Tag Archives: investing

Why chat with an Adviser?

With only around 20% of Australians thinking it’s worthwhile seeking professional financial advice, it begs the question – ‘what’s in it for me?’  ‘Why would I see a financial adviser?’

And I can give you 6 pretty good answers to that question!

Firstly, seeing an adviser can help you set and achieve personal financial goals.  Sure, you can do that on your own… but do you?   Most of us fare much better when we share our goals and feel accountable to someone for achieving them.  But then, some never think to set financial goals or have a clue about achieving them.  This is where an adviser can provide much value.

Secondly, we can help you make the most of your money.  Chances are, if your like most you live first and save last… if there’s anything left over.  Advisers can assist with salary packaging, planning, tax minimisation and ensuring you get paid and get to save.

We also know a bit about Centrelink, and have helped some who didn’t even know that they were entitled to the Pension or an Allowance to be able to claim what they’re entitled to.

One of my favourites tho is assisting you to feel more in control of your financial situation.  Knowing that you’ve got a plan, someone to keep you on track and that each year you can see that you’re getting ahead, is priceless!

We all make mistakes, it’s a part of living and learning.  But some of them can be extremely expensive.  Being able to run business, investment and financial deals past an expert who knows their numbers can potentially save hundreds or even thousands of dollars in expensive mistakes!

And finally, we know all about protection.  Having a brilliant financial plan is no good if all that you’ve already worked so hard for isn’t protected.  Ensuring that your own life and the wellbeing of your loved ones is taken care of means real peace of mind.

Now, aren’t they 6 good reasons to make an appointment today?

 

Suffering from Financial Insecurity?

“Financial Insecurity.”  Don’t worry, it’s not a communicable disease!

Are there parts of your life you feel insecure about as far as money goes?

Do you not know much about shares?  Do you find it hard to understand taxes? Do personal insurances like Income Protection and Life insurance confuse you?  Does the acronym ETF mean anything to you?  How much do your Superannuation savings interest you?

The world of finance can be pretty complicated and our education system certainly doesn’t help us get our head around what’s out there.

Which in turn begs the question:  If you want to learn more, do you know someone who can help you?

You might notice that one of the habits of people who are good with money (or anything for that matter) is that they aren’t afraid to ask for help.  They know what they know and they know what they don’t.  And that’s a gift!

There’s no need to have any shame when it comes to not knowing all there is to know about money.  You aren’t supposed to ‘just know’ how managed funds work, what shares to invest in, when term deposits are the best choice, or what types of investment  products exist… including those mysterious ETF’s!

Do you try and conceal some issues around money that you feel you should know?   Would you like to build up your knowledge repertoire when it comes to money?  Who do you know who could help you?  (This post is starting to sound a lot like 20 questions isn’t it??)

What is reassuring, it that you can build up your confidence as far as questions about money go.

These days, there’s online free courses.  Check out the ASX website.  Ask friends who you believe are savvy with money, or even chat with a financial adviser about what you’d like to learn.  Chances are they can recommend some good reading material for you to start with.  Even the ATO and YouTube have educational information and videos that you can use to start building up your knowledge base.

I’d love to hear what you’ve done to up-skill when it comes to your financial situation.

Shake it up!

Most of us have issues with change… out brains are wired to keep us safe, in comfort.  Often, we’re particularly challenged with changes needed on the financial front – unless of course it’s a big fat pay rise and promotion heading your way!!

A reluctance to cut your losses and sell down a losing investment is one thing, but have you ever felt resistant to any form of financial change?  Bucking at the smallest tweaks you know are necessary?

Maybe you just really don’t want to sit down and do your budget, perhaps you don’t want to put extra funds into your retirement savings, you don’t want to cut out that unnecessary expense, or take the time to research that new credit card or loan that might offer better benefits at a lower interest rate.

This behaviour is pretty widespread, and what behavioural economists classify as the “status quo bias.”  While you may not want to upset your emotional apple cart, at times it’s definitely in your best interest to do so.  And like in all areas of change, starting in baby steps is always a good idea.

Shouldn’t you cancel that gym membership you never use, but keep paying for anyway because you figure maybe someday you’ll be motivated enough to go? Perhaps, instead of cancelling your membership outright, start off small by freezing your account for one month.  See how much you really miss it and if you’re motivated to start heading back and hitting the weights.  Otherwise, why hold on?

That morning heart-starter coffee you stop by your local for every single morning, can you cut it back to three days a week, then two… maybe even as a weekly treat?

Not only are incremental steps less likely to trigger your worry of regret or fear of the unknown, but they allow you to assess your feelings along the way to see how you’re coping with the change.

If after a month you prefer to revert to the way things were, there’s really no harm done, although you may also find that making smart, small and calculated changes isn’t as scary as you thought it would be.

As for big picture changes—like reworking your superannuation savings plan or assessing your investment progress, pick strategic times of the year to analyse your strategies.  The new financial year in July may be a good time to revisit your options.  Should you then review your health insurance or salary sacrifice arrangements?  A new calendar year may call for a simple new resolution.  Easter holidays may be a time to revisit what you’ve set in motion.

What works for you?  And shake it up and keep it interesting!  That’s the best way to stay on track.

Accountability issues

We all have good intentions around our wealth and money.

And yet, most of us never get to reach our goals. Other things  tend to get in the way and we get to another January 1, review out New Year’s Resolution, get into gear, and give it our best shot once again for a couple of weeks.

One of the best things you can do for yourself however, is find someone to be accountable to.  Can you think of a friend, colleague, professional or family member who is not going to let you give up on your goals and will keep you accountable?  Who do you know who will check up on you, getting you to raise your standards and reach those goals you’re setting?

People who get to reach their goals, often will set up consequences for themselves should they not achieve them.

For example, if you don’t start the regular investment plan you wanted to by a certain date, tell a friend you will donate some money to their favourite charity and make it painful! $1,000 not $10.  Drastic times call for drastic measures!

Set a goal and set the time frame.  Just pick one thing that’s been on your financail bucket list for a long time.  Should you pay off a credit card?  Can you put extra on the mortgage? Start saving for that holiday you’ve always talked about? Will you start an education fund for your kids?  Find that investment property you’ve been talking about?  And by when?  You need a realistic deadline to achieve your goal!  One month?  One year?

Choose one goal in the area of your personal wealth that you’ve wanted to achieve for years.  Then decide, when you’d like to achieve it by, and who is the best person you can ask for help from. Send them an email or call them today and have a chat about what you’d like to do.  Maybe it’ll work both ways and there’s something they’d like to be kept accountable for too.

How’s that for a win-win?  I’d love to hear what you come up with.  And if all else fails – I’m here.  Tell me and I’m happy to keep you accountable!

The Thief of Time

Do you have an issue with procrastination?  Do you often put off until tomorrow what could be done today?  Is there a particular area in your life that you constantly procrastinate on?

Choosing not to take advantage of the opportunities available in investment world and constantly putting off starting, can be a great source of procrastination for some.  Even if we have the best of intentions, we can be merrily led down the garden path of postponement, especially with all the noise and conflicting news going on in the media.

Any slight breeze of a downturn, or rustle of doom can easily spook a big investment decision and when you add a touch of worried advice or hyper-concern by those we love, procrastination blooms in all miserable glory.

However, if you do have the intention to start investing, whether in property, the share market or managed funds, along with the research and knowledge to back it, the hesitation gap provided by the fearful usually generates the best market opportunities.  That’s often when you need to make that gutsy decision the most.

Always remember, that the best way to start something, is to begin!

Make sure you don’t get caught up in all the hype out there and take the appropriate steps to invest in your future now.  Most long term investors will tell you that it’s not about timing the market, but time in the market.  Will you be bold enough to make the decision to invest?

Advisers can be a great tool to assist you in implementing your portfolio and helping you past the procrastination blues.

Could you be an Investment Addict?

Does the idea of having to appreciate long-term value in an investment bore you?

Do you just love the idea of instant gratification?

And which is a better guide to good money management?

Do you know how to use a credit card responsibly or have a plan to stay on track with your retirement savings strategy?

Our minds crave short-term wins over sticking to a long term plan everyday.

It’s also why the Bounty bar at the service station looks so much better when we’ve decided we want to lose a few kilos.  The immediate buzz is what we’re after!

When a smart money move pays off and we manage to make a great gain, we get an emotional high that leaves us wanting more.  It’s what neurotransmitters in the brain are wired to do, and why so many of us chase the ‘good feels’ or ‘warm and fuzzies’ we get when things go our way or we have a win.  We all love the fist-pumping action of a win!  And why we can get a little teary over it too.

The danger is when chasing this feel-good emotion trumps our better judgement, possibly tempting us to sell additional shares perhaps, even if it would be better to keep them a while longer or maintain the hold, rather than sell for the buzz we’ll get from netting a quick gain today.

So the next time you’re craving a neurotransmitter high of the investment kind… set up a way that will help you vet the idea first, such as making it a joint decision with your partner or financial adviser first.  Or even simply sleeping on it.

Someone who’s not emotionally involved can bring you back down to earth, give you the reality check you may be needing, and help you model different outcomes, like how much extra money you may be able to earn if you keep your investment in the market another  or two, or five or ten years.  Alternately, selling may be the best idea and you’ll get the green light.

But if it doesn’t work out, and you’re still after that neuro-high, carve out a small portion of your portfolio that you can play with in order to gratify your need to tinker in the market, and feel the rush.  This way you won’t endanger your portfolio as a whole.

Do you keep a part of your funds aside for riskier investment options?

I’m Walking Away

No-one likes to admit that they’ve made a mistake or that a financial decision didn’t quite pan out how we wanted.  And no-one likes to lose… especially financially.

Investors feel comfortable selling a share at a profit, that’s what we invested for, but many hate the idea of unloading shares of a sinking stock. Instead, many cling to the idea that the stock will eventually regain its value, even when all reasonable indicators suggest otherwise.

A lot of us can ride losers too long, hoping for the miraculous turnaround.  And sometimes this makes sense.  If you have no need for the cash and believe in the long term prospects of the company, you may be justified in holding the position for some time.

But most of us don’t like to close out an account on a negative note. It’s not easy to walk away and know we’re going to lose.  We often stay in, thinking that we absolutely must break even at the very least.  But on some occasions, overcoming the fear to sell can be the difference between cutting your losses and losing the lot.

Sometimes, we just have to come to terms with the fact that the share is priced at what it is now and not what it used to be.  We’ve all seen the examples of companies that have left investors hanging with no prospect of being salvaged.

It’s also good to remind yourself that there are still benefits to selling.  Chances are you’ll put a stop to the cash you’re losing, but by realising short-term losses you can also save on tax as it may also help you offset capital gains you’ve made on the sale of your winners.

Aside from shares, this can also apply in the real estate market – especially with our personal homes.  We become emotionally attached and can’t bring ourselves to take anything less than what we’ve decided our place is really worth.

And again, sometimes you’re right.  If you don’t need to sell, there’s no point taking a bath on the sale price.  However, you may also need a reality check.  Chat to your local real estate agents, review the sale prices of other homes in the area.  It may be time to realise other more effective uses for your money.

I’d love to hear about when you’ve chosen to cut your losses and how it panned out for you.