How does David or ‘Rachael’ or ‘Jodie’ or Tanya pay down their 500,000 mortgage?
Yes this is the question we have been asking since we spoke to all four families in recent weeks? They also have families with David having 3 daughters & Tanya & ‘Rachael’ each planning to increase from one son.
Lets revisit Making your dreams come true the six secrets to Financial Freedom to help you realise there is a way out of DEBT faster.
We know that families need at least 5000 per month to live on without any extras such as following Junior Masterchef to Disneyland.
That is 60Kp.a. + after taxx just to meet reasonable basics.
A 500,000 DEBT [i.e. 4 letters] is designed to take 25 years and on a bank website that means 3,695 p.m. @7.5% on a standard variable home loan.
Total interest paid over the loan is 608,486 according to the site.
When we add the 500,000 principal that is a lotto prize 1.1m going to the bank.
Hence the advice we took 30+ years ago to buy bank shares. Profits this year for the big 4 banks have been 6.3+ Billion each. Thank you.
Remember also that DEBT might last longer than the relationship & hence there is much less time if any were to start again.
Hence David or ‘Rachael’ or ‘Jodie’ or Tanya need to earn 105,000 after taxx to survive & to pay down their DEBT in 300 months.
At the end of 300 months what will they have?
They might have paid off the house if they haven’t renovated or moved house or replaced the car several times.
Of course they will have their super. However their super won’t be much as the average retirement lump sum today is only 154K. As David & ‘Rachael’ & ‘Jodie’ & Tanya are 30 to 40 then yes they will have much more. They might even have in today’s numbers another 500K, the governments ‘benchmark’.
So they supplement the aged pension with say 25K p.a. from their super.
Are they all working so hard for only that outcome?
Let’s be very aware that big government makes the rules & super suffers from legislative risk & it is very possible it may be later changed so that it is only used as an income stream.
I.e. no lump sum to pay down the remaining DEBT.
It also has preservation rules & can only be accessed with difficulty e.g. after 26 weeks of Centrelink payments.
Hence David & ‘Rachael’ & ‘Jodie’ & Tanya need to revisit their thinking.
They could always do as Lisa our taxx agent suggests i.e. rent their best friend’s house next door.
Yes that would make their DEBT taxx deductible. However that option would be for very few.
There are others who suggest a SMSF with an investment property in it. We have heard of such in the booming mining areas but what happens when the mine, as they do by definition, is finished. Banks also require a LVR of > 50% for such loans. Remember houses are ‘like spouses they require money & makeup.’
So how do you have the taxx man subsidise your DEBT?
If David or ‘Rachael’ or ‘Jodie’ or Tanya need 104K net of taxx then they must earn a gross 145K. They must pay 34.2kp.a or 855K in Taxx to the ATO over the next 25 years.
What happens when ‘Rachael’ & Tanya take a pregnant pause. Does the bank do similar?
Yes there is a solution to their challenge & it is our PCMS or personal cashflow management system.
It isn’t suitable for many as the above numbers suggest a family income of 150K. We need some saving to capture & maximise.
We don’t like rental property with another big DEBT & do tenants pay the right rent & care for your asset?
Of course most are in this position & it is in their best interest to not leave it until it is too late as we believe this real life case is.
Why not read our ‘Making your dreams come true. The six secrets to Financial Freedom’.
Make it happen & Make a Plan & we have been suggesting this strategy PCMS for 17 years.
Welcome to call us on 07 3848 1088 or email or visit our websites
John McAuliffe
What is it that we do?
An article written by Steve Helmich that I believe is as relevant today as when I first read it in 2009.
Planning that lasts a lifetime
26 March 2009
I want to put it to you that a financial adviser is really a life coach and just like any other coach, their role is to change habits and get better outcomes for the person or people they are coaching.
The only difference is that the value a financial adviser adds can’t be witnessed in just six weeks after following a fitness regime – the rewards pay off over a number of years. It takes discipline and it takes time.
Why is it a well-kept secret that is known to those who have a relationship with an adviser but doesn’t seem to be understood by many industry commentators or critics?
Perhaps the best place to start is by blowing some of the misconceptions out of the water.
The greatest of these misconceptions is that a financial adviser’s main task is to beat the market or to select the next best share to invest in.
This leads many to the question of why people should pay money to advisers in the current environment when asset values are falling.
In reality, I do not know of any adviser who guarantees they can beat the market, and if a adviser promotes that as their value proposition, they are setting themselves up for a fall.
The value and strength of the relationship between a financial adviser and a client is somewhat intangible, but by seeking and taking an adviser’s advice, a family can be set up for life.
The Australians out there who have a close relationship with their financial adviser know exactly what I’m talking about.
For my wife and I, the strength of the relationship with our financial adviser was recently put into perspective when we finished a review of our strategy and despite the fact that our asset values had decreased, my wife turned to me and said, “I always feel good after visiting that office”.
This is exactly what you want from your adviser: peace of mind and confidence in your future strategy.
It is the intimacy of the relationship between clients and advisers that offers great value to clients. Over a period of time, a financial adviser will achieve more for a family than any other professional – the value of their work will span generations.
What does a planner actually do to add value?
Very early in the process an adviser will sit with a client to work out what goals or dreams they want to achieve in life.
Now for many this can be a challenge, especially in a situation where a husband and wife can’t reach an agreement on what the future looks like.
Quite often, the adviser will take on the guise of a counselor or mediator in situations such as this. How do you put a value on this? I can’t think of another profession that actually asks you to think ahead about your life and plan your goals.
After identifying the goals and reviewing the clients’ current financial circumstances, the adviser will set a path to achieve those goals while articulating the risks involved in such a plan, including making sure contingencies are in place. The adviser will also help manage cash flow, minimise tax and facilitate the correct asset ownership for their clients.
It is true that for many, visiting an adviser can be a very emotional and confronting experience.
Imagine being told you have to curb your spending and work to a budget – this isn’t always a message a mature adult likes or needs to hear.
It is this financial discipline that is missing in the lives of many Australians and it often takes hearing the harsh reality of the situation to make people realise the trouble they are in or what they need to do to achieve their dreams. How can you put a value on this?
We often hear about fees, charges and investment returns as being the key inhibitors for people who retire with too few dollars – the truth is that Australians need to contribute more than the compulsory employer superannuation contribution of 9 per cent for a comfortable retirement.
But they often take action in this area too late in life and the compound effect of time cannot make up the shortfall.
A financial adviser helps people plan for their retirement by forecasting exactly how much they will need to achieve a comfortable lifestyle in retirement.
They will then help a client change their ways.
The value of peace of mind
The world we live in is full of instant gratification (mostly on credit) and the value of using a financial adviser has limited appeal instantly.
But in the long run it is the most valuable professional relationship someone can have – it’s life changing.
Despite this, people do not flock to the offices of financial advisers to seek their professional and valuable advice.
Many of the new clients who walk through the doors of our financial advisory practices are referrals from existing clients who have witnessed firsthand the value of advice.
Often people seek the advice of a financial adviser much later in life, but it pays in the long run to benefit from advice early in order to achieve goals and dreams.
Why do only 17 per cent of Australians seek financial advice when there is so much value in it?
Is it the fear of the unknown? Is it the fear of being told things you don’t like to hear? Or is it just the uncertainty attached to the advice process and how much it might cost?
It is probably all these reasons, but the sad fact is that those who don’t enjoy the benefit of having a close relationship with a professional financial adviser during their life will be worse off.
They will most likely never achieve their financial and lifestyle dreams and goals, and in a country like Australia, that should be a crime.
An article we concur with.
Welcome to call on 07 3848 1088 or email info@wealthcoach.net.au
or visit our websites www.wecoachwealth.com.au
John McAuliffe
Planning that lasts a lifetime
26 March 2009
I want to put it to you that a financial adviser is really a life coach and just like any other coach, their role is to change habits and get better outcomes for the person or people they are coaching.
The only difference is that the value a financial adviser adds can’t be witnessed in just six weeks after following a fitness regime – the rewards pay off over a number of years. It takes discipline and it takes time.
Why is it a well-kept secret that is known to those who have a relationship with an adviser but doesn’t seem to be understood by many industry commentators or critics?
Perhaps the best place to start is by blowing some of the misconceptions out of the water.
The greatest of these misconceptions is that a financial adviser’s main task is to beat the market or to select the next best share to invest in.
This leads many to the question of why people should pay money to advisers in the current environment when asset values are falling.
In reality, I do not know of any adviser who guarantees they can beat the market, and if a adviser promotes that as their value proposition, they are setting themselves up for a fall.
The value and strength of the relationship between a financial adviser and a client is somewhat intangible, but by seeking and taking an adviser’s advice, a family can be set up for life.
The Australians out there who have a close relationship with their financial adviser know exactly what I’m talking about.
For my wife and I, the strength of the relationship with our financial adviser was recently put into perspective when we finished a review of our strategy and despite the fact that our asset values had decreased, my wife turned to me and said, “I always feel good after visiting that office”.
This is exactly what you want from your adviser: peace of mind and confidence in your future strategy.
It is the intimacy of the relationship between clients and advisers that offers great value to clients. Over a period of time, a financial adviser will achieve more for a family than any other professional – the value of their work will span generations.
What does a planner actually do to add value?
Very early in the process an adviser will sit with a client to work out what goals or dreams they want to achieve in life.
Now for many this can be a challenge, especially in a situation where a husband and wife can’t reach an agreement on what the future looks like.
Quite often, the adviser will take on the guise of a counselor or mediator in situations such as this. How do you put a value on this? I can’t think of another profession that actually asks you to think ahead about your life and plan your goals.
After identifying the goals and reviewing the clients’ current financial circumstances, the adviser will set a path to achieve those goals while articulating the risks involved in such a plan, including making sure contingencies are in place. The adviser will also help manage cash flow, minimise tax and facilitate the correct asset ownership for their clients.
It is true that for many, visiting an adviser can be a very emotional and confronting experience.
Imagine being told you have to curb your spending and work to a budget – this isn’t always a message a mature adult likes or needs to hear.
It is this financial discipline that is missing in the lives of many Australians and it often takes hearing the harsh reality of the situation to make people realise the trouble they are in or what they need to do to achieve their dreams. How can you put a value on this?
We often hear about fees, charges and investment returns as being the key inhibitors for people who retire with too few dollars – the truth is that Australians need to contribute more than the compulsory employer superannuation contribution of 9 per cent for a comfortable retirement.
But they often take action in this area too late in life and the compound effect of time cannot make up the shortfall.
A financial adviser helps people plan for their retirement by forecasting exactly how much they will need to achieve a comfortable lifestyle in retirement.
They will then help a client change their ways.
The value of peace of mind
The world we live in is full of instant gratification (mostly on credit) and the value of using a financial adviser has limited appeal instantly.
But in the long run it is the most valuable professional relationship someone can have – it’s life changing.
Despite this, people do not flock to the offices of financial advisers to seek their professional and valuable advice.
Many of the new clients who walk through the doors of our financial advisory practices are referrals from existing clients who have witnessed firsthand the value of advice.
Often people seek the advice of a financial adviser much later in life, but it pays in the long run to benefit from advice early in order to achieve goals and dreams.
Why do only 17 per cent of Australians seek financial advice when there is so much value in it?
Is it the fear of the unknown? Is it the fear of being told things you don’t like to hear? Or is it just the uncertainty attached to the advice process and how much it might cost?
It is probably all these reasons, but the sad fact is that those who don’t enjoy the benefit of having a close relationship with a professional financial adviser during their life will be worse off.
They will most likely never achieve their financial and lifestyle dreams and goals, and in a country like Australia, that should be a crime.
An article we concur with.
Welcome to call on 07 3848 1088 or email info@wealthcoach.net.au
or visit our websites www.wecoachwealth.com.au
John McAuliffe
Declutter & Inner Eternal Peace
Declutter & Inner Eternal Peace
Alison who returned from hot air ballooning in Turkey this week said she was in Declutter mode when we offered her David’s glass desks. It was David who left them with us & we are doing his Declutter for him.
Alison has also downsized house as Thomas was reluctant to work in the yard. In fact we commented that those who are now retiring with a rental property are selling as they find the negative cashflow is a negative with their spouse.
Also those who have ticked further are selling down as older couples find the big house is in fact a big chore. Downsizing & decluttering.
How many mini-skips to move?
This is what the retailers are finding at present. I.e. their sales are static because everyone has enough clutter & doesn’t need any more.
In fact Lester, a mortgage broker, recently told us that he is constrained so that he doesn’t provide loans to those which could leave them in financial hardship & have to sell the house.
What he also said was ‘it’s the clutter in the house that forces owners out of their mortgage’.
I.e. less clutter could mean for you less debt & less stress & maybe fewer working years.
Even the RBA could reward this with a 0.25% drop in the cash rate which helps the mortgage holder but not the retiree. Why the RBA drops rates because of the price of bananas only they could answer.
It was interesting to view a bank advertising that at age 70 most have no super left. Here is a bank suggesting save more & of course they want to give you investment advice.
Why is the world so at present? The banks& all knowing governments have brought us to where we are i.e. broke. Have a look at a bank’s share price over the last year.
Would they invest in the bank?
Will that bank planner be there next year or as Maureen stated ‘they could remember her father’s name a day later even though he had invested 750K with them’.
Over the years we have sat around a few kitchen tables & observed that those who have plenty of clutter can’t make the big decisions which go with wealth accumulation.
We suggested to Roger to Declutter before he actions his contemplated renovations. They then maybe smaller. his new borrowings might be smaller. It worked for us.
It has always been an axiom to save 10% but until SGC very few did.
Those who have recently bought into Brisbane property could be sitting on a 6.7% drop in price over the last year.
In fact Kevin who moved from his house 2 years ago had originally asked for 580k & eventually sold for 508k & a drop of 12% on his asking price. He is now very aware that his new mortgage is not reducing because it is in fact too big. He also said the new Mater home that was won along the road from him was advertised to be worth 1.2m & sold for 700K.
When we observe the Euro discussions then it is the bad loans to the beach lovers & those who want to retire at 50 on the public purse that have brought us to near collapse. It’s the big guys who have now need to Declutter their loans by 50%.
Interesting the IMF doesn’t want to do so maybe not a done deal yet. The Red Queen & White Duck might give the IMF another lecture.
Donna said recently shopping at Vinnie’s is where there are some great labels all for < $10.
We have found David’s glass desks invaluable & a serious discount to Freedom. The old truism is that ‘others trash is your treasure’.
There are bargains to be had whether as it be Irish banks as Doug suggested this week or ‘bargains galore’ as some brokers say.
We know Alistair who is selling property in the US which has fallen 40% & maybe you could purchase a town or two there. Others commented that the precious metals are worth considering.
This could all be true if you have decluttered your debts as then you have freedom to play.
This week we meet several who are off to WA. They have some wounds from marriages & with less time they are moving to WA where the pay is up to twice what they are earning here. The catch is that their taxx will be twice as high & unless some wealth coaching they may not be any better off. They also have restarted with bigger debts & new mortgages.
Will they ever learn?.
Recall that ideally we need to have 1 million in capital outside the house to provide the income we need so as we don’t run out at age 70 as the bank suggests.
As we discussed with another David yesterday ‘what most need is a strategy to have the taxx man subsidise the mortgage’.
We must congratulate Ted for achieving ‘ inner eternal peace’.
The Bleus may have got "a poke in the eye" back.
Was the ‘Rainbow Warrior’ mentioned before the final as Don suggested to us on Monday?
Teams achieve their goals when there is wisdom, old heads & free spirits along with self discipline & a skill set. When at some stage in the RWC the Wallabies were ranked world No 2 then no one was blaming Robbie.
We welcome your call on 07 3848 1088 or email or visit our websites as here to coach you through the financial game.
John McAuliffe
Alison who returned from hot air ballooning in Turkey this week said she was in Declutter mode when we offered her David’s glass desks. It was David who left them with us & we are doing his Declutter for him.
Alison has also downsized house as Thomas was reluctant to work in the yard. In fact we commented that those who are now retiring with a rental property are selling as they find the negative cashflow is a negative with their spouse.
Also those who have ticked further are selling down as older couples find the big house is in fact a big chore. Downsizing & decluttering.
How many mini-skips to move?
This is what the retailers are finding at present. I.e. their sales are static because everyone has enough clutter & doesn’t need any more.
In fact Lester, a mortgage broker, recently told us that he is constrained so that he doesn’t provide loans to those which could leave them in financial hardship & have to sell the house.
What he also said was ‘it’s the clutter in the house that forces owners out of their mortgage’.
I.e. less clutter could mean for you less debt & less stress & maybe fewer working years.
Even the RBA could reward this with a 0.25% drop in the cash rate which helps the mortgage holder but not the retiree. Why the RBA drops rates because of the price of bananas only they could answer.
It was interesting to view a bank advertising that at age 70 most have no super left. Here is a bank suggesting save more & of course they want to give you investment advice.
Why is the world so at present? The banks& all knowing governments have brought us to where we are i.e. broke. Have a look at a bank’s share price over the last year.
Would they invest in the bank?
Will that bank planner be there next year or as Maureen stated ‘they could remember her father’s name a day later even though he had invested 750K with them’.
Over the years we have sat around a few kitchen tables & observed that those who have plenty of clutter can’t make the big decisions which go with wealth accumulation.
We suggested to Roger to Declutter before he actions his contemplated renovations. They then maybe smaller. his new borrowings might be smaller. It worked for us.
It has always been an axiom to save 10% but until SGC very few did.
Those who have recently bought into Brisbane property could be sitting on a 6.7% drop in price over the last year.
In fact Kevin who moved from his house 2 years ago had originally asked for 580k & eventually sold for 508k & a drop of 12% on his asking price. He is now very aware that his new mortgage is not reducing because it is in fact too big. He also said the new Mater home that was won along the road from him was advertised to be worth 1.2m & sold for 700K.
When we observe the Euro discussions then it is the bad loans to the beach lovers & those who want to retire at 50 on the public purse that have brought us to near collapse. It’s the big guys who have now need to Declutter their loans by 50%.
Interesting the IMF doesn’t want to do so maybe not a done deal yet. The Red Queen & White Duck might give the IMF another lecture.
Donna said recently shopping at Vinnie’s is where there are some great labels all for < $10.
We have found David’s glass desks invaluable & a serious discount to Freedom. The old truism is that ‘others trash is your treasure’.
There are bargains to be had whether as it be Irish banks as Doug suggested this week or ‘bargains galore’ as some brokers say.
We know Alistair who is selling property in the US which has fallen 40% & maybe you could purchase a town or two there. Others commented that the precious metals are worth considering.
This could all be true if you have decluttered your debts as then you have freedom to play.
This week we meet several who are off to WA. They have some wounds from marriages & with less time they are moving to WA where the pay is up to twice what they are earning here. The catch is that their taxx will be twice as high & unless some wealth coaching they may not be any better off. They also have restarted with bigger debts & new mortgages.
Will they ever learn?.
Recall that ideally we need to have 1 million in capital outside the house to provide the income we need so as we don’t run out at age 70 as the bank suggests.
As we discussed with another David yesterday ‘what most need is a strategy to have the taxx man subsidise the mortgage’.
We must congratulate Ted for achieving ‘ inner eternal peace’.
The Bleus may have got "a poke in the eye" back.
Was the ‘Rainbow Warrior’ mentioned before the final as Don suggested to us on Monday?
Teams achieve their goals when there is wisdom, old heads & free spirits along with self discipline & a skill set. When at some stage in the RWC the Wallabies were ranked world No 2 then no one was blaming Robbie.
We welcome your call on 07 3848 1088 or email or visit our websites as here to coach you through the financial game.
John McAuliffe
How long to go until this Volatility ends?
How long to go until this Volatility ends?
How long to go until this Volatility ends is the question participants in the ‘markets’ are asking at the moment.
That is why we did attend this week four presentations from those entrusted to manage billions of your dollars. Lets listen to those who probably know rather than read the headlines from the sub editors.
Hence we listened to four different fund managers this week & their estimates are we have up to another year of turmoil. This is also what Peter Q said in May.
Why? It is those European debts who have loaned monies to governments who are unable to pay their loans back. The total that European banks need to be recapitalised is 1.6 trillion according to one speaker on Tuesday. I.e. 1.6 x 10¹² .
In the US most banks have done so but not yet in Europe.
Banks too frequently have to be recapitalised which is another reason why they are trading lower as new shares will be offered at a discount to current prices.
We recall buying WBC @ 3.05 in 1980 & then when the late Kerry was wanting to buy them @ 2.50 we were concerned then. What percentage fall was that & what have they returned in dividends since then has been much appreciated?
Our first presentation also known as ‘death by PowerPoint’ opened with a slide of DJ’s opening on Boxing Day. Also now is a great time to buy prestige cars & vineyards.
That was a common theme by the fund managers. I.e. the markets are at a 30 year low. This of course doesn’t imply that they won’t go lower.
We also watch Sky Business & a common theme there is ‘ bearish’.
I.e. there is no great rush to ‘go long’ yet as the trend is still down.
Now is when a monthly averaging in amount is appropriate .
However lets be very aware that deposits in the bank at 6% won’t go to the capital you require to complete the gray lap in style.
Without reproducing the 50 line disclaimer which is at every presentation lets summarise.
• The 2010 – 2011 financial year All Ords return was 12% from 8% growth & 4% dividends.
• From 1983 to 2011 Average growth has been 7.5% with dividends 4% giving 11.5%p.a.
• These are well above bank deposit rates & ‘franking’ would add another 1%.
• As intuition suggests the longer the holding the less risk. There was no period longer than 7 years when returns were negative. This was over any period in last 100 years.
• The forward PEs @ 11 are still below the average of 14.8.
• Developing countries are driving growth & not the tired socialised West.
• Corporate Australian is strong with cash sitting on balance sheets.
• One fund manager participated in 650 company meetings. Does an individual do that?
• This fund manager visited Mongolia which is much closer to China than Australia.
• A selective view on commodities for iron ore, copper & thermal coal & oil.
• Currently Australian banks have lower growth but valuations are attractive.
• There are sound reasons why credit e.g. bonds should be in a portfolio. [legal right, capital position & more predictable income].
• This global income fund earned 9.8% over 1 year & the high yield fund 11.8%.
• Bonds & credit deserve an allocation in your portfolio. [we have suggested previously this to be your age]
• Bonds have a lower volatility with competitive returns.
• Bonds provide diversification & enhance income.
• Bonds provide a less aggressive way to achieve returns.
• The current banking funding risk is NOT the liquidity crisis of 2008.
• There is a slow growth fear due to long term debt
• The G7 countries have debt >70% GNP
• There are options to deleveraging & there are risks.
• Interest rates are dropping here & elsewhere.
• A small cap fund did 23% to 31 August which is in spite of volatility.
These are ‘bullet point’s & all can be expanded. However there is plenty of opportunity other than the bank deposit .
Jarrod the builder on Wednesday compared that the DIY at Bunning’s with the licensed builder is at best playing but most can’t do the serious building.
So too the capital you require for a lifestyle shouldn’t be delegated to DIY.
It’s too important for that.
These fund managers in all cases were as gray as we are.
Hence there is no rush yet to invest but invest we must as otherwise we outlive our money & rely on others. How much do you need for a 30 year holiday?
You are welcome to call on 07 3848 1088 or email or visit our websites
We read today that Robbie was a maths teacher as we were.
We now both coach & have some common background. [yes we did score in front of Miss World although Belinda probably doesn’t remember].
John McAuliffe
How long to go until this Volatility ends is the question participants in the ‘markets’ are asking at the moment.
That is why we did attend this week four presentations from those entrusted to manage billions of your dollars. Lets listen to those who probably know rather than read the headlines from the sub editors.
Hence we listened to four different fund managers this week & their estimates are we have up to another year of turmoil. This is also what Peter Q said in May.
Why? It is those European debts who have loaned monies to governments who are unable to pay their loans back. The total that European banks need to be recapitalised is 1.6 trillion according to one speaker on Tuesday. I.e. 1.6 x 10¹² .
In the US most banks have done so but not yet in Europe.
Banks too frequently have to be recapitalised which is another reason why they are trading lower as new shares will be offered at a discount to current prices.
We recall buying WBC @ 3.05 in 1980 & then when the late Kerry was wanting to buy them @ 2.50 we were concerned then. What percentage fall was that & what have they returned in dividends since then has been much appreciated?
Our first presentation also known as ‘death by PowerPoint’ opened with a slide of DJ’s opening on Boxing Day. Also now is a great time to buy prestige cars & vineyards.
That was a common theme by the fund managers. I.e. the markets are at a 30 year low. This of course doesn’t imply that they won’t go lower.
We also watch Sky Business & a common theme there is ‘ bearish’.
I.e. there is no great rush to ‘go long’ yet as the trend is still down.
Now is when a monthly averaging in amount is appropriate .
However lets be very aware that deposits in the bank at 6% won’t go to the capital you require to complete the gray lap in style.
Without reproducing the 50 line disclaimer which is at every presentation lets summarise.
• The 2010 – 2011 financial year All Ords return was 12% from 8% growth & 4% dividends.
• From 1983 to 2011 Average growth has been 7.5% with dividends 4% giving 11.5%p.a.
• These are well above bank deposit rates & ‘franking’ would add another 1%.
• As intuition suggests the longer the holding the less risk. There was no period longer than 7 years when returns were negative. This was over any period in last 100 years.
• The forward PEs @ 11 are still below the average of 14.8.
• Developing countries are driving growth & not the tired socialised West.
• Corporate Australian is strong with cash sitting on balance sheets.
• One fund manager participated in 650 company meetings. Does an individual do that?
• This fund manager visited Mongolia which is much closer to China than Australia.
• A selective view on commodities for iron ore, copper & thermal coal & oil.
• Currently Australian banks have lower growth but valuations are attractive.
• There are sound reasons why credit e.g. bonds should be in a portfolio. [legal right, capital position & more predictable income].
• This global income fund earned 9.8% over 1 year & the high yield fund 11.8%.
• Bonds & credit deserve an allocation in your portfolio. [we have suggested previously this to be your age]
• Bonds have a lower volatility with competitive returns.
• Bonds provide diversification & enhance income.
• Bonds provide a less aggressive way to achieve returns.
• The current banking funding risk is NOT the liquidity crisis of 2008.
• There is a slow growth fear due to long term debt
• The G7 countries have debt >70% GNP
• There are options to deleveraging & there are risks.
• Interest rates are dropping here & elsewhere.
• A small cap fund did 23% to 31 August which is in spite of volatility.
These are ‘bullet point’s & all can be expanded. However there is plenty of opportunity other than the bank deposit .
Jarrod the builder on Wednesday compared that the DIY at Bunning’s with the licensed builder is at best playing but most can’t do the serious building.
So too the capital you require for a lifestyle shouldn’t be delegated to DIY.
It’s too important for that.
These fund managers in all cases were as gray as we are.
Hence there is no rush yet to invest but invest we must as otherwise we outlive our money & rely on others. How much do you need for a 30 year holiday?
You are welcome to call on 07 3848 1088 or email or visit our websites
We read today that Robbie was a maths teacher as we were.
We now both coach & have some common background. [yes we did score in front of Miss World although Belinda probably doesn’t remember].
John McAuliffe
We wish to confirm that the plans insurer has admitted your Total & Temporary Disablement [TTD] claim
Dear Mr.
We wish to confirm that the plans insurer has admitted your Total & Temporary Disablement [TTD] claim for the period 31 July 2010 to 31 August 2011.
The calculation of your benefit is as follows
Total Gross payment for the period $63,462.75
31July 2010 to 31August 2011
Les PAYG tax $12,753.00
Net Benefit Payable $50,709.75
The amount of $50,709.75 has been deposited into your nominated account.To enable the insurer to further assess your claim please complete the following
Group Salary Continuance Progress Claim for 1 September 2011 to 30 September 2011
Please forward in the self addressed envelope attached.
Yes this is daily news for some person or family & helps do the job when your income ceases due to an accident or illness. In ‘Joseph’s’ case after a ‘minor’ stroke this is a major help in paying the mortgage & meals & all those other needs for the next year with maybe another extra year of payment.
Of course it never makes the ‘if it bleeds then lead’ headlines but huge sums, say Billions, are paid out per annum from the life industry.Hence the ‘What if’ it happens to you or me today?
Will the mortgage be paid?
What about the extra gap payments that the selfish medical system needs?
What about the rates, car bills, school fees, superannuation payments , carer & we could go on.
We welcome you to check out our websites i.e. www.wecoachwealth.com.au or www.wealthcoach.net.au where you can have an estimate on what the premium might be.
However a ‘quoting tool’ like all equipment needs experience & a license & there may be other needs or solutions to your problem.It is generally between 1% to 2% of your income or sum insured.
As our Young travel agent always said ‘if you can’t afford the insurance you can’t afford the trip’.
Welcome to call 07 3848 1088 or email or visit our websites for a Free initial chat.
Is that too hard?
Here to help you if we can & you wish
John McAuliffe
We wish to confirm that the plans insurer has admitted your Total & Temporary Disablement [TTD] claim for the period 31 July 2010 to 31 August 2011.
The calculation of your benefit is as follows
Total Gross payment for the period $63,462.75
31July 2010 to 31August 2011
Les PAYG tax $12,753.00
Net Benefit Payable $50,709.75
The amount of $50,709.75 has been deposited into your nominated account.To enable the insurer to further assess your claim please complete the following
Group Salary Continuance Progress Claim for 1 September 2011 to 30 September 2011
Please forward in the self addressed envelope attached.
Yes this is daily news for some person or family & helps do the job when your income ceases due to an accident or illness. In ‘Joseph’s’ case after a ‘minor’ stroke this is a major help in paying the mortgage & meals & all those other needs for the next year with maybe another extra year of payment.
Of course it never makes the ‘if it bleeds then lead’ headlines but huge sums, say Billions, are paid out per annum from the life industry.Hence the ‘What if’ it happens to you or me today?
Will the mortgage be paid?
What about the extra gap payments that the selfish medical system needs?
What about the rates, car bills, school fees, superannuation payments , carer & we could go on.
We welcome you to check out our websites i.e. www.wecoachwealth.com.au or www.wealthcoach.net.au where you can have an estimate on what the premium might be.
However a ‘quoting tool’ like all equipment needs experience & a license & there may be other needs or solutions to your problem.It is generally between 1% to 2% of your income or sum insured.
As our Young travel agent always said ‘if you can’t afford the insurance you can’t afford the trip’.
Welcome to call 07 3848 1088 or email or visit our websites for a Free initial chat.
Is that too hard?
Here to help you if we can & you wish
John McAuliffe
Do you thank Robbie
Do you thank Robbie?
Yes just maybe Robbie the coach could be a reason that the Wallabies won the Tri-nations for the first time in 10 years. Of course it can always be argued that playing @ home or a new captain or it was a damp ball that contributed to the result.
We certainly have seen some revolving doors recently in the AFL when teams don’t perform & the coaches are marched. Hence there is some correlation between coaches & results & the Arsenal recent result was a one off we hope.
As we do we have recently attended various professional seminars as that is an expectation of ourselves & clients to be able to provide not only the macro picture but also the micro. We could easily expand on each one but it was our last attendance at a technical seminar run by a major organization that really had us thinking.
The presentation had the theme how much better off clients will be after they have had financial advice.
So in the kit for that day which started with a disclaimer was a strategic update, a 160 page superannuation guide, a 46 page pocket guide& a regulatory insurance guide website.
These are all only summaries of Canberra red tape.
Now we used to love detail & our 1st degree is in Pure Maths. However this stuff is pure strangulation. At least with maths the rules doesn’t change.
However this stuff changes daily which is why 80% have no interest in their super as it is out of control.
Canberra is suggesting that clients be ‘player coaches’ & should be able to do their taxx returns on line & they shouldn’t need any coaching on all matters financial.
This could be on their possible largest asset which is their super or their biggest liability which is their mortgage or how do we retire on more than the pension or the ‘what ifs?’ of life.
How often does that work?
Whose benefit is in when the maximum taxx refund isn’t claimed or if there is a better taxx effective way to be paid?
Is there a better solution than a chook raffle after a personal tragedy?
Have you ever filled out a Centrelink form & how often do they want to be updated & what are the consequences?If the fallback is Canberra then that is the solution that only Canberra wants.
As the presentation discussed the major reason for advice is strategic.
One page of the presentation was that strategies are not ‘set & forget’.
• Strategies are meant to optimize your position
• They can be affected by changes in taxx, super & social security. I.e. Canberra
• Strategies can be affected by age, employment status & other variables
• Certainly cashflow affects all families & businesses.
As Robbie coaches it is the big picture which is reviewed on every Monday after the game & how to prepare for the next game. The details are then refined & acted on. As recent Wallaby events have shown there are always variables that should have been handled correctly.
As discussed previously preparation means the outcome should be better.
This means for you that at every financial decision some guidance is wise.
Isn’t your time & your money so valuable & important that you would not like to waste it.
A conclusion also made was that a review every second year did provide an improved outcome compared to those who ‘set & forget’.
I.e. there is a cost to not meet & review. Canberra is suggesting that clients opt in every second year. If they don’t then clients will be generally worse off in end benefits.
We will certainly opt in to opt out should clients opt out.
Peter this week is a believer in focusing on what he can control during times of market turmoil. This means concentrating on buying opportunities, keeping investment costs and taxes to a minimum --.
Other points in the article are
• to maximise super as you have to play by today’s rules
• focus on asset allocation [e.g. you could argue is your industry fund is balanced?]
• controlling the income flow of investments
• retiring latter as assets values have fallen. This means health is essential.
You might note ‘Having a takeaway coffee twice day costs Sydneysiders more than annual electricity bill | is a simple strategy.
Reviewing if your super bats for the other side is another idea when we read of misuse of union funds.
We have just been asked if Sandra was our dentist. As all know the dentist suggests every 6 months. The car requires a service every 6 months & if we recall correctly where Robbie’s grandstand is they require ‘road worthies’ every 6 months. Coaches need to on the training paddock with the players.
We suggested after the Tri Nations that maybe Robbie out coached the All Black coaches.
This week we have had very useful reviews which have generally settled any doubts.
Any communication is good & no communication builds up the negatives.
If you ‘are stuck’ & want to improve your financial game then you are welcome to call us on 07 3848 1088 or email us or visit our websites.
We promise that your time won’t be wasted & you will know more about your money.
It costs not to contact us & we are non- aligned & servicing clients for 27 years.
John McAuliffe
Yes just maybe Robbie the coach could be a reason that the Wallabies won the Tri-nations for the first time in 10 years. Of course it can always be argued that playing @ home or a new captain or it was a damp ball that contributed to the result.
We certainly have seen some revolving doors recently in the AFL when teams don’t perform & the coaches are marched. Hence there is some correlation between coaches & results & the Arsenal recent result was a one off we hope.
As we do we have recently attended various professional seminars as that is an expectation of ourselves & clients to be able to provide not only the macro picture but also the micro. We could easily expand on each one but it was our last attendance at a technical seminar run by a major organization that really had us thinking.
The presentation had the theme how much better off clients will be after they have had financial advice.
So in the kit for that day which started with a disclaimer was a strategic update, a 160 page superannuation guide, a 46 page pocket guide& a regulatory insurance guide website.
These are all only summaries of Canberra red tape.
Now we used to love detail & our 1st degree is in Pure Maths. However this stuff is pure strangulation. At least with maths the rules doesn’t change.
However this stuff changes daily which is why 80% have no interest in their super as it is out of control.
Canberra is suggesting that clients be ‘player coaches’ & should be able to do their taxx returns on line & they shouldn’t need any coaching on all matters financial.
This could be on their possible largest asset which is their super or their biggest liability which is their mortgage or how do we retire on more than the pension or the ‘what ifs?’ of life.
How often does that work?
Whose benefit is in when the maximum taxx refund isn’t claimed or if there is a better taxx effective way to be paid?
Is there a better solution than a chook raffle after a personal tragedy?
Have you ever filled out a Centrelink form & how often do they want to be updated & what are the consequences?If the fallback is Canberra then that is the solution that only Canberra wants.
As the presentation discussed the major reason for advice is strategic.
One page of the presentation was that strategies are not ‘set & forget’.
• Strategies are meant to optimize your position
• They can be affected by changes in taxx, super & social security. I.e. Canberra
• Strategies can be affected by age, employment status & other variables
• Certainly cashflow affects all families & businesses.
As Robbie coaches it is the big picture which is reviewed on every Monday after the game & how to prepare for the next game. The details are then refined & acted on. As recent Wallaby events have shown there are always variables that should have been handled correctly.
As discussed previously preparation means the outcome should be better.
This means for you that at every financial decision some guidance is wise.
Isn’t your time & your money so valuable & important that you would not like to waste it.
A conclusion also made was that a review every second year did provide an improved outcome compared to those who ‘set & forget’.
I.e. there is a cost to not meet & review. Canberra is suggesting that clients opt in every second year. If they don’t then clients will be generally worse off in end benefits.
We will certainly opt in to opt out should clients opt out.
Peter this week is a believer in focusing on what he can control during times of market turmoil. This means concentrating on buying opportunities, keeping investment costs and taxes to a minimum --.
Other points in the article are
• to maximise super as you have to play by today’s rules
• focus on asset allocation [e.g. you could argue is your industry fund is balanced?]
• controlling the income flow of investments
• retiring latter as assets values have fallen. This means health is essential.
You might note ‘Having a takeaway coffee twice day costs Sydneysiders more than annual electricity bill | is a simple strategy.
Reviewing if your super bats for the other side is another idea when we read of misuse of union funds.
We have just been asked if Sandra was our dentist. As all know the dentist suggests every 6 months. The car requires a service every 6 months & if we recall correctly where Robbie’s grandstand is they require ‘road worthies’ every 6 months. Coaches need to on the training paddock with the players.
We suggested after the Tri Nations that maybe Robbie out coached the All Black coaches.
This week we have had very useful reviews which have generally settled any doubts.
Any communication is good & no communication builds up the negatives.
If you ‘are stuck’ & want to improve your financial game then you are welcome to call us on 07 3848 1088 or email us or visit our websites.
We promise that your time won’t be wasted & you will know more about your money.
It costs not to contact us & we are non- aligned & servicing clients for 27 years.
John McAuliffe
Our one is smaller than your one!
Our one is smaller than your one!’ is the inference that some advertising regarding your superannuation fees makes.
But that is only part of the story.
What about the returns of the funds ,say balanced or growth or other, you are invested in.
Just maybe they too are smaller than our one.
It is usual to declare that ‘our one is bigger than your one ‘& this they have not been doing so.
So as is usual the big guys tell the biggest furbies.
What is of concern to you is the net return to you after fees.
It is the return that matters.
They may have on their sites the facility to compare fund fees.
However they do not have the facility to compare your net returns of the thousands of funds after fees have been deducted.
These returns can be calculated over various time frames which can provide you with a fair comparison on how your net fund return is performing.
So what is available.
We have the facility to compare funds types, many markets & many individual portfolios for you.
We have available the features & benefits comparison of 190 Australian funds which are the major industry, corporate, government, retail personal & employer funds.
This comparison can provide dollar for dollar comparison based on investment options & platforms.
A report of your fund comparison can be printed off.
Just suppose for the moment that your fund returns are smaller than others available. What is that going to cost you over your remaining working life.The market & competition is reducing fees between funds but it doesn’t do that for funds. That is where a fund comparator could be very worthwhile for you.
It may be very worth
while to have your fund, be it industry or a bank or any other fund compared. This will at least provide some peace of mind for you as it could even be your most important asset.
Of course there is more to it than just comparing funds. Maybe some other coaching & financial advice may leave you better off.
It is too important not to call us & compare your funds or not listen to advice or not make a plan.
Welcome to call us on 07 3848 1088 or email or visit our websites
John McAuliffe
But that is only part of the story.
What about the returns of the funds ,say balanced or growth or other, you are invested in.
Just maybe they too are smaller than our one.
It is usual to declare that ‘our one is bigger than your one ‘& this they have not been doing so.
So as is usual the big guys tell the biggest furbies.
What is of concern to you is the net return to you after fees.
It is the return that matters.
They may have on their sites the facility to compare fund fees.
However they do not have the facility to compare your net returns of the thousands of funds after fees have been deducted.
These returns can be calculated over various time frames which can provide you with a fair comparison on how your net fund return is performing.
So what is available.
We have the facility to compare funds types, many markets & many individual portfolios for you.
We have available the features & benefits comparison of 190 Australian funds which are the major industry, corporate, government, retail personal & employer funds.
This comparison can provide dollar for dollar comparison based on investment options & platforms.
A report of your fund comparison can be printed off.
Just suppose for the moment that your fund returns are smaller than others available. What is that going to cost you over your remaining working life.The market & competition is reducing fees between funds but it doesn’t do that for funds. That is where a fund comparator could be very worthwhile for you.
It may be very worth
while to have your fund, be it industry or a bank or any other fund compared. This will at least provide some peace of mind for you as it could even be your most important asset.
Of course there is more to it than just comparing funds. Maybe some other coaching & financial advice may leave you better off.
It is too important not to call us & compare your funds or not listen to advice or not make a plan.
Welcome to call us on 07 3848 1088 or email or visit our websites
John McAuliffe