What we did in the past will not work for the future.

I can remember my first fore into the Financial Planning industry (funny, they called it Financial Planning but there were so many aspects that were not dealt with in the early days) it was basically, here is a product you can use.   We  just had a few types of investment products; bank instigated investments, insurance bonds, Whole of Life insurance policies, Endowment Policies, investment trusts, then came the wholesale trusts, then, the different types of investment platforms and the variety of products grew. The array of products, platforms and derivations has multiplied and now there are literally thousands to know and understand.

The past few years have really tested my beliefs, understanding and values. The Financial Planning Industry has undergone change and it is interesting to listen to the general information that has been generated. I have been part of the financial planning industry for twenty six years and it has given me a great deal of opportunity for growth and expansion of knowledge. I love the industry because it has the ability to positively impact lives once understood and used properly.

Two years ago Tony Hartley, one of the Directors of Madison Financial Services, came and spent some time with me, he sent me a book ‘The Ascent of Money” by Niall Ferguson, I also purchased the DVD and the CD series. I found it very interesting, and the information that it contains is important in understanding money and the tool it is.

One of the most interesting concepts that I know to be important is that financial planning is just that, FINANCIAL PLANNING, life happens, things happen, and we have to take into consideration the affects of ‘what happens’ in conjunction with where you are and what it is that you want. It cannot be done in isolation. One type does not fit all.

The last 18 months, I have used to develop my knowledge on the financial instruments that are available for our use, which investments fall into the category of real tools, and the ones that fall into the category of ‘gambles’, not only which tools are best to use, but also how they can be used more effectively.

If your thinking is ‘take my money to the bank, it is safe there,’ I suggest that is an interesting thought pattern.

Ask yourself the question ‘Would you rather have 5-6% interest on the money you allow the bank to use or would you rather own part of the bank and get the earnings, the imputation credits and the growth?’

Another question you may consider, ‘who has control of my money?’

There are many different ways to think, none right or wrong, however our thinking is generally limited by the knowledge we have and understand, and the perception we have about that knowledge.

We live in interesting times and it is to our best interest that we make our decisions based on facts relevant to our situation. Fear is not a good fact to base your decisions on.

Enjoy you day

Irena Butler

See the financial planning that changes  when we change a few habits; the debt reducing, the savings increasing, the investments growing. It is amazing how you find ways to increase the money you put away and it makes you feel so good, you are in control.

My daughter was telling me how they are paying extra off their housing loan, putting extra away in their investment account, and they still have their buffer account which they do not put anymore into because they have reached their target. It continues to grow because of the effect of compound interest. The decision is now will they pay more off their house loan or put more into their investment. Another thought was to put money aside for a holiday. She felt that they deserve a holiday but feel that because of the economic situation she may put that money into the housing loan.

It doesn’t matter what decision is chosen, it will be a decision that is right for them.

Sometimes you are so far from being in control that you cannot see the finish line. So start. Write your commitments onto a sheet of paper, on the left hand side the debt on the right hand side the monthly commitment. Work out how much money you need to meet your commitments. They are your number one priority. How are you going to convince yourself that they are your priority?

If you look at your debt as an investment you made in yourself, you also can see that someone believed in you enough to lend you the money. This is a different way of looking at the debt, a different attitude to the debt; therefore it will precipitate a different approach to the repayment.

This is only the beginning. You can create a different thought process which will amaze you with the difference in the end result.

Have fun with this approach, I know that you are thinking, how can I have fun? Try it and see.

One March many years ago, I was feeling as though I was at the whim of every incident that occurred. I visualized that I was in a dinghy and was in rough waters. I was drifting, making the best of every situation and because of that I became a great problem solver. I was proud of the fact that I could find solutions that were working.

I vividly remember thinking of where the tide was taking me, I had no idea, and I just kept doing what I needed to do to keep myself afloat. I started thinking and started to ask myself questions:-

Could I do something to give me direction?     YES
What could I do?                                           I don’t know
What did I really want?                                  To be happy
What would make me happy?                         To have a house to call home
What do I need to do to have that?                 Have a deposit
How much do houses cost?                             I can answer that
How much deposit do I need?                         Too much
Here is where I make a choice.                       Will I go for it or do I give up
The fork in the road; which road will I take? The one of least resistance or will I go for it? I thought about the end results of each alternative, I wanted to feel good about my decision.

I decided to go for it, I worked out how much was needed for the deposit, worked out what all the costs were, how much the repayments were, and just went for it.

I put the tiller in the water and started to steer my boat.

Was it difficult?                Yes
Did I succeed?                 Yes
Can you?                         Yes
It starts with:

a decision
know your starting position
know your end position
make the map
create the stepping stones
go for it
Have fun with your journey, steer your boat to the success that can be yours once you make the decision.

It is so much fun when you read, this morning I was going through my daily ritual and read a piece from The Maxwell Daily Reader. This piece comes from author H. Jackson Brown Jr. He said ‘Talent without discipline is like an octopus on roller skates. There’s plenty of movement, but you never know if it’s going to be forward, backwards, or sideways.’ I laughed and then thought about it.

How many times have I done just that?

So much activity on so many different fronts and no real results.
Why no results?
What was the problem?
Taking the time to think is so valuable, activity without direction will take to nowhere; you will be like the octopus. However thought, creative thought, will give you many options.

You will come up with:

What activity will produce the results you want?
What result am I really looking for?
Why am I after this result?
What am I prepared to do to get the result I am after?
This last question actually determines whether the end result is in keeping with what you really want. Then just do it.

Small steps every day will give you big results.

Have a great day.

Irena

Have you ever really wanted to do something, really believed it was possible and every time you think that it may actually see the light of day, something happens. A blow, a setback, and this time it hurts so bad you just want to give up. But no, one more time you look for the solutions that are there when you look for them.

I love Winston Churchill, his talk that consisted of, never give up, never give up, never give up. Man, have I had to draw on that so many times.

Nothing worthwhile comes easy, you have to grow into the role, you learn through the journey to your success. The amazing thing about life is that the sun will come up tomorrow, lives are lived and your day is about as good as you choose it to be.

Opportunities abound, they wait for us to see them so we can make them grow into realities. Understand that the only person that can crush your dream is you. So, yes, circumstances may not always be what you want, life may not always be easy, but it comes down to the fact it is your choice.

Oh look! An opportunity is coming, I am ready, I will not crush my dream, it is worthwhile and it deserves a place in this world.

Enjoy your failures they are the stepping stones to success.

Like to be able to sleep, eat and have fun. Well, yes, it is possible. However you need to do some homework so that you can put yourself into a position where you can cushion yourself from the effects of the market and the rise and fall of interest rates. When you have structured your finances to suit your particular circumstances you are in a position to take control of your long term financial security.

You are the master of your finances; you have made decisions which have lead you to where you are now, so if you are not happy with that position, then it is time for you to take a change in direction.

Why do so many people live at the ”effect” of life, rather than being in a position of taking advantage of the ups and downs of the market. Many of us take a knee jerk reaction to the ”stuff” that happens to us and then we live with the consequences of that knee jerk reaction.

Most of this happens because of a lack of knowledge and understanding of the financial world. We do not understand the impact that a lack of control over personal financial situation has. Also, many of us do not know the tools available, or, the application of those tools.

The proof is in the pudding,

Situation 1 Existing retiree:

Initial investment $59,204

Client for 11 years

Has received $60,615 in pension payments

Current value of investment $74,383.99

This particular client was 64 years of age when he first came to see me; he already had an annuity and had been retired. The purchase price of his annuity was $92,500. He was receiving an indexed income of $19,351 from the annuity. He did not require that amount of income and the annuity had another four years of payment and then he would have had nothing. The client is now 75, he still has a nest egg and his income is increasing.

Situation 2 Pre-Retiree:

Initial investment $243,801.26

Client for 6 years

Has received $95,269.17 in pension payments

Current value of investment $308,620.62

Client was 64 at his first visit, we were able to restructure his position so that he had an improved tax position, which meant that he was able to use more of his money. This year after the “crash” we have enough funds to pay his pension for the year and still be able to reinvest a further $20,000 to increase the number of investments he has.

Situation 3 Redundant:

Client for 12 years

Has $557,183 in super

Initial investment $37,000

Has a business that employs 4 staff

Has not paid company tax

Client was 48 when his employment situation changed. We discussed options and came up with a solution that was best for the client. He did not like super and did not want to put his money there, however after discussions he decided that superannuation was the safest bet for him. We also put funds aside for long service leave for his employees. We were able to minimize his tax position and maximize his asset growth. He is now in a position that he can retire if he chooses.

You need to be flexible, so if the rules change you are in a position to take advantage of the changes.

Markets go up and down, ‘stuff” happens, interest rates rise and fall, sometimes it rains, sometime it pours, sometimes the sun shines, that is all part of life. If you want to give yourself the best opportunity to have and take advantage of the choices in life, you have to actively pursue the opportunities that present themselves, even if they do not look like opportunities. You need to know where you want to end up.

So here are some tips for you to follow, you:

• need a good structured financial management system
• need to understand and control your cash flow position
• need to understand the difference between cash flow and budget
• need to understand your tolerance level
• need to understand the tools available to you
• need to understand RISK, the risk of the market, the risk of under insurance, just to mention two
• need to take time to look at your situation and make a valued assessment of where you really are
• need to know the result you want
• need to have a mentor, someone who can honestly and professionally tell you where you are heading if you continue down the path you are currently on
• need to take responsibility for your position
• need to make your plan, revise it constantly, and adjust if necessary.

No matter where you are in your life, if you want to make it closer to the reality you want, start now. Look at where you were five years ago, has anything changed? If not, is anything going to change if you do not make the changes.

Making the decision to see a financial adviser is an important decision. The reasons why you do that are generally financial, based on tax and sometimes social security consequences.

Some of the reasons I hear are:-

I want to put myself in the best financial position
I don’t want to pay as much tax
We have a wedding coming up
We want to send our children to a good school
We want to own all we have
I don’t want to worry about money
I want to go on a holiday
We want enough for our retirement
You can put in whatever reason you want it is the end result that is important to you.
Clarifying what you want to get out of the meeting is really important. The first meeting is generally just a getting to know you exercise. Here you make the decision on whether or not you feel comfortable with the adviser. This is so important, your relationship will last years, you will be discussing all kinds of intimate facts and you need to feel that it is your interests that are being served.

My suggestion is that you make a list of expectations:-

How you expect to be treated?
What information you would like?
What is the end result you are after?
What is important to you?
How often you want to be contacted?
What services do you expect?
How do you want the information given to you?
How often do you want to see your adviser?
What do you think your adviser can do for you?
These are just a few to get you thinking. I have found through years of experience that the expectation of what service is provided is so different to each person in the equation. It is the unspoken expectation that can cause issues to arise and if they are not dealt with then you will not be getting the best service your adviser can provide.

Have a great day

Irena

Do you feel that success is eluding you? What is your interpretation of success? Would you like to know some keys that you may find interesting and helpful?

Key 1. Success is predictable, it is achievable and you can teach others to succeed.

Key 2. Results change when you change your thinking

Key 3. Results change when you know where you want to go, when you have a clear vision of your purpose. When you are focused.

Key 4. Results change when you build relationships with people who will hold you to a higher standard, and when you hold yourself to a higher standard.

Key 5. Always give more than is expected of you. It makes you feel good and it makes others feel good. A real win- win situation. If you are owed a debt, forgive it and move on.

Key 6. Always be grateful for everything. When you are grateful you see things differently.

Key 7. Be accountable. Results do not equal no results plus a good story

I love this last one, when I read it; it hit a cord with me. Being accountable and responsible for your own actions is one of the keys that can turn your life around. Time spent in blaming and making excuses can be better utilized in productive thinking and building systems to prevent the issue from reoccurring.

Life is very interesting; it gives  opportunities for growth everywhere. While I was listening I heard a comment being passed on a person and the perception was that the person was chasing rainbows and wasting their time. ‘If only they would focus on this rather than chase, their life would be so much better’ was one comment expressed.

We are interesting creatures, why is it that some of us believe that we know what is better for someone else? Do we really know what keeps that person going? Do we really know their circumstances? Do we really know what they want? Can we just love them and allow them to be who they are?

I remembered a story that was told in my presence. The story related to a dog, this dog was running in and out of bushes, seemingly stupid behavior to anyone watching on the sideline. What the lookers on didn’t see was the rabbit the dog was chasing.

Are you chasing a rabbit?
Are you being told that what you are doing is wasting your time?
Are well intentioned people looking into your life and giving you their opinion on what would be in your best interest?

The important thing is, are you chasing a rabbit? Does it give you a zing; does it make you want to get out of bed in the morning? Does your rabbit give you a purpose?

What does your life feel for you?

To me it is fun chasing rabbits; it allows me the full gamut of experiences, the exhilaration of the chase, the annoyance when the rabbit gets the better of me, the regrouping, the learning experiences I can put into my wealth tank, the recalculating the chase path and going off again. This time with more knowledge, a better game plan, is it going to work this time, maybe yes maybe no, the fun is in the journey, in the chase, in the exhilaration, in the new experiences, in the knowledge that I can keep going and creating life’s experiences every day.

Financial Planning, life planning, is an exciting journey. Your life is a journey, every section studded with learning experiences, go and chase your rabbit, have fun with it, you never know you may be the sparkle that put a light into someone else’s life.

Have an interesting day and enjoy all your experiences.

We currently have several clients facing the possibility of retrenchment. I remember in the early 90′s many people were faced with the same dilemma. Some chose to take the bull by the horn and offer themselves a candidate for the package, some waited until they were offered the package. Decisions were made and consequently life changed for the people involved.

Now, change is not necessarily bad. It is often in times of hardship that we make life improving changes. It is all in how we manage this change. Some chose to buy themselves a job, some retired, some from life, others from work.

We are working with some clients, through this issue now. The trick is to look honestly at where you are, look for the opportunity for you, in this time. Taking the time to evaluate your position rather than allowing the dread to swallow your productive time. Because if you do, you will not see what value this opportunity has for you. Take stock of your resources, look at your knowledge base, look at what you like to do and look at where you can make a difference. When you take a different perspective on the situation, life’s treasures show themselves to you. I am not going to kid you that you will not go through hard times. You will go through them, however, you will not get stuck in the muck if you take action.

Thinking is important. You do not want to go from the fry pan to the fire. You do not want to become one of the statistics that failed. You want to do your homework and be successful. It is not difficult, it will require work, it will also require the right attitude and determination.