Three (3) Areas Of SMSF Investment Poorly Done

Whenever I review the investment section of a problematic SMSF, the areas I find that are commonly poorly done are:

The Investment Strategy

Appreciation of risk

Asset allocation

Inadequate Investment Strategy

More often than not, I find the investment strategy is either missing, out of date, or it has been trivialised to the bare minimum necessary to pass an audit. It appears to me to be one of the least respected documents in the SMSF suite.

I find that the investment strategy is rarely the driving force it should be, which is a shame because it represents such a great opportunity to set up the fund for success. Whilst administration and compliance are necessary priorities, it is ultimately the investment strategy that will achieve your retirement goals.

Lack of appreciation of risk

It is common to see an SMSF investment portfolio that is not consistent with the innate risk tolerances of its members. If the trustees have moved away from cash, it is common to see investments that are way too risky for the members. If the members do have an appreciation for the underlying risk, it can mean many sleepless nights worrying about it.

Trustees typically do not fully understand risk, for example:

The risk of not understanding individual comfort zones and tolerances

Risks associated with speculating rather than investing

The risks of holding too much of one asset type, including cash

Risk by not understanding investment correlations

Risk by not understanding the role of insurance in managing investor risk.

So the aim of your Investment Strategy is to pull together investments that work well for you; that are inside the comfort zones of members, without raising stress levels. Paying attention to protection is critical.

Poor asset allocation

From what I see, there is a major gap in know-how when it comes to choosing assets to invest in within the SMSF environment. With no training and little previous experience, trustees find themselves suddenly charged with the responsibility for investing hundreds and thousands of dollars, or even a million or more.

It is little wonder that people tend to hold a lot of money in cash. Trustees I talk to simply don’t know what to do. This is ironic because one of the widely promoted advantages of an SMSF is the wide range of investment possibilities.

How to research, what to invest in, identifying and managing risk are the biggest challenges that SMSF trustees face. However, the trustees who solve the investment conundrum are the ones most likely to achieve their financial retirement goals.

So it is a matter of experience and getting the balance right; a balance that I should point out is different for every SMSF, and varies among members of the same SMSF.

This is general advice only. The purpose of this article is to provide you with education in SMSF investment, which is a difficult area. As a licenced financial advisor, I strongly urge you to seek personal advice based on your individual goals, needs and circumstances, before making any decision about self-managed superannuation.

 

Gary Weigh

Financial Advice or Smoke and Mirrors?

The financial advice industry is one that has lost some respect over the years.  For so long it has been too easy for anyone off the street to do an online course and set up shop.  It has also been too easy for adviser self-interest to interfere with client best interest.  The rogues and the inexperienced have tended to trample the reputation of an entire industry.

Tertiary qualifications, years of experience and good reputation are what you should look for.  Newcomers are green and their knowledge levels are very low, so they tend to focus on financial products.

However, there is a huge difference between product-selling and providing advice that is not product-based.  Genuine financial advisers are generally not sales people.  They focus on personalised strategy and only concern themselves with product when the need appears.  They have an honest interest in guiding people around life’s financial pitfalls, into good financial habits and ultimately towards a better position.

To do this well requires serious tertiary study and years of experience.

Putting you in a better position is not about making you rich.  For most people, that is a dream.  I prefer to work with reality.  Your income and earning potential is largely the result of your own ambition and career choices.  I will show you how to protect your income and how to use it as a base for investment, but I can’t create base income where no means and no will exist.

A case in point – a few years ago, I visited a couple with no children whose combined income was in excess of $300,000 a year.  They lived a high lifestyle and had a substantial amount of personal debt because they spent more than they earned.  They asked me to fix it.  I asked if they had considered spending less, paying off their debt and saving more.  They were horrified.  They told me that my job was to fix it but were adamant that would not involve any change to their lifestyle or spending habits.  I wished them luck and left!

A better position is not only about better investment returns either.  Although I can teach you the fundamental principles underlying prudent investing, all investment is subject to risk, and there is no such thing as a risk-free investment unless you are in cash; and that also loses real value while ever the interest rate is below CPI.

So how else can financial advice help?

Gary WeighMy brand of financial advice is about helping you do what you can to improve, given the position you are in.  It may require solving financial problems, managing risk, and making you aware of possibilities you weren’t aware of.  Ultimately, it is to guide you onto a comfortable path towards your own goals.

To me, part of putting you in a better position is imparting knowledge to you.  So my role is also educational; teaching you what you don’t know and arming you with the skills to improve your financial wellbeing.

So let me give you just three (3) examples of where I fit in (there are many more):

  • How much do you know about superannuation? Probably not a lot and because it’s a difficult area you largely ignore it.  What you don’t realise is that attention to your super can reduce your income tax now and set you up for a tax-free retirement later. It can also host insurance benefits that you can’t otherwise afford.
  • Do you know how to use Transition to Retirement to your advantage? Some people research it but most middle-age people I meet don’t understand it.  What you don’t realise is that government has provided us all with a seriously good opportunity to save more money for retirement, lower personal income tax, and / or reduce working hours leading into retirement.  Why wouldn’t you consider it?
  • How much do you know about Self-Managed Superannuation Funds (SMSF)? I know from experience that the answer is next to nothing, but that hasn’t stopped over a million people starting up over half a million SMSFs in this country.  What you don’t realise is that by using an accountant to set up a fund for you and by handing off the administration to an external service, all you have done is acquired the vehicle and a service contract, but there’s no one in the driver’s seat.  What you are missing is the knowledge and experience to be the effective CEO of your new retirement investment business who is capable of breathing life into the real opportunities offered by the SMSF concept.

My point is that you don’t know what you don’t know.  Financial advice is about showing you what is possible and what you can do in your situation.  It is about guiding you through the maze of rules and demonstrating to you how to use Australia’s financial system legally to your advantage.  In the end, my job is to allow you to make informed decisions for yourself.

The rest is really up to you.  Remember the old saying, “you can lead a horse to water but you can’t make him drink”? You as the person receiving advice must play your part also if you are serious about change and improvement.

Learn more about me personally and the type of advice I give at Gary Weigh & Associates.

protection and estate planning

Basic Protection and Estate Planning

protection and estate planningNo one likes to think about their own incapacity or mortality but estate planning and insurance-planning is not about you.  In the event of something going seriously wrong, it’s about considering the family around you, who must care for you.

In the event of your death, whether premature or not, it’s about leaving clear instructions for those you leave behind; and it also means leaving this world with a clean financial slate.  That is, debt-free.

Consider the following:

  1. What would your family do if you become seriously ill, suffer a traumatic health event, become unconscious, paralysed or lose mental capacity in an accident or even dementia?  As a result of this, you lack the mental capacity to sign documents or make your own financial decisions.  Your family makes enquiries only to find that no one can sign or transact on your behalf without your formal written authority (which you now can’t provide).  Also, you become a financial passenger who no longer earns income and requires ongoing medical, nursing and rehabilitative care.  Most ongoing care is out of hospital and not covered by private hospital insurance.

Checklist 1:

  • If you have a Will, it won’t help in this case because you are still alive. You need more than that.
  • Consider an Enduring Power of attorney so someone you trust can sign on your behalf
  • Consider creating the money you need at the time you need it by arranging income protection and trauma insurance to cover normal living expenses plus the unplanned medical and ongoing care expenses respectively

 

  1. What would happen to your family if you die prematurely from e.g. sudden cardiac arrest, heart disease, one of many forms of cancer, or perhaps in an accident? Let’s assume that the only insurance you have is the small amount of Death Cover in your super.  Your family still has the mortgage or rent to pay but no longer have your regular pay coming in.  You don’t have a Will and you haven’t nominated anyone to receive your superannuation.

Checklist 2:

  • Consider having a Will prepared by a solicitor. Without a Will in Queensland, the Public Trustee will distribute the assets you own according to a formula, regardless of what you would have wanted.  
  • Consider nominating a valid beneficiary to receive your superannuation. All insurance in super is paid by the insurer to its legal owner, which is the trustee of your super fund.  From there it is subject to the laws of superannuation.  Without a binding instruction, the trustee of your super fund has total discretion as to who receives your money. 
  • Consider creating the money you need at the time you need it by arranging sufficient life insurance to pay out debts and whatever additional amount you would like your family to have.

Note that your Will only covers estate assets.  That includes only those assets and property personally owned (i.e. in your name only).  Jointly owned property (e.g. your home) is excluded and your Will doesn’t deal with your superannuation or life insurance unless you deliberately direct the money to your estate by making a written nomination.

So you can see that if you have a business or assets owned by a company or trust, there is more planning to do.

Estate planning, if done hand in hand with insurance planning, gives you the power to create certainty when things go wrong; and also the ability to create the money that is needed at the time it is needed.  The longer you leave it to act, the more likely you are to find out the hard way just how important this all was.

 

This is general advice only. The purpose of this article is to provide you with information and education in a complex area. As a licensed financial adviser, I strongly urge you to seek personal advice based on your individual needs and circumstances, before making any decision about estate planning, superannuation and insurance.

Investment for Beginners

Investment for Beginners

If you are a novice and not sure where to start with investing, please ask me.  I would rather give you general advice and guidance free of charge than know you have charged ahead and lost your money.

Meanwhile, read on and learn about THREE INVESTMENT SCREAMERS that can cause a lot of financial pain.

  • Speculating v Investing
  • Borrowing to Invest
  • Investing only for a tax deduction

Avoiding these three (3) fundamental investment traps will help get you on the path to long term responsible investing and creating long term wealth.

Speculating v Investing

You get a hot tip from a friend and want a piece of the action.  You do absolutely no research and put your money on a ‘sure thing’ underpinned by nothing but hope and faith.  So many people do this and get into trouble by throwing money at money-mirages.  This is not investing; it is speculating, a very dangerous practice.

Borrowing to Invest

This is widely accepted as a traditional investment strategy, so what could possibly go wrong with making an investment using someone else’s money?  Over the years, I have seen so many people get badly burned doing this – even when buying real estate.  Borrowing to invest can appear attractive when market values are rising and interest rates are low, but what goes up always comes down and vice versa.  The financial pain comes when markets turn and the value of the investment drops below the amount borrowed. Years after the GCF, many people are still stuck with ‘white-elephant’ investments and will be repaying very real loans for years to come.   So the moral of the story is that markets are cyclic so plan ahead for changing market conditions.

Investing only for a tax deduction

The very first rule of ‘Investment 101’ is that if you are investing solely for a tax deduction, you are investing for the wrong reasons.  You only have to look around and see how many promoters of tax-effective agricultural investments are still around.  There is a big difference between investing for a tax deduction and responsible investing with an understanding of the applicable tax rules.

The reason I am pointing out these common traps is that it is easy to inadvertently slip into all three traps even when buying real estate.  It is a popular myth that if you buy property you can’t go wrong.

It can go very wrong and often does, mostly because investors become blinded by distractions other than the core quality and true value of the property being purchased, and the real risks surrounding the investment.  Risk is commonly underestimated because of the popular misconception, “It can’t be that risky if everyone is doing it, right?” Wrong! There is risk with every investment, and when you borrow money, your risk is multiplied.   Know this before you start.

Your investment focus should be on research and asset quality.  You should have a realistic view of all of the risks involved for the return you expect.   Always understand your market and the true value of your purchase.  Do your sums, know your limits and align your investments with your own innate attitude to risk.  In other words, invest in a way that is not going to keep you awake at night.

This is general advice and educational information only, designed to increase your general knowledge of investment.  As a financial adviser, I strongly urge you to seek professional advice before making any decision about investment or before making a major financial commitment. As this article suggests, there are many investment choices and which investment is appropriate for you depends entirely on your goals, individual needs and circumstances.  Please contact me for personal investment advice.

Are all Superannuation Funds the same?

Are all Superannuation Funds the same?

Are all Superannuation Funds the same?Definitely not!

They are all different, and I have summarised some the most common types of super in the marketplace with a brief description:

Government Super – if you work in any level of government you will have this type of super.  Some funds offer some great contribution benefits and if you have been in the government for a while, you might still have a Defined Benefit account.  I strongly urge you to seek advice before converting it to an accumulation account.

Industry funds – these are the funds often associated with unionised industries, which means that employees working in these particular industries usually have an account.  Industry funds offer basic superannuation and insurance benefits to a vast number of employees at an affordable price.

A Personal Super Fund – these are retail funds that offer considerably more member control by offering a wide range of managed fund options, plus insurance that can be tailor to your specific needs. Administration and investment fees are a little higher but you get what you pay for.

A Superannuation Wrap – a form of personal super which offers direct investments (e.g. direct shares, term deposits) in addition to a wide range of managed funds.  The administration fees are a little dearer still but the wrap offers the highest level of choice and control, short of moving to a self-managed fund.

A Self-Managed Super Fund – these are the DIY funds usually owned and operated by families.  Up to 4 members are allowed at any time, and every member must also be a trustee, thereby ensuring each member is totally responsible for the fund. SMSFs allow very wide control and influence over investment, taxation and estate planning, but there are some very strict rules to observe, administration to do, and reporting deadlines to meet.

So which super fund is right for you? 

To answer that, you need personal advice.  I don’t promote any type of fund over another.  All funds serve a good purpose to different sections of the superannuation market.  It is about matching an appropriate fund to your individual needs.

Quite often I find that the fund people are in is just fine, but they are simply not doing enough within that fund to make it work better for them.

However, I would give you a few words of caution.  If it is a Self-Managed Super Fund (SMSF) that you believe you want, then I strongly urge you to seek advice.  The reason for the caution is that whilst it might be appropriate to your needs, you can get a lot of things wrong because you are inexperienced.  There is much more to it than just the set-up.  You will need expert guidance through the first couple of years at least, until you get used to it.

This is general advice and educational information only, designed to increase your general knowledge of superannuation.  As a financial adviser, I strongly urge people to seek professional advice before making any decision about superannuation. As this article suggests, there are many choices in the superannuation market and which type of fund to choose depends entirely on individual needs and circumstances.

insurance in super

Do You Have Insurance in your Super Fund? Have a Closer Look!

insurance in superIf you have retail super, industry super, corporate super or you are in a large public fund, then read on because this applies to you.

There are benefits in arranging your life insurance through super, and they are mostly related to lower cost and budget affordability:

  • The cost of the cover is often cheaper because super funds purchase insurance policies in bulk and some funds pass back the benefit of the tax deductions they receive for premiums as a discount
  • Insurance through your super can be tax-effective because premiums are paid from your super account, which is pre-tax income, not your after-tax salary or wage income
  • You can have a basic level of cover for you and your family, even if money is tight
  • It is easy to manage because premiums are automatically deducted from your super account
  • Some funds automatically accept you for cover without requiring a health check

 

However, the greatest misconception is that insurance cover acquired through your super fund is free, particularly if you receive it automatically when you join.  This is definitely not the case.  Insurance through your super fund stills cost money, whether you asked for it or not.

The major limitation of insurance in superannuation is that only (a) life insurance (b) ‘any occupation’ TPD and (c) basic salary continuance insurance are available.   This is because superannuation law governs what is and what is not allowed in super.

The policies that you CANNOT arrange through your super are:

  • Trauma insurance
  • ‘Own occupation’ TPD
  • Agreed value Income Protection with benefits to age 65, plus choice of ancillary benefits. Generally only indemnity style policies with a 2-year benefit period are available
  • Any policy on a ‘level premium’ Only ‘stepped premium’ is available in super

AND

There are several other issues that you also need to be aware of if you are arranging insurance through your superannuation.  These include:

  • Insurance arranged through your superannuation is not owned by you. It is owned by the trustee of your super fund on your behalf
  • The level of cover available through super is often limited. What you receive automatically (as opposed to what you arrange yourself) could be well short of what you need
  • There are some severe restrictions on when, how much, and for how long salary continuance payments can be made to you if you are temporarily disabled and unable to work
  • If you move to a different super fund or your employer’s super contributions stop, your cover will likely terminate. This is not a problem if you hold your insurance outside super.
  • If you have more than one super fund with money in them, you may be paying for insurance in each fund, which may be an unnecessary cost
  • If you do not make a Binding Death Benefit Nomination, or your super fund does not offer binding nominations (many don’t), the trustee of your fund will decide who gets your benefits when you die, and it could be a lengthy and frustrating process. None of this is a problem if your hold your insurance outside superannuation.
  • In some circumstances lump sum benefits can be taxable.

This last point is a biggie!  Here’s why:

  • If you are paid a permanent disability (TPD) payment under 60 years of age, the benefit could be taxable.
  • If you die and your life insurance is paid to someone who is not a defined ‘dependant’ for tax purposes (the most common example is adult children), there could be significant tax implications

Generally, lump sum insurance benefits (life, TPD & Trauma insurance) are tax-free if held outside super.

So here is a tip if you already have, or are considering insurance in your super fund:

  • Consider topping up your super to cover the cost of the insurance premiums so your retirement nest egg is preserved and continues to grow over time. Remember that stepped premiums will rise each year, so your ‘top up’ needs to be reviewed annually.  If the additional contributions are the ‘non-concessional’ type (i.e. after-tax money), you may be eligible for the Government Co-Contribution Payment if your income is in the appropriate range.

General advice warning

The article above is general advice only designed to educate and heighten awareness of superannuation issues. It should not be regarded as personal advice because it does not take into account your personal circumstances, financial situation or specific goals. For personal advice that is tailored to your needs, please call me or consult a licensed financial adviser.

Direct Insurance more expensive says CANSTAR

Finally independent research is here to explode the consumer myth that direct insurance purchased online or over the phone is cheaper than adviser-recommended insurance.  That is not the case.  In fact, direct insurance is significantly more expensive.

Read the Canstar article courtesy of The Sydney Morning Herald at http://www.smh.com.au/money/planning/online-insurance-doesnt-come-cheap-20140829-103y95.html

You probably wonder why this is because surely direct insurance cuts out the middleman (i.e. the adviser).  The reason is that all of the focus on high convenience, few questions and no medicals means that the direct insurer has a large pool of people insured but little information about who is healthy and who is not.  When the health risks of a large group of people are unknown, the insurer does a number of things to make sure that the amount paid out in claims stays well below the premium income.  For example, they increase the price to reflect additional (unknown) risk, and they exclude any pre-existing conditions you have at the time of applying.  So if you have health issues, you can end up paying a lot of money for a policy with low certainty of a claim payment.  For example, if you have a pre-existing diabetes condition when you apply, you won’t be paid on a diabetes-related condition; and there are many serious conditions related to diabetes.  Whilst the direct insurer may not ask too many questions when you apply, they will ask a lot of questions at claim time when you are dead, disabled or seriously ill.  It’s when they go back through your Medicare records that they will find out about pre-existing conditions.

On the other hand, when you purchase adviser-recommended insurance, you provide full health and lifestyle disclosure to the insurer upfront at the time you apply.  It is known as the underwriting process.  It takes a little longer, but this way, the insurer knows precisely the risk you pose to them.  You will then be offered terms at the best price possible having regard to the state of your health.  And you have high certainty of a claim payment provided that you tell the truth.  And in the interests of being fair in my diabetes example above, the underwriter still may vary or deny insurance when you apply, but at least you know immediately and you won’t be paying premiums for insurance cover that will never pay out.

Finally, very few people are asked to do a full medical, mostly because the insurer has to pay for it if they ask for it.  When you apply for insurance, you authorise the insurer to request your medical history from your doctor.  For many people that and a signed application form is sufficient health evidence.  If any medical testing is required at all, it is often just a blood test paid for by the insurer and carried out by a qualified contract nurse in your home or at your work.

I should also add here that many people have had their lives saved through insurance medical testing.  Insurer-requested blood tests and ECGs have identified many potentially serious or deadly conditions.

Request an adviser-recommended quote from me now – income protection, trauma insurance, life insurance, total & permanent disability insurance.  You family might depend on it.

Cheers Gary

Also check out Canstar for independent consumer research on financial products, interest rates and electricity at http://www.canstar.com.au/

General advice warning

The article above is general advice only designed to educate and heighten awareness of insurance issues. It should not be regarded as personal advice because it does not take into account your personal circumstances, financial situation or specific goals. For personal advice that is tailored to your needs, please consult a licensed financial adviser.

 

Call Gary for your free consultation

Nine Questions You Should Ask About Your Super

gary weighSuperannuation is so much more than a low administration fee. We so often see TV ads for union-related superannuation funds, commonly known as industry funds, promoting low fees as if it is the only thing that matters.

It is not surprising, because what you are hearing is a provider of superannuation talk about the product features of their particular brand. Nothing more!

A superannuation provider is not licensed to give advice beyond their own product.

Find out how your super can be made to work well for you using the personal approach of a good financial adviser who specialises in superannuation and, importantly, using one that doesn’t have any bias towards any particular product provider.

Whether you are suited as member of an industry super fund, a retail super fund, a superannuation wrap, or a self-managed super fund depends entirely on your personal circumstance, your financial situation and your retirement aspirations.

Advice comes first! Which type of superannuation you need and which product you might ultimately purchase comes a distant second.

If you think your super is not working for you the way it should, and you are interested in improving it, then you might be interested in some general advice from an adviser who understands superannuation very well.

Whilst fees are important, here is a list of NINE other important aspects of your super to consider if you want your super to be the effective retirement vehicle it is supposed to be:

1. Is your super all in the same fund?

2. Does the fund you are in actually suit your needs from a control, investment management, tax effectiveness, and estate planning point of view?

3. Are you able to replace lost insurance benefits if you change super fund?

4. Do you have enough insurance in your super and is it tailored to your needs?

5. Do you know what to do with a government ‘defined benefit’?

6. Are your investments consistent with your tolerance for risk?

7. Do you understand the tax consequences of your withdrawal options

8. Are you aware that lump sum tax could apply to your benefit if you die

9. Are you aware that by being in the wrong fund that your spouse or young children could miss out on a lump sum tax refund in addition to your benefit if you die?

You have probably never heard of most of the issues I have raised above and, to be fair, they need to be explained to you. But as you can appreciate, superannuation is a complex area and there is so much more that matters besides a low administration fee. The points above are the areas that a good adviser will address to make an enormous positive difference for you.

With a good investment strategy and frequent reviews, your benefit can grow over time and then be repositioned to provide income for you when needed. But there’s much more!

With correct structuring; appropriate contribution and withdrawal strategies, personalized protection and inheritance planning, and an eye for tax consequences, you can potentially save a lot more money over the course of your working life, into retirement, and eventually, beyond death where your descendants safely receive your remaining wealth.

So as well as hearing about super from a superannuation product provider’s point of view, ask about super from a ‘how to make super work for you’ point of view from a knowledgeable adviser’s point of view.

General advice warning

The article above is general advice only designed to educate and heighten awareness of superannuation issues. It should not be regarded as personal advice because it does not take into account your personal circumstances, financial situation or specific goals. For personal advice that is tailored to your needs, please consult a licensed financial adviser.

a man in suit holding a credit card

Tips to Reduce your Credit Card Debt

gary weigh

I find that people with significant credit card debt generally don’t like budgeting.  Most I meet as a financial adviser tell me that they are hopeless budgeters.   What they really mean is – it wouldn’t tell them anything they didn’t already know deep down, and because they don’t know how to change, there seems no point as they would not be able to live within its means anyway. 

Regardless, I still insist on a budget because it shows the depth of the problem and it helps prioritise spending.  After all, my job is to help, not judge!

The reality is people get into trouble with credit cards because they spend more than they earn and the credit card is being used to bridge the gap.  It occurs a lot with lower income earners but I have seen many couples on a combined gross income of $200,000 – 300,000 a year complain to me that they can’t make ends meet.  It is all relative!

When families can’t make ends meet, credit card debt increases and as each month passes, it becomes rising core debt.  Core debt means that the debt is not paid down to zero each month.  It therefore carries over to the next month where it is increased by new debt associated with current purchases.

Typically, this bad habit will continue for a couple of years until finally, at a crippling interest rate of between 15%-20% per annum, the debt eventually grows beyond the capability of the cardholder to manage it.

Growing credit card debt means only one thing – you are spending more than you earn.  Your two choices are simple – either to earn more or spend less (or both).

To reduce existing credit card debt:

  1. Obviously, stop adding more debt to your credit card
  2. Pay as much as you can afford each month as an extra payment in addition to the required minimum repayment, otherwise the number of years required to repay your debt, plus the total amount you will ultimately repay, will quickly blow out beyond your control
  3. To get some breathing space, renegotiate the interest rate on your existing debt either with your own bank, or take advantage of a better offer to transfer the balance to a new bank
  4. If you are a homeowner, consider consolidating your personal debts into your home loan and then increase your home loan repayments.  This would usually lower your total monthly repayments for all debt.  This may or may not be feasible depending on your circumstances, so it is important that you seek professional advice before you take action!
  5. If you are not a home owner, consider approaching your bank and ask them to convert your credit card debt to a personal loan.  Then work hard at paying off the personal loan.  Personal loan interest rates are generally lower than credit card rates.  This will generally lower the interest rate and therefore your decrease your monthly repayments.  This may or may not be feasible depending on your circumstances, so it is important that you seek professional advice before you take action!

Let me be clear:

“Using a credit card is the worst personal finance strategy you can think of!” 

If you have a credit card that is maxed out, or you have more than one credit card, you are either in financial trouble or trouble is looming and you should seek professional advice immediately.

Nobody needs a credit card.  For payment convenience in this cashless society, switch to a debit card where you are spending your own money, and not borrowing and increasing your debt every time you make a purchase.  At least then, when the account linked to your debit card runs out, it is an unmistakeable signal to stop spending.

Gary

christmas bokeh background

My Christmas Gift List

Gary Weigh Financial AdviserI have finished my Christmas shopping without spending $1,000 or running up a credit card debt. This year, more than ever, I am looking forward to Christmas day because I have the following five gifts:

  • I gave up on expensive gifts with no lasting value
  • I have given over to my imagination and creativity
  • I am giving my time and genuine interest to my family
  • I want to give solo friends the opportunity share Christmas with me
  • I feel great about giving charitably to help those less fortunate

As the years pass and the composition of family and friends around the dinner table ever slowly change, I think the best part about Christmas is the light of excitement in children’s eyes, the pure enjoyment of being part of a family, and wonderful memories of Christmas past.

Have a Merry Christmas

Gary

Please make a small donation to Jacaranda Clubhouse Ipswich to help those recovering from mental illness http://www.jacarandaclubhouse.com.au

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