Often the first question I get asked is how do we sit and decide what needs to be done for a client?
In all honesty, it’s a challenging question to answer. I usually like to ask my clients a few questions that help me crystallise my view around what is best for them. These questions include:
– What would you do if you had won a lottery worth $10 million?
– If you had only three months to live, what would be your five biggest regrets and five biggest accomplishments?
– What is your end goal?
As you may have noticed, they are a range of subjective questions that explore their emotions and behaviour around money. The reason why this is important is because it helps us discuss what is important in your life – what do you value the most, what do you cherish the most, and how do your finances affect it?
After we get to know you and your goals, we usually start by looking at your portfolio outside of super. Firstly, it is important to look through all of your income and expenses – picking out any irregularities in spending and to discuss how we can manage it.
A little bit of luxury is good, a little bit of shopping is good, a couple of dinners out is great – but not when it starts putting a strain on your budget. It is vital that we discuss how we could open up multiple savings or transaction accounts – for example, one for loan repayments, one for day to day expenses, one for holidays, one for savings, and one for emergency. Then we look at the individual account and start going through what can be done to get you to where you want to be at.
We then look at all of your assets and liabilities and see if it is possible for us to recycle the debt from being nondeductible to deductible and discuss how can we better use your equity in assets to generate extra growth and income for you.
We look at your insurance cover (if any) as that is one of the ways to ensure that you are not financially constrained in the event of an unfortunate circumstance.
It is important to remember that in the event of an unfortunate circumstance, it is the payout from the insurance companies that will help you navigate through the circumstances more confidently. There are different ways to construct your insurance cover so as to make sure that you are not paying too much in premiums and ways to construct it to ensure it doesn’t affect your cash flow.
Once we go through that, we then ask what can be done for your superannuation – are there ways to improve your superannuation holdings in terms of your contribution, investment allocation, and insurance in super as well as binding death nominations? Could we make use of your current superannuation structure or should we change it? How much should we boost your super to make sure we can meet the amount required by you in retirement?
You would be surprised that sometimes salary sacrificing a small amount might make a huge difference in your superannuation balance in retirement.
It is now that we sit and talk about investments – where should we invest the money? The word investment often scares many people away as it is widely associated with risk. But in reality, it is a risk that can be managed, a risk that may pay off if we are to invest wisely and smartly.
At Conscious Money, we take a fresh new approach for each client when constructing your portfolio – there are many ways to buy a share for you.
For example, if you want exposure to the bank stocks you can buy it on the market as a direct equity, through a warrant holding, or you can buy it via a fund manager (either active manager or passive manager depending on the strategy). You can also go through the exchange traded funds (ETFs) or through an SMA – in short, in many different ways.
We also go beyond Australian shares and consider various strategies around other asset classes (cash, fixed interest, property, and other investment types such as collectibles). Within each one there are different types of investment structures like your standard savings account, a term-deposit holding, different types of property funds, listed property stocks, or for some who may even prefer the collectibles like artwork.
But each structure is suitable for certain types of investors which is why we take our time to get to know you and your approach and attitude towards money as that determines what is the best structure for you. It is a very interesting process and is sure to catch your attention and get you excited to be part of the journey.
Why this is important? It is important as we are dealing with your money, your assets, your future, your loved ones – and simply because life is complicated, your finances don’t have to be!
Please contact us for a one-hour complimentary financial review – mention that you saw us on “Star Observer” and we will offer you a concessional review which will be discounted at one-hour of our time.
Karam Singh, Authorised Representative of Madison Financial Group Pty Ltd ABN 36 002 459 001 AFSL no. 246679.
He can be reached at firstname.lastname@example.org or 1300 193 136
This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. We strongly suggest that you seek professional financial advice before action. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc. as at the date of issue.