Page 97 - Smart Money

Smart Money

address your needs. If you have an insurance broker and that is all they do,
they will not be in a position to consider your cash flow, superannuation,
and things of that nature. Go to a planner who has the capacity to address
all the issues, and as the consumer and client, you have the power. Keep
looking until you find the right one.

A good financial plan will cover all eventualities. At a core level, we
would cover super, insurance, cash flow; we would consider tax situations
where relevant, and then estate planning, because they are, to an extent,
intertwined. If you consider all those things, you can put the perfect plan
in place, but you still do need to review it. The one constant that we have
is changes – in government, changes to rules, the tax office changes the
rates, the markets change over time, be it property or shares or interest
rates. As individuals, our own situations can also change. As we get closer
to retirement, our needs are different; if we are raising a family, we have
different needs to someone who has just started a job and doesn’t have
any dependents.

Key Point

With investments, always consider the worst-case scenario and mitigate
against it. We have already touched on life insurance, but think about
what if would happen if interest rates were to go up by two or three
percent. What if you didn’t have a tenant for a long period of time and
you didn’t have that income? If you ask yourself those questions and
your response is not a worst case for you, but is something you can
cope with, then you can continue with a little more confi dence.

We have clients whose ages range from the early 20s to the mid-80s, and
they are still actively seeking advice and reviews from us. You become
an adult, technically, at the age of 18, but you really become an adult at
a different time, when you realise, “Geez, I have kids, I have these super
statements that I never look at, I have all these different things that are
quite adult, daunting things to think about, but I don’t want to address
them.” That is generally when a financial advisor can assist, because you
let them do it for you, as Homer Simpson says.