Top 11 Disciplines for Financial Success

  • Spend less than you earn

champagne taste on a beer budget?

  • Pay down non-deductible debt first

Any debt that doesn’t make you money or create your wealth should be paid down first. Start repaying your store and credit cards and personal loans then your home loan BEFORE your investment debt. For every $5,000 racked up on your credit card, you are affecting your property borrowing capacity sometimes by about $30,000 or more.

  • Pay off your highest interest bearing credit card fast

Paying off a credit card with a 27% interest rate will allow you to feel awesome. When you apply your existing payment that was previously used to pay off the high interest rate card to another card debt, watch the balance drop significantly in a much shorter time frame.

  • Think carefully before taking on any new (or bad) debt

(including credit cards, Afterpay/Zip Pay, personal or car loans). Not every 0% interest (or low interest) rate is what it seems. Always check with your financial adviser (us) first, BEFORE taking on any new debt. If you start to shop around yourself, you could very well damage your credit rating and end up not being able to borrow at all for a longer period of time.

  • Spread your indulgences over a longer time frame

Yes, you need to be rewarded for your hard work and discipline. So when you DO indulge, spread it across the year or over several months to take advantage of maintaining your budget, cash flow and to reduce any more financial damage.

  • Revisit the way you are using and spending your money often

Sometimes we drop out of good habits. Don’t beat yourself up, just jump back into the flow and get cracking again.
Invest in good quality objects/clothing that will last as opposed to grabbing possessions in sales that you will only use on a few occasions or perhaps never use at all. Quality over quantity is a good mindset to have in the world of saving, finance and investing.

  • Invest in good quality objects/clothing that will last

as opposed to grabbing possessions in sales that you will only use on a few occasions or perhaps never use at all. Quality over quantity is a good mindset to have in the world of saving, finance and investing.

  • Prepare for life’s unexpected financial events.

Have a rainy day account to avoid upsetting your plans. You don’t need any excuses to stop your progress and results.

  • Don’t be afraid to ask for help.

BUT – be careful who you listen to Sometimes those who give us advice are the ones not following their own advice or have little knowledge and/or success themselves. Remember, we are only a phone call away.

  • Be positive about the future

What we think about comes about, so be careful what you focus on. Looking at your debt will bring more debt. Look at your equity and asset growth instead!
Educate yourself, then take massive action “To know and not do is really to not know.” Stephen Covey. There is a lot to do to achieve financial success. Don’t try it alone.

Call us to arrange a catch up. We can discuss your personal needs and help you get on track financially.

Technology has changed the way we use and value money.

Apart from all the physical, emotional and family effects, mobile technology has changed the way we use and value money.

We live in a world where we don’t see physical money often. Online purchases are made and cards are tapped or swiped.

Data from comparison site finder.com.au reveals if current trends continue, physical cash could vanish in Australia as soon as 2026.

Children’s games on tablets are purchased online without a hint of any notes or coins being exchanged.

How do they learn to check change or even add up their bills?

How will children learn the real value of money without seeing, touching or paying with it?

Children lack the connection between themselves and the day to day essentials to live in this world.

How will they form an understanding of life skills?

Guiding money-wise kids

Here are a few tips to help your kids to be money-wise:

1. Explain ATMs – how and where the money comes from

2. School banking – if your school has a banking program, open an account, contribute money as a reward and set an end of year goal to withdraw

3. Explain debit and credit cards – that they have to be paid off, topped up with money and that purchases are not free

4. Pay pocket money electronically – set up an online bank account and contribute money for chores and homework. Once they are old enough to manage their own bank account, transfer the money over and teach them how to use ATMs (if they are still around), and to read and check receipts

5. Start educating them about the world of finance from a young age – start with the simple money jar or piggy bank

And for the teenagers, check out the show on ABC ‘Teenage Boss’ hosted by mathematics teacher Eddie Woo.

It follows fifteen teenagers from across Australia as they take control of the family finances for a month, with some surprising and not so surprising results.

Being money-wise is important to us. We can help guide you on the right budgets and investment decisions for a successful financial future – and one to teach your children and grandchildren.

Contact the office today for a confidential discussion if you or your young adult children need help with managing their finances.

Australians’ love affair with property

Why people DO it

Around 20% of Australians invest in property for:

• potential capital growth

• rental income

• tax benefits

They tend to consider property one of the more solid, less volatile forms of investment because you can actually touch bricks and mortar.

They like the feeling of getting ahead financially.

They don’t want to be one of the 80% of Australians who have to rely on the aged pension when they retire

Why others DON’T

They:

• need more information to take the first step

• don’t know how to ensure their investment is not threatened by interest rate rises or unreliable tenants

• aren’t sure about how to pick appealing properties for good rental return

• don’t realise they can probably afford it – even if they don’t have a big salary

• think all debt is ‘bad’ and haven’t realised that an investment property could make them money and even pay for itself

Here are some time-tested strategies to help overcome common initial jitters about investing in property. Getting an education from people who are investors themselves is the fastest way – go to those ‘in the know’.

1. Being comfortable with your debt level and being able to afford the repayments

Borrowing to purchase income-producing assets such as investment properties is considered by financial experts as ‘good debt’. Rental income is generally used to pay the mortgage and expenses whilst the owner benefits from any capital growth in the value of the property. Bank guidelines also reduce your risk because they simply won’t lend to you if they don’t believe you can repay the debt (and they also allow for interest rate rises).

2. How to keep making payments on your investment property if you lose your job

Positive cash flow property – This is where your rental income exceeds the mortgage payments and property expenses. Direct the excess rental income into your offset account and hold it there as your ‘rainy day account’ to cover loan repayments if you find yourself unexpectedly unemployed or financially strained.

Negative cash flow property – Negatively geared property is when the mortgage needs ‘topping up’ from your income.

Your property deductions/out of pocket expenses may help you to secure a tax refund at the end of the financial year. Save your tax refund as a buffer. Alternatively, your accountant can help you request access to your tax refund for a reduction in your weekly tax. Put this extra amount aside each week and it will help accumulate a buffer to maintain the property in the unfortunate event that you lose your job or your income is reduced.

3. Risk of not securing a tenant

The best way to mitigate this risk is to carefully select a property with high rental appeal. Only buy in high rental areas where the vacancy rate is consistently less than 3%. It is also sensible to select a property manager before you settle so they can secure tenants immediately.

4. Possible problem with bad tenants

How do you pay the mortgage if the tenants don’t pay their rent? Or pay for repairs or damage caused if they ‘do a runner’? The answer is landlord insurance to cover any losses. The cost of this insurance is minimal when you consider the cost of not having it – and it is tax deductible as well.

5. Coping with interest rate increases

Changes to interest rates are a fact of life. If you are going to invest in property allow for interest rate increases and only purchase property that you can afford to hold onto even if rates rise.

6. An exit strategy is your ‘pull the pin’ plan

It is best to put this plan together in the cool light of day, before you buy, because doing it under pressure can lead to the wrong decision. An exit strategy gives you peace of mind and allows you to sleep at night.

Call our office today and make an appointment to discuss your property investment plans. You’ll need a clear idea of how much you can borrow before you start looking at properties.

Technology and Kids

A state of insufficiency

We all know that technology has become an increasing part of our everyday lives across all generations – and none more so than children.

In fact, Australian children as young as four and five years old are spending 2.2 hours each week day watching screens. Those numbers increase to 3.3 hours by age 12 and 13 and longer on weekends.

Effects of technology are long and varied

The long and varied list of the effects of technology include online addiction, access to inappropriate content, reduced physical activity, security, hacking, online predators, sleep difficulties and family conflict.

Amongst the problems cited above, technology can affect family wellbeing and harmony.

Television has been around since 1954 and in Australia since 1956. Back then those who were fortunate enough to have one often watched television as a whole family activity. But times have changed.

New technology offers children independence from their parents’ involvement in their social lives with social networking and messaging sites. Parents see it as a loss of connection – but it is not all the children’s fault.

Parents can be just as much consumed by technology as their offspring. In fact, if you have an iPhone, check out your daily and weekly screen time usage. It is alarming. As adults, we typically use our smartphones not just for communication but as an ‘escape’ to the online world of social media – seeing what others are doing, browsing and even reading books.

Most of us have our work and personal life all in one phone. That ‘ping’ we hear during family dinner time or even when we sleep may be an email from the office or calendar notification of some sort!

Children are born to learn

Children are born to learn, to socialise. We have known for decades that without social interaction and relationships, we are denied connection and bonds – a core part of being human – as explained in Maslow’s theory of a human’s basic needs.

Modern family life often consists of TV dinners and TV (or iPad) baby sitters which seem to be the way of life now. Yet we have all heard about the numerous studies and warnings on how harmful these are for our society and the impact this will have in generations to come. We are already seeing the scary evidence.

Effects on children’s learning

A former teacher and education and technology researcher, Kristy Goodwin, studied the effect of technology on children’s learning which was highlighted in an SBS Insights segment.

Although there are benefits to using devices to create digital content for storytelling, movie making, creating animations or coding, there are also many complaints.

Screen time causes myopia – a condition of the eye where light focuses in front of the retina instead of on the surface, resulting in blurred vision.

The research showed that the premature introduction of screens, before the eyes have time to develop, was a cause of the condition. Another common complaint when it comes to kids and technology is the way screens can captivate and hijack their attention. There are two main reasons why we all find it so hard to digitally disconnect.

The state of insufficiency

1. The brain releases neurotransmitter dopamine. Looking at social media will give our brain dopamine hits. Dopamine is associated with the pleasure system of the brain. This in turn motivates us to do, or continue to do, certain activities.

2. When we’re online, particularly on our phones, Goodwin says “…we enter something called the state of insufficiency. We never, ever feel done. We never, ever feel complete.”

We have all seen the trance like looks on children’s faces – the tantrums and those videos that have gone viral on social media showing children ‘losing the plot’ and having demonic screaming meltdowns due to the lack or removal of access to Wifi or their computer games.

Technology is here to stay. Be proactive and control it. Don’t fear it. Set boundaries, install parental controls and educate your children on the dangers of technology and appropriate information.

Consider how the online world is affecting the way we use our finances and the important lessons our children are missing out on as we move towards a cashless society.