10 Tips For Financial Security

#10 – Have A Financial Plan

What Is A Financial Plan?

It is a detailed picture of where you are now as well as a detailed picture of where you want to be. It involves detailed strategies, actions and investments that you need to get to your goal. By having a financial plan you are able to set out clear financial goals and the strategies that enable you to achieve these goals.

What Goes Into A Financial Plan

The diagram below illustrates the various aspects that go into a financial plan. It is important to be as detailed as possible when developing your own plan.

Our team of financial planners can build you a customised plan.

#9 – Know How Much Money You Will Need

Being clear about the amount of money needed to live a secure life is one of the most important things when it comes to financial security. We’ve broken it down into 4 main categories that help you to determine how much you’ll need during retirement.

The 4 Main Categories

Reasonable living expenses
Extra lifestyle income e.g. travel, hobbies
One off spending e.g. toys, house reno’s
Helping others e.g. kids, parents, charities

#8 – Protecting The Assets You Have

Knowing how to protect your assets now, in the future and after you’ve passed away is a critical aspect in securing your financial future. Below are some common areas in which we’ve helped our clients to improve.

Good risk management
Use of tax structures
Focus on Superannuation
Insurance for valuable assets – properties, etc
Good risk management
 Personal insurance – income, disability, death, trauma
Wills, POA, etc

#7 – Minimising Your Biggest Risk

The biggest risk we’ve found clients facing is the realistic possibility of outliving their money. People are living longer and spending longer being retired meaning they are spending more money. This is something that is often overlooked when planning for the future.

What we’ve found is that the average male and female will spend 21 and 25 years in retirement respectively. If they’re in good health add another 8 and 6 years respectively to those figures. For every couple, there is a 50% likelihood that at least one partner will live into their 90s – that’s 35 years in retirement!

#6 – Understanding Inflation

Inflation is often an overlooked aspect of planning for people’s financial future. We’ve helped plenty of people who were working towards a certain dollar figure that failed to take inflation into consideration to reevaluate their finances and plan accordingly for their futures.


Take the standard Australia Post stamp, in 1977 it was worth $0.15, fast forward to 2012 and it cost $0.60. That’s an increase in cost of 4 times in just 35 years! This simple example highlights the need to understand the long-term impacts of inflation on your savings.

#5 – Investing In Growth Assets

It is important to invest in assets that will increase in value over time. Often people fall into the trap of buying what they think are assets however this is not the case, with the value of these so-called ‘assets’ decreasing over time. This is something to be mindful of when making purchase decisions.

There are four categories that growth assets can fall into.

Businesses – your own, other people’s (shares)
Loans – Bank accounts, Bonds, Term deposits, Debentures
Property – commercial, residential, industrial, tourism
Stuff – collectables, gold, art, antiques

The first three categories all would be expected to produce income, but with stuff, we are really holding it hoping that the price will go up, and we can sell it to someone else at a higher price. Take a piece of a gold bullion or a work of art. On their own, they don’t produce any income, so the only gain we can make on them is if their value goes up.

Additional Tip – Property Vs. Shares

Here are 4 key points to consider when thinking about investing in property or shares.

Liquidity / Ability to sell
Risk Management
Management / Maintenance
Taxation / Finance

#4 – Minimise Your Tax

For many, income tax can be the number one expense during a person’s lifetime. If you get smart from age 55 however, it doesn’t have to be.

Here are six common areas where we’ve been able to help clients:

Eliminate non-tax deductible debt / maximise deductible debt
Use negative gearing if appropriate
Consider salary sacrificing
Pre-pay interest if possible
Think multi-generational
Start your tax planning on July 1 each year, not June 30

#3 – Get Control Of Your Super

Understand your current super fund is critical to the long-term financial health of your portfolio. By making small changes to your superannuation fund, you can drastically change the end result, which can be greatly beneficial considering the amount of time and money that is involved in your superannuation.

Each of the different superannuation funds below requires a different management strategy specific to the characteristics of that fund.

Industry Fund
Retail Fund
Master Fund
Self Managed Fund

It is important to understand the features of the fund in regards to:

Investment choice
Estate planning
Income streams
Strategy options

Most importantly you need to understand the fees & charges of your fund – you SHOULD get what you pay for.

#2 – Understand Why Most People Fail

Our experienced advisors have narrowed down their top reasons why people fail to achieve a secure financial future. These are:

 A lack of information / too much information
Leaving it too late
Distraction & procrastination
Looking for the “magic solution”
Getting caught up in figuring out why things won’t work
Failing to believe they are capable
Never taking action
Failing to make it a priority
Not getting help

Speak to one of our advisors today to ensure that you avoid these common pitfalls.

#1 – Get Help. Get Advice.

We all live busy lives, trying to juggle our family, career and a healthy lifestyle with a multitude of other things. Constantly pressed for time, we look to others for help, advice and coaching to improve in these areas.

So we can get help with anything.
But here’s the really interesting question:

Can you delegate or outsource the key actions required for you to succeed in that area?

Can I pay someone to go for my morning run?
Can I pay someone to play with my kids?
Can I pay someone to eat more fruit and vegetables for me?

When it comes to wealth building, however, we can outsource pretty much everything except the funding. And if we’re smart enough we can even get the tax office and the banks to help with that!

Wealth building is the one area that will actually give us more time when we get it right. Yet it’s the one area that most people want to try and work out how to do it all by themselves, sacrificing time that could be spent focusing on what is most important to them and what they need to be there for.

To kick start your journey to financial security speak to one of our financial advisors today to organise your cost and obligation free discovery meeting.