Designing a prosperous retirement

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Business coaching Brisbane

As we live longer and work less, reliance on superannuation alone to provide an income in retirement looks increasingly bleak. Time spent in retirement or at least away from full time work could be up to 35 years.  For many people, time in retirement will equal or exceed time at work.  Financing such a time span will be an enormous challenge, even for the financially astute.

It is hard to imagine anyone being content to stay home for three decades or so.   Retirement should mean that work is replaced by enjoyment of life.  Committed time at work should be replaced by free time at home.  Regular employment income into the retiree household should be replaced by alternative income streams.

In retirement, discretionary spending can rise significantly.  It is a time for trips, holidays, pastimes and generally having fun.  Unfortunately, poor health and the need for aged care can add other significant layers of expense.

For most Australians, the traditional retirement income streams include a pension from a super fund, supplemented by the Age pension via Centrelink.  For the greater majority that won’t be enough.  It may be necessary to build other passive investments and to consider an active investment, such as a business.

However, older people need to be careful that a new business started later in life is not labour intensive.  Nor should it occupy every waking moment.  For those who want to travel as well, it needs to be flexible enough to operate from anywhere in the world.  Therefore, it must have a strong commitment to portable computer technology, instant online communication and internet marketing.

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Come back and tell me I’m wrong

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Business coaching Brisbane

With few exceptions, staying alive is what all of us on Earth want.  It stems from our basic survival instinct.  Our need to survive is hard-wired into our primal being.  But most of us want more than that.  We want quality of life; a more complete enjoyment of our time alive.

Quality of life has many dimensions and generally, it has to be worked at.  Although it is a very subjective and personal concept, there are some common elements, including:

  • A good home
  • Love and companionship
  • Good health & vitality
  • Safety & security
  • Happiness and fun
  • Financial prosperity

In Western society there is no doubt that financial prosperity underpins a quality life.  Although money is not everything, it does provide the means for basic subsistence and discretionary choices.   For example money provides opportunity for higher education and a wider range of repair options for damaged health.

One of the certainties of life is that things will go wrong from time to time.  Whilst we all hope it doesn’t happen to us, it is foolish not to be prepared for the worst case scenario.

From my own experience I can say with certainty that, when something goes wrong, it can be severe and there is very little warning.  One day you’re healthy, next day you’re not.  As my wife so eloquently phrases it, “A rooster one day, a feather duster the next!”

When the good health and vitality we have taken for granted for so long finally breaks down, life can change suddenly.  We are forced into alternatives.  Quality of life quickly reverts to survival mode.  For most people, a reversion to survival mode means trying very hard to stay alive whilst finding the money to live.

On top of that, medical bills can be quite draining even with comprehensive health insurance.   You don’t realise until surgery time that Medicare and top hospital insurance between them will still only cover up to the AMA recommended fee.  Many specialists charge above this level and impose non-reimbursable charges such as booking fees.  It also adds to the out of pocket costs when the help most needed cannot be found locally.

Regardless of whether the afflicted person is the breadwinner or not, the family focus immediately narrows onto saving the life or health of one of its own.  Priorities change overnight!  That which seemed important yesterday becomes totally irrelevant today.

The financial problem that most people face is that there is very little spare money to fight the battle ahead.  The bank account is usually a few thousand dollars at best.   After that, credit cards are maxed out, investments are sold down, personal loans are arranged or money drawn against the home equity.

Not only does financial prosperity come to a grinding halt, it actually goes backwards.

I have never been able to work out why our first instinct is to insure our house, car and boat, all of which are inert and replaceable, ahead of ourselves.  Apparently we can’t live without them, but we instinctively baulk at purchasing a safety net for our family.

Whatever you think about insurance – “Waste of money, premiums to high, or nothing will happen to me”, personal risk insurance serves one purpose and one purpose only.  It provides a war chest of money for those times when life deals one of its unexpected and devastating blows.

So when it happens to you, come back and tell me I’m wrong!

Gary

Business coaching Brisbane

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10 lame excuses for not saving money

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10 lame excuses for not saving money:

  1. I’m too busy to think about it
  2. I have nothing left to save
  3. I have too much debt to put money into savings
  4. I intend to live fast and die young
  5. I want to enjoy the here and now; I might not be here tomorrow
  6. I’d like to save money for a rainy day but it hasn’t rained in months
  7. I’m too young; I’ll do it later when I’m old
  8. I’m old now; it’s too late to make a difference
  9. I save thousands each year and the tax man takes it
  10. I don’t need to save because I’m planning on winning the lottery

For quality business coaching Brisbane call Gary on 0408 756 531

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7 surprises to bring a thriving business undone

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You wouldn’t be the first business owner to believe that running a business somehow negates your need for personal financial planning; and that the growing equity in your business equity is the only superannuation plan you need.

You think that because you own a business, your retirement is completely taken care of.  You assume that your business will provide everything.  There is nothing more for you to do!   On all counts, nothing could be further from the truth.

Running a business is no more than a choice you make in how you earn your income.  Some choose business income; some choose employer income.  Either way, those who take a deeper interest in planning their personal and family financial wellbeing will prosper in the long term.

Furthermore, as a business owner there is an extra layer of planning you should be thinking about.  That is, planning the future of your income-earning and capital-appreciating asset, and protecting the equity in business that you work so hard to build up.

There is no guarantee that your business equity will translate into the retirement lump sum you hope for.  There are just a few of the things that could go wrong and derail your dream:

  1. Adverse circumstances (e.g. litigation, legislative change, customer desertion, obsolescence) force you to sell at a bad time
  2. Your health fails you before you reach your ideal ‘sell out & retire’ scenario
  3. Your business partner dies prematurely and his / her spouse becomes your new unwelcome business partner
  4. You want your children to inherit your business but they are not interested
  5. You don’t structure your business correctly to take advantage of the small business rollover rules
  6. You don’t have a Will to control the bequeathing of  your personal assets or your business ownership and / or control
  7. You have no emergency fund and no liquidity available should something major go wrong

Personal planning and business planning aren’t just esoteric concepts.  They are processes that help you predict, protect, or take advantage of the expected and unexpected things that life throws up.

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How much email marketing is too much?

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This is something I wrestle with personally.  At the moment I am busy promoting my new online MyProsperityForum site.  My target market is risk insurance (i.e. life insurance & income protection) advisers, financial planners and home loan professionals.  I am also about to start a keyword and social media campaign to drive traffic directly to the site.

But back to the email issue!  I am emailing other financial professionals to let them know what a great resource this innovative forum is for them personally as well as the enormous benefits for their clients.

Whilst I don’t want to send emails too often, I do want them to know the benefits of using and referring their clients to the forum.  But how much is too much?

I am reasonably well known in the financial planning and business coaching Brisbane communities so I don’t want my emails relegated to the spam box.   That outcome will only serve to tarnish my good reputation.

But I do want to get my messages across.  For example:

  • Non-financial planning financial advisers are regularly asked questions outside their field of expertise.  MyProsperityForum is a perfect solution.
  • Some people, even clients of financial planners, are personal finance DIYs who are very interested in understanding the many tricky financial planning concepts as they apply to both individuals and business owners.  MyProsperityForum is the ideal solution and a service option not available or offered in the past
  • Many people can’t afford to or are reluctant to consult a financial planner.  Again, MyProsperityForum is a perfect solution
  • A lot of people simply want to ask questions of a knowledgeable professional without any obligation or product push.  There is also a lot of value at MyProsperityForum in seeing what other people ask.
  • People want difficult financial concepts (e.g. personal risk insurance, investment, superannuation, retirement, estate planning) explained in plain English.  MyProsperityForum already has such content uploaded in easy-to-read article form

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Traps in ignoring your own financial planning

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Financial planning is a poorly understood concept that for many people is complex, too expensive and overshadowed by adviser mistrust.  Many avoid financial advisers because they believe that they will be sold a commission based financial product that they don’t really want, without being any better off financially.

So many people turn to family and friends for advice.  Often, they rely on flawed advice, and adopt a simplistic and less-than-ideal approach to household money handling.   The real problem here is that most Australians live from week to week.  It feels ok when things are going well (i.e. “What’s all the fuss about – she’ll be right mate!”), but there are some inherent traps in this approach:

  1. Although there are several basic, universal principles of personal financial planning, everyone has different circumstances; different goals in life; and a different attitude to investment risk.  So what works for one may not be right for another at that time, or indeed ever.   To get your planning right, there’s an order of doing things and none of those things should keep you awake at night.
  2. For many, their potential wealth is being leaked to banks through credit cards.  Ease of access to credit has led to instant consumerism and a shift away from a savings discipline.  The majority of Australians waste the opportunity to grow their wealth by spending everything they earn or, in some cases, by spending more than they earn.
  3. Most people are not prepared for the things that can go wrong, such as retrenchment, accident, or sickness.  One or more of these is bound to happen over the course of an 80-year life.  Without income, most can’t last more than a month without racking up debt.
  4. A whopping 80% of Aussies don’t adequately provide for the future, including retirement.  A lot of financial problems arise with an unexpected death in the family.  For example, two thirds of Aussies don’t have a valid Will, which means an eventual wrestle with State government intestacy laws, which assign money and property according to an unfriendly fixed formula.

The issue for most people is not that they don’t care.  It is that they don’t know.  People are simply unaware of what they don’t know and they don’t know who to trust to find out.  That is why it is essential to get information from someone trustworthy who does know.

Most financial planners out there are scrupulously honest and highly trustworthy.  I am one of them, and after almost 20 years in the industry, I have a large store of valuable knowledge, which I now share at low cost.

I have retired from public practice and started the innovative and unique MyProsperityForum.

It is a low cost way to access a highly knowledgeable financial planner and receive information, ideas, general strategies and guidance.  In the end, it is your choice whether you do it yourself or ask to be referred to an appropriate professional.  A critical element of the forum is that the general advice given is not tainted or biased by selling plans or financial products.  It is a safe place so give it a try.

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My top 10 tips for wealth building

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It makes no difference whether you are considering investing in the stock market or in building your own business.  The only difference here is that stocks and shares are considered to be ‘passive’ investments, while your own business is an ‘active’ investment.  In other words you are hands-on, elbows-deep every day.

  1. Invest in yourself, the best asset you have
  2. There’s no time better than now; it’s never too late to start
  3. Keep your plans simple formed around goals that motivate you
  4. Make a habit out of goal setting, budgeting, saving & investing (repeat)
  5. Adapt and diversify; earn big and live small
  6. In every case fully understand the risks you are taking
  7. Don’t allow opinion, fads or trends to derail you; stay true to your vision
  8. You can never go wrong with quality people, products & services
  9. Know your market; understand the rules; maximise your opportunities
  10. Protect both yourself and your growing wealth; one relies on the other

Future-proof your business

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Business coaching Brisbane

Future-proofing your business means adapting and changing so that your business will remain innovative and competitive.

There are many ways to achieve this.  Just a few suggestions are:

  • Embrace developing technology to enhance the customer experience
  • Make the most of the internet; it is still in its infancy
  • Personalise customer communications (e.g. personally blogging about your business)
  • Personalise the products you sell and / or the customer experience
  • Embrace the concept of business without boundaries
  • Instead of standing still, constantly re-invent your business model
  • As the owner, be very available

What’s happening in the forum?  Find out at MyProsperityForum

What’s happening in the forum?

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There’s plenty going on!

  • Kate got a good solution to her product pricing (am I actually making money?) problem
  • Narelle has started saving for a home deposit more because she has a simple budget tool to use
  • Audrey read one of the many insider articles, ‘How much life insurance is enough’ and realised that she was leaving her two kids unprotected
  • In the meet-up room, Narelle asked Kate to give her more information about her natural pain management products

Ask the most basic of business questions or financial planning questions and get a straight answer.  The best part is – it’s not about product, it is only about expert unbiased advice.

Join MyProsperityForum today and boost your money making skill

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Do you attend too many meetings?

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Business management tips Australia

In my view, there is an inverse relationship between number of meetings and increasing profit.  In other words, more meetings less profit!

A lot of time can be wasted each week with so-called business meetings.  I think meetings that don’t have a direct link to key financial objectives are useless.  They serve little purpose other than making participants feel busy and included.

It has been my observation that universities and public service organisations thrive on them.  Quite often an organisation’s entire decision making system can be based in a system of meetings.

Even though these organisations have to operate inside budgets and pay their way, no individual’s income is directly affected by the meeting outcome.  The only purpose seems to be one of accountability and equity.  That is, everyone knowing what’s happening; everyone having their say and keeping as many people as possible happy.

In the real world, a meeting where the underlying purpose is not somehow profit-driven is unproductive.  No innovative and profit-oriented business in the private sector can stand too many meetings.  In fact, most meetings tend to actively stifle innovation and therefore profit.  The larger the group, the less likely is change.  It called the comfort zone.  It is a worrying trend that this tends to happen when small organisations grow larger.

The only worthwhile business meeting is one where the income of one or both participants depends directly on the outcome.  Anything else is pure and unadulterated shooting the breeze and communication alternatives should be considered.