Plan 2 Prosper

And it looks like we are in for stormy weather
With pain and destruction coming through
Oh, look out there she blows
Now everybody knows
Stormy weather always makes me think of you

The dramatic events in the global investment markets of the last few days make for startling headlines. Pause and consider for a moment that today’s news is tomorrow’s fish and chip paper. If the news that the media continues to present for your consumption makes you feel anxious, the simple answer is to turn it off, stop listening or reading and go for a walk outside in the sunshine … live, love and enjoy life.

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If you are driving through Rockhampton please stop and take the time to walk through the Kershaw Gardens.

This area once was a local landfill and rubbish dump (a waste transfer station in more modern terms).

Now it can be thought of as a tranquil area of natural beauty. This transformation didn’t happen overnight and it didn’t happen without a lot of planning, patience and discipline.

The Kershaw Gardens story is very similar to what the story of wealth creation is like – if you let it be.

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Consider for a moment the following statement attributed to the United States Court of Appeals:

“… what corporate purpose could be considered more essential than key man insurance? The business that insures its buildings, machinery and automobiles from every possible hazard can hardly be expected to excercise less care in protecting itself against the loss of two of its most vital assets – managerial skills and experience …”

It is clear that key persons may be found in all types of business, large and small, incorporated and unincorporated, capital oriented and personal service oriented, new and old. However, the need for key person insurance is not the same for all businesses that have key persons. (more…)

Many people of us are betting with our mortgages when it comes to interest rate rises. An article I read recently (apologise for not recalling where) indicated that fixed rate loan demand for a major mortgage product provider was falling to levels not seen in the last seven years – most were betting and opting for variable rates rather than fixed. What is happening to interest rates is beyond the control of most mere mortals. The June quarter inflation rates due out around July 23 will provide some good indicators, for those attempting to predict what is likley to occur (ANZ is predicting two more 0.25 % rate rises over the remainder of 2008).

Good general advice to all is to review your household budgets and your capacity to make extra repayments. (more…)

Did you know that every working Australian has a 1 in 3 chance of becoming disabled for more than 3 months before turning age 65. This means a 1 in 3 chance of not being able to work for a period of more than 3 months. The majority of disablements occur outside of work so Workcover/workers compensation often does not apply.

Have you had the unfortunate experience of being off work for a few months? … thankfully I haven’t, but I know a few people who have. They tell me watching the mind numbing soapies is painful enough without stressing over having the extra burden of paying the mortgage or regular expenses while they are unable to work. It is a fact … disabling sicknesses and injuries happen every day.

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The majority of things in life have a financial cost attached to them and family and relationships are no different.

Generally speaking, you will be more confident of achieving goals relating to family and relationships if you are able to plan for them in advance. To restate a recurring mantra … planning helps you prosper: by increasing the chances of avoiding financial surprises.

Family and relationships hold different levels of importance for different people. The financial and lifestyle goals for someone with a large, close family may differ enormously from someone with a very small, separated family (even if they share identical financial circumstances). Likewise it is important to recognise that people have different cultural backgrounds which may lead to vastly different personal values. (Different values perhaps highlights why for one persons important need is another person less important want). (more…)

In an earlier post we introduced the What do you value? series. Now we will explore a little further the value grouping: Career and Occupation.

Many people make inaccurate assumptions about the relevant dollar$$$ and other a$$et$  they need to generate and develop during the wealth accumulation stage of their life, to not only achieve their immediate goals but also to put themselves in the right position to satisfy their desired lifestyle in retirement. (more…)

What is it that you value? Have you really taken time to think about your values? Maybe you should. Is what you value the same as your partner? Have you spoken about this before?

At the base level the development and ongoing relevence of an appropriate Financial Plan hinges upon all parties involved having a clear understanding of the “client’s” personal values as well as any associated goals and priorities. This clear understanding enables the “adviser” to more easily assist the “client” identify gaps, options and choices which can be addressed through any Statement of Advice which formalises the “client’s” financial plan.

The clarification of of personal values is important as financial goals which are anchored to personal values will generally not change dramatically over time.

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It amazes me how often I have heard clients say they are going to move north or south to a quieter area when they retire. Whilst a ‘sea’ or ‘tree’ change may be desirable in some ways, it may not necessarily be the wisest move for all people. It is a great result for those who are able to realise their dreams … for others much heartache and distress. (more…)

We have reached the final post in our series of six on Budgeting. Let’s take a moment for a quick review:

• If you have participated in the previous Budgeting posts, you would have gone over your expenses for the past 12 months and have identified your average monthly spending in each area or budget category.
• Then you would have identified one area you would like to work on for the month and you would have decided what percent to reduce that budget category by.
• Then you would have made a list of all the ways to cut expenses for that budget category.

If you have done all of the above, congratulations. You are ahead of 99% of the population in that you have a very comprehensive understanding of where your money is going. Since knowing where your money is going is the most important step in managing your money, and since it is the hardest step to take, the rest should be downhill for you from now on.

You will now want to maintain your spending in the rest of your categories so that you keep the same average as before and then you will want to track your spending in your grocery category so that you don’t spend over your new goal that you have just established for yourself.

Monitor your progress for the month and then the next month, choose a new category to attack. Keep this up each month and by the end of 6 months, you should have your finances amazingly under control.

In another post, I’m planning to share with you an exceptional tool that will help you track your spending using a variation of the “old fashioned” envelope method (its an oldie but a goodie). But for now, we just want to get through the first month.

NOW…
Let’s take some time and talk about planning.

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