Plan 2 Prosper

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

Saving for the future

• Do you want to build your wealth and pay less tax?
• Are you saving for your child or grandchild’s future?
• Do you wish to retire earlier?

An investment bond can help you achieve your long-term goals tax-effectively.

Investment bonds provide you with an opportunity to build your wealth over the long term in a unique tax environment by investing in a range of investment options that are managed by professional fund managers. 

Dan Smith of Plan 2 Prosper says, “The great aspect about investment bonds is they suit a range of different investors: high income earners looking to minimise income tax or fund an early retirement, parents or grandparents wanting to save money for their children, or business owners wanting ownership flexibility and protection of their assets against the risk of bankruptcy.” (more…)

In this chapter of your life you may have taken on more responsibilities and begun to use debt to buy your first home.

Some significant events may have already taken place, so you’ll need to reappraise your insurance needs. These could be:

• Getting married or committing to a long term relationship 
• Having children or trying to grow your family 
• If you have children one member of the couple might have chosen to stay at home to help raise the children
• You have mortgage repayments to meet or are madly saving to buy a house 
• You have car repayments and running costs 
• There are credit cards to repay 
• You likely have mobile phone and internet service costs 
• There may be important social and professional clubs memberships 
• You may be saving and/or paying for your children’s education

And the list goes on.

Did you know?

According to the Australian Institute of Health and Welfare, “Australia’s Health, 2008′, an average of 2,650 Australians, aged 30-39 die each year from:

• Motor vehicle accidents,
• Cancer for females
• Heart diseases for males
• Intentional Self-harm.

The top 3 causes of disability in the same age group are:

• Injuries from road accidents,
• Self-inflicted injuries, or
• Anxiety and depression.

From a NATSEM study of Australian child costs in 2007, the total cost to raise two children from birth to age 21 is $537,000. Worryingly, 60% of those with dependent children haven’t got enough insurance to look after their loved ones for more than a year if they were to die.

What have you got to lose?

A lot … your family, home and way of life could be at serious risk if you’re underinsured or uninsured. Your partner may have to give up work to care for you if you’re sick or disabled as well as look after the children. As a result, your income could shrink to next to nothing, because you can’t afford to repay the mortgage.

IFSA Research shows that only 4% of families with dependent children have life insurance to levels in line with accepted industry norms. What have you got to lose when for a little more than the cost of a daily coffee you can protect yourself and the lifestyle you would like to lead now and in the future?

Insurance products that could suit your needs are:

• Income Protection – If you were on an annual salary of $60,000 and have another 35 years of work, you have a future lifetime earning capacity of over $3.6 Million. Isn’t that an amount worth insuring?
• Critical Illness – If you suffer a critical illness such as cancer, this pays you a lump sum so you have choices. Choices to reduce any personal debt have an extended holiday to aid your recovery or fund things such as modifying your home.
• Total and Permanent Disability – This also pays a lump sum to provide you choices in modifying your home or paying for special medical needs.
• Life Cover (possibly) – This pays your family or a beneficiary a lump sum if you die so they can pay off any of your outstanding debts or provide whomever you bequeath the proceeds choice to do things which you may have done together if still alive.

We have commented upon this topic before:

• http://plan2prosper.com.au/articles/2007/10/protecting-whats-important-to-you/
• http://plan2prosper.com.au/articles/2008/07/is-insurance-an-expense-or-an-investment/
• http://plan2prosper.com.au/articles/2006/11/life-insurance-and-the-financial-planner/
• http://plan2prosper.com.au/articles/2009/03/maximise-opportunities-from-personal-events-to-further-protect-whats-important-to-you/

And we’ll comment on it again because protecting yourself and your future earning potential is one of the most important things that can affect our families.

Money, as we all know, seems to slip through our hands in the shortest possible time, no matter how good our intentions to save. Somehow, the dream of the long awaited holiday, or new car, or paying off the mortgage, seems as far away as ever. The reason is often painfully obvious – people work hard for their money and then ignore the essential step of applying sound financial planning to those hard earned dollars.

Financial planning sounds simple – and to a large degree it is. But too many people ignore it. Most Australian households have no financial plan. A sustainable wealth protection strategy is the very foundation of any long term financial 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 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.

You may think you don’t need to think about insurance at your age, but I’d urge you to think again.

Consider your lifestyle and what you could lose if something were to happen to you.

• You regularly go out with friends.
• You have started a career.
• Perhaps you are paying off the education expenses of previous years investment in your future earning.
• Maybe you are running a credit card and may have some debt on that.
• Maybe you are renting your first property or even buying your first home with a mortgage.
• Maybe you are saving for a deposit on a flat or a house.
• Perhaps you are saving for travel abroad or paying off debts from previous travel you just completed.

Did you know?

According to the Australian Institute of Health and Welfare, “Australia’s Health, 2008′, an average of 1,800 Australians, aged 20-29 die each year from:

• Motor vehicle accidents,
• Accidental poisoning,
• Intentional Self-harm.

The top causes of disability in the same age group are:

• Injuries from road accidents,
• Self-inflicted injuries, or
• Anxiety and depression.

What have you got to lose?

A lot … but for a little more than the cost of a daily coffee you can protect yourself and the lifestyle you would like to lead now and in the future.

Insurance products that could suit your needs are:

• Income Protection – If you were on an annual salary of $35,000 and you spent the same amount of time in the workforce as the average male Australian, you have a lifetime earning capacity of $3 million (around 43 years based on Australian Government Productivity Commission report Jan 2007 and assuming your salary increases by 3% due to CPI and other increases)

Isn’t that an amount worth insuring?

• Critical Illness – If you suffer a critical illness such as cancer, this pays you a lump sum so you have choices. Choices to reduce any personal debt have an extended holiday to aid your recovery or fund things such as modifying your home.
• Total and Permanent Disability – This also pays a lump sum to provide you choices in modifying your home or paying for special medical needs.
• Life Cover (possibly) – This pays your family or a beneficiary a lump sum if you die so they can pay off any of your outstanding debts or provide whomever you bequeath the proceeds choice to do things which you may have done together if still alive.

We have commented upon this topic before:

http://plan2prosper.com.au/articles/2007/10/protecting-whats-important-to-you/

http://plan2prosper.com.au/articles/2008/07/is-insurance-an-expense-or-an-investment/

http://plan2prosper.com.au/articles/2006/11/life-insurance-and-the-financial-planner/

http://plan2prosper.com.au/articles/2009/03/maximise-opportunities-from-personal-events-to-further-protect-whats-important-to-you/

And we’ll comment on it again because protecting yourself and your future earning potential is one of the most important things that can affect our families.

Money, as we all know, seems to slip through our hands in the shortest possible time, no matter how good our intentions to save or to do the right thing. Somehow, the dream of the long awaited holiday, or new car, or paying off the mortgage, seems as far away as ever. The reason is often painfully obvious – people work hard for their money and then ignore the essential step of applying sound financial planning to those hard earned dollars.

Financial planning sounds simple – and to a large degree it is. But too many people ignore it. Most Australian households have no financial plan. A sustainable wealth protection strategy is the very foundation of any long term financial 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 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.

Taking time to talk

It seems like there’s always time to talk about the little things in life, but discussing the big issues is never as easy. 

If you think about what’s really important to you -family, security and your way of life – you realise the need to keep them safe. 

Illness isn’t a subject anyone likes to dwell on but the unfortunate reality is you or someone close to you will be critically ill at some stage.

The financial cost of this is something you can avoid. Research shows living expenses during a time of critical illness can be about $80,000 a year, not including the cost of medical treatment and rehabilitation.

For many people, the scenario gets worse as their illness prevents them from working and they lose their income, then their savings and investments. But it doesn’t have to be this way. (more…)

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…)

Your way of life is all about enjoying the things that matter to you most – family, friends, fun and freedom. Insurance can help safeguard everyday life. But for most people the amount they have may not be enough to protect what they treasure in the event of accident, sickness or death. Lifewise shows how you can take some simple measures to create a more secure future.

Lifewise is being coordinated by the Investment and Financial Services Association (IFSA) and is being funded by special contributions from IFSA’s life insurance and reinsurance members. Research conducted by IFSA in 2005 raised the profile of underinsurance, a problem the life insurance industry has been aware of for a while.

Despite the fact that almost every working Australian has a level of life insurance cover within their super, Australia has proved to be one of the most underinsured nations in the developed world. In fact, a 2007 Swiss Re research report found Australia ranks 16th in the world for life insurance density and penetration. And a 2008 survey by the Australian Institute of Superannuation Trustees (AIST) and Industry Funds Forum (IFF) revealed that “one in two industry fund members were underinsured by $100,000 or more”.

Lifewise is an initiative of the Australian life insurance industry aimed at addressing this issue. You can access the Lifewise website through The link following allows you to access the Lifewise website: http://www.lifewise.org.au/

Through Lifewise, Australians will be able to find out about:

• the risks they face in everyday life;
• the consequences of not protecting themselves financially from these risks;
• how much life insurance cover they have; 
• how much cover they need; and 
• who they can talk to find out more.

Like always we welcome your queries to Plan2Prosper regarding these and any matters you may be considering while travelling along your life’s journey.

Where to from here?

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

In challenging economic times, the Federal Government last night handed down one of the most eagerly anticipated budgets for many years. In the end, there weren’t many surprises with most of the major initiatives carefully ‘leaked’ in the days leading up to the official release.

Items released which were of particular interest to Financial Advisers and their clients include:

• Halving the cap on concessional super contributions
• Temporarily reducing the super co-contribution
• Halving the minimum drawdiwn rates for account-based super pensions for 2009/10
• Removing tax defferal for shares issued under Employee Share Schemes
• Retention of previously legislated personal income tax cuts and low income tax off set changes
• An increase to the maximum Age Pension payment for couples and singles
• A phased increase in the age pension to age 67
• Introduction of a Government funded paid parental leave scheme
• Introduction of a means test for private health insurance rebate
• Abolition of the Pension Bonus Scheme (excluding registered participants)
• Removal of Tax-Free super/pension payments from the Commonwealth Seniors Health Card income test.

As we have observed in recent times these announcements may have further fine tuning before they receive the majority vote required to progress through the lower and upper house and be passed into legislation.

We know any announcements made by the Rudd Government regarding the 2009 Budget is something you’ll be watching closely to see how it affects you. We have sourced information through our strategic partnership with MLC, which we are happy to be able to pass on to you.

Video:

•  In the Budget 2009 Video, technical expert Gemma Dale analyses and explains the key budget measures and how they are likely to affect investors.

Articles:

• What next for self-funded retirees? Hit hardest by the global financial crisis, the article looks at why in most cases switching to a more conservative strategy is not the answer. Also spotlighted are to discuss which could help ease the pressure for account-based pension holders.
• The upside of a recession. Theres not much to like about a recession, however this article uncovers four benefits which you could be taking advantage of.
• Clever Year end Strategies. This article outlines four strategies which boost superannuation savings and save tax.

It’s important to consider this information in the context of your own personal circumstances and objectives… or in language we all understand better … Like with most things, what is right for you, may not be what is right for your mate in the smoko room or over the back fence.

While it is important to have an adviser (or counsel of advisers) whose technical abilities you respect, it will prove far more important to have an adviser whom you trust – literally with your families financial life. Do not care what they know, until you know they care. Thank you to those who are trusting us at the moment.

Where to from here?

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

Working with a client to develop a financial plan requires a certain amount of looking into the future. There is no certainty about what th efuture will hold, so assumptions will need to be made. These assumptions may be about:

• the client’s situation (eg. health, income, dependants) and goals (retirement date, income needs)
• the economic environment, including tax, superannuation and social security
• investment returns

Together the client and the adviser will need to better understand the client’s attitude to investment risk as well as the unceretainty of future returns. Once a plan is put in place, it is imperative that the client participates in periodic reviews of the implemented financial plan so as to provide the opportunity to assess its progress and make changes where relevant.

Consider these changes that have affected many peoples established financial plans in recent years … who would have thought when compulsory superannuation was introduced in 1992 that now:

• super after age 60 is generally tax free
• reasonable benefit limits (RBLs) have been abolished
• assets test exempt income streams can no longer be commenced
• official interest rates would rise to 7.o% in February 2008 and fall to 3.25% a year later
• the exchange rate of the Australian dollar in terms of the US currency woul dbe 97.86c in July 2008 and then fall to 68.84c as at 20 March 2009

When a financial plan is reviewed and identifies deficiencies in client goal attainment … the plan may be revised to:

• meet the clients new situation or new goals
• take advantage of new opportunities or avoid threats presented through/by legislative change or adverse economic circumstances
• cater for a change in client’s attitude to investment risk.

The end of the long bull run in investment markets is an extreme example of a situation where assumptions made in a financial plan might not come to fruition (at least in the short term). 

While the adviser may recomend a course of action involving various strategies and products, the client must make an informed decision to accept the recomendations and ‘own’ their financial plan. In the early rapport building stages, the adviser will generally know more about the legislation, products and possible strategies … whereas the client will know more about their own situation – their fears, goals and attitudes. Over time, the adviser will start to understand the clietn and will expect the client to have a better understanding of financial issues, strategies and products.

A client may say they understand share markets rise and fall in value. However, it is something different to see the value of their own investments rise and fall. This is real ‘in-your-face’ education. One of the Adviser’s roles is to ensure the client is coached through these ‘lessons’ and has a better understanding of financial returns from a long term perspective.

No one can really predict the future … current media headlines are almost universally negative, so it’s not surprising that absorbing these will probably add to downhearted feelings. Previous posts have commented on surrounding yourself with positive news and positive people … even when listening to the destruction caused by Victorian fires and North Queensland flooding there were still many positively inspirational messages provided by those people facing some relatively tough challenges. In uncertain times, most people look for signs that the future may be more predictable and certain … while no one knows the future, retaining a positive outlook and encouraging people to manage what they can control (look at things like Debt Management, cash flow, access to liquid assets and personal spending patterns) is an important message. Economies and markets are cyclical and we can expect them to self-correct over time with the help of government intervention and renewed consumer confidence … so c’mon Get Happy.

When the markets turn as volatile and confusing as they have been over the last year, even the most patient of people will begin to question the wisdom of the financial plan they have been following … we can certainly empathize with people who find the current environment troubling and disturbing … we’d like to help, if we can and to that end here’s what we offer:

A cup of coffee and a 2nd opinion

By appointment, you’re welcome to come in and sit with us for a while. We’ll ask you to outline your financial goals and your understanding of what your existing financial plan is intended to do for you. Then we’ll review your financial plan for and with you.

If we do not believe we can add value to your situation, we’ll gladly tell you so and send you on your way.

If, on the other hand, we think we are able to add value, we’ll explain how in plain English and, if you like, recommend alternative financial strategies to assist you to achieve your goals.

Either way the coffee is on us.

Where to from here?

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

On our shared journey through life we all experience common trials, challenges and other things life insurance companies may define as Personal Events. Generally these Personal Events include:

• you or your spouse adopt or give birth;
• you get married or divorced;
• you complete an undergraduate degree at a government recognised institution;
• you take out or increase a mortgage to buy or improve your home.

Increases without medical evidence are available inside most Life insurance companies through their plus range of contracts. Through Personal Events, you may be able to increase your sum insured, without any underwriting by up to 25% (of your original insured benefit) or a maximum of $200,000.

Why is this “Personal Events” Benefit important? 

The ability to increase a policy without needing to again be medically underwritten (more…)