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What happens if something goes wrong with my financial advice?

Jul 30, 2021 10:44:02 AM

What happens if something goes wrong with my financial advice?

Sometimes things go sideways, advice is provided that leads to money being lost either on a small scale or potentially a life altering scale.

For example, you may get advice to invest your savings into a fund, so you put your retirement nest egg or part of it into a short-term vehicle on your financial planner’s recommendation – and it goes bust, you lose the lot. This has happened in Australia, Storm Financial, then insurance provider HIH, which went under leaving many Australian’s not able to claim on their insurance, nor their assets insured at all.

So, it does happen, albeit not regularly so there are mechanisms for both large and small grievances you may have against your financial planner. Wanting to take your planner to court because they said, ‘you could make 20% on your investment’ and you only make 15% will be struck out before you even get there. However, where real losses are incurred, improprieties are perpetrated or you feel your planner has behaved unethically, then there is certainly recourse.

Working out a mutually beneficial solution with your planner

As with most situations, the first step is to air your grievance with your financial planner and see if there is a mutually beneficial outcome. If they have done everything, they can iterate your plan, worked to reinvest to make money back and you are on track, then we would recommend that you collaboratively work with them – rather than against them. However, if the matter is unable to be satisfactorily be resolved, then you have several other places to go.

Financial Planners Association

By working through planners that are registered with an industry body or association, they not only have to adhere to standards of ethics, development and expertise, but they also are subject to the rules and regulations of the respected body.

For example, should you have a grievance, you can speak with members of the association and lodge a complaint, enter into mediation, or potentially have them investigate your matter in an effort to seek a resolution. This will be a much cheaper option than bringing in lawyers and starting legal proceedings. However, if you are not getting a satisfactory outcome, then you can then escalate the matter to the Financial Services Ombudsman.

Financial Services Ombudsman

The Financial Services Ombudsman (FSO) is there to protect consumers rights, and to hold industry participants to account. Although taking your case to the FOS will be cheaper but can be more time consuming and there is a $280,000 cap on compensation.[1] As such, you need to review at this stage – with a lawyer – what the implications of taking the practitioner to court are, if your claim + damages exceed the cap on compensation, then you may wish to proceed further and take them to court.

However, it should be noted, that often in this case, the legal fees eat significantly into any settlement that may be achieved, and if your financial planner or advisor goes bankrupt in the process, you may be left with very little.

The Australian Financial Complaints Authority provides live chat, online and phone access to people dedicated to assist you with your compliant, and work towards a resolution for you as a consumer of financial services.

[1] https://www.mauriceblackburn.com.au/blog/2016/july/11/bad-financial-advice-how-you-can-fight-back/

What are the risks of working with a financial planner?

Jul 30, 2021 10:37:39 AM

What are the risks of working with a financial planner?

As we have clearly outlined throughout this Walker Capital eBook, the risks (and costs) of not working with a financial planner are far greater than that of working with one.

The missed opportunities, how as little as $100 per month into a managed account could one day give you a $280,000+ nest egg, or how much you could benefit from a self-managed superannuation fund (SMSF), changing your insurance providers or investing into a fund.

Like almost everything in life, there are most certainly risks being aware of with working with a financial planner.

Investment Losses

No one likes to lose, but that is a fact of the financial markets – which people call efficient for just that reason, some people win, and some people lose.

However, one of the risks of working with a financial planner, is just that. You invest your money into a portfolio, fund, property, shares or other alternative investment vehicle and it loses value.

Spare a thought for people who invested in cryptocurrencies like Bitcoin, put their SMSF money into it, when it seemed it could climb to astronomical heights – only for it to fall from over $86,179.29 to $45,780,98[1] as at the writing of this article.

That is a loss of over $40,000 in just a matter of months, or 46% of your total investment! Sure, some lucky people bought these coins for under $1 and are enjoying the spoils – but they are speculative. For more information on Alternative investments, please see the Walker Capital Alternative Investments eBook.

So, back to your potential risk of investment losses while working with a financial planner. As the client, you need to be very clear on how high your risk tolerance is, how much you want to diversify your portfolio and the types of investments you are prepared to make.

Irrespective of how safe a company may look, or how solid an investment may look, there are always externalities such as macro-environmental factors that are well outside your control – such as the GFC in 2008 and COVID-19 in 2019-2021 that may incur losses to your portfolio – so be warned.

Clinging to failed strategies

As Kenny Rodgers in the classic tune The Gambler said, “you need to know when to hold them, know when to fold them”. Although he was refereeing to cards in a card game – your investment portfolio in this respect is no different.

You and your financial planner need to have a candid conversation when it becomes apparent that failed strategies have been implemented and losses have been incurred by your portfolio.

Clinging to failed strategies is risky business, hoping they may turn around. For example, investment in property funds, in which the fund manager keeps saying “The development is coming, we are just waiting for some more capital”, despite your prospectus document stating the building should have been paying you annual returns for the past 2 years, and in fact, the building should have been constructed by now!

There are signs outside of simply losing money when it comes to your investments, where you should cut your losses and move one. And although a bitter pill to swallow, you as the client need to be strong and do so.

Life Event Risk

There are only three sure things in life, birth, death and taxes. As such, as an investor, trader, planner or simply a person wanting to set themselves up, you need to be prepared – life happens.

This is not always a negative risk to your portfolio, despite being at a great personal detriment, you may experience a financial windfall when a parent or loved one passes and this needs to be factored into your portfolio.

But you also may have started out your financial journey as a single working person, got married, had children and so on. As your life progressed, you may like one third of Australians get divorced, then remarried, and create a new family. So, in essence, life happens, and it is important to be prepared.

There are many risks with anything financial, but the greatest risk is to push through life, only thinking of the weekend, the here and now, then to get to the end of your working life with no nest egg, a mortgage and no passive investments to supplement your income when you wish to slow down.

Plan to succeed, and even if you encounter the above-mentioned risks, you and your financial planner have the skills, expertise and options to set a new plan in place and move forward.

[1] https://www.coindesk.com/price/bitcoin viewed at 1.28pm 30.06.2021

How did the Royal Commission into the Financial Services Sector effect my Financial Planner?

Jul 30, 2021 10:33:17 AM

How did the Royal Commission into the Financial Services Sector effect my Financial Planner?

Unless you were sleeping under a rock and haven’t read any of the previous chapters of the Walker Capital eBook into Financial Planning, you would have heard about the into Misconduct in the Banking, Superannuation and Financial Services Sector.

The findings were damning, and the whole sector has gone through an overhaul to regain the trust of their customers – including in some cases paying back large sums of fees and fines that were changed indiscriminately and unlawfully.

According to KPMG, “this report will drive significant transformation in financial institutions including operating models, product design, customer interaction, governance, remuneration and risk management. Businesses impacted include banks, mortgage brokers, wealth managers, insurers, superannuation funds and financial advisors.

The Commission’s work has four clear observations:

  • the connection between conduct and reward
  • the asymmetry of power and information between financial services entities and their customers
  • the effect of conflicts between duty and interest
  • holding entities to account.”[1]

As a client of financial planning (financial service), you could be excused for wondering “How this may directly affect you?”.

For a specific review, the Australian Treasury released a table with the recommendations of the Royal Commission, and the effective response they issued to move forward – Restoring Trust in Australia’s Financial System.

In summary, though the Royal Commission provided the following changes to your financial planner, the Commissioner’s recommendations, while expected, bring significant disruption to and accelerate necessary changes to business models, specifically:

  • Removing grandfathered conflicted remuneration
  • The suggestion that life insurance commissions be reduced to zero
  • Requiring annual consent to fees.
  • Higher training requirements
  • New reporting obligations and controls
  • A significant uplift in internal compliance.
  • A new disciplinary body to bring financial advisers into line with other professions. 
  • Compulsory training and a new Code of Ethics
  • Reporting compliance concerns.
  • Organisations will have a responsibility to ensure rigorous recruitment and reference-checking processes for advisers seeking to operate under their licence.[2]

These ten points are only the beginning of the changes in compliance, reporting, regulation, fee structures and services that directly affect your financial planners, the organisations they work for and the services they provide. As such, it provides you as a consumer of financial service far more clarity, more convenience and more safeguards to know that you are protected – as you should be.

As we have mentioned earlier, it is important to do your due diligence into your financial planner – or any professional services provider for that matter.

To get a feel for potential planners, review their website, ask for phone numbers of several clients to discuss their ongoing experience and get a feeling for whether the planner is a good fit. In addition, have your lawyer and accountant investigate your new adviser – just to get a feeling about them.

This is no different to an interview process that you may go through to get employment, and your financial planner is no different – they are being interviewed for a long-term position within your network of consultants.

Finally, you need to do some reading, get an understanding of what they need to provide, how they need to provide it and what they need to provide to you. The governments Restoring Trust in Australia’s Financial System is a great place to start, as are the FPA and AFA websites.

[1] https://home.kpmg/au/en/home/insights/2019/02/financial-services-royal-commission.html

[2] https://www.ey.com/en_au/financial-services/how-the-royal-commission-impacts-the-financial-services-industry

Common Mistakes when seeking advice from Financial Planners

Jul 30, 2021 10:26:06 AM

Common Mistakes when seeking advice from Financial Planners

Choosing your financial planner is important, as they will more than likely be a ‘long term partner’ to you and your financial progress (or journey) from where you are now through to your retirement.

There is a range of common mistakes that people make when seeking advice, and these should be known prior, during and after your engagements, to ensure you are getting the very best advice.

Coming unprepared

One of the most important elements to get the ‘right financial advice’ is to come prepared. Technology today is something that can support you in doing so, setting up a Dropbox or Google Drive and getting all your files ready for your meetings.

Files to get prepared are:

  1. Bank statements – ensuring you have the last 3 to 6-months of your banking statements done.
  2. Credit Card Statements – same as the above, it is important that despite how large or small your debt may be, you have them in the file.
  3. Loan statements – car loans, business loans, personal loans, Buy-now-pay-later account (Afterpay/ZipPay) statements.
  4. Superannuation statements
  5. Insurance statements
  6. Shareholding or investment statements
  7. A list of goals and objectives – short, medium and long term.
  8. Any other documentation that you feel is important and may have a bearing on your financial decisions now or in the future.

Although this may seem like an exhaustive list, it may indeed seem excessive, the more you have available, the better the outcome for you and your financial planner will be. Why? Because they have all the information, and they are not asking you to come back to them with additional information.

The more you need to go away and come back with information, the more time will be expended on your account by the planner – which in the end will cost you time and money. Failing to plan is planning to fail!

Looking for a quick fix

There are no ‘quick fixes’ to getting rich or retiring, this isn’t a Powerball planning session. Financial planning is the long game, it is about setting systems and processes in place to give you the absolute best opportunity to be financially stable in your future and into your retirement.

If you are walking into your financial planners thinking that you will walk out in a couple of hours with fists-full of cash – you are wrong.

What you will walk away with is a plan, a clear mind and a strategy on how you can set a course for your financial future. Even if you have inherited a significant amount of money or property from the estate of a deceased one, looking for a ‘quick fix’ is a sure path to losing some or all your money.

Irregularity of reviews

Although it may be annoying to set aside $500 per quarter for a review of your financial plan, review your assets and progress, and to look at any new funds, insurance or superannuation options that have come available – it is important.

As we showed in an early chapter, making the smallest of changes, and investing them wisely can make huge differences in your future financial stability and security.

It is vital that you have at least quarterly reviews with your financial planner, to ensure that everything is on track, that your investments are working as they should according to your plan and that if you need to iterate anything – that is to change any investments for any reason, then you are able to do so.

Honesty and Transparency

It does not matter what your financial situation is, or how much money you think you should have, not being honest as to your costs of living, your debt amounts, your income, savings, and other assets. On both sides of the fence – both the client and your financial planner – you both need to be open, honest and transparent.

Putting all your cards on the table early will ensure that you have a clearly defined starting point, goals & objectives while also you understand how the fee structure is set, where your money is going and why.

Don’t be too proud, ashamed or worried about what your financial planner ‘will think about you’, they are not there to judge, they are there to be your financial guide.

Failure to set or work within a budget

One of the most important factors with any financial plan is that you are working within and to a budget. If you are unable to curb excessive spending on discretionary items, thus leading to you being unable to invest, save or pay down that which you have set out in your financial plan – then your success is going to be hampered.

Just like being honest and transparent on the about of debt/equity, you have on your balance sheet – you need to ensure you stick to ‘the plan’ as you have agreed to do with your financial planner.

If you don’t stick to a financial plan, you could see your investments dwindle, putting downward pressure on your household – should you commit to investments that you cannot withdraw from for a period – such as a development fund or term deposit – or you won’t be able to achieve the objectives and goals you set out for yourself.

Key Watch Outs with Financial Planning

Jul 30, 2021 10:19:04 AM

Key Watch Outs with Financial Planning

Financial Planners and advisors are charged with managing your money for your future. It is not about they want, their ideas or their interests, it is of the upmost importance that you remember that you are the client and it’s your money.

In recent times, the Royal Commission has gone along way to stamp out a lot of the ‘cowboys’ of the industry, but there are some key watch-outs when it comes to financial planning.

It’s about you!

As mentioned in this and previous chapters, your financial journey is about you, your family, your future, your retirement and your succession planning. Therefore, it is so important to engage your accountant, lawyer and financial planner/advisor collaboratively, so that your needs are being met.

In some instances, it has been seen that financial planners and advisors recommend products and services that they best benefit from – in terms of commissions and kickbacks – while not necessarily being the best for you.

This is something that you need to ensure you ask for ‘like for like performance of the fund/ investment/ insurance vs. comparable options or substitutes. No different to you looking at several open homes from several different agents before you commit to buying a house.

And just like buying a house, you are well within your rights to have your ‘building and pest inspections’, by asking your accountant and/or lawyer to review the details and provide independent and trusted advice.

You are not expected to be a financial expert

One of the common issues as a client is that you are not a financial expert. You may not jump out of bed and read the financial section of the financial review each morning. You may not have been through a finance degree, nor be an accredited financial planner – and you are not expected to be.

As part of the ‘duty of care’ that your financial planner is obligated to provide, they must explain everything to you within your current level of understanding. They should avoid bamboozling you with financial jargon, be condescending and push products or services on you, or have you sign up to things that you simply don’t understand.

It is ok not to understand financial products and services, as it is often said that they were designed complicated by Wall Street Bankers so only they – and a select few - could understand them.

As a client, you have every right to understand what you a signing up for and not be treated by anyone you are paying fees to in a demeaning way. IF this is happening, report them to the Financial Planning Association and see how they like that?

Communication is the key.

A trait of a good financial planner is clear, concise and regular communication with clients. Thanks to digital mediums – such as Zoom, Teams, Slack, Asana and more, there is no excuse even in a COVID-19 lockdown for financial planners not to be communicating with you.

Communication is the key to sound and prompt decision making, and if your financial planner is not returning your calls in a timely manner, not responding to emails or not uploading files to you as they said they would – you need to call that out.

However, on the flip side, remember they are busy running their own business, with other clients and their own small business considerations – so there is a balance.

Honesty – they must speak their mind!

When it comes to your financial matters, you want a financial planner that can speak their mind – and call the situation as it is.

You may get upset or feel embarrassed by their feedback or observations on your financial position, but it is better than signing up for services or investments, financial plans, or policies that you can’t afford or that are not right for you.

Not only does the planner need to speak their minds and be honest, but so do you as the client. It is paramount that you have a two-way, open and honest conversation – otherwise things will get missed, skipped or overlooked.

Issues with getting a second opinion.

Many professionals do not like their work critiqued by other professionals – no where more than in the financial services sector.

There are most certainly going to be differing opinions in the selection of financial product and services by your trusted advisor – ie. lawyers, accountants, financial planners etc – however, it is always important to get a second opinion.

As previously outlined, there are clearly defined roles and responsibilities of your professional service providers, they should not cross over. That is not to say that your accountant cannot review the validity of an investment option or change of superannuation provider as a ‘fresh set of eyes’.

Remembering they have financial training as well and know what to look for. Meanwhile, your lawyers can review the fund or investment options, check the legal validity, and undertake some due diligence for you.

It’s important to keep your advisors in their swimming lanes, but it never hurts to get a second opinion – remember it’s your money and your future we are talking about here.

The Financial Planning Association and Royal Commission into the banking and financial services sector have largely stamped out much of the bad advice and unscrupulous operators in the industry. However, unfortunately where there is money, there are people wanting to take advantage.

This may not be your financial planner themselves, but it may be those around the planner – you never know. As such, it is always important to take your time, never rush your decisions, review all the PDS (product disclosure statements) and get a second opinion – remember, it is your money and your decision.

Fee-Only vs Fee Based – What is the best method?

Jul 30, 2021 10:09:45 AM

Fee-Only vs Fee Based – What is the best method?

No one likes discussing billing or having to pay bills, regardless of if you are paying your phone bill, car registration or your financial planner for services.

Like with many services, there are several different types of fee structures, based on which financial planners you use and what product or services you invest in.

For some people – the larger investors/clients for financial services, there also may be an incentive to invest more. With this in mind, the fee structures over $500,000 invested, for example, may attract a different fee, however, that is for another day.

Fee-only & fee-based structures are the two readily used fee structures within the Australian financial services market, but what is the best method for you? Let’s find out.

Fee-Only Financial Services

As the name suggest, fee-only financial service providers earn their fees through the money their clients pay to them. These can be billed in several ways, including a flat hourly fee for their services provided. For example, $200 per hour for 5 hours = $1000 + GST for reviewing your financial plan, setting up some new investment options you agreed on, and working with your lawyers & accountants to ensure everything is compliant.

The second is Funds Under Management (FUM) or Assets Under Management (AUM) that the financial advisor or planner is managing for you. This will be often used by Financial Advisors - more than planners – such as retail or property investment fund managers, who may for example offer you a return of 16% per annum on your invested capital, however “might pay 1% for all assets up to $2 million in AUM, 0.75% for the next $3 million and 0.65% on all assets above that amount”.[1]

A fee-only financial planner or advisor won’t receive income from any other sources, as their income is derived from the services they provide to their clients and the amount of FUM or AUM.

Fee Based Financial Advisors

Although fee-based financial advisors make money from billing their clients fees and charging a FUM or AUM fee structure, there are other means from which they derive income – which, truth be told, have come under far greater scrutiny within Australia after the Royal Commission into the sector.

These are largely derived from commissions paid by either brokerage services, through recommending of superannuation services, insurance companies and fund managers.

All of this is legal and above board, but it is important to understand if your financial planner or adviser is receiving a commission or kick-back for recommending you switch to a product or service.

Why? Because you need to ensure that you are switching due to superior performance for you as the end user, not a superior incentive scheme for an advisor.

An example of this, was a young executive that was wanting to learn more about what steps they could make on their financial future, so they sought out a meeting with a financial planner. As this was prior to the Royal Commission, the planner although qualified, was certainly not as astute as they should have been.

As such, they recommended and pushed the young client to move their superannuation to a different provider as the first order of business. However upon review of the Product Disclosure Statements (PDS) and the like for like performance over the short, medium and long term of both superannuation funds, it was clear that the current provider was performing better over all three periods, and had lower management fees.

When the client bought this up with the advisor, they had little to no answer as to why they should switch. What was clear through this example, is that the financial advisor was receiving a kick back from the super-fund provider and not working in the ‘best interests’ of the client.

It must be noted that this example is just that, and your financial planner should not only be working for you but should be working within the new guidelines on how they recommend products or services.

For this and many other reasons, it is paramount that you sit down with your planner, understand the fee structure, how if they recommended products or services are they being paid, and ensure that you compare ‘apples with apples’ when it comes to your financial matters.

[1] https://smartasset.com/financial-advisor/fee-based-vs-fee-only-financial-advisor

How much does it cost to hire a financial planner?

Jul 30, 2021 10:05:36 AM

How much does it cost to hire a financial planner?

A financial planner with a solid financial plan over your lifetime can save you tens or hundreds of thousands of dollars of your financial journey, even more! That may sound unrealistic, but if you look at starting small, investing a little, if you put $100 per month in an investment account with a compounding interest rate of 11% – rather than buying your coffee every morning, over 30-years, that would be $280,000 in your pocket[1]!!

But what does it cost to get this sort of advice cost you to get set up, and cost you ongoing to maintain?

Despite the example above, and thousands more like it on how by making little changes to your life and lifestyle, you can set you and your family up for the future, there are huge barriers for people sitting down with a financial planner.

According to Canstar, for many Australians, one of the big barriers to getting financial advice is the cost. In 2019, ASIC research found that 41% of Australians intended to get financial advice in the future. Despite this, 35% of respondents said one reason they did not or might not get advice was because they thought it was too expensive.[2]

How fees are changed for financial planning services

Depending on what services you are getting, there are different types of fee structures that you may be charged by your financial planner for service.

We have outlined these below taken from the Australian Governments Money Smart website:

Fixed fees

  • Statement of Advice (SOA) fee — A one-off fee for preparing your SOA. This fee is either paid up-front and deducted from your investments or added to ongoing fees for service.
  • Fee to implement financial advice — A one-off fee for implementing financial advice — for example, opening accounts and purchasing investments. This can be an up-front fee based on the value of your assets.
  • Fee for ongoing financial advice — An ongoing fee for advice and services, like reviews, reports, phone calls, emails and newsletters. This is often a monthly fee.
  • Fee for review — A one-off fee for reviewing your financial plan and implementing any changes — for example, changing your investments to align with your goals.
  • Investment platform fee — Fixed fee for the administrative financial platform
  • used to manage your investments.
  • Hourly rate — Fixed fee per hour to answer one-off questions that are not part of ongoing advice or services.
  • Fee for service — Fixed fee for a service or a type of advice, for example, preparing your Statement of Advice (SOA)

Percentage-based fees

  • Asset-based (portfolio percentage) — Percentage fee based on the total value of the assets in your portfolio. The more assets you have, the higher the fee. You pay this fee regardless of how well your investments perform.
  • Investment management fee (performance percentage) — Additional percentage fee, based on the performance of your investments (usually measured by an agreed benchmark).[3]

What are the costs of seeing a financial planner?

The cost of seeing a financial planner can range from $2,500 to $3,500 to set up a plan, and then about $3,000 to $3,500 annually if you have an ongoing relationship with the planner, according to the Financial Planning Association (FPA).[1]

This should include at least a quarterly meeting to review your benchmarks & goals, investment activities, reporting and planning outside of the time you spend with your planner.

Put this into perspective with the example we gave before on the $280,000 through investing just $100 per month. This is only one of many strategies and savings you would make through a financial planner implementing a strategy for you.

Even at $3,500 for an initial consultation, then $3,500 per year, every year for 30 years, that would cost you $108,500 over 30 years. So already, you are $171,500 in front, using one basic and easy to use strategy – imagine how far you could be in front with ten different strategies all working together!

Just like your latest ‘Catch of the Day’ purchase, “its not about what you spent, its about what you saved”, financial planning is the same. By spending a little now, in the short, medium and long term you could have significant inroads, and financial freedom you never realised possible.

The question should not be “can you afford to spend money on a financial planner?”. It really needs to be, “Can I afford not to spend money on a financial planner?”.

[1] https://www.canstar.com.au/superannuation/financial-advisor-fees-cost/

[1] https://www.ramseysolutions.com/personal-growth/setting-financial-goals

[2] https://www.canstar.com.au/superannuation/financial-advisor-fees-cost/

[3] https://moneysmart.gov.au/financial-advice/financial-advice-costs

How to set your personal financial goals

Jul 30, 2021 9:59:48 AM

How to set your personal financial goals

Goal setting is vital to the success of any project, be it a DIY project around the house, fitness or finance, if you don’t have goals, you have no idea where you are heading.

There are several key areas around financial goals that are vital – as with every objective or goal set, that they are S.M.A.R.T. A bit more about the specifics of these key areas are outlined below.


A meaningful financial goal is “I want more money”, it is not specific enough; it can’t be benchmarked in terms of performance or achievement, and really, it’s a waste of time. However, stating “I want to pay down $15,000 of my personal debt this year” is specific.

Being specific means you can either achieve the goal, or you do not – which is not terrible; you just need to iterate your plan so you can reset, refocus, and achieve it within the next defined date.


Finance by nature is about money, which is quantifiable and measurable. A goal that is not measurable, is not really a goal at all. For example, “By January for my portfolio of shares to have investments in at least five different ASX listed companies”.

This is measurable, did you have five or more in January – then you achieved it, if not, then you failed – it is that simple.


We touched on this in previous chapters, that as a goal, it needs to be achievable, or you are essentially setting yourself up for failure. For example, “I want $1 million in my savings around by December next year”. Which is fine if you can achieve it, but if you earn $50,000 + super and have $5,000 in your savings account, with a large inheritance or winning Powerball, there is very little chance that this goal is achievable.

This section is about working within your limitations, and this is something that you and your financial planner can effectively work on together.


Within your financial goals and objectives, they need to be relevant. For example, “wanting to purchase a jet ski by June next year”, although not entirely relevant to your finance success, is indeed relevant as part of your financial plan, as you need to put contingencies aside to pay for your new jet ski.

However, if your goal is to “find a new boyfriend/girlfriend”, quite clearly is not a relevant objective, no matter how high it ranks on your personal goal or objective ladder.  


When setting your personal financial goals, determining what your short-term, mid-term, and long-term personal financial goals are is the first step.[1]

Short term may be 6-12 months, it may include a holiday, paying off a credit card or just hitting a milestone in your savings account – such as “having $10,000 in a savings account available for investment in shares by December”.

Mid-term is usually between 2 to 5 years and will be more strategic than your short-term objectives, however just as important. Your short-term objectives may be independent of your mid-term – such as saving for a holiday – or they maybe intrinsically linked, such as that $10,000 you saved, being turned into $25,000 by year 2, thanks to investment and further savings.

It also may be around purchasing an investment property, setting yourself up with a self-managed super fund (SMSF) or similar.

Finally, let’s explore long term objectives

These are setting up retirement savings, trust funds for your children, investment portfolios or paying off your house by a defined date. Often lofty and in many instances most people don’t feel they even need to start thinking about these areas until they are well into their 50’s – which is very wrong and dangerous.

Goals and objectives are a vital part of everyday life, they allow you to benchmark your performance, understand if you have achieved or failed to achieve what you have set for yourself, but more importantly, it will force you to become habitual in how you review, plan, save and invest – which over the long run will have nothing but a positive impact on your financial security, and ultimately your overall health & wellbeing.

[1] https://www.moneymanagement.org/credit-counseling/resources/how-to-set-and-keep-personal-financial-goals

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