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.