We had only strapped our cross-country skis about 2 hours before hand.  And for some of us (me included) it was our first time cross-country skiing.  For me it was basically like hiking.  I still had a pack on my back, carrying food, water, tent, sleeping bag, etc – but instead of walking I was in snow and skiing across the top.

After just  few hours one of our guides pulled us up and started some instruction in what to do if you got caught in an avalanche.  What to look out for, how to survive and what was required when searching for someone.

Rather than share the whole story, we had stopped in this small valley rift where avalanches had happened within the last few days.  So it was a good place to practise and learn.  HOWEVER we all got a big shock when there was an almighty “CRACK”.  We looked up the slope to see a snow slide gathering momentum.

As it gained speed it impacted so many other things.

Rock was caught up, as were trees.  It kicked up snow drift and vision was impaired.  It seemed to both suck the oxygen out of the air and yet fill the air with snow gusts all at the same time.

It got bigger and seemed to get out of control very quickly.  We all managed to get out of the way before it reached us and we had front row seats as it slowed down and deposited a massive volume of snow at out feet.

So how, Duncan is this anything like investing, I hear you ask?

Well understand this.  Just like in physics – for every action there is an equal and opposite reaction.  If you have not developed, and then actively manage a finance and investing plan – just like an avalanche – one single, seeming harmless decision can have a rolling impact to so many other things.

And before you know it, opportunities are missed, profit is destroyed and sometimes the wind is just knocked right out of you.

When you invest you need to consider:

• What Result Do You Want From Your Investment – Growth or Cashflow?
• What Timeframe Do You Want The Result To Happen In?
• What Is Your Available Equity or Borrowed Funds You Can Use?
• What Is the Ownership or Entity Structure You Wish To Use?
• What Are the Short and Long Term Tax Implications?
• What Are ALL The Investment Options Available That Could Meet The Above Criteria?
• FINALLY – Be Prepared to Adjust As You Need To So You Can Achieve The Best Result Possible.

I don’t believe there is ever one perfect investment.

You need to understand your Personal Lifestyle Goals FIRST, the Investment RESULT second and then be prepared to adjust as you go.

Because one poorly informed or rush decision WILL HAVE a flow on impact to all the other areas of your finances, investments and personal life.

And I’m sure you don’t want to be under a pile of snow – wondering why you didn’t both planning ahead.

An adjustable and well-informed investment strategy CAN SAVE your life – it can support the people you LOVE and it can help provide experiences that are most IMPORTANT to you.

Invest Intelligently.  Live Authentically.

There is sometimes the perception that ‘celebs’ have got it all sorted.  Well – this is few and far between.  Whilst I am going to give you just 3 examples below – I realise that you have probably heard some of this before.  And of course the ‘countless’ stories of those who have won the ‘Lotto only to blow their millions (and indeed their health and relationships) in a very short time period.

Read what happened – but most importantly learn from the lessons I’ve provided.

1. Donald Trump

“The Donald” and his different corporate entities have filed for bankruptcy four times: in 1991, 1992, 2004, and 2009.  Each instance was a corporate and not a personal bankruptcy, which is often described as being the “restructuring of debt” and not going broke.  But the fact remains that businesses associated with his name have needed financial assistance four times in the past two decades.

In exchange for getting some of these bankruptcies approved, Trump had to give up Trump Airlines, a mega-yacht, and an almost 50% stake in the Grand Hyatt Hotel.  But even after all those filings, Trump currently has an estimated fortune greater than $2.7 billion, as he keeps his personal money separate from his business money.

Your Takeaway Lesson: If you are running a business, creating lifestyle options through assets and investing, you may want to establish yourself as a corporation.  This way you can separate business funds from personal funds, and also limit your liability should your business start to falter.

2. Michael Jackson

Even before his death in 2009, the King of Pop was recognised as the most successful entertainer of all time by the “Guinness Book of World Records.”  But in 2007, Jackson filed for bankruptcy after not being able to pay back a $25 million loan on his home, Neverland Ranch.

Neverland, purchased in 1988 for the price of $17 million, had grounds containing a zoo, an amusement park, a movie theater, a railroad line, helicopter pads, and its own fire department. It reportedly cost more than $10 million dollars a year to maintain, and Jackson was well-known for his shopping sprees, including a $6 million trip recorded for the documentary “Living With Michael Jackson.”

Even after signing a nearly $1 billion recording contract in 1991 and selling more than 750 million records, Jackson had just 0.05% of his net worth in accessible cash, which left him no option but to file for bankruptcy.

Your Takeaway Lesson: No matter your income or personal net worth, you cannot overextend yourself by taking on more debt or financing a grander lifestyle than you can afford.

3. Gary Coleman

Star of the TV program “Diff’rent Strokes,” Gary Coleman had to file for bankruptcy in 1999 after his parents and manager spent the majority of his money.  Coleman had amassed $8 million in trust funds during his career as a young actor, but eventually discovered he had just $200,000 in cash to his own name.

His ongoing medical issues did not help his financial situation either, and Coleman died in 2010 after many years of financial difficulties.

Your Takeaway Lesson:  It’s not what you make – but what you keep.  It’s a dangerous gamble to not be educated or involved in managing your finances.  

How Does This Happen?

The Number #1 Reason These Celebrities (and everyday people) commonly file for bankruptcy:

Lack of a Financial Education

Often, when you go from having nothing to having everything, a financial education is not part of the package. Learning how to save, budget, and invest can take years, and if you’ve never had substantial money before, you may never have learned these essential financial management skills. When handed huge checks to cash, many celebs go out and buy the biggest house and fastest car they can find, rather than learning how to properly handle their money.

Don’t Let This Me You.  It’s Worth Checking That You Do ‘Have All Your Finances In Order’.  I Promise To Give Your Finance & Investing Situation the ‘Once Over’ For FREE.

CLICK HERE TO BOOK IN ONE OF SIX AVAILABE POSITIONS FOR A LIVE CALL AT A TIME THAT SUITS YOU

OK Peeps – this is a very important post.  And I IMPLORE YOU to please take 3 minutes to read it.

There are some MASSIVE changes coming through the economic world.  Yep – this will impact little ‘ole Australia as well.  So you NEED to be prepared.  Well you don’t have to be prepared.  You can continue in ignorant bliss if you like.  But if not – read on.

We are currently living through the biggest demographic change in history – which will hurt economic growth for generations.  And we will need to adjust.  YOU will need to adjust.

For the first time in human history, we are arriving at “peak youth”.  This is where the number of people over the age of 30 outnumber those who are under the age of 30.  And the number of people who are 65 or older are likely going to outnumber children under 5 years of age by 2020.

This has never before happened in history.

So what does this mean?  Well quite simply there are less ‘working’ people – which means less taxes for the government than there are / will be non-working people.

This will make governmental support over the coming decades near impossible.  Therefore you must raise your FINANCIAL IQ and get help to ensure YOU ARE PREPARED.

This global shift in age demographics will affect GDP (Gross Domestic Product) growth in countries all over the world.  That’s because the global workforce will shrink as a higher percentage of the population is past working age.  Fewer workers is a major cause of lower productivity and slower GDP growth. 

**  Now on a side note – this is just PART of the reason why Australia is reviewing the age for compulsory retirement and also options to review the use of Superannuation funds.  This will be clearer later.

Global life expectancy is expected to reach 77.1 years by 2050, compared with 48 years in 1950.  That means over a period of 100 years, life expectancy will have climbed by 29 years, or 60 percent.  The global population of those 60+ years is expected to grow to 2.1 billion, compared with 901 million today.  That is about a 130% increase.  More than DOUBLE.

One way to look at the impact this will have on global economies is through something called a support ratio.  A country’s support ratio is the ratio of its working age population (15-64 years) to its old-age population (65+ years).  It reflects how many workers “support” older people – via an economy’s social support system. 

**  Again – another prime example why you need to look after and take control of your OWN financial support system.  ‘Cause I can guarantee that what is around now in the form of government sponsored social systems will NOT be around in 20, or even 10 years time.

The global support ratio has steadily fallen, from 12:1 in 1950, to 8:1 in 2013.  In developed economies it stood at 4:1 in 2013.  Meanwhile, fewer new workers are entering the workforce.   Simply because there is not the younger people around to do so anymore.  The support ratio in developed economies is expected to fall to just 2:1 by 2050.

Management consultants McKinsey & Company suggest that average global economic growth will fall to 2.1 percent over the next 50 years, compared to 3.5 percent in the previous 50 years.

During that time (the previous 50 years), growth in productivity and labour contributed roughly equally to economic growth.  But they forecast that labour growth will nearly vanish as a source of economic growth, as shown in the figure below.

So what does this mean?

Here are a few points that I take from these startling facts:

a. There will be more ‘baby-boomers’ (people aged 60+) over the next 2 decades than there are aged 5 years or younger.  This means there will be a significantly reduced ‘work-force’ for developing countries to tax and derive income to provide government sponsored social support programs.

b. It is more apparent now and will increasingly be so, that every individual MUST expand their financial knowledge and take control of their own financial future.  The way it has been done in the past, by your parents and your parent’s parents are now NULL and VOID.

c. Failure to develop an investing mindset combined with an investment strategy (different from a traditional financial plan) will lead you to suffer from what the globe will throw at you.

d. Finally, the times of good and higher level ‘growth’ in traditional assets will slow.  And this will be normal.  Hence you may want to consider alternate options, get educated and embrace strategic decisions and ignore the desire for the ‘fast-buck’.

Is there an answer?  Sure there is.

1. Develop Your Own, Personalised Finance & Investment Strategy.  If You Don’t Have One (or Know How To Even Start) Then Team Up With Someone Who Can Help You.  The cost to do nothing is 100x greater.
2. If you are basing your future ‘profits’ from equity or growth alone – maybe adjust your targets slightly.  ALSO have an alternate plan or understand how a slow-down may affect you.
3. Finally – look at short-term (say 2-4 year) measures for alternate income generation.  As inflation will slow along with growth, cash returns will be at an all-time low.  Most are currently sub-3%pa.  Expect this to be below 2% – that means in the 1%’s per annum.  You need something that can get you at least 8-10%pa or more.

There are plenty of options at www.DuncanBuchanan.com where you can avoid these problems and set yourself up for financial & lifestyle success.  Or just call / email and ask.  Never hurt anyone by just asking eh!

It’s Completely Up To You!!

Hey Guys.  I need to talk to you about “Lost Opportunity Cost”.  If you’ve already got an investment in shares, property, business or a combination of both, you really have to listen to this message.  It is critical to your success in the investing world.

So what is lost opportunity cost?  For a lot of you out there and this is the  fact.  90% of investments, so that’s 9 out of 10 investments are made by an individual or by an entity and then forgotten about.  Ok, here me now.

That means that people have gone in and made and investment and then have kind of just forgotten about it in any detail.  They just put it to one side and hoping that magically, they’re going to get an email or a cheque is going to land in their letter box.

Lost opportunity cost is about not understanding how you can optimise the opportunity that you have and you lose or you miss out on future opportunities.

And this is commonplace where you’ve gone and bought an investment.  It could be a share portfolio, you could have one or two real estate investments, it could be some bonds, it could be a term deposit.  It could be a business that you are not directly involved with and what happens is you just put it on the back burner.

You are thinking to yourself – “You know what?  It’s just sitting there.   It’s not causing me any problems.  And it’s not having a real negative impact on my lifestyle.  So I’ll let it go and just let it do its thing.”  

OMG!!!

There are opportunities that you are missing out on and it’s because you’re not tracking your investments.  It’s because you’re not measuring what’s happening with your investment.  Do not be the 9 out of 10 investors who take on something, and it could be something as simple as some bonds or a term deposit, it could be a piece of real estate where you believe that:

“As long as it’s not costing me anything.  It’s OK”

Here’s the rub people –

Whether it is costing you or not is irrelevant – If it’s not making you anything – get rid of it!!

How do you know if your investment is not costing you anything.  Because if you know whether or not it is costing you – then you should know whether or your investment is benefitting you.

Unless you know whether it is growing in value or unless you know whether the ROI is increasing, it is a wasted investment.  And you may as well take all your cash out and put it in a shoebox and stick it under your bed. Ok.

Inflation will probably do better than some of the investments that some of you guys have on the go. So it’s something that I’m going to speak a lot about over the coming weeks.

One of the absolute key problems that current investors face is they go and invest in stuff and don’t properly track or measure the performance of that investment.  And then when it’s not working are too scared to change anything.

Now Imagine this.  You have an investment – but question it’s validity.  You are unsure whether you should keep it or move it on.  If you cannot decide – it’s either because you are too emotionally attached to the asset OR you have some limiting money beliefs that are blocking your ‘good judgement’ skills.

So Imagine that one night – whilst you are sleeping – your investment in question was replaced with a pile of dollar bills on the floor of your bedroom.  To the amount that your investment is worth on the current market.  So if you had some shares with $55,000 – instead of the shares you now have a pile of dollar bills worth $55,000.

You wake up.  Now!!  You get to make this decision.  Do you:

1.  Buy the investment you originally had for the amount of money sitting on your floor.  Because you’ve weighed up all your options and you believe that – yes, it IS what you need.
2.  You realise that the money on your floor can be used for a better or different investment.

This little mental activity is a wonderful way for you to remove yourself from the situation and make a rational decision as if you are ‘starting from scratch’.

So make sure that you understand about lost opportunity cost.  And have you seen the updated FREE Training Videos yet??

JUST USE THIS LINK TO CHECK THEM OUT

It will cost you nothing other than your time.  Or even just drop me and email and say “Duncan I’ve got these assets, it’s kind of doing this, do you think I should keep it? What do you suggest is happening in the world? “And I give you whatever options I can.  So crew take it easy.

Whilst this may in your mind be a very true and valid thought – please understand it is just that.  A THOUGHT!

This is not really a money myth, but rather an excuse. (WHOA…did I just say that)

Now “Hold On” I hear you say.  “If I knew how to do better with my investments then I would”.  Well, my question simply is “Then why aren’t you?”

This is where there is a direct link between what you are naturally good at and what you want from your lifestyle. 

What you actually crave Versus the types of investments you are making and also how you are managing your finances…your money.

Not knowing the next step is NORMAL people.  It’s a completely normal experience.  What separates the good investors from the not-so-good investors are the ones that seek out education and assistance so they can find out what the next step is.

What is good for your neighbour, your friends or your parents does not mean it’s good for you.

Once you get a plan and you can LINK your investment plan back to enjoyable experiences then you will be able have the experiences you deserve.

All of these challenging mindsets come from two main problems:

a. Not understanding money and how it works.

b. Having subconscious negative associations with the idea of money.

Whether you’re struggling with one, or both of these, you’re going to have a hard time with money til you remediate the mindset.

Just like developing any new skill or getting better at something you are already doing, you’ve got to take the time to understand investing, money and finances so that you can create better positive associations around it.

Once you are better educated – you will make better decisions.  This is different to just ‘knowing more stuff’.  That alone will give you stuff all.

Information is not power.  It’s cluttered and irrelevant until you do something with it.  Until you are EDUCATED extra information will simply bog you down and over-whelm you.

Maybe a simple first step is to learn HOW to align your personal lifestyle goals with your investment goals.

Learn what the different types of investments are and which ones are suited to you.

And discover the effective tools to then track and measure your investment results. 

This is exactly what you benefit from in the 6 Week Online Training course.  CLICK HERE TO LEARN MORE.

Unlimited access to all the training videos, downloads and resources that you can access over and over again. 

And really get educated about developing a STRATEGY that is flexible and suited to your personal needs.

Click HERE to check it out.