Now more than ever there’s so much noise around. Stock markets are up one day, down the next, the media puts it right in your face ( I call it financial pornography), but at the end of the day no one knows what’s going to happen. 50% are going to be right, 50% are going to wrong.
Combine this with potential government changes to tax, super and the impact of the Royal Commission there’s enough information to stop you taking action because of something that might happen. Bottom line we have no idea what the future is going to hold.
We, at Jigsaw Private Wealth, prefer to keep the odds in our clients favor and focus on what we know work. It’s not exciting but it’s time to go old school.
Recently I was in Sydney for business, learning from some leading financial planning firms. As I always say, there’s always room for improvement.
While there we went out for dinner to a unique restaurant called Bisteca. At first, it looked like any other Italian restaurant.
We had a pre-dinner drink at the bar and when our table was ready we were ushed into the dining room.
When we entered the dining room, we were asked for our phones. We were all surprised, a little shocked as this has never happened before.
The waitress said it was a phone free zone. She placed all our phones in a draw on the wall, locked it and gave us the key and showed us to our table.
We were given the menu which was one page, a few starters, a few sides and the only main you could order was Bisteca (steak) and you ordered it by the 100 gms. There was not a multitude of options you see at many other restaurants, it was kept very simple.
We ordered our steak and they brought over the steak to show us on butchers paper and then cooked it over coals in the restaurant where we could see it.
It was a great night and it got me thinking that getting back to basics can provide a great outcome. It was a memorable night.
In saying that, I believe that most are over complicating the path to financial freedom, getting caught with the shiny new investments, being sold by slick salespeople and not following the simple principals that actually get results.
Now, they are not exciting, they are boring but following this approach will get you results. It does require some discipline and patience, however, the results will come.
Aspirations + Savings + Tactics + Metrics = Financial Freedom
Aspirations – Know what it is that you want to achieve in the future? If it’s financial freedom, what does that look like for you, how much would you require dollar wise to achieve it?
If it’s a certain lifestyle in retirement, what does that look like for you?
Want help to calculate it? You can download our Start Right Guide to Designing Future Lifestyle Certainty here>>
Savings – This is something you can quite easily automate. Once you know the above you can work through the numbers and work out what’s required.
Where most people fail is they start with good intentions and see little progress. Here’s the thing, most of the effort is achieving around 70% of the goal and then the remainder is much easier to achieve.
It’s what we advocate here at Jigsaw Private Wealth. The road to financial freedom is hard, but the first part is the hardest.
I’ve provided a link to this article below, however, I wanted to summarise this for you.
If you are looking to achieve a goal of reaching $1,000,000 the first $100,000 is the hardest to achieve. That’s because the savings rate takes up most of the achievement.
However, post this it takes less and less time to achieve each $100,000. That’s because the power of compounding comes into play.
So, what’s the lesson?
It matters more in the early years the amount you save. In the later years, it’s the investment return that generates the results.
If you really want to achieve financial freedom.
Focus on what you can control, such as savings rates, earning more, minimising investment costs & maintaining an appropriate asset allocation based on what you want to achieve.
Tactics – When we talk tactics, this relates to strategy.
What are the strategies you are going to put in place, ie are you going to contribute more to super because you can save tax, do you invest in your own name or do you use a tax bond where the maximum tax rate is 30% because you can access the funds when you want.
It’s different for everyone, you just need to determine what is the most appropriate based on your individual circumstances.
Metrics – Like most things in life, you do not achieve it unless you have the right metrics to gauge and review your progress.
One of the things we consistently use with our clients is to use a metric based on every individual so they know at every stage what’s required to achieve their financial goals.
Ps. It has nothing to do with investment returns.
I hope that helps you focus on getting on top of your finances.
Here are a couple of other posts we have put together that may be useful:-
Want to know how to achieve financial freedom? We discuss the 6 steps here>>
Achieving financial freedom is never easy so we discuss the challenges here>>
One thing that gets in the way of maintaining your focus is letting market gyrations mess with your mind. It makes you make dumb mistakes. We discuss that here>>
So, if you’re a professional earning a good income, business owner or someone planning for retirement and are wanting to create your path to financial freedom with more certainty with less stress and anxiety feel free to book in a 15 min Possibilities call here>>> and we can help you work out what the first step is for you.
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.
Ps. We don’t sell you anything on this call. We will help you determine what the next step is for you. However, if you are someone who is looking for a get rich scheme, silver bullet or believe you know everything we are not for you. However, if you are someone who really wants to achieve financial freedom, committed and wants to work collaboratively then we can help.
Hope that’s been useful.
PS. Can you help? We are preparing a new resource to help people 5-10 years out from retirement make better decisions so they can retire in style, live the lifestyle they always dreamt of. Can I ask you complete our survey to help make this resource even more valuable and useful? CLICK HERE to complete>>
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