Author Archives: Duncan

Track Your Investments

As silly as it seems, you gotta TRACK the small stuff with your investments.

The small things all add up. If you’re not paying attention to the small things, like making sure particular payments are paid on time or rates are cancelled on time or discounts are accessed, that can make your portfolio cost a lot more than it needs to OR you are missing our on returns you should be getting.

Check that you are not being double charged for property costs, bank fees or management charges. It happens and often by accident. And this can compound.

Pay attention to the paperworks, get in touch with your lenders and discuss your strategies regularly with your team of professionals to able to maintain a strong foundation for portfolio management.

At the end of the day, missing or even IGNORING the ‘little things’ in your investment portfolio could result in bigger financial issues.  Which is why I encourage investors to ensure checks and balances are in place.

Be an active participant in the management of your investments, no matter how big a team you have backing you up.  Or how big or small you perceive your investment portfolio to be.  It may be one investment property.  Or a handful of shares.  Know key dates, know your entitlements and check that all is functioning in your favour.

The good lesson here is to be a little bit more diligent around the rules and regulations and the tips and traps to get the small things right.  It should be high on your agenda.

I would suggest you set up your own 1-pager (or 2 if need be) with key dates listing renewals, rates, contact numbers, etc and then schedule into your calendar time to check on these. Sometimes this will only take a few minutes. And if you are not detailed at all, then get someone else to give you a hand.

Take responsibility for your own investments. Cause no one else will.

The 5 Considerations You Must Make Before Choosing Your Investment

The BEST Investments for ANYONE should ALWAYS be based on the RESULT.  The successful investor is able to correlate an investment to a result – and not just a return.

Rather than Successful investing I prefer to use the term Intelligent Investing.  Why?  Success can come in many shapes and forms.  Intelligent Investing is more about Purpose.  Reason.

I was chatting to a private client just last week and he made the comment that he had surplus funds ‘not doing anything’.  But did not have the time to analyse all his options.  And wanted to pay someone to do it for him.

Now there are many folk around who will take your money to conduct analysis.  And in some cases this is money well spent.  I would encourage everyone to spend a bit of time and get clear on what you actually want to achieve.

When considering what you want to invest in, here are 5 very important considerations you MUST take the time to document.  To write down – not just think about.  In your decision making process:

#1  Liquidity – How quickly can you sell and get your initial capital back?  Do you need the option to get your initial investment back quickly?  If so, how quickly.  Days, Weeks, Months. 

#2  Returns – What are the annual returns of the investments you are looking into?  Do you have a minimum that you want to achieve? Or a baseline where you will consider opportunities above a certain return.  Are your decisions based on a percentage (%) or a dollars ($) return.

#3  Payment Frequency – are the returns paid annually, more or less frequently (eg. every 2 years or maybe every 6 months).  Do you want returns paid to you annually, bi-annually or maybe even quarterly.  The more regular, possibly the more choice you have.  However the more inclined you could be to ‘waste’ the funds as well.

#4  Investment Time – how long do you wish to invest for.  Noting once committed you can’t simply change you mind.  Are you in for 1 year, 3 years or longer.  Is it short term – maybe even just months.  Medium term 2-4 years.  Or longer term 5 – 10 years.

#5  Purpose / Intent – what are you trying to achieve?  At the end of the day, what’s it all for.  What is your investment RESULT aligned with to achieve in your personal life.  How will this provide you an experience that you value.

Whilst these may not be the ONLY factors to consider, these are by far the most important.  I would even write these down on the left hand side of a page.  Write your investment options along the top of the page.  And then simply ‘tick n flick’ which ones match your criteria.

This is an excellent method to quickly analyse your initial options before then getting into the details.

 

 

Ideas To Change From IO to P&I Loan

Despite the benefits of interest-only loans for investors, the regulatory measures imposed on investors and these loans mean that principal and interest loans are being considered more and more.

According to the RBA, about

two-thirds of interest-only (IO) loans are set for expiration by 2020.

During this time and over the next three years, $120 billion worth of interest-only loans will roll over to principal and interest (P&I) loans. What would this shift look like, and will it change the investing landscape?

Some lenders are finding IO loans more and more of a risk to lend out, and as such are placing more scrutiny on those who apply for them.

In comparison, P&I loans have less scrutiny and can improve an investor’s chances of securing finance.

However, while borrowers would be paying less interest, the principal part would result in an increase of approximately $7,000 per year on an average $400,000 loan.

How can investors moving from an IO loan prepare for P&I?  Here are a few ideas that you can take on so you are prepared for the change.

  1.  Save additional money

By anticipating the move to pay off an overall higher loan, borrowers can save themselves some trouble by saving money to pay more off.

“Many borrowers make provisions ahead of time for the rise in required repayments. It is common for borrowers to build up savings in the form of offset accounts, redraw balances or other assets. They can draw upon these to cover the increase in scheduled payments or reduce their debt.”

2.  Use the Interest Only period to make additional payments

This is by far and above my preferred strategy.  Most people don’t realise you can make Principle payments on an Interest Only loan.  This means you can make additional payments on when you choose to.

But the affect is that you reduce your overall borrowing amount, so when the interest rates rise or more importantly when you IO period expires, the overall monthly repayments calculated mainly on the remaining principle has been reduced.

3.  Refinance the loan

Borrowers also have the option of refinancing their home loan for an investment property to an IO loan, or enter into a new, longer P&I loan, which can reduce the cost of required payments.

“Any such refinancing will reduce the demands on a borrower’s cash flows for a time. However, it is worth noting that by further delaying regular principal repayments, eventually those repayments will be larger than otherwise.”

4.  Sell a property

A final scenario, if a loan is unmanageable, is borrowers could also sell a property in order to repay it, but this situation is one that investors are not facing as much as owner-occupiers are.

Remember that the purpose of an investment is to HELP your lifestyle.  It’s to add value to what you enjoy.  Any investment that drains you, causes you financial stress is really one that you should ask yourself “Why do I even own this?”

The IO to P&I changes could be the catalyst needed to ‘remove your deadwood’.

 

 

Interest Rates – What’s Coming?


“Investors need to keep an eye out on international markets” says some commentary.  Sure.  But realistically who does that 🙂

What you DO NEED to know is where funds come from to support our banking system.  And a lot of it is NOT from our domestic market.  But rather from overseas.

It’s always important to see how the overall market is performing in Australia, but according to the Housing Industry Association (HIA), investors and even home owners, who intend to go for another loan need to keep an eye out on something bigger than the Reserve Bank of Australia. Here’s why.

To purchase an investment property, your own home, upgrade or downsize or even request a loan extension for some home improvement – you need a loan.  Well 95% of us choose to use leverage rather than expose large chunks of equity at one time.

Without loans, we would have a much harder time investing, and even though we would be investing from Australian banks, HIA’s principal economist, Tim Reardon, believes not only should the state of the Australian economy be considered when securing a loan but also the global economy at large.

According to Mr Reardon, this is because Australian banks are only as strong as the conditions that allow them to give out loans, which is influenced by the global market as well as conditions at home.

“The costs of finance to Australian banks is as a consequence of cost of borrowing globally, and what’s likely to play out in the next couple of years is that there is a timing of that money supply,” Mr Reardon said at an industry briefing.

“Post GFC, there was a flush of both loose behind monetary policy and loose fiscal policy which gave us a money supply volume that was largely unprecedented post Second World War, so that would give us the only point in time where we would have a reference to look at, to see what happens when you start to restrict that supply of money.

“As those US, UK [and the] rest of the world pick up and they start to tighten their fiscal policies and they

start to tighten their monetary policies, that supply of money tightens, the cost of borrowing for Australian banks increases,

so regardless of what happens with the Reserve Bank, the cost of borrowing domestically is likely to rise.”

For example, when the Nasdaq Stock Exchange experienced a fall in February, Mr Reardon said that this was felt globally with a curbing of the supply of money.

Other influencers, the principal economist said, include how major international trading partners are keeping Australia up and not down; the growth of India overtaking China; and how the pressure for interest rates to go up rather than down is being felt globally, not just in Australia.

So what does this all mean?  Interest rate rises are coming.  Rates will go up over next 12 months and longer – not down.

We have bottomed out and the global economy fiscal tightening is a simple supply versus demand effect.  As accessing a limited supply globally becomes harder – the costs to do so increase which in turn results in higher costs to the banks and this in turn is passed on in the form of higher interest rates.

Higher rates are coming.  In fact increased rates have already started happening in the Australian lending market.  You need to understand your investment and finance strategy and ensure you have a plan in place to deal with these changes.

Top 10 Tips For A Successful Financial Year

I know it’s a bit late – but HAPPY LAST FQ.  Now is the time peeps to review the last 9 months.  And prepare carefully for the remaining 3 months of the FY.

Not only will this determine how you conclude financially – but it also can determine where you may be in 12 or even 24 months time.

Here are the Top 10 Questions I’d suggest you answer for yourself in order to be in the best position for financial success in the next 12-15 months:

1.  Has my financial position improved over the last 12 months (since April last year)?

Why since April last year?  This allows you to determine patterns and benchmarks.  If you only review the last 9 months (current FY) then you miss any important data based on your similar position this time last year.

I review in Quarterly blocks (so read and analyse quarterly reports) focusing mainly on P&L (or income / cashflow) and then asset allocation.

Review firstly by overall ownership or entity structure.  And then break down to analysing individual asset and income lines.

2.  If it’s not improved then why not?  If it has, why has it?

If nothing has improved write down why not.  Be honest – because hiding the truth from YOURSELF is just plain dumb!  If it has improved, what happened to improve it.

3.  What financial result do you want to achieve in 2 years from now?

Why 2 years from now?  If you are considering borrowing funds for asset  or capital expansion, or even to enhance cashflow, then lending parameters are often based on a historical 2 year review.  So you need to have a good idea (always open to change of course) of what you want to be experiencing in the short term.

10 years is often too far – and only really applies if as part of your planning (as I do) include retirement and superannuation planning.

4.  And 12 months from now?

1 year is an excellent short term target which I’d strongly encourage you to break down into quarterly (3 month) reviews.

5.  If nothing changes – will you achieve the 12 and 24 month targets?

Make sure you are clear and honest with yourself.  And even more powerful, be honest with your partner (personal or business).  If you do nothing and continue as is, will you achieve your 1 and 2 year targets?

6.  If nothing changes, what do you NEED to change?

In your analysis, if you’ve determined that by doing nothing, making no changes and leaving everything as is (effectively sticking your head in the sand) that you will NOT meet your 12 or even 24 months targets.  Then what do you need to change.

And this point, don’t get concerned or scared about HOW you will achieve it.  Just identify what needs to change.  The HOW and WHO answers come later.

7.  Can you do it yourself?

Are you a DIY person or do you get the best results having someone guide you and also hold you accountable?  I know PLENTY of people who choose to struggle.  Because in their mind it’s important to find the answers themselves and ‘bumble along’ hoping (praying) that they’ve got it right.

And if that’s you – fine.  As long as you are sincere and work through these questions you are giving yourself a great chance to improve.

However, if like most of us, we are more concerned with security, peace of mind and having choices – then identify that’s the case and acknowledge that maybe you ‘could’ do it yourself – kind of, sort of.  But you know better, faster and safer results will come from being guided be someone who is already getting the results you want.

8.  What or Who do you need to help you achieve these targets?

Do you need a DIY framework?  A set of guidelines and structures to achieve what you want.  You feel if you had the templates and an explanation, then you are enough of a ‘self-starter’ that you will be fine.

If not, it’s not a question of ‘What’. It’s a question of ‘WHO’.  Who do you need to get the results you want and to help you impact your business, your family and improve your lifestyle.

9.  Are you prepared to commit to your targets or are you really just kidding yourself?

This is a great question.  Is all the answers you’ve written down so far, fair-dinkum.  Or are you just blowing smoke up your butt?  Are you committed to change?  If you are – then things are gonna change.  Or are you too scared (or to egotistical) to make a change.

Either way – again be honest with yourself and if you are serious about helping your loved ones, then commit and take action.

10.  What date will you finalise your finance & investment plan mapping out the action steps to your goals.

Write down the date in which you will FINALISE your finance and investment planning.  Not the date in which you are going to start.  You already have started.  But the date in which you want to have completed your Finance, Investment & Lifestyle Plan.

From here you will know the weekly, monthly and quarterly action steps you need to take to get the results.  Commit to completing your plan.  And work backwards from there.

The LIFETIME FINANCE & INVESTMENT SUCCESS Online Course is ideal for those DIY’ers who want the templates, the instructions to do it themselves.  This program is FULL of Bonuses, videos, tutorial, etc etc.  You enjoy LIFETIME access and can re-watch, re-do anything anytime.  And get all updates forever more.

Or the PERSONALISED 1:1 CONSULTING Program is tailored to your personal, business & financial position.  By Application ONLY, work with me for 3 or 12 months.  With minimum monthly personal finance & investment strategy sessions, ongoing weekly contact PLUS you get access to the Lifetime Investment Success Course COMPLIMENTARY as a private client.

 

CLICK HERE TO LEARN MORE ABOUT THE LIFETIME FINANCE & INVESTMENT SUCCESS ONLINE COURSE

 

CLICK HERE TO LEARN MORE ABOUT THE PERSONALISED 1:1 CONSULTING PROGRAM

 

 

 

 

The Financial Success Activities for 2018

1.   Why New Year Resolutions SUCK!

    • Most have no passion
    • Becomes just a ‘to do’ list
    • It can be the same as last year – or just look at what was not achieved last year and add it to the new ‘list’

2.   What you SHOULD MUST be doing instead

    • Align to experiences – not just action steps
    • Create a Wealth Plan – and ensure you write out back pages of your Future Goal Planning Guide
    • If money is part of planning, is it equity or long term growth OR cashflow
    • If it’s BOTH (as many people believe) be SPECIFIC. 

Bring the result to a specific purpose. 

    • Once you do that it is more measurable.  You can assess it’s performance.  And you also know that you got that experienced or goal “covered”
    • This opens up the specifics to target other areas.  And before you know it, your action steps – even if it’s just going to the same job you always have – has far more purpose because there is a defined results and goal outlined and written down

3.   Aligning Personal & Business Profits

    • What do you need Personal expenses (tgt mthly)
    • Understand business net profits (not gross profits and not total revenue)

And if you achieved those personal profits you link to those personal experiences

    • As these are achieved you can expand targets
    • Business profits again are for a reason.  It may be either business or personal.  Therefore you target the business objectives to get that goal.
      • eg. Business expansion, new business premises Vs personal holidays, paying down personal debt, growing your investment portfolio.

4.   How to Determine What You MOST want

    • Brainstorm
    • By Category
    • Talk with your partner (if you have one) and understand the needs and wants of each other.  How you can support each other and if your goals are in alignment with yourself
    • Write at the reasons why and why not these are important to you (back pages of the Goals Guide)

GET THE “FUTURE GOAL PLANNING GUIDE”

CLICK HERE TO DOWNLOAD YOUR FREE COPY NOW

 

Building Wealth is like building…well, a building

Wealth is just like building a building.

People see the finished product and they want to copy it because they think it’s fantastic.

So after seeing the building – the end result – they head off to get their own bricks.  And then start stacking the bricks one on top of another.  Because they too want to build their building.  They want to get the same result.  And figure that they just need to stack the bricks and try and make it look the same.

In building wealth, what many people forget is the process required before you start building.  Just like building our building.  You first need to fine the land.  Not just any land.  As someone who has developed property before you need the RIGHT TYPE of land in order to suit your building.  You can’t build on sand.  If you want to build really big you may need to start small, and then buy more or bigger land to allow you to grow.

Then there are the foundations.  You know.  All that preparation under the ground that you can’t see.  The blood, sweat and tears in developing your foundation BEFORE you start building.

This includes having your plans drawn up.  A visualisation of the end result and the step by step process to get there.  Your plans are flexible.  You may change them before you start building.  You may change them when your building is underway.

But you MUST have a plan.

And one you review – and share with your team.  As it’s so much easier, safer and faster to build your building with a team.

This preparation can seem a bit boring at times.  In fact your building preparation – the research, writing up your plan, preparing the foundations can take just as much time and often longer than the build itself.  And others don’t see this.  They don’t see the ‘behind the scenes’ of your building.

And in building wealth, some people choose to ‘skip’ the preparation.  The building of a foundation.  And just start stacking bricks wherever they can.

You need to put the time and effort in behind-the-scenes.  You need to build a solid foundation. You need to have the plans.

You don’t want to just start piling bricks on top of each other in an attempt to copy what you believe someone else has created.  You don’t know the planning and foundations that have been worked on before you see the end product.

Remember build your foundations, complete your planning, understand your vision and only then will you be able to build the right thing.  The thing to suit your needs.

Good building takes time.  Good wealth creation is not about trying to build in a hurry using some ‘quick drying – no mess’ product.

Put in the effort and build your foundations.

So just like building a building, your wealth can be used to provide safety, security, fun and memories for you and for those you love.

INVEST WITH PURPOSE.

It all starts with having a plan.  Set your own goals and outline why you want to achieve this.  By using the FREE “Ultimate Future Goals Setting Guide”.

CLICK HERE TO DOWNLOAD YOUR COPY TODAY

 

 

Why DayDreaming Could Be a Harmful Thing

daydreamingBut I thought the ‘daydreaming’ about wonderful, awesome & fun possibilities was a good thing??

Research in psychological science has proven that daydreaming about good things can set you up for failure.

A new study shows that fantasising about a wonderful happy future may make depressive symptoms worse.

So how could this be? Surely if we keep thinking about great things we can manifest them. Right? WRONG!!

The key is not talking the talk but when daydreamers then fail to walk the walk – by not taking any positive action.

Thinking about and desiring something is only PART of the process. Sure – it’s a big part and one in which often gets overlooked by the ‘doing’ crowd.

Once You’ve Thunked It – Chunk It – and Start Taking Action.  

This is where the power of momentum proves itself.

For our lives to be amazing – both in wealth and wellness there is proof we need to combine good thoughts PLUS actions.  Even if it is only little steps at a time.

Make sure you read the Blog about the important of Micro-Action as a receipe for success.

It Can Be One Of The Most Wonderful Times Of The Year

How was your Christmas Day?

For most of us, it can be one of the most wonderful times of the year.  Family – Fun & Laughter.

Travelling may miles to be together.  To eat to much food.  Enjoy that extra glass of bubbles.

Watch the kids faces light up as they open gifts and really share the spirit of giving.

This Blog is NOT about the deep values fo Christmas.  I’m sure there will be plenty of posts kicking around going over that.

It’s NOT about being grateful for what you have.

What I really briefly want to touch on is being GRATEFUL FOR WHO YOU ARE.  Or rather asking yourself if you are PROUD of the person you are BEING.

You’ve probably heard the saying that we are all human beings.  Not human havings.  Yet we seem to spend a lot of time worrying about and taking action to make sure we HAVE things.  It does not matter what those things are.

So how about, rather than HAVING we ask ourselves about BEING.

I teach my clients the gift of financial and personal development through the process of:

BE  then  DO  then HAVE

Most go the other way.  They are striving to HAVE certain things, so that they can DO what they want and then that will allow them to BE a certain way.

How about BEING the person you want to be.  Then DOING the actions that that person would do.  So that you can then HAVE the things that you want.

This is something that we can all be mindful of throughout the year.  It does not have to be only in the festive season.  However in the Christmas spirit when everyone is more mindful of having things.  Spend some time BEING.

You don’t need to sit under a rock and meditate.  Just in your daily interaction, display the behaviour, use the language and resonate with the energy of BEING the person that come naturally to you.

And experience what happens.  Does it feel great?  Or does it feel like you may need to work on you, rather than trying to fix someone else.

This is one of my favourite times of the year.  I LOVE the spirit of giving.  Of being together.  Of family, love and memories.  It’s not about THINGS.

Life should develop through BE – DO – HAVE.

 

Money And Relationships

Money is a giant issue of consideration in any given relationship. How either partner approaches the issue could make or break the relationship. In any given relationship, money can either be part of what brings and reinforces unity or what brings about conflict.

Money and trust

One of the key issues when it comes to a relationship is trust. The partners in the relationship must be able to approach every issue with trust and confidence in each other. In most cases, when money is brought into the equation, there is plenty of distrust where neither partner is willing to share how much they earn, how they spend their money or even how much they are willing to spend on each other. At the end of the day, the distrust results in conflict and ends up destroying the relationship.

Money as a dividing factor

When you look into a relationship, you may find a number of factors that act as reasons for conflict and break up and money is almost always involved. For instance, there could be mistreatment in the relationship with one partner exercising extreme superiority because he/she makes more money. Another instance could be when one’s sole focus is seeking more money thereby spending more time working than with the partner. Such issues as cheating, jealousy, spite and misunderstanding could all be related to money.

Money and growth

Much as there are negative aspects in the association between money and the relationship, there are also positive aspects. Money can be a source of growth for both partners and the relationship. Money invites stability and development, which generally leads to success. Success in life often creates room or leads to a successful relationship.

Money as a unifying factor

Just as it is a dividing factor, money can also be a source of unity within the relationship. If the partners in the relationship are open and trusting with each other about all issues including money, they form a strong bond that surpasses material needs. Money then ceases to be an issue and become a source of unity as they plan their future with each other.

How to handle the issue of money in a relationship

While there is no direct guide to how each relationship can be molded into perfection, there is a general approach to the issue of money. Basically, there should be trust and support as well as commitment to the relationship. The partners in the relationship should have a clear discussion on their boundaries, goals and their vision for the relationship.

If ever in doubt, ask someone or another couple that you trust and that you feel is achieving what you would like to attain.  Ask their examples.  Or even speak with someone who is able to give you the strategies and practical steps to take to enhance your relationship around money.