A recent survey of 2400 Australians showed that for many, retirement funding was a cause of ‘high anxiety’. They found it confusing and held a deep seated fear that ‘the pension won’t be around when we need it’. The interesting thing was however, that they were disengaged with their own retirement planning and funding. They know that they should take an interest and be active in managing it but made a myriad of excuses why they will ‘do it later’.
So while 66% of them were not confident of having enough to fund their expected lifestyle, only 37% had made any attempt to work out how much they needed and 7% thought that planning was a top priority. Be one of these 7%! Then you can relax and enjoy your current lifestyle, knowing that there is a strategy for the future funding in place.
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I recently heard a QANTAS pilot giving a presentation including a few “wildly improbable” anecdotes. All testing of parts, engines and planes are measured in the likelihood of failure. This may be 1 per 100,000 hours, 1 in 3m hours, etc. Risk is measured and understood so that informed, considered decisions are made when the unexpected happens. The smart investor thinks like a pilot.

We need to ‘plan our course’ and then make regular changes where necessary to ensure that we are on track. There will be turbulence, there will be noise, there will be unexpected weather and there may even be a catastrophic engine failure!
These changes we make may be due to economic factors, personal circumstances or legislation. Change applies to most part of our lives.
It is not the strongest of the species that survives, nor the most intelligent - it is the one that is most adaptable.” Charles Darwin
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I will let you in on a trade secret. You can put your money in ‘pre tax’, you can choose who manages it, where it is invested and when you retire all earnings and income are tax free. Not only that, it is protected from creditors. And the government is encouraging us to do it.
OK, so super doesn’t have the same ‘bragging rights’ but this is actually how superannuation works. There is simply no other investment structure that has these benefits, so if you are not using it as a key wealth creation strategy, you are paying too much tax.


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 Here are the top four tips – make sure they are in place first. 

1.      Understand risk and return. The yield that an investment generates is the starting point. Don’t take additional risk without being rewarded by additional return. The most effective way to reduce risk is to diversify – across asset classes, managers and regions. An investment that generates a loss with the expectation of potential future growth is speculating. Don’t confuse the two.
2.    Insure your income, assets and life. “We’ll get by” or “she’ll be right mate” won’t cut it with the spouse and kids left behind who have to sell the family home. Unless you can live comfortably without working and you don’t need to generate an income, this is essential to protect your assets and loved ones.
3.    Have a cash buffer. Stay liquid and have a cash buffer to cope with the unexpected. This may be for unexpected buying opportunities or unexpected personal circumstances but gives additional flexibility. The amount will be different for everyone.
4.      Get your estate planning in order. If you want your assets and wealth to end up in the right hands at the right time, you need to have a comprehensive estate plan in place. So who needs one? Anyone with either assets or loved ones. And that is before we even consider second marriages, step kids, ex spouses, spendthrift kids, “interesting” family members etc
BD Financial planning is able to refer you to one of our Professional Partners who can discuss your estate planning needs.
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Finally as the year draws to a close, we hope that you have a wonderful Christmas and a look forward to working with you in 2011.

BD Financial Planning will be closed from 24th December and will reopen on Monday, 17th January. 
For urgent issues, please phone Brett on 0414 821 863 or Devona on 0412 876 850.
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