
“Not very long.” they answered in unison.
“Why didn’t you stay out longer and catch more?”
The fishermen explained that their small catches were sufficient to meet their needs and those of their families.
“But what do you do with the rest of your time?”
“We sleep late, fish a little, play with our children, and take afternoon siestas with our wives. In the evenings, we go into the village to see our friends, have a few drinks, play the guitar, and sing a few songs.
We have a full life.”
The tourist interrupted, “I have an MBA from the University of Sydney and I can help you!
You should start by fishing longer every day.
You can then sell the extra fish you catch.
With the extra revenue, you can buy a bigger boat.”
“And after that?”
“With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your fish to a middle man, you can then negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Noosa, the Whitsundays, or even the Gold Coast!
From there you can direct your huge new enterprise.”
“How long would that take?”  
“Twenty, perhaps twenty-five years.” replied the tourist.  
“And after that?”  
“Afterwards? Well my friend, that’s when it gets really interesting”, answered the tourist, laughing. “When your business gets really big, you can start buying and selling stocks and make millions!”
“Millions? Really? And after that?” asked the fishermen.
“After that you’ll be able to retire, live at Zilzie Bay on the Capricorn Coast, sleep late, play with your children’s children, catch a few fish, take a siesta with your wife and spend your evenings drinking and enjoying life with your friends.”  

And the moral of this story is:
Know where you’re going in life…you may already be there!!

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and based in Rockhampton. For many people he has become their trusted adviser and Financial Planner. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

In The Big Shift author Bernard Salt provides an articulate interpretation of the settlement of the Australian continent, charting the shifts and shuffles that have made us who we are over the past 200 years.

He chronicles Australia from the unique bush culture of the swagman, to today’s world of boomers, Xers and Dotcoms, and goes on to consider the rise of suburbia on our national psyche and maps out the likely influences on Australian culture over the early decades of the twenty-first century. Many others have built on or offered alternative commentary on phenomena such as Tree change and Sea change. In an earlier post (“Is a tree or sea change the right retirement option?” ), we investigated some of those considerations that ought to be given far more time and attention. 

Xanthe Kleinig recently provided an update (Meet the Overseas changers … ) on vast numbers of Australian retirees refinancing so they can spend their twilight years living like kings in foreign lands, in an international version of the “seachange” trend.

Whilst for many, moving away may mean long held dreams fulfilled, it does need to be given careful consideration. An alternative to selling, moving and finalising ownership of their current home may be to consider renting out the family home for a year or two. While renting the family home out, move to your desired location and rental accomodation there … dip a toe in the water and try before you buy. In this case, if the sea, tree or international change isn’t what it was planned to be, a return to the family home is available minimising the effects on original living arrangements.

More than anything else, plan so that you have choices if things don’t quite go to plan. 

Where to from here?

• Contact us
• Get more information about an Educational Forum for you and your friends
• Register and receive regular email updates

Dan Smith is self employed and based in Rockhampton. For many people he has become their trusted adviser and Financial Planner. He has clients in various locations throughout Australia but predominately in Central Queensland and specifically the geographic area encompassed by the Rockhampton Regional Council.

Today’s twenty something generation – Generation-Y or Gen-Y as they’re known – are renowned for being optimistic go-getters. Born between 1976 and 1991, these children of baby boomers are often described as being unrealistically optimistic and over-confident about life, particularly around financial matters.

Perceptions are often reality …

Gen-Y are perceived as being happy to rely on ‘Bank Boomer, ‘Family ATM’, ‘The M&D Bank’ to prop up their lifestyle, especially during this economic downturn. With tags such as ‘helicopter kids’, ‘Kidults’ and ‘boomerang kids’, who just keep coming back to their parents for further assistance, Gen-Y are fast becoming “Kids In Parents Pockets Eroding Retirement Savings” – KIPPERS. In the past, our Baby Boomer parents were pretty confident that they could sustain not only their lifestyle but, if things went wrong with their Gen-Y sons and daughters, that they could also help them out. Sadly, for many that confidence is gone, and is no longer a practical reality.

By nature of the year of my birth, I am a member of Gen-Y (only just).

Unlike previous generations, such as our baby boomer parents, credit has been all too readily available and we stand accused of failing to understand the ramifications of our spending habits and potential impact of escalated debt levels, particularly given the effects of the global financial crisis.

Recognised by many as the driving force for tomorrow’s economy, many of our number are financially uneducated and paralysed by debt. Gen-Y has its fair share of entrepreneurs and many have, or are looking to, start their own business. Basic budgeting, business planning and accounting advice will be beneficial in this respect to provide that initial foundation on which to build a sustainable business.

Now with increased unemployment and vulnerability in the economy, Gen-Y has received a much needed wake -up call. It’s great that this wake-up call has been received now, rather than in our early 40 and 50′s … much more time is on our side … I urge you now to take action and review or rethink your current and future financial strategies. I only hope you (Gen-Y) were listening when the wake-up call came and didn’t rollover for another sleep. (more…)

We’ve all heard the saying by Benjamin Franklin: “In this world nothing can be said to be certain except death and taxes.” I’m sure you would agree that this quote is as true today as it was in Franklin’s day when he first penned it in a letter. While a touch on the morbid side, my good news reminder to you is that implementing sustainable life insurance can help you minimise the financial impact of both of these certainties.

Now onto the topic of aged care in Australia. This is a topic that my own family has had recent personal experience. This recent personal experience has reinforced to me that that looking into the costs and legislation associated with moving an elderley person into care can be quite complex and requires careful financial planning. It also reminds me of an earlier post from 2007 : “A Lesson from Home and Away – Sunset Planning“. A balance is also required, as often is proven and observed, the best outcome financially may not be the best outcome emotionally. (more…)