10 Tips to Put Your Financial House In Order for 2017Hello , Happy new year and I hope that 2017 is a bright and prosperous year for you. As we start the year it’s an opportunity to start afresh. It’s a great time to set new financial goals or review your existing ones to see if they are still meaningful and relevant to you. 10 Tips to Put Your Financial House In Order 1.Re-visit Your Goals (or if you don’t have any set some) Make sure your goals are S.M.A.R.T – specific, measurable ($), achievable, relevant (to you) & time bound. Remember, if you set clear goals it helps clarify in your mind what’s important to you and what you’re looking to achieve. 2. Be Strategic & Plan Having a plan to achieve your goals greatly increases your chance of success! Remember to celebrate as you reach your milestones and goals. Rewarding achievement is important in re-enforcing the right behaviour. 3. Review/Setup Your Lifestyle Budget & Live within Your Means! Most of us dodge this one because either we’d rather watch paint dry or we don’t like what we’ll find. A useful way to get started is to use one of the many budgeting applications available – e.g. MoneyBrilliant (press button below) which even has a free version. It’s easy to use, will quickly give you 3 months history of your spending as a base line for setting your budget, help you work out where you’re able to save money and re-direct this towards achieving your goals. I was amazed when I realised how much I was spending a year on buying coffee every day. 4. Review Your Debt Plan (for those who have debt) As Albert Einstein once said… “compound interest is the eighth wonder of the world. Those who understand it, earn it, those who don’t, pay it.” Make sure your debt is structured to meet your needs and that you have a plan to pay it off within a time frame. I’m principally talking about “non-deductable” debt e.g. credit cards, personal loans, home loans etc. Consolidating your debts may reduce the amount of interest you pay, help you pay off your debt faster and allow you to start saving and investing earlier. Most of us spend time on both sides of the “compound interest scales" – i.e. borrowing and investing. If you borrow $500,000 to buy a home at 5% interest and re-pay the loan over 30 years you’ll pay over $460,000 in interest – that’s a lot. If you can repay the loan over 20 years you’d pay just over $290,000 in interest. That’s a difference of $170,000 in interest. Talk to your mortgage consultant about whether your current debt arrangements are still competitive in the current market place. 5. Have a Savings Plan & Invest the Proceeds This is the other side of the compound interest scales - the “earning side”. Any savings plan needs to be considered in conjunction with your “Debt Plan” (4. Above). If you’re able to save regularly and invest that money for the long term then compound investment returns, with the aid of a sound investment strategy, will do its work to grow your wealth but you need to be patient - e.g. if you invest a sum of money, achieve a 7% p.a. return which is reinvested, then compound interest will double the initial amount in approximately 10 years. Our teenage son recently started working a weekend job and has a super fund account so the power of compound interest will be working away at growing his super every day for the next 50 years! 6. It’s Never Too Early to Plan for Your Retirement Having a plan puts you in control of your retirement rather than being a passenger. It helps you take advantage of the tax concessions superannuation provides, helps you minimise tax and benefit from the power of compound investment returns. If you’re not on track for retirement then you have time to make changes and improve your situation. Once you retire you have to work with what you have! 7. Make Sure You have Money for a Rainy Day From time to time things pop up and you need to access extra funds quickly. Having funds set aside for life’s emergencies allows you to be better prepared and can help you sleep better at night. 8. Review Your Wealth Protection Plan If you’re not retired, make sure you have the appropriate insurances to meet your financial needs should you be unable to work temporarily or permanently. We often undervalue what our future income earning potential is and under estimate the financial implications if we were unable to earn our income through to retirement. 9. Review Your Estate Plan Make sure that your wills, powers of attorney and enduring guardianships are up to date and accurately reflect your wishes. If you’re not sure, talk to your solicitor. 10.Give Back to Your Community I’m sure most if not all of you are actively involved in various ways in your local community. Our involvement and the opportunity to give back benefits everyone. Volunteering Australia in its April 2015 “Key Facts and Statistics about volunteering in Australia” noted that volunteers are happier, healthier and sleep better than those who don’t volunteer – doctors should recommend it! If you enjoyed our “10 Tips” feel free to share it with friends, family and collegues by clicking on the "Forward" button at the end of this email. Investing In 2017 Dr Shane Oliver, Head of Investment Strategy and Chief Economist at AMP Capital provides his view on the impact of Trump on markets in his article “The Fed Hikes & Trump Stimulus in 2017 - Implications for Investors & Australia”. Please click on the button below to view the article. Changes to Superannuation & Age Pension Asset Test As discussed in our December Newsletter, click on the button below for a summary of the changes. Like to know more? If you would like to find out more on the areas covered in this Newsletter or would like to discuss other financial planning needs or challenges please contact me on 02 6685 8867 or 0434 210 153. Know Someone Who Could Benefit from Our Advice? We really enjoy working with you and look to work with others like you to help them reach their financial goals and make their financial life simpler. Your family, children, friends or colleagues may value our services just as you do! For that reason, we look to invite our clients to refer others to us. When you refer people to us, we introduce them to our practice in a non-obtrusive way. Our initial meeting is complimentary with the aim of discussing their financial goals, aspirations, challenges and how we can add value to them. Best Wishes for the year ahead, Chris Whiteford, Adv Dip Fs (FP), CA, BEc (Accounting) Principal | Aurora Financial Planning Authorised Representative of Charter Financial Planning Limited ABN 35 002 976 294 AFSL 23665 Note: Any advice contained in this document is general in nature and does not consider your particular situation. Please do not act on this advice until its appropriateness has been determined by a qualified financial adviser. Whilst the tax implications have been considered we are not, nor do we purport to be a registered tax agent. We strongly recommend you seek detailed tax advice from an appropriately qualified tax agent before proceeding. ContactP: (02) 6685 8867 M: 0434 210 153 2/10 Brigantine Street, Byron Bay NSW 2481 Lvl 1, 95 Tamar Street, Ballina NSW 2478
Aurora Financial Planning Pty Limited (402127) ATF Aurora Trust ABN 73 958 338 024 trading as Aurora Financial Planning is a Corporate authorised representative of Charter Financial Planning Limited ABN 35 002 976 294, Australia Financial Services Licensee Licence number 234665. If you no longer wish to receive direct marketing from us you may opt out by calling us on the phone number under our contact details. You may still receive direct marketing from AMP as product issuer, bringing to your attention products, offerings or other information that may be relevant to you.If you no longer wish to receive this information you may opt out by contacting AMP on 1300 157 173. This document contains general advice only. You need to consider with your financial planner, your investment objectives, financial situation and your particular needs prior to making any strategy or products decision.
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