As we see the end of another year, are you sitting there assessing the year that has been, whether it be your wins or lost opportunities, it’s time to let it all go. 2019 in a new year, no point wasting energy on what could have been.
When it comes to New Year Resolutions we know that over 90% of new years resolutions are never achieved.
There’s a reason for that, there’s no real why behind the resolution.
Now is the time if you haven’t already done so to improve your financial position, something that will keep giving in the future. Surely that’s got to be worth getting excited about!!!
You have two options:-
Whether you earn good money but not sure where it is going, in a good financial position but want to improve it further or you are someone who is aiming for financial freedom (to be in a position to have more options available to you) you will get benefit from this.
You can have all the best intentions in the world, say you are going to improve your financial position or finally get your financial house in order.
You start to research your options, time gets in the way, there’s too much information to digest and finally, it all gets too hard and life gets in the way.
This is what I see consistently. After all, they don’t teach you about money at school or University.
Here’s an example of one way it could go, what will happen to most…
You say you are going to do something about it. You start with good intentions however other priorities get in the way and you decide to work on it next week, next month, next year and before you know it you’ve made no progress.
The years go by and now your approaching retirement thinking it would be really good to retire on your terms when you want too but you take a look at your finances and work out you are nowhere near where you need to be.
It starts to hit you, you now need to compromise your dream retirement. You need to decide to work more, give up more, save more and ultimately you regret the decisions you made early in life not to get your financial house in order and actually do something about.
This tends to lead to really bad financial decisions as you start chasing the quick wins, but guess what things don’t come easy in life.
The measured approach…
Alternatively, you can read this post and actually get off your backside and do something proactive about getting your financial life sorted so you can choose to do more of what you love, live more, experience more, stress less about money and know exactly what you need to do to achieve financial freedom and actually get your money stuff sorted.
So, if you are in this camp let’s get started with this simple but yet very effective strategy to get your money stuff sorted once and for all:-
Time and time again the people I talk too all have one thing in common, they are all worried about their financial future and even if they don’t say it, it’s the core of what they are worried about deep down.
Particularly in a time where government pensions are going to be out of reach for most, government continually changing the goal posts, investment markets all over the place and just to throw one more thing in, the Royal Commission into the banking sector is hitting your confidence.
There’s a wall of worry out there.
Here’s the thing, you need to let go of what is out of your control.
You can choose to sit there and complain and worry about it or take action and do something you can actually control and that makes your money work harder and ultimately achieve financial freedom.
A word of warning, it’s going to be slow, it’s going to be boring, it’s going to be repetitive and it will take time.
But, if you’re up for it, here’s how to do it…
Step 1: What are you trying to achieve in Life?
We’re not trying to get all sensitive here. Take some time and have a think about what your future intentions (goals if you want to call it that) are? What do you want your future lifestyle to look like?
Even if you only have a rough idea, this is good enough because it’s likely some of these are going to change over time.
Put a timeframe on it, when do you want to achieve it?
Why is this so important to you? This is the guts of what is going to motivate you to achieve.
So, for example, it could be that you want enough money to provide an income of $70,000 in retirement.
You want in this position by 2025.
You want this because you have worked hard all your life, educated and provided for your kids and there are many things that you would love to spend your time doing. You want to be in this position so you and only you can decide when you finish work and start your next adventure and transition into your retirement lifestyle.
To be in this position would mean you would not need to worry or stress out about money.
You would be able to live a comfortable lifestyle in retirement, be able to afford dinners out with friends, drive a reliable car, help the kids out, look after the grandkids, enjoy a few hobbies, travel Australia while enjoying some overseas travel to countries that you’ve wanted to visit for some time.
It may not be retirement for you, it could be something else like renovating the home, putting kids through private school, regular overseas trips or just knowing you have enough.
This is what will motivate you to take action…
Step 2: Assess your current financial position
Where do you currently sit financially, what’s the value of your super, investments, debts, cash etc?
It’s important to know where you currently stand, call it a financial audit if you will.
Step 3: What’s the Gap
In step 1 is where you calculate the amount you require.
If you are wondering how much you need to retire comfortably, CLICK HERE to download our worksheet>>
Here’s where you work out the gap you have between where you are now and where you want to be.
So if you are looking at retirement in 2025, you have six years till then.
You know what you need, let’s say $1,500,000 to fund your $70,000 pa in retirement.
Your combined assets (super and investments) are approx $1,000,000.
Your gap is $500,000. This is what you need to fill to make your dream a reality.
At, first glance this may look such a hard gap to fill.
The skill is in breaking it down further into smaller, incremental changes to achieve it.
Step 4: How can you fill the gap?
This is the critical one and where most get it wrong. They go looking for a get rich quick scheme or look for the quick win which they all regret later on in life.
Understand where your money is going to uncover wasted cashflow that can go towards filling the gap.
Don’t know where your money is going try this…
Get your bank statements out for the last 6mths and list all your expenses on a spreadsheet or a piece of paper.
On one side put all the expenses that you value or could not do without on this side of the paper. You could even put a happy face next to it.
With all the other expenses put them on the other side of the paper and put a sad face if you want next to them. These are the expenses that you can now make a decision you don’t value.
By completing this little exercise you will have an idea of what you have to work with.
Obviously, you’ll need to decide where the money goes, ie super, in your own name, partner with the lowest tax bracket or a tax bond.
Don’t know where to start? Time to find yourself a great financial planner.
Bottom line, for most the funds, will be invested for a long time so don’t just let it sit in cash.
Step 5: Review and Course Correct Periodically
Whether this is monthly, quarterly, six monthly or yearly, make sure you book it in. This is where the rubber hits the road. If you are not constantly reviewing your progress how do you know where improvements and adjustments need to be made to fast track your success.
Why do you think successful sports people all have coaches unless your a Nick Kyrgios (and we know where that’s got him, right?)? They need someone to constantly review their performance, their training, their diets to help them move forward and constantly improve to achieve the end goal.
If you cannot do this yourself (your in Nick Kyrgios’s shoes), then I’d suggest you find yourself a mentor, accountability coach or a good financial planner to help you on your way.
Step 6: Repeat
Continue to repeat the above steps.
We told you it was going to boring, not that exciting, take some hard work and ultimately it will take time.
I remember earlier in the year when I completed an eight-week fitness challenge, Gunny, she was the nutrition side of the equation would set the rules around what to eat and what not to eat.
However, there would always be people sending her an email asking if they could eat this or eat that. Gunny’s response was gold. “Check the list, if it’s not on the list it’s not on the list”.
Although this is only part of the equation I have given you here, you to can follow the same way, if it’s not on the list it’s not on the list.
Building financial freedom is not hard, it’s about understanding what works and what doesn’t. If you stick to what works, break it down and follow it, you will succeed.
However, if you want exciting, by all means just head to the casino and try your luck.
I know this has been a long one, but I hope this sets you on the right path to achieving all your financial dreams.
So, if you’re a professional, business owner or someone planning for retirement and are wanting to get your version of a personal trainer in finance and want more with less stress then feel free to book in a 15 min Possibilities call here>>> and we can start a conversation.
I’ll be honest here, we won’t do your pushups for you, but if you are motivated for the right reasons we can save you a lot of time and heartache and save you from the mistakes most people make to fast track your way to wealth.
Hope that’s been useful.
Make it a great Life!
Challenging the Status Quo!
Glenn Doherty – CFP – Founder & Financial Organiser at Jigsaw Private Wealth
Email: [email protected]
Mob: 0401 253 729
Advice Disclaimer: Any reference in this publication to the provision of advice refers to advice of a generic nature, and should not be taken as product or investment recommendations. Before any action is taken based on the information provided, independent financial advice from a licensed financial adviser should be sought. Financial Freedom Project Pty Ltd ATF GA & DC Doherty Family Trust Trading as Jigsaw Private Wealth is a Corporate Authorised Representative of Exelsuper Advice Pty Ltd. The information contained in this publication is of a factual nature only and is not intended to constitute financial product advice. Information is current as at June 2018. This is an online information blog. It does not imply an offering of securities.