Tag Archives: savings

What does an Adviser really do?

The term financial adviser or financial planner has been around for a long while.

When I left school though, I’d never heard of a Financial Adviser and certainly didn’t know it was a career path, or that it was the one I would take.

I knew about Life Insurance Agents or Brokers, Accountants, Economists and not much else.  So if you’re like I was, and not really sure what a planner did, allow me to enlighten you…

Advisers are Authorised Representatives of an organisation that is licensed by ASIC (the Australian Securities and Investment Commission.)  Some choose to hold their own license, some are through non-aligned companies and others are through big corporates that you may recognise such as AMP, MLC (NAB) or ANZ.

The upshot is, you need to be licensed to give advice and that’s a role we take pretty seriously.  People pay us for what we know, meaning we’re in a very trusted position and one that we don’t take for granted.

When you initially meet or research an Adviser, chances are you’ll be provided with their Financial Services Guide and Adviser Profile.  This outlines what your Adviser is allowed to provide advice on.  Some are very limited and choose to specialise in a particular niche, such as Insurance or Self-Managed Super Funds (SMSF.)  Others are educated in many areas and are called ‘generalists.’  Additional accreditation may be achieved in areas such as Aged Care and SMSFs.

Most covered areas include investments, finances, budgeting, insurance, superannuation, retirement and pre-retirement planning, estate planning, risk management, business risk mitigation and taxation.  Advisers are usually only too happy to let you know the areas that they’re qualified in and can offer advice on.

Chances are, seeing an adviser can add value to your personal financial situation, so why not consider a meeting with a planner real soon!  Most offer their initial consultation at their own time and expense, so what have you got to lose?

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?

 

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.

Keeping up with the Jones

Do you have a little envy going on?  These days, everything from Order Envy (your friend’s meal choice looks way better than yours) to outright covetousness over their assets seems to be in vogue.  You may know it as that feeling when their gleaming new ride pulls up next to your perfectly operational and completely reliable, but 2005 model Corolla, and suddenly you feel a little lame.  Or you’ve been toting that fabulously comfortable, but rather battered handbag around a bit longer than most, while your friends have had a few sparkling new upgrades.  The Kardashians have even decided that you should really emulate them and based an empire on it!

It may not even be that you have a desire to actually  have what your friend or Kim or Khloe or Kourtney has—but what some behavioural economists call “image motivation,” which in layman’s terms, is simply the desire to be perceived as successful by others.

Basically, there’s nothing wrong with this—unless of course it encourages you to spend and live beyond your means. And that’s where there’s a problem.  It’s also always good to remember, that just because someone has it, doesn’t mean they can actually afford it.

You’ve likely heard the very common expression that someone may be trying to “keep up with the Joneses.”  Neighbours outdo each other with bigger and better renovations and newer and sportier vehicles while other look on and giggle.   You may however like to see where it’s all at for the original Jones…

The fabulous Wyndclyff Mansion built in 1853 in Rhinebeck, New York by Elizabeth Schermerhorn Jones originally inspired the phrase, and it’s now a crumbling ruin in total disarray.  So if you have a touch of the green-eyed monster over some of your friends places or belongings, perhaps you could hang a picture of what the Jones estate looks like now to give you a little comfort and perspective.

The house ended up with a number of owners who couldn’t afford to maintain or repair it, and it has now been abandoned for years.

So the best advice I can give, is to take the home’s fate to heart and use your desire for a little prestige as the fire to aid you in making your own individual, solid financial decisions.

Funnel the money you would have spent matching your mates into a savings or investment plan instead.  Chances are, by investing instead of spending, you’re way more likely to end up ahead!

Time to Sweat the Small Stuff

What little habits do you have, that take up small parts of your wages each working day or week?

Most of us have something we love and really feel we just can’t do without!  That amazing frappe from the local coffee shop at $7 a pop?  That seriously healthy juice we need every day at $9 a slurp?  A fantastic bought lunch at $15 per day, because it’s so much nicer than a vegemite sandwich?  The latest glossy mag full of Kardashian butts to keep you enthralled at $10 a read?  That Bounty bar that we only ever get when we fill up each week at the servo at $3 a bite?  Don’t get me wrong, it’s nice to be able to indulge in life’s little luxuries!

But sometimes it’s also good to take stock of just how much we pay out on ‘the small stuff.’

As an example, if you save the $7 per working day on the coffees ($35 per week at 48 weeks per year) you’re looking at a total annual spend of $1,680!  Didn’t that add up quickly!

Can you buy lunch once a week and bring in leftovers the other days?  Can you cut the magazine spend down to monthly not weekly?  What little incremental changes can you make, to make a big difference somewhere else?

Now, I’m not saying you need to go without – heaven forbid!! But what if you chose to cut it down – maybe a once a week treat – and every day, transfer those little bits you’d otherwise spend into something else?  Like, paying down those credit cards, chipping away at the mortgage, or finally putting it towards that holiday we’ve been dreaming of!

The benefits of the compounding interest (that you’re saving) may just surprise and delight you.

Let me know what little indulgences have run away from you?  And what you’re prepared to give up to focus on something else?  I’d love to hear your stories!

Time for a financial clean up?

When we think of giving something a good clean, we usually think of a room in our home, the pantry, our laundry or some cupboards and drawers…

The de-cluttering fad has taken the world by storm and experts and converts and hooked on the new levels of simplicity.  Just check with Pinterest!

But what about cleaning up other parts of our lives?  For example, cleaning up your relationships or your health?  There may be friends that you really no longer need to be in touch with, family members who never leave you feeling good or other relationships that it’s in your best interests to move on from.  Is it time to get serious about your health? Can you leave behind the daily lattes?  Lose the chocolates?  Maybe get that blood test to see why you’re feeling tired?  Book in for that overdue pap?  Or see to that dodgy freckle you’ve been meaning to have checked?

What part of your life most urgently needs you taking the broom to it and having a good clean up?

From what I see, many leave their finances in the ‘too hard basket’ for too long and find it a bit overwhelming to get started.  So, it’s time to get out the broom!

You may have lowered your standards and made up fantastic reasons for why it’s still acceptable in some form or another to not have your act together financially. Excuses have come first… until now!  But what if that all changed today? How can you start cleaning up this one area of your life?  It’s totally up to you!

Remember, everything great always starts with really small steps in the right direction.

Which will you tackle first?  A basic budget?  Consolidation of your super funds?  Paying off the credit cards?  Making real dents to the Mortgage?  Starting a savings plan for the kids’ eduction?  Putting away for the dream holiday?

You will be amazed how much progress you can make in a matter of weeks and months if you put some serious focus on this area of your life.

So pick something, anything!  And take the Domestos to it!  I’d love to hear what you’ve decided to tackle head on and how you’re going to go about it!