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Harvard Wealth Knowledge Confidence Lifestyle

Planning for the future can be challenging on a number of fronts: having the time to explore all the options, making informed decisions and ascertaining the difference between good and bad advice.

In these times of financial collapses, frozen funds, European monetary issues and sovereign debt concerns, it can be daunting to wade through the global financial terrain in search of what is good and right for you. At Harvard Wealth we pride ourselves on old fashioned values of sincerity, honesty and integrity in caring for our clients, who gain peace of mind knowing their needs come first.

Whether you are looking to build wealth for your future or planning to retire we can provide the direction you need to achieve your goals.

Future wealth
Building wealth for the future starts with simple strategies. The first step is identifying your goals and objectives.

A common error is not spending enough time exploring what is important and identifying your key priorities. It is unfortunate that this is overlooked as it provides the blueprint for your financial future.

Protecting one’s family is a top priority through appropriate levels of life insurance, disability and income insurance. Combined with a well-constructed will, this provides certainty in the event of your untimely death. Testamentary trusts enable you to provide security and flexibility in your estate planning.

Other goals may be to pay off personal debt, establish cashflow targets or to remove a home mortgage. There are many ideas that help in this area, from simple mortgage offset accounts to selecting a mortgage to best suit your needs. Establishing a mortgage may seem a simple event, but it can be costly to refinance when you elect to use more creative ideas. Find out how to pay off your home quicker using an investment property as part of our Pathway to Wealth program.

Another goal could be to invest in a rental property or buy shares. It is essential to discover which is right for you.

Superannuation is a minefield of change – what fund is best for you and do you know enough about it to extract the best value? Is a self-managed super fund right for you? Strategies can be simple, straightforward and “hands-off”, through to sophisticated and somewhat complicated processes requiring constant involvement, so you need to determine what is right for you.

Building wealth is about understanding your goals and matching them with the resources you have, then setting in place an ongoing maintenance program so that your plan continues to meet your objectives.

A program such as our Pathway to Wealth assists in developing a plan of action addressing all of your needs and strategically aligns them in one straight forward direction.

Retirement
A successful retirement is principally about peace of mind. The confidence to know that the following questions have been answered:

  • When to retire?
  • How much is enough?
  • What to do with accumulated long service and annual leave?
  • What are you going to do with the extra 50 hours a week?
  • What investment strategies are appropriate?

When you choose to retire is based on financial and emotional reasons. Most important is mental health. Are you mentally prepared for the change in direction? This is the most dangerous area of retirement planning as the best plan will soon unravel if you haven’t prepared for the journey. What are going to do to amuse yourself? You can’t fish or play golf every day, as much as some of us would like to.

Having a sense of purpose is critical, something to do – a hobby, restoring a car, travelling the world, supporting the community or minding the grandchildren are examples.

All too often retirees have saved their leave believing it is a good strategy. Perhaps it is from a financial point of view, but finishing in a tired state of mind is not ideal. Under statutes you are supposed to take leave as and when it falls to maintain good health, so an ideal position is to finish on a bright note, well rested to start the retirement journey in the best possible shape. Quite often the common strategy of preserving leave means you start retirement tired. It is better to stay working longer and use all your leave progressively so you can practice what you will be doing.

Another facet to consider is your partner – they have not seen you 24/7 for weeks or months on end for a long time (if ever), which brings in other potential stresses. For example, I remember a client coming to me who had just retired. He was in all sorts of strife as he was continuously under his wife’s feet. He had lived to work and now was fundamentally lost with no sense of purpose to his life. He found his direction through involvement with community volunteer groups – instead of feeling useless and creating friction at home, he was able to productively and meaningfully use his newfound time.

How much is enough for you to retire? This question is commonly asked at Harvard Wealth. The answer depends on what base lifestyle cost you need to maintain, adding on holidays and other non-recurring expenses like replacing a car, boat or caravan.

In this equation we also factor in the potential for moving from your current home, downsizing, moving to be closer to family and a range of other issues. Will you require capital or will it provide more investible capital?

Where do you intend to live? What capital expenses will you incur? What cash flow do you need; and what reserves would you like to keep on hand to cater for the unknown?

Once these points are addressed the financial aspects take over. The most important questions are:

  • Are you a hands on or hands off investor?
  • Do you have the time and motivation to be involved?
  • How do you generate the income you need?
  • What investment structures generate the greatest efficiency?
  • How do you counter the impact of inflation?

Where advisers sometimes fail is in identifying accurately whether clients want to be involved in the process of managing their financial affairs. Getting it wrong can lead some clients to feel as though they are left out of the loop and shut out, or others feeling overwhelmed. One couple came in to see me who had it wrong and had been totally perplexed about their investments for a number of years. We were able to simplify their overall plan and provide a well overdue sense of relief and peace of mind.

Sometimes total transparency in investment reports creates confusion and doubt. Alternatively, a big picture view can provide clarity, helping clients quickly understand how each one of their investments is performing.

Investing in today’s world where superannuation has special tax considerations means the starting point of any retirement strategy must include superannuation.

There are many types of superannuation funds. A topical point of discussion is the use of self-managed funds. Whilst appropriate in many cases it is often overlooked that 3000 are closed each month for a variety of reasons.

At the end of the day, peace of mind is paramount. It can only be achieved by knowing your adviser well enough to have confidence in them, so when considering the advice you’re provided, you know you are both working in the same direction.

At Harvard Wealth we pride ourselves on our client care and service, so please contact us to find the direction you’ve been looking for.

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