Category: MARKET

Money can be both a master and a servant in our lives, depending on how we choose to approach it. As P.T. Barnum once said, “Money is a terrible master but an excellent servant.” Let’s explore what this means and how we can ensure that money serves us rather than the other way around.

Money as a master can be a daunting prospect. It can feel like we are constantly at its mercy, always struggling to make ends meet and never feeling like we have enough. When money is our master, we may find ourselves paying late fees and overdraft charges, overspending, and feeling constant stress about money. It can be a never-ending cycle of worry and anxiety that leaves us feeling drained and overwhelmed.

On the other hand, when we view money as a servant or tool, we regain our control. We choose what we do with our money and how we feel about it. We are intentional about our spending and saving habits, balancing short-term enjoyment with long-term stability. We make decisions based on our values and goals rather than allowing money to dictate our choices. This can lead to a sense of peace and security around money, which can be incredibly freeing.

So how can we ensure that money serves us rather than becoming our master?

Define your values and goals: Understanding what is important to you and what you want to achieve can help you make intentional decisions about how you use your money. Take time to think about your values and how you want your life to look.

Create a budget: Whilst so many people try to avoid this, a budget can help you take control of your finances and ensure that you are living within your means. By tracking your income and expenses, you can make sure that you are spending money on the most important things to you.

Establish an emergency fund: An emergency fund provides a profound sense of security and peace of mind. This fund can help you cover unexpected expenses without going into debt or costing you your other financial goals.

It’s not a straight road ahead. There will be times when money stress creeps back in, even when we’ve put our plans in place. Life keeps us on our toes, so be kind to yourself if you find yourself slipping away from your budget, or losing sight of your deeper values. Simply knowing that you have a plan to align with, values to guide you and people around you to support and celebrate with empowers you to easily regain your focus so that your money serves you rather than the other way around.

“Financial security and independence are like a three-legged stool resting on savings, insurance and investments.” – Brian Tracy.

When it comes to financial planning, many people focus on investing as the key to financial security and independence. However, as Brian Tracy points out, financial security and freedom require a three-legged stool resting on savings, insurance, and investments.

Savings are a crucial component of financial security and independence. Without savings, unexpected expenses or emergencies can quickly derail your finances. It’s important to have a savings plan in place that includes an emergency fund, a retirement savings plan, and savings for other long-term goals such as buying a house or starting a business.

Insurance is another important component of financial security and independence. Without insurance, you may be left with significant expenses in the event of an accident, illness, or other unexpected event. It’s important to have insurance coverage for your health, home, car, and other assets. You may also want to consider life insurance to protect your loved ones in the event of your death.

Investments are the third leg of the stool, and they can help you build wealth over time. However, it’s important to invest wisely and to choose investments that align with your goals and values. This might involve investing in stocks, bonds, mutual funds, or other types of investments.

To achieve financial security and independence, it’s important to focus on all three components of the three-legged stool. Here are a few tips to help you get started:

Create a savings plan: Determine how much you need to save each month to achieve your long-term goals, and create a budget that allows you to save that amount. Set up automatic transfers to your savings accounts so that you don’t have to remember to do it each month.

Review your insurance coverage: Make sure you have adequate insurance coverage for your health, home, car, and other assets. Consider getting a quote from multiple insurance providers to ensure you’re getting the best coverage for the best price.

Invest wisely: Choose investments that align with your goals and values, and make sure you’re comfortable with the level of risk involved.

Working with a financial adviser can be incredibly beneficial in helping you achieve financial security and independence when working on all of the above. Together, we can create a comprehensive financial plan that considers your goals, values, and risk tolerance whilst guiding insurance and investment strategies, helping you navigate the complex world of insurance and estate planning.

Thinking, feeling, and acting are interrelated processes that shape our behaviour, and they often become so habitual in our busy lives that we are no longer mindful of them. We lose control of being intentional about the direction our lives are taking – and this often shows up in our finances.

Therefore, it is important to be aware of our thoughts and feelings and how they influence our actions, especially concerning financial behaviour.

Essentially, thinking refers to the cognitive process of processing information and making decisions. It involves analysing and evaluating information to reach conclusions and make decisions. Feeling refers to the emotional experiences and reactions triggered by events or thoughts. Our actions are shaped by our beliefs, values, and emotions, as well as our thoughts and decisions.

In many cases, our thoughts and feelings can interact in a cycle. For example, a person may have negative thoughts about their financial situation, which can trigger stress and anxiety. These feelings may lead them to act impulsively and make poor financial decisions. On the other hand, a person with a positive mindset and emotions may be more likely to make sound financial decisions. All three of these are shaped by our various intelligences.

Intelligences are the various capacities or abilities we have to process information, understand and interact with the world around us, and solve problems. There are different theories of intelligence, but one of the most widely recognised is Howard Gardner’s theory of multiple intelligences, which proposes that there are eight distinct types of intelligence.

1. Linguistic intelligence: ability to use language effectively.
2. Logical-mathematical intelligence: ability to solve problems and think logically.
3. Spatial intelligence: ability to perceive and manipulate visual information.
4. Bodily-kinesthetic intelligence: ability to control one’s body movements and handle objects skillfully.
5. Interpersonal intelligence: ability to understand and interact effectively with others.
6. Intrapersonal intelligence: ability to understand one’s own emotions and motivations.
7. Musical intelligence: ability to perceive and produce musical sounds.
8. Naturalistic intelligence: ability to understand and appreciate nature.

Each type of intelligence can impact our financial behaviour in different ways. For example, those with strong linguistic and interpersonal intelligence may be more skilled at negotiating salaries and financial deals.

Those with strong logical-mathematical intelligence may be more likely to make sound financial decisions and manage their finances effectively. On the other hand, those with strong musical intelligence may be more prone to impulsive spending on musical instruments or concerts. Understanding one’s bias in terms of intelligence can help inform and improve financial behaviour.

Not only does this help us understand how we might make, spend or save money in different ways to others in our family or business, but it can also help us see how we could arrive at solutions to problems in more creative, analytical or logical ways. This improves communication and forges stronger relationships with those around us and with our money.

People have a wide range of feelings and perspectives regarding investing. Some view investing as a way to grow wealth and secure a financial future, while others may view it as too risky or complex.

Some of us are confident in our investment knowledge and feel comfortable making decisions independently, while others prefer to seek guidance from financial advisors or investment professionals.

Still, others may feel nervous about the stock market and prefer to put their money in lower-risk investments such as bonds or savings accounts.

Ultimately, our feelings about investing will be influenced by our individual financial goals, risk tolerance, experience, and knowledge. Understanding our attitudes and feelings towards investing is important to make investment decisions that align with our personal financial planning values and goals.

For the next 12 months, here are some great tips to keep you focused and motivated in your investment strategy.

First off – start early! The earlier you start investing, the more time your money has to grow. The “Power of Compounding Interest” drives your investment over time, creating wealth out of your money. It’s why every financial guru recommends starting as soon as you can, even if it’s a small amount. And, apart from the value of compounding over time, it helps us develop healthy saving habits early on.

Second – diversify. Spread your investments across different asset classes and geographies to reduce risk. The proper diversification strategy is a vital step in the investment journey, needed to ensure a balance of growth and stability of the portfolio. In a nutshell, it’s about avoiding putting all our eggs in one basket.

Third – monitor and review: Regularly reviewing investments ensures they are aligned with our goals and enables us to make changes where necessary. It helps us choose and stick with investing approaches that are most suitable for our investment needs.

Fourth – stay disciplined: Stick to your investment strategy and avoid making impulsive decisions based on short-term market fluctuations. This has been one of the most valuable tips in our recent times of market volatility. Fear of missing out or losing everything can cause us to switch too early or too frequently, which erodes our wealth over time.

Fifth – create a budget. Whilst this is normally the first thing anyone does when trying to bring order and structure to their finances, it’s the first thing that we let go of when money gets tight or we start investing on a larger scale. Few people like sticking to budgets, but it remains at the heart of a healthy financial plan. 

Whether you’re starting out on your investment journey, jump starting an investment strategy or simply struggling to stay the course, these tips should hold you in good stead. Otherwise, just reach out and let’s chat!

Vincent van Gogh is quoted as saying: “Great things are done by a series of small things brought together.” This quote highlights the idea that even the smallest actions or details can contribute to the creation of something significant. Focusing on and taking care of the small things can achieve big results over time.

Essentially, this is about being productive. In the moment, we might think that it’s just a small action or an insignificant choice, but they all add up. Productivity has a direct impact on our health, time and money. By being productive and efficient, we can complete tasks faster, produce more work, and increase the value we create and enjoy in life.

Those of us who are productive and manage our time well are more likely to be able to save money, manage our stress better, and make healthier life and financial decisions.

One of the first ways to prioritise the important ‘small things’ is to avoid multitasking. Multitasking is often seen as a way to increase efficiency and productivity, but in reality, it can have the opposite effect.

When we multitask, we divide our attention between multiple tasks, leading to decreased focus and lower quality of work. And, switching between tasks generally creates more stress and mental fatigue, but it’s incremental, so we don’t always notice it at the time. After a few hours of multitasking, we may simply feel frustrated but not really know why because we’ve felt busy, but haven’t been productive.

It’s better to focus on one task at a time, giving it the necessary attention and effort to complete it effectively before moving on to the next task. This can lead to improved concentration, higher-quality work, and overall greater productivity.

Here are some practical ideas to try out:

• Identify your goals and priorities: Determine what is most important to you and what you want to achieve.
• Make a to-do list: Write down all the tasks that need to be done and prioritise them based on their importance and urgency.
• Use the 80/20 rule: Focus on the 20% of tasks that will produce 80% of the results.
• Avoid distractions: Eliminate distractions such as emails, social media, and unimportant tasks to focus on what is truly important.
• Take breaks: Regular breaks can help increase productivity and avoid burnout.
• Review and adjust regularly: Review your priorities and to-do list, and adjust as needed based on new information and developments.

Remember, consistency and attention to detail in small tasks can lead to significant outcomes. Focusing on the small details and consistently working towards our goals can achieve great results over time, leading to big payoffs in the end.

In recent years there has been a considerable amount of economic uncertainty. Many people are unsure of their financial future, concerned that they won’t be able to retire because of financial setbacks related to the pandemic and other global events.

Saving for retirement often aligns closely with benefiting from tax advantages, tax-free investing and tax deferment. Life beyond work is a season of life that we can start planning for now and see immediate savings in our tax returns and the long-term wonders of compounding interest.

Retirement planning refers to financial strategies for saving, investing, and ultimately distributing money to sustain oneself during retirement. It’s a very personal journey, and the amount we need to save depends on our age, income, desired retirement income, inflation, and more. But what so many people overlook is that they can reap short-term benefits, too – tax savings being the most obvious, but emotional and mental wellness are also notable benefits.

Life after work is not just a financial conversation – it’s a whole-of-life conversation! Debt is only one challenge; divorce, depression and disenchantment all feature high on the list of struggles that those entering life after work face – and if they’re not prepared, these can be devastating.

Despite all this – we continue to engage with people who are not prepared for retirement. Sometimes it’s due to factors outside of their control, like the economic uncertainty mentioned at the beginning of this blog, but sometimes it’s due to avoidance and poor advice.

There’s room for improvement in retirement planning and saving, and a quarter of non-retirees have no retirement savings. Thankfully, it’s never too late to start saving for life after work, and there are ways to catch up if you feel like you’ve fallen behind.

When tax returns are due, we always find that there’s an increase in questions about retirement savings and how they can reduce tax. These questions don’t always have simple answers, so it’s a good idea to consult a financial advisor to get personalised advice that fits your financial situation and goals. Whether you are looking to save on your tax bill in the immediate future or bolster emotional and mental fitness by securing your financial bearings for life beyond work, the sooner you can engage with your retirement plan, the better.

For years, people have said that insurance is sold and not bought. The stigma surrounding the industry and those representing it still hangs thick in our social memory, with old stories of brokers peddling policies purely to earn commission instead of seeking the best needs of their clients. However, in the last decade or so, we saw a shift in motivation for sales, with a breed of financial planners and advisors emerging who chose to put their clients first, not the product providers, insurance houses and investment offices.

Coupled with pandemic-influenced buying habits and near-limitless access to information, we are finding that risk products are being requested more and more, shifting it to a product class that is bought and not sold.

From various reports, research and client feedback, the most significant factor prompting consumers to start exploring different life insurance is their concern for the future, most likely heightened by the pandemic and other global issues.

Interestingly, people are only sometimes using cost as a motivator for their final choices. As financial advisors, we have found that our role has shifted from being gatekeepers of information to being gatekeepers of value. Where clients would typically ask for information about different products, we’re finding that the conversations are shifting more to understanding which products best suit their lifestyles and future goals. This means that cost is only one consideration, if it even features.

In a world of fake news, value is now found in product providers who can fulfil their promises and offer flexibility, integrated value and robust client engagement. Near-instant communication through online chats, social media and platforms like WhatsApp, means clients expect faster and more comprehensive feedback on claims, adjustments, annual changes and product upgrades.

Value is not only found in the end product; greater accessibility through digital buying platforms and underwriting innovations requiring a less invasive process all contribute to the perception of a company that can understand its customers and deliver on its promises.

At the end of the day, this relates to how we choose our risk cover, who we choose to invest with, and how we build our own reputations in the 21st century. Access to information, improved technology, and a recent history of black swan events have impacted how we consume and contribute to our local and global communities. If you feel like you need to rethink your financial plan, please get in touch soon and let’s see how we can enhance your situation.

“A deep life is a good life.” – Cal Newport, Author of “Deep Work: Rules for Focused Success in a Distracted World.”

Have you heard of deep work? A term coined by Cal Newport, deep work is a state of distraction-free concentration when your brain works at its maximum potential.

As you read this, you probably realise just how hard it is to find a space of genuinely distraction-free concentration. Even whilst reading this blog, you may be thinking about your next task, hearing the notifications from your mobile device or switching between tabs in your browser. We all have a ton of distractions that we’ve allowed to permeate, and often govern, our days.

So whilst we think we’re making the most of our productive time, there’s a good chance we’re not. Instead of deep work, we’re engaging in shallow work. Newport’s deep work theory suggests that to be truly productive, we should log out of all communication tools and work uninterrupted for long periods every day. So while we might not be able to step away from communication tools fully, we can aim for 60-90 distraction-free minutes at a time.

Deep work is effective for two reasons: it helps us avoid distractions and rewires our brains to help us learn hard things faster—so we can get better work done in less time. The next step to implementing deep work into your schedule is to choose a deep work philosophy.

In his book, Newport outlines four different philosophies to follow as you decide how to schedule your deep work. Depending on your lifestyle, some approaches may work better than others: 

Rhythmic philosophy

With this approach, you establish a regular habit and rhythm for deep work, blocking out between 1-4 hour chunks to focus at the same time every day. For example, schedule time for deep work between 8-10 am every weekday. The key to this strategy is consistency, which you can achieve by committing to a certain amount of deep work daily.

Journalistic philosophy

This method allows you to fit deep work wherever you can into your schedule. You could schedule time for deep work when you have 90 minutes between meetings, and this requires you to switch into deep work mode at will, which can be difficult for beginners. The rhythmic philosophy may be your best bet if you have a predictable meeting schedule.  

Monastic philosophy

This approach eliminates or drastically reduces shallow work across all aspects of your life. For example, science fiction writer Neal Stephenson famously avoids email and speaking engagements to free up his brain space for writing. That means Stephenson is nearly impossible to get a hold of but highly prolific, with over 80 works to his name.

Bimodal philosophy

This method involves dividing your time, with long stretches (at least a full day) set aside for deep work and the rest dedicated to everything else. Bimodal scheduling is a more flexible version of the monastic philosophy—instead of completely eliminating shallow work, you can spend a day or more working deeply and then return to your other obligations.

Again, like so many other skills we’re learning in our current age, it begins with mindfulness. Many of us begin our days by responding to emails, and before we realise, we’ve spent an entire day simply following the needs and requests of other people. Becoming mindful of how we spend our work time is the first step to choosing how to spend our time more productively. A deep life is a good life.

There are times in the year when we see and engage with more people than usual – through end-of-year functions, annual celebrations, birthdays, anniversaries, weddings, funerals and the like.

It can be wonderful – but it can also be stressful. We are quickly reminded that these old friends, colleagues and distant family from far-off shores have opinions that challenge our own, and they’re all too willing to offer unsolicited advice.

All these voices can be exhausting – especially if we’re already feeling a little burnt out or overwhelmed with what we feel we still need to accomplish. This is okay – we don’t have to take their advice too seriously, especially when it comes to managing our money.

You can choose to stick to listening to the voice of your trusted financial adviser and wealth management team. Actually, this is the best choice! When managing our finances, listening to too many voices can be treacherous to our financial plan.

It’s like when you’re buying a car; the more people you speak to, the more confused you’ll become. The same is true of your finances.

Working together, we want to create and follow a plan that helps you avoid common financial planning and investment mistakes in our relationship. This doesn’t happen once a year at a lunch party where the financial conversations tend to be rather superficial. This happens regularly and only after deeper conversations around meaning and purpose have been explored and brought into context by the money that you have.

Some of the high-level principles to keep in mind include the following:

   – Invest with a financial plan in place, don’t run an ad-hoc strategy

   – Invest in the correct products for your plan

   – Always remember the effects of inflation

   – Avoid spending your retirement savings when changing jobs

   – Let your emotions subside, then decide

So – what voices will you be listening to? When someone has skills, experience and qualifications that can help you AND has spent time understanding your needs and helping you put a plan in place that reflects your goals and risk appetite – you listen to their voice. Not only does it begin to echo your own, it will also help you articulate what’s important to you.

Religion, politics and money are all connected – and probably always have been! This is because they’re all currency for influence, power and status. These three topics can become highly volatile when we’re in social settings as they’re super subjective.

The markets, politics and religion all give us a sense of belonging, purpose and stories to share. Since they offer so much meaning, we’ll likely talk about them at any chance.

Depending on the crowd we’re with, our conversations will be dominated either by academics or opinions or perhaps a balance of the two. When it comes to elections (both in our country and others), the situation is the same too – so when you’re next around a dinner table, here are two crazy academic points that you can contribute to the conversation.

MARKETS – LOCAL AND OFFSHORE

The most common sentiment regarding political influence is around confidence in the leadership. This metric will directly influence investor confidence. This can be both local and offshore – if investors don’t like what leaders are doing, they are less likely to invest in local businesses (markets) and more likely to look at a heavier offshore weighting. The same too would apply to those who are sitting outside our country – and determine whether money is pumping in, or out, of our economy.

Administrative policies play an equally important role here as new administrations often like to shake up policies of previous administrations. These affect everything from the support offered to businesses at every level, living standards of the workforce, education and health for their families and the taxes we will pay for goods, services and investments.

This all leads to a more immediate impact – and that is the strengthening or weakening of the currency. Our buying power goes up and down accordingly – and once again circles back to how much we can afford to invest in our local economy.

TRADE RELATIONSHIPS

Elections in other countries can also heavily influence what happens in the local market as we have significant trade relationships with them. In his book, 21 Lessons for the 21st Century, Yuval Harari reminds us that all our communities are so intrinsically connected through trade-relationships that it’s hard to stand for any cause or initiative without indirectly supporting the opposition.

The clothes we wear, food we eat, cars we drive, technology we use and the social media platforms we communicate on are all manufactured, harvested, designed, managed and maintained using intricate global networks. 

Political movements and influence matter to all of us. The next time your dinner party runs wildly away with passionate opinionistas, you can throw in the above nuggets and sound like a guru!