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10 Revealing Questions About You and Your Money!

Picture 457When it comes to our choice and money, we always make emotional decisions and then rationalise them according to our values. I have created the following 10 questions, to ask yourself about money, make better choices about our money, and achieve a better outcome for both ourselves and those important to us.

  • Do I feel poor?
  • Do I feel worthy?
  • Are the opinions of others hindering me from following through on choices that inspire me?
  • What is my enough number?
  • If I could change one thing about my finances, what would it be?
  • What is important about money to me and why?
  • What is the biggest risk to me achieving my financial goals?
  • How do I want to be remembered?
  • Are my financial choices and actions in alignment with my core values & what is important to me
  • What is my wealth philosophy?

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Getting sh#t done!

Yes You CanOh man. It’s happening again !!!!!!

Another rule change to implement and this on top of another change in regulation, another additional education requirement, another change to how we work and having to do all this just to keep pace with the changes to our profession we aspire to be great at, so we can continue to do what we love i.e., help our clients.

It doesn’t blindside me. It’s more like a mix of groundhog day and being a frog slowly boiled, “grenouilles bouille” for the Francofiles, “yudegaeru” to the Japanese and “rana hervida” to the Spanish speakers among us.

But then it happens.

Burnout, exhaustion, apathy whatever you call it; the bottom line is that it all gets too hard. Everything that is outside my control and that I wrongly thought was in my control gets the better of me. these feeling not only undermine even what I know is in my control but just can’t do anything, anymore.

I know it’s wrong, but to take my mind off my guilt, I'll start checking on my social media accounts. Obviously, this makes me feel worse and at best distracted and even guiltier. Making me feel even more worthless and sapped of energy, because I'm not out there slaying dragons and conquering the world.

Enter the spiral down of self-loathing aided by procrastination, search for soothing industry news wanting to hear others complain (soothing to see it’s not only me), junk food and motivational Youtube videos. 

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The 10 Important things about personal finance, someone without a finacial background needs to know.

photo6Whether you've just started out on your journey to achieving financial independence or you're well on your way, but feeling a bit lost.

The following are some nuggets of gold I've discovered along the way that has helped and encouraged me too.

1. Investing in yourself will be the most valuable and highest returning investment you will ever make.

2. Aligning your financial choices to your core values will help you not only make better decisions, you will also be able to make them faster, more confidently and give yourself a higher probability of success.

3. More money is only the outcome of doing everything else right. Money alone is not the reason for getting your life and finances in order.

4. Money always flows to where it receives the most value.

5. Time is a finite resource. It is the invisible ingredient when making any decision, plan and realising your goals.

6. Better to save on fees, taxes and protect your earnings from inflation, than solely focusing on your investment returns. If you can reduce these costs, you can increase your investment returns without increasing your investment risk.

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10 Strategies to Increase Your Cashflow in Retirement

Horsfield FamilyThe biggest fear I hear from my retiree clients is they do not want their money to expire before they expire.

Australia has an enviable retirement safety net for their seniors. It's called the Age Pension and along with a superannuation system established in 1991 (30 years old) it ensures at least some additional funds for retirees to help with their day to day living expenses.

Some people I meet with want to access the full age pension. Others just want a part pension so they can access other benefits i.e., reduced rates, medical etc.

Regardless of retirement or not, I’ve never met anyone who wanted less income or that didn't want to increase their cashflow.

The following list is more tailored for retirees who are seeking legal ways to increase their cashflow in retirement, however some strategies are also relevant to those still working too.

 

10 Strategies to Increase Your Cashflow in Retirement

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How to Confidently Retire in 5 years’ time or Less

Hawiian StyleThe greatest equalizer of all, is time.

Regardless of our sex, nationality, physical ability, money, career or up bringing, we all have the same amount of time. And it has always been so.

Nothing has changed. A thousand years ago, people only had 24hrs in a day and seven days a week to do everything they need to do. Today we have the same 24hrs a day and the same seven days in a week.

The other great equalizer is death. Sorry to sound so morbid, however it is the truth when I say no one is getting out of here alive. And I am sure most if not all of us would rather be spending more of our time experiencing what life has to offer rather than working till the day we die.

 

1. Whether we do or do not, time will pass regardless. With this in mind, working backwards is the first and arguably most critical ingredient for our success.

Be More YouSpecifically defining what our ultimate goal is, then breaking it down into measurable long (yearly), medium (monthly), short (daily) activities, allows us the highest probability of success.

Doing so we can then better benchmark our progress, hold ourselves accountable and motivate us to do the work we need to do to achieve our goal.

For example, if our goal is financially independence in five years, requiring an additional $500,000 in savings alone. Our yearly goal would be to have $100,000 saved. Our quarterly goal to have $25,000 saved. A daily savings goal of $273.97 per day being required to achieve our goal.

By knowing what we need to regularly achieve and benchmarking our actual progress we give ourselves a better opportunity to make not only tactical changes along the way, but we are also better placed to make quicker decisions, silence our distractions, and have greater confidence we are making positive progress towards our goal

2. Money and Time = Financial Freedom. Ultimately financial independence is achieved when passive income from our activities/ investments is greater than our daily living expenses. In business circles this is called Free cash flow.

GoalsFor those of us who achieve this, the world becomes a hugely different experience along with a shift in priorities. Those who have achieved financial freedom often valuing time over money. Their legacy over consumerism. Relationships and experiences over the accumulation of more wealth.

Achieving passive income greater than our expenses can be achieved many ways. We could choose to increase our income and maintain our current living expenses. Maintain our income and choose to reduce our expenses. Or do a bit of both.

In my own experience I have found the third option i.e., increase my income and decrease my expenses has turbo charged achieving financial freedom sooner along with helping me to better prioritise what is important to me on this trip we call life.

 

3. Aristotle’s “Golden Mean” and knowing when enough is enough. Moral behaviour is the mean between two extremes- at one end is excess at the other deficiency. Find a moderate position between those two extremes, and you will be acting morally”.

Golden PandaThe challenge of many who are still working while at the same time very financially dependent is overcoming their fear of letting go. They fear of losing their own label, importance, and power. Sadly, this fear holds them back from deeper relationships with their families, undermining their own physical/mental health and direct benefits of experiencing the opportunities only they can experience through their own participation.  

The mirroring of this applies to those who are not financially secure and see no value in working. However ultimately the same outcome is experienced i.e., eroded relationships, declining physical/mental health, and a lack of direct benefits due to limiting experiences.

My hope is that out of this covid-19 epidemic, instead of trying to live a work/life balance, we reprioritise our lives to be more of a life/work balance. Both are important and together they enhance our lives and experiences

4. Active vs. Passive retirement strategies. The problem is not one of “Active vs Passive” investing, but rather emotional-based vs. long term disciplined investing.

Emotional investingThis opinion was backed by Dalbar Inc after it had undertaken a study of passive vs active investors over a period of 20 years. There research showing that active share market investors had achieved an annual return of just 3.9%pa vs the market index annualised return of 11.9%pa over the same length of time.

While there is a place for active investment, be it in retirement or while still working considering where one’s best allocation of time, skill and ability is essential to heightening one’s chance of success.

Retirement should be fun, not stressful. So rather than increasing risk and increased losses, considering where you can get the highest gains with the least risk or requiring any of our money.

For example, we may consider a part time/ casual employment in a field you enjoy i.e. substitute teaching that pays $400 per day (50 days per year = $20,000) vs investing $100,000 trying to achieve a 20%pa return. The substitute teaching role required a small-time investment along with no risk to your money.

The point is, especially when retired, consider active activities you enjoy, require only a little of your time and do not risk your investments. Regarding investment decisions in light of the theory soap theory, “the more you touch it the small it gets”.

5. Free cashflow ideas. The following are some strategies to improve your cash flow and help you to retire earlier. 

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10 Easy Hacks to Start Living Your Ideal Life

Ideal Life Hack

  1.   Let go of your past. The past is dry cement. We cannot change it, however the choices we make today can change our future. So, next time your thoughts drift back, and we start to self-judge. Be like Elsa from the movie Frozen and start singing “Let it Go!”.
  2. Do something. “An inch of action will always get you further than miles of your best intentions”. We do not have to do a marathon immediately, just put your shoes on and go for a walk. If you want more financial security, start saving a little. If you want better relationships and business, we can start by making one phone call a day to some one important. Remember motion begets motion.
  3. Get out of your head and go for a walk. Sitting all day at your desk is not only unhealthy it arches our back, slopes our shoulders, and shortens our breath. If we want to feel better, think more clearly, problem solve better and be more creative, then go for a walk with our head up and our shoulders back.
  4. Write it down. “If it’s in your head, it’s dead’. Fact, ninety two percent of people do not achieve their goals. The eight percent who do achieve their goals, all have their goals written down and their goals are specific, motivational, aspirational, realistic and time bound AKA SMART goals.
  5. Decide. Do it. Drop it. Delay it or Delegate it. Deciding to do something or not, helps us prioritise and act. It also gives our brain more capacity to process our “Do it now” tasks that we have chosen to focus on. Deciding increases our chance of success along with less distracting thoughts.
  6. Be accountable to someone. Ever hit the snooze button on your alarm clock after telling yourself you were going to go for that run? Now imagine if you had a friend who had also gotten up super early to exercise with you. Would you have more motivation to get out of bed or hit that snooze button? Accountability works, so draw on its power, to creating your ideal life.
  7. Declutter everything. If it does not serve you or spark your inner joy, it is holding you back. This includes relationships, your career, your lifestyle, finances and whatever else that may be hurting you or hindering you from being true yourself and supporting you to live your ideal life.
  8. Live by your own expectations. Not the Jones’s, not your parents, your boss, your friends or even your partner. Loose the temptation to compare yourself to others. Be true to yourself and discover your own joy. Authenticity attracts as much as it is liberating at the same time.
  9. Make it your thing. Choose an occupation you love, and you’ll never have to work a day in your life”. Chances are if you can make your passion financially viable; you will be more successful, be given more opportunities and inspire a greater number of people who have a similar passion.
  10. Live with gratitude. Although difficult, have gratitude for others and ourselves for our hurt and pains. It is from this pain that we have grown to become who we are today. If we can start to notice the good things, appreciate them and express our gratitude more frequently then we will start to find joy of more things in our lives and experience greater peace.

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10 Reasons Why I’m Not Quitting Financial Planning

peter profileIf you read the media and industry headlines, you'll read that thousands of financial advisers are currently running for the door.

Their reason?

Over regulation, increasing costs, loss of income, increased education standards and ongoing negative sentiment headwinds from the wider public and media.

Let’s not sugar coat the facts.

Now is a very difficult time for the financial planning industry.

I regularly hear stories of advisers who have taken their own lives, lost their homes, their livelihood's and families; at the same time of their career many others would consider thinking of retirement rather than going back to university or a change of career.

Indeed the industry is at a turning point.

The question we all need to be asking ourselves is, "What do we all i.e. consumers, regulators, suppliers (financial product manufacturers) and advisers, want from our financial service providers and how much are we prepared to pay for it?"

Maybe this tongue in cheek approach is the answer?

Our services are Good, Fast, & Cheap......Please pick two.

All bad jokes aside, I continue to see the following universal law of money being applied i.e. Money always flows to where it’s most valued.

Call me a sadomasochist, crazy or simply plain arse dumb for choosing this path however I believe the outcome will result in something better for us all as the financial planning community and industry transitions into a profession.

So as for me, I’m not quitting. In fact I’m very excited and looking forward to sticking around.

So without further ado the following are my top ten reasons I’m sticking around as a financial planner for the long term.

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Certainty Delivers Dopamine

Dopamine CertaintyJust as much as we get a dopamine hit when we eat food, have sex, embark on a new adventure and find acceptance. We experience this same natural drug and feeling when we move from certainty from our initial feeling of uncertainty.

In situations of uncertainty we experience a rush of adrenaline, anxiety, an increase of heart rate, confusion and a racing mind for answers. This too is our bodies physical and an emotional response to a threat i.e. getting us into a state of preparedness and fight or flight for our own survival.

We are all naturally addicted to dopamine. Its function is to both reward us and too keep us alive.

Did you know neuroscientists and researchers have discovered and know can evidence that our brains are determinists?

This means that while sometimes we make decisions consciously more often we make them unconsciously due to our habits, environment, ego and sense of self i.e. we make our choices reactively rather than proactively.

One of my many ongoing activities is to help clients proactively match their comfort and certainty with their investments and expectations, while balancing this with their ever-changing personal circumstances.

I regularly remind them “money flows to where it is most valued” because being humans we value certainty. In money markets certainty has a price. The more certain the return, the lower the expected return.

When it comes to investing this is what bankers, market commentators and economists call “the risk premium” of an investment. i.e. How much more risk are you prepared to expose your investment in order to achieve a higher return?

As investors we experience an adrenaline hit as we buy something and a dopamine hit after we have bought something and we see the value increase i.e. we see our financial position being more certain. A secondary dopamine hit comes from our ability to have predicted something and then have it evidenced back to us that our predictions were correct, resulting in a positive feeling.

Beyond investing, this is also why we feel good after completing a task, passing an exam etc. and provide us an explanation as to why we feel anxious and uncomfortable if we have had poor previous experiences making choices, doing specific tasks or sitting exams.

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The Humble Advisor

The Humble AdvisorWhy would anyone consider financial planning as a profession?

Even before you begin the rallying cry of others intent on undermining trust in an adviser is deafening.

Media articles splash scandals and opinion pieces. Industry fund run blitz propaganda campaigns implying advisors will erode your retirement returns. Authors of general advice = all care no responsibility, promote manta’s that it’s better to do it yourself, ‘if only you buy their book’. Get rich spruikers lord their conflicted schemes while dispiriting the need for any other advice and lastly the well-intended opinion and concern of friend or relative who believe they know better and should be more trusted because <insert ego driven reasons>.

Cutting through all this negativity, let’s say someone still considers contacting you.

Personal communication skills aside and regardless of how empowered you make your enquirer feel, they are still required to reveal to you; a stranger all their personal information, read pages of legal documents, signing authority requests and be judged.

We all judge each other. We judge if we/they are worth the risk. We judge if we/they are worth our time and we/the judge if the relationship is worth the emotional investment. That’s enough to raise anxiety levels in everybody.

You may have a generous spirit. You may have a desire to help your client and make the world a better place. The reality is that we live in a litigious world and other professionals’ existence is reliant on finding fault and gaining compensation.

The reality is that in the eyes of prosecutors, your well thought and researched strategies and recommendations are viewed as potential risk and liabilities. Not a benefit. If your client is better off, if your client achieves their goals and your clients are happy with your services; prosecutors have no case and no work.

So good intentions aside, how defendable are your files? How defendable is your research, comparisons, recommendations, projections and the delivery of your promises? You must be able to evidence all this on request. Be it requested by your client, your professional standards team, industry association, an array of regulators, insurers and now with the introduction of new standards, your peers too.

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What is Focusing Illusion?

Poker with friends in St RemyMany of us assume there is a silver bullet formula to attain happiness in our pursuit of personal growth and a higher quality of life. Better education, our career advancement, improved family harmony, more money, material assets and healthier etc.

However the paradox is that happiness in itself is not in having these ingredients of happiness but in fact the pursuit of these ingredients we have the opportunity to experience the lasting satisfaction if done authentically.

For example. We all know having more money does not mean you are happier. Money is needed to fund a level of quality of life, however beyond this, studies confirm the amount of happiness attained is a diminishing return on effort.

Those who continue to pursue excessive wealth often find themselves with less health (mental, emotional, spiritual and physical), greater worries, and finding less and less fulfilment even when they have achieved herculean levels of greater wealth.

The same applies to studies, our careers, health and any other ingredient of our lives that we feel compelled to need to have in order for us to experience more happiness.

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How to turn your 20 days annual leave into 52 days of holidays in 2020.

MaldivesAs a financial planner for the last 20 years, planning is now well and truly part of my DNA.

And between you and me, once you know the core fundamentals about money planning; working with numbers, projections, legislations and financial product features all day can at times get a bit dry and dull.

So given that today is a Friday, I’m in Cairns and the weekend is just ahead, I thought I’d take a break from the daily grind (while still firmly in my roll of planning) and research the following juicy question.

How to take more time off and still be paid for it?

What I discovered is that with a bit of planning, getting your holiday requests in early (before other staff) and a flexible boss. You can easily extend your 20 days annual leave all the way out to 52 days a year, or a 260% increase in leisure time.

The following maximising you leave and holidays is based on for Queensland Australia public holidays.If you are in another state please check your relevant state holidays there as they may differ slightly i.e. different Labour Day, Queens Birthday, Show Day dates.

Note. For completeness calculations begin from 1st Jan 2020 which is a Tuesday however if you drew on annual leave on the 31st December the first holiday would extend an additional 3 days for a total of 9 instead of 6.

Additional note. If you also took Friday the 27th December off (leave without pay) this could extend the Christmas break length of holidays from 6 days to 9 days (inclusive of weekends, two days annual leave and a day leave without pay).

So let’s begin!

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How we achieve an additional $50,000 in savings annually

HawaiiFirst let’s be clear. We do not live on tins of baked beans or substitute gravel for toilet paper. Ouch!

Secondly the $50,000 in additional savings we are accumulating is not from any increase in income or side gigs.

Our savings are purely from implementing smarter ways and choices to legally keep more money in our pockets instead of others.

Thirdly, we’re not special.

We have the same amount of time and days in a week to do everything we need to do just like you.

Lastly we also each have average incomes. Disclosure we pay ourselves $73,060 (after tax) or $100,000 gross annually.

So how did we do it? How have we found these  additional $50,000 in savings annually without cutting back on our necessities and quality of life?

More importantly, can you too achieve these levels of savings or more?

The short answer is “Yes you can".

You simply need to decide on what you want, identify the price, and decide if you are willing to pay and if so pay the price. Then get on with it.

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How To Pay Off Your Debts ASAP

Paul Sohn How Leaders Can Learn from A Couple Who Paid Off DebtIt's common knowledge that debt and financial problems are the number one cause for stress and worry in our lives. 

Recently I met with "Frank and Ernest" who had amassed combined total debts of $127,000 across their credit cards, home loan and personal loans. 

Frank told me that they expected to be debt free in fifteen years (based on his mortgage etc). 

"How does being debt free within the next five years sound?' I asked.

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If You Were a Listed on the Share Market Would You Buy Your Stock?

Invest in You

Part of my day to day routine is meeting with BDM’s (business development managers). As you can imagine like any meetings some are zzzzz! and some are great.

One of the best questions a BDM has ever asked me was, “If You Were a Listed on the Share Market, Would You Buy Your Stock?”

I remember staring back blankly as I began imagining a bunch of long faced sceptical analysists pouring over my life, benchmarking me as a business, my personal and financial growth, pulling out a slide rule to measure my routines, efficiencies, asking about my life’s back up plans, satisfaction and plans for growth.

“Sure I would” I replied but the question was so great that I continued to ponder it throughout the rest of the meeting.

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Confidence - The Only Plan You Need To Achieve Your Goals

Confidence

Twenty one years, three months and a few days ago I looked up into a star filled night sky and I was overcome by feelings of regret, fear, loss and embarrassment.

I didn’t like where I was, what I had become and what the future would hold if I was to continue down the same path I was on. I also remember thinking massive change only comes from massive action.

And so on my 25th birthday I decided, committed and began down my own "road less travelled". 

Today I'm a few decades further down my road as I continue on life's journey and with the luxury of hindsight and experiences can now reflect back upon and share with you what worked what didn’t and the “one-two thing” to do every day.

Only Three Ingredients Needed for Your Success 

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Reboot

Palm-Cove-Beach-2Just like when my personal computers freeze because I have too many programs open so to my decision making freezes when I have so many competing important matters in my life.

This got me thinking about how to solve life’s problems from the perspective of an IT help desk.

Life has taught me when I choose to neglect a problem so too does my probability of an epic crash increase. When talking with others about my problems I’ve also found that most of us share similar if not the same problems and fears. Most importantly our problems are not unsolvable.

Often I've experienced many of my life’s problems solved simply by updating an old program or as I call it my daily routine. If this update doesn’t work then I research better programs to do the job and install this new program i.e. daily routine into my life.

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What the media, finance experts and most books don’t tell you

Angkor WatThis blog is not based on new theories, new ideas or new philosophies; it‘s simply a collection of experiences, insights and discoveries on a journey to financial independence over the last twenty years. As such the blog hasn’t just happened it’s evolved.

On the journey to financial independence we've read a lot of financial books and information. Most of such assumes financial success determines our quality of life and experiences. While on the surface this sounds logical, real life experience has taught us otherwise.

For example our decision to either save, borrow, buy, invest or sell is not in fact to make more money; but to experience an emotionally inspired feeling and certainty of security, freedom, choice, independence, deeper relationships, increased stature and happiness. All which directly enhance our quality of life.

Early into this journey of  financial independence I (Peter) found myself quickly out of my depth and questioning my own abilities be them emotionally, financially and my courage to commit.

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Why Making Money Is Counter Intuitive

Uncle Mc Scrooge

Making better financial choices is the key to unlocking higher returns.

So why is creating wealth counter intuitive?

Simply because the more we touch our money, the less it grows.

The following are five age old and proven ways to help you accelerate our wealth, keep it longer and enjoy it more.

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Finding Your Sweet Spot

ice20kids

“The middle is messy but that’s where the magic happens”  Brene Brown

I love ice cream any time of the day and I especially love an ice-cream on a hot summer day.

Today is one of those days, 31c with 95% humidity, so it feels very hot.

As I sit back and enjoying this simple pleasure of eating an ice-cream my mind wanders back to happy childhood memories and dreaming about what I wanted to be when I grew up. I remember liking trucks; wanting to be rich and become someone important.

Like most people I had no idea what this meant or what I really wanted to do.

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Investsure Holdings Pty Ltd ABN 16 050 286 630 \(t/as Horsfield & Associates\) is a Corporate Authorised Representative of Infocus Securities Australia Pty Ltd ABN 47 097 797 049, who holds an AFSL and Australian Credit License No. 236523.
Information published on this website has been prepared for general information purposes only and not as specific advice to any person. Any advice contained in this document is General Advice and does not take into account any person's particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a qualified adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. Past performance of financial products is no assurance of future performance.