Introduction

Securing Your Financial Future?

What does financial planning really mean for you? What’s important to you about preparing your financial future?

These are the essential first questions when I work with a new client. Common answers include ‘freedom’, and ‘security’. But to each of us, those words have a personal meaning.

For some, freedom could mean not having to work past a target retirement date. For others, it could mean having the resources to follow the Formula 1 Championship from country to country each year, or the Golf, or … (insert your passion here).

For some, security may mean simply not retiring broke. For others, it may mean future security for our family, both financially and in terms of education and other opportunities.

Each one of us has a different set of objectives in life, and we need to call upon various resources to achieve those goals - good health, family support, financial resources, and time. In this respect, financial planning is like project management for your finances. Our ‘start point’ is where we want to be in the future, and we work backwards from there to build a plan, putting together the steps we need to take to achieve that.
Alice: “Would you tell me, please, which way I ought to go from here?” “That depends a good deal on where you want to get to,” said the Cat.

How Well Do You Sleep At Night?

A while ago, at his first financial review after setting up a savings plan, a client of mine said to me, “You know Roy, it’s been terribly hard adapting my lifestyle to the amount I’m saving each month. I’ve had to make sacrifices, and had less to spend on treats and going out. But I’ll tell you what, I’ve never slept so well in years.“

Let’s think about that for a moment - good financial planning often means making some sacrifices now, so that we don’t have to later in life. Even if we have a high income right now, it’s too easy to become accustomed. That’s why, whatever our current income, we should probably be putting something extra away every month, to reduce the chance of an income shock sometime in the future.

And if we're already wealthy, retired, or approaching retirement, then it's even more important to make your financial resources work for you.  We need a plan.

As a financial advisor, it’s my job to help you sleep well at night. But I can’t do it alone…

Not Rocket Science

There’s no secret to building wealth for the long term. And it’s certainly not rocket science. It boils down to only three essentials:
  • Be Disciplined - religiously set aside part of your income each month, and part of your annual bonus too;
  • Make Your Money Work Hard For You - don’t be satisfied with bank rates that barely keep up with inflation, have a long term investment plan;
  • Make Time Work For You, Not Against You - compound growth really is an incredible force, but for it to work you actually need to be saving!
You’ll notice that only one of the above factors - making your money work hard - is the responsibility of your financial advisor. The other two - discipline, and starting early enough - are down to you.

There’s a lot of mumbo jumbo spoken in the financial industry; much of it is nonsense. It’s no coincidence that the most successful investors - such as Warren Buffet - are renowned for two things, (i) taking a long term view, and (ii) having an easily understood and down-to-earth investment policy, that can be described in just a few sentences.

I call it ‘The Science Of Financial Common Sense’.

Now, we may not all have a few billion dollars in loose change, but I work with clients every day to help them make good decisions now, so that sometime in the future they’re in a position where they never need to worry about money again.

If Not You, Who?

I’m a firm believer that nobody is more motivated than you to look after your finances, and plan for your future. It’s my job to help you do that, in a transparent and straightforward fashion.

Popular Posts

How to Read a Fund Fact-Sheet

Image
Has your adviser given you a factsheet on a recommended fund, and you need to understand what the terms mean? If so, read on … The fund factsheet is an essential document for the private investor. Unfortunately, the information contained in a factsheet - and the way it is presented - is not controlled in the same way as it is in a fund prospectus (a prospectus is a legal document). In essence a factsheet is marketing literature. Only a tiny fraction of investors ever read the formal prospectus for a fund, that’s why it’s especially important to be able to read a fund factsheet correctly, and if necessary to read between the lines. Key Contents Of A Factsheet Most fund factsheets will contain some or all of the following: Fund Name Many funds are commonly referred to by a short or abbreviated version of the full fund name. Hence it’s important to make use of the identifying codes (see below). Fund Management Company & Domicile The fund management company is structured and reg
Read more

Understanding Compound and Annualised Growth

Image
Across fund manager houses, there is little standardisation of how performance figures are presented on fact sheets. Percentage returns are usually presented as either (i) discrete (or calendar) annual, (ii) cumulative (for example a total return figure for 3 years or 5 years) or (iii) annualised (the equivalent annualised return for a period such as 3 or 5 years, sometimes called compound annual return). This tutorial shows you how to convert from discrete annual performance figures, to cumulative or annualised figures, over a period of your choice. As an example, we’ll look at some USD fund performance data presented in an October 2010 factsheet. The performance data are presented to us in a very clear way, but may not be the complete picture we are looking for. The table directly above shows the discrete annual returns - ie. net of fees the fund delivered 7.46% in 2009, -4.90% in 2008, 9.82% in 2007, etc. But let’s suppose you ask yourself (or your advisor) “What was the total growt
Read more

Tax Free Savings Plans for Australians?

Image
Question: How can returning Australians (and expats moving to Australia) make MASSIVE tax savings by using offshore investment bonds and investment-linked life policy wrappers? Answer: Set it up while you’re an expat working abroad, and keep it running at least ten years (even if you go back home) for maximum tax benefits. (Note: this article is relevant to expatriate Australians working in Singapore and other overseas locations, as well as other nationalities who may be moving to Australia in the future.) Click to download a copy of this information in PDF format. Background - Repeal of Foreign Investment Fund legislation For several years the Australian Tax Office (ATO) had very defined, and perhaps harsh, rules for how foreign insurance bonds were treated in respect of capital gains for tax residents in Australia. In effect, these tax wrappers were treated in a ‘look through’ manner and holders were liable for tax on actual gains made or at a deemed rate set by the authorities
Read more

British Expat? Here are the Huge UK Tax Benefits of an Offshore Investment Plan...

Image
Would you like to maximise the tax planning benefits of being a British expat abroad? Read on for a summary of some key reliefs and allowances available from the HMRC tax man… (Note: this article is relevant to British expatriates working in Singapore and other overseas locations, as well as other nationalities who may be moving to UK in the future.) Click to download this information in PDF format. Summary of Tax Benefits of an Offshore Investment Plan Under HMRC tax rules for ‘ foreign ’ investment bonds and investment-linked life policies have additional tax planning benefits compared with their domestic equivalents. The purpose of this article is to briefly highlight the most important. The content is not intended to be specific tax advice of any kind, and rules can change at any time. Everyone’s tax situation is unique and you should consult a qualified tax accountant regarding your own circumstances. 5% withdrawal allowance Time apportionment reduction Top slicing relief
Read more

Mobile Phone Screens Are Getting SMALLER!

Image
If you bought a “6-inch” screen phone this year, it will have a SMALLER screen than the “6-inch” screen phone you bought two years ago.  Here’s why. Call me old-fashioned (or just old), but I spend a lot of time reading stuff – articles, charts, and data – on my phone.  And I mean actually reading it – not ‘skimming’ through an article while my thumb is continually scrolling the page upwards. A ‘Full HD’ screen is 1920 x 1080 pixels – which is nice for movies, and gives an eye-friendly ‘book page’ ratio of 16:9.   This has been the standard screen ratio of mobile phones for several years, up to the last year or so, when suddenly manufacturers have switched to a 18:9 ratio  (which is 2:1 by the way… no idea why they call it 18:9, duh).   For me, 16:9 is perfect for reading text.  2:1 isn’t – it’s too thin and narrow.   Supposedly, manufacturers have switched to this format because phones with skinnier screens fit into our pockets better, and are more easily used with one hand.   They h
Read more

Stroke Victim Trapped in UAE Four YEARS Because of Debts

Image
Malcolm Munroe, from Manchester in UK, built a thriving construction company in Dubai. In 2013, he suffered a stroke, and was hospitalised at Rashid Hospital. He was immobile, and breathing through an oxygen tube. Because he couldn’t work, his business went bust owing debts. The Dubai courts sentenced him to a three-year jail sentence . He didn’t go to prison, because he needed around-the-clock care in hospital. But neither could he service his debt. He was trapped in Dubai . Finally Home The kindness of others led to him finally coming home. A healthcare volunteer in Dubai spent over a year communicating with Mr Munroe’s debtors, to explain his situation and beg for his debts to be forgiven. Another medic from Manchester arranged for Mr Munroe’s return to the UK, and thousands of pounds was donated by well-wishers via a crowdfunding site to cover costs. His family finally welcomed him ‘home’ (the Salford Royal Hospital) in May 2018, where he remains (as at June 2018) under twenty-
Read more

How to Manage Currency Risk in your Investment Portfolio

Image
Introduction To some degree, currency risk is embedded in the portfolios of every international investor. So it’s surprising that such an important topic is often ignored, mismanaged, or misunderstood from both outside and inside the financial planning industry. Given that global currency movements are prominent in the headlines right now, it seems like good timing to have a quick review of currency risk, and safety-check that the currency exposure of our personal investment portfolio is in line with our objectives. What Is Currency Risk and Where Does It Come From? Most people who live and work internationally have experienced first-hand the impact of positive or negative currency movements; this is currency risk (also called exchange rate risk). Maybe you’re sending money home each month to pay your mortgage, and payments are easier than before because you get paid in a stronger currency. Or maybe your child wants to attend university in a country whose currency has appreciated again
Read more

Dollar Cost Averaging

Image
How Regular Savings Create Gains From A Falling Market Dollar Cost Averaging is a strategy in which an investor places a fixed dollar amount (or indeed any other currency) into a given investment such as a unit trust, on a regular basis. The investment generally takes place each and every month regardless of what is occurring in the financial markets. As a result, when the price of a given investment rises, the investor will be able to purchase fewer units. When the price declines, the investor will be able to purchase more units. Millions of investors around the world employ a dollar cost averaging strategy because it offers the following benefits: It’s an attractive option for investors who want to contribute to their investment portfolios on a regular basis. It eliminates the issue of ‘market timing.’ As a result, an investor’s returns will be determined more by the overall trend in a given fund as opposed to the investor’s specific entry price. In addition, it helps investors reduc
Read more

What Can Bitcoin Teach Us About Retirement Planning?

Image
So, you’re in the pub one evening, and a friend tells you about some fancy ‘investment’ called cryptocurrency. It all sounds a bit fishy. “I’ve been getting eight percent growth per month”, he says. You do the maths on your phone… $100 would become $108 after the first month. Then $117 after the second month. Then $126 the third. By the end of a year, it would be $252. That’s an annualised growth rate of 152% per annum. “Ok. Tell me more”, you say. You’re still a bit sceptical, but you drop $100 into the crypto. ~ ~ ~ A month later, you’re back in the pub. “What do you think?”, says your friend. “Not bad, I’m up seventeen bucks”, you say. “Well, I’ve been putting in a thousand a month. I started ten months ago. My investment is now worth $15,650. Make hay while the sun shines, my friend!” ~ ~ ~ You get it. There’s an opportunity here. Your drinking buddy is onto something. That evening you go online and look through all those old bank accounts you’ve forgotten about. You manage to scra
Read more