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

I thought you may value viewing a short economic outlook video presented by Matthew Drennan, General Manager of Zurich Investments.

In just under six minutes, Matthew shares his views on the big questions around inflation, interest rates and the outlook for the Australian sharemarket. He also notes that whilst the world has negotiated the global financial crisis, the outlook for different economies varies quite markedly. Whilst Australia has fared well and may return to normal levels of economic activity, the USA is likely to continue with its bumpy ride as it deals with numerous deep seated issues.

To view the video, click the following link: http://www.zurich.com.au/audio/Matthew_Drennan_update_231109.wmv  

Where to from here?

If you would like to discuss the topics raised in this video 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…)

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.

After enduring almost 2 years of relentless declines in asset values, it’s wonderful to see some tangible evidence that the world is not about to end and a sustained recovery has commenced. It’s amazing what a difference 6 months can make.

The extreme market environment of 2007 - 2009 has highlighted the importance of understanding the risk and return characteristics of different assets under multiple scenarios. 

During adverse environments, often only “risk free” assets such as cash and government guaranteed bonds deliver positive returns. Every other major asset class may fall in value. This is what occurred in 2008. In contrast in 2009, so called “risky” assets such as shares, company issued bonds and listed property recovered significantly. Cash and government guaranteed bonds are shaping to be the laggards of this year.

As of the 13th October, the Australian share market was up more than 50% from its March 2009 low, the Australian dollar ($AUD) had rallied strongly, corporate bonds yields had declined sharply, and the listed property market had begun its structural recovery. Positive returns were recorded for virtually all risk assets over the year, and the quarter to 30 September 2009.

The last 6 months are testament to the benefits of maintaining your strategy, particularly if your investment timeframe is long term (>5 years). There is no doubt that the length and severity of the downturn tested the resolve of all investors, irrespective of individual risk appetites. But the enduring lesson is that markets can turn quickly and unexpectedly. Waiting for news of improvements means that you can miss out on some great returns.

Maintaining your exposure to assets such as shares that contribute to economic growth will provide you with premium returns often in short periods of time, as the last 6 months have amply demonstrated.

Congratulations to all investors who held their nerve while their resolve was being tested. I take this opportunity to remind you all of an earlier posting  ”Why wealth creation is like our Rockhampton Region’s own Kershaw Gardens.”

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.

Financial year 2009 has been another tumultuous year for investors. In his Financial Year-End Market Wrap Up video, MLC Investment Analyst, Brian Parker analyses:

• how global economic and financial conditions affected investment markets over the last year
• what needs to happen for the ‘green shoots’ economic recovery to continue, and
• what this may mean for future returns.

(more…)

MLC Investment Specialist, Brian Parker verbalises his insight regarding developments in the market over the month of June and then looks to the periods beyond.

Brian reinforces the underlying volatility in the markets dance toward recovery via an analogy of three steps forward, two steps back.

MLC June Market Update Video Link 

These and other regular updates provided by MLC are available for you to access directly from MLC’s Market Watch website. 

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 the 29th May, MLC Investment Specialist, Brian Parker offerred his insight regarding developments in the market over the previous month and what in his opinion it means for investors.

Some of the topics Brian Parker covers include:

• movement in world share prices
• recent gains in corporate debt markets
• improvement in world money markets
• monetary policy in Australia and the US, and
• predictions for economic recovery.

MLC May Market Update Video Link 

These and other regular updates provided by MLC are available for you to access directly from MLC’s Market Watch website. 

Where to from here?

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

Which is better?
There is no one hard and fast answer to this age old debate. Generally speaking, it is not about one being better than the other but rather it is one complementing the other! From our experience in advising clients, there appears to be an often incorrect perception by mum’s and dad’s investors as to what share investment is about. The mystique and self-acknowledged ignorance of this form of investing is a significant reason why mum’s and dad’s investors continue to flock to residential real estate investment.

The hype and hysteria shown by the media is also a contributing factor when markets rise and fall on a whim and adds to the perception that sharemarket investing is a form of gambling. We trust that as you read through other posts made on this site, you will be at least aware that our philosophy of a sustainable diversified investment strategy is one of logical method underpinned by extensive research and is far removed from any gambling hobby.

While the average Australian appears to be preoccupied by the real estate market, particularly the residential sector, it is fortunate that most working Australians also have sharemarket investemnts via their superannuation funds. Over the long term, which is what superannuation is designed for, investments into shares have generally provided outperformance against other asset classes. 

Often, the comparison between shares and property is made by reference to the specific returns generated by a particular stock, in contrast to owning residential property in certain locations.

Reference is also made to the various factors that contribute to increasing growth in one area or another, such as a strong economy and lower interest rates.

However, if the before tax return from shares and property is the same, the better after tax result is often produced by an investment in shares. (more…)

While income distributions vary over time, this year will see many investors receive lower amounts than previous years. Many clients have been asking about this and rather than drafting my own response I thought it appropriate to refer to a a recent update posted to MLC’s Market watch website.

To read the commentary provided by  MLC’s Michelle Heinreich click on the following link: Market conditions and income distributions