Financial advice: to seek, or not to seek? 

we just read this post by another planner also named McAuliffe

we agree with all that Ash has said & hence we include the link to what he wrote

as a summary for you
 
Finally, it was a batch of bills they didn't know how they'd pay that pushed the couple to see a financial planner.

The decision changed their lives.

"I'd always wanted to get financial advice but it's one of those things we'd put on hold, we didn't have the money to go and pay somebody to give us the advice," Mr Doherty said.

"As soon as we walked out of our first appointment, we both had big smiles on our faces and a weight off our shoulders," Ms Doherty said.

"It makes your life so much happier."

and also

 "It's not about having huge amounts of money and getting advice on how to invest it, financial advice is about achieving your lifestyle goals, whether that's retiring at 55 instead of 65 or buying your first house or your tenth house."

the link again  with the full article

 

You are  welcome to call us on 07 3848 1088 or contact us via our websites. 

We advise you what we would do if we were in your position so that you are in a better position in 3 years time.

John McAuliffe 

Jettison mortgage

We had ‘David & Margaret’ call us after they had been to their bank. Thanx Geoff for the referral to us.

David & Margaret weren’t happy  with the bank’s Statement of Advice’ that ‘all of the products were the bank’s & there was too much insurance.’    

    

At our initial lunch here we listened to this & as we summarised later to them

Lets also remember that the bank considers your ‘liability’ as their asset. Why would they suggest reducing it?

When Margaret corrected David in that the mortgage wasn’t 500,000 ‘it is 498,000 as I looked at it today’ then it suggests to us that the mortgage is a stress to her.

If the bank had read what we read on the completion of David & Margaret’s ‘HW’ then here is what they might have read.

Goals and Objectives

Short Term Goals

1.       You wish to halve your mortgage over the next three years.

2.       ….

Medium Term Goals

1.         Jettison mortgage

2.         ……..

Long Term Goals

1.       Put ‘mortgage money’ into interest bearing investments/equities

2.       ….

 At our age it is great having no debt & when you are in the ‘fatigued fifties’ as they are then debt reduction becomes a priority.

At the lunch we made this suggestion but the bank had run the numbers & they were arguably better off building their supers up. If you have a ‘growth’ profile then earning a higher gross return would show this. However what if another GFC or another 'third in a century' flood .

 Guess where their super were to go.

 Lets allow for some comfort & listen to Margaret.

Margaret & David will be impressed what we project for them as their debt is zero in 2016. 

We also did allow for their Europe trip next July  to see their children doing their OE.

Yes they do have some factors going for them to accelerate the debt reduction

·         They are both over 55

·         They have [almost] sizeable superannuation that could be maximised. Remember that as your super doesn’t pay you an income it is not an asset.

·         The youngest child has just left home & the food bill has reduced significantly.

·         David is on a high salary although there is a whack of wasted taxx to come out to feed the Zombies.

We also allowed for possible mooted Centrelink changes in a year’s time.

We did if only for big brother compliance & to save us from the ‘crows’ recommend some insurance to complete some gaps in case of a stroke or trauma. We will tailor & reduce as the debt goes down & this allows for accelerated debt reduction than our model.

Insurance only gets dearer. Who wants to collect it. We did comment to Stephen who is 60 today that claims are on average 2 years after you drop your insurance. Hence tailoring & reducing but not zero  makes sense.

 Would the bank do that?

Our 1^st cousin said of the health system recently ‘they don’t know’.  Hence a preventive health story is an essential part of our holistic planning. We noted their advt whilst watching the WTA tennis.

As we state to all ‘ our mission is we would do for them what we would do ourselves if we were in their position.’

This week ‘Warren’ went to the net asking for some income protection. As he has 3 children, a mortgage & only earns 90K then he can’t afford what he should have. 

We await his call on 07 3848 1088 or email for lunch here. Warren will need a different strategy.

John McAuliffe