Kicking goals | The important step you're missing to achieve financial freedom

Posted by Neal Durling on 18 September 2018
Kicking goals | The important step you're missing to achieve financial freedom

Getting on top of your finances and working to build your personal wealth is an important step required in creating a business and life you love.

Often though, we set our sights too short and don't take the time to create a plan for what we want to achieve in our lives overall, which is a recipe for unfulfillment down the track.

When it comes to achieving financial freedom and contentment, there's an important step that often gets missed but that is crucial to setting yourself up for success and happiness in the long run.

Ready, set, GOAL

So, you're earning some money. You might even be saving some! But, while it's great to feel the accomplishment that comes with taking your finances to the next level, the most important component in planning for the future is setting some personal goals.

Having concrete goals that you're working towards is critical because it allows you to focus not just on the generation of wealth, but also on what that money is going to get you and how it will contribute to making your life better.

What does success look like?

It's important to establish clear goals that you want to achieve so that you can track your progress and celebrate your successes along the way, and the first step in this process is establishing what success actually looks like for you, over the course of your life.

This means taking a step back and thinking about your personal and family values and identifying what's really important to you in life. This might sound a bit philosophical, but unless you truly understand what makes you tick and the type of experiences you want to make your life enjoyable, you're well and truly putting the cart before the horse.

Help is at hand

Often, identifying and articulating these values can be tricky to do on your own, and it can be hard to pin down the specific goals and milestones that are going to make you happy throughout your life.

Meeting with an experienced financial adviser can often help in this regard, and should create the space for reflection; helping to steer your discovery of these values through thoughtful, exploratory questions and a lot of listening.  It often takes an objective opinion to help weed out the top, big-picture goals that are really going to make a difference in your life, so speaking with an expert who can support you in getting there makes sense.

It's important to take this big-picture view, because it can be easy to get hung up on short-term goals, which, while still important, change often and generally only offer temporary satisfaction - think, a new car, expensive holiday or that big house you're eyeing. These are all worthy short-term goals, but it's important to assess these through a big-picture lense to ensure they're helping you achieve the overall life you're envisioning.

Having these specific long-term goals nailed down, means that you have the building blocks for your life that, when achieved, will go a long way toward making you happy and fulfilled.

Ch-ch-changes

It's important to note that goal-setting is not a one and done exercise. No matter how much time we take "getting them right", it's inevitable that our values, and what we view as important, will change over time. This just means regular reviews of your goals are necessary to ensure what we're aiming for is still in line with what's going to make us the most happy.

If you need support getting in control of your money, we're here to help. Like most people need a personal trainer to get fit and stay fit, the same can be said about finance, so it's worth investing in professionals to help you get on track and stay there.

Get in touch today!

Posted in: Financial planning   0 Comments

Money management 101

Posted by Sean O'Kane on 16 August 2018
Money management 101

When it comes to keeping on top of your personal finances, it can be easy to overthink your approach and get overwhelmed. But although there are lots of things that you could worry about, it doesn't mean you should.

Easier said than done, we know.

Beware information overload

With our 24-hour news cycle, it can be hard to avoid the seemingly unending stream of things to add to our list of financial woes.

What's going to happen with property prices?

Are we on the brink of the next global finance crisis?

What's Trump going to do next?

But while these are all legitimate things to be thinking about, the key to managing your money effectively is to spend more time and energy concentrating on the things you can control about your finances.

And the best way to get in control (and stay there) is to keep it simple and, if in doubt, focus on two things:

  1. concentrate on your day job, be that working in your own practice or in the public system, to create the cash flow to build your personal wealth; and
  2. get a handle on your spending so you know what's going where (and why).

Systems are your friend

I've written previously about using an effective cash management system and how this can help you run your personal finances like you would your practice finances. To date, we've implemented this system for over 50 clients with excellent results.
For most, this is the first time they have a true picture of what is happening with their income, expenditure and thus their surplus cash flow. We're so excited about this as a business, as it allows the forward planning we do to help clients with their financial decision making to be far more accurate.
The other piece of the puzzle

Tracking your finances and understanding what you're spending your money on is all well and good, but the next step is making sure you do something with that information. And that means being in control of what you spend.

I've found that for a lot of clients, once we start tracking their expenditure, this automatically results in them thinking a bit more about how they spend their money. But I firmly believe that to be fully in control you need to go one step further.

Here's what you need to do:

  • work out a budget for your discretionary expenditure;
  • divide this by 52 to get to your weekly amount;
  • set up a discretionary expenditure account and have EFTPOS cards for this account;
  • transfer the weekly amount into this account;
  • use the account for all discretionary expenditure; and
  • stop using a credit card (seriously, we mean it!).

This is a system that I have been running for some time, and have also helped many clients implement, and I can honestly say it works!

If you need support getting in control of your money, we're here to help. Like most people need a personal trainer to get fit and stay fit, the same can be said about finance, so it's worth investing in professionals to help you get on track and stay there.

Get in touch today!

Posted in: Budget Financial planning Planning   0 Comments

What if there was a royal commission into accounting?

Posted by Matt Connor on 12 July 2018
What if there was a royal commission into accounting?

The banking royal commission has all but been and gone, but it's left us wondering what would happen if there was a royal commission into accountants?

Great accountants operate 100% in their clients' best interests, through a pure fee-for-service model, meaning they only charge and get paid for services that their clients actually need.

As with any industry, however, not all accountants are created equal, so If there was to be a an accounting royal commission, one of the major issues I believe would be in the spotlight is unnecessary complexity.

Complexity for complexity's sake

Where accountants would potentially come unstuck in a royal commission is for advising and servicing complex and unnecessary business and investment structures. Generally speaking, the more complexity involved, the more money that can be charged to manage it, so it makes sense that this is an area that's open to manipulation.

If you're dealing with an accountant that's not on the up and up, and are out to increase their bottom line at any cost, you could be the victim of being sold over-complicated and unnecessarily involved setups that you don't need.

Less is more

The starting point for any accountant should be to act in their clients' best interests at all times, however, further to this, it should ultimately be a focus to steer clients towards the simplest option available to them.

This isn't always easy.

The psychology of complexity is interesting - some people are sceptical of solutions that are too simple, often demanding the solution with all the bells and whistles, even when a simpler (and cheaper) solution will achieve the same result.

Trust is everything

It's critical that you can rely on your accountant to give you honest, impartial advice when it comes to your finances, and not put you into arrangements that are costly to administer and provide no added value.

Bottom line is, if your accountant is telling you you don't need to spend more money on a more complicated solution, you should listen!

Look before you leap

Before you get yourself locked in to a large, complex accounting structure, it's important to make sure you're working with an accountant that understands the value of simplicity and is most interested in offering you the least complicated proposal there is, with the best return.

Take the time to make sure you're comfortable with any proposed course of action before you get started. It can take a number of years and cost significant sums in tax to undo overly complex arrangements, and, often, structures that hold a large asset or business can cost more to unravel than it would cost to simply keep going until you're ready to exit, accountants fees and all.

So, if you find yourself in a complex setup and you're not sure of the benefits, ask your accountant why they've advised the strategy detailed in their proposal.

Better to take your time to scope out your requirements before you set up than race into a new structure that might hurt you in the long run.

Get in touch to learn more and find out how we can help you with your accounting needs.

Posted in: Tax   0 Comments

The Royal Commission...

Posted by Neal Durling on 3 May 2018
The Royal Commission...

Like many I have been saddened to hear the Royal Commission have, again, uncovered a number of systemic "cloudy" advice practices where an advisers "best interests duty" requires something a little purer. 

This simple truth reminds me of why we chose to engage with clients the way we do 10 years ago, with annual opt in and flat dollar fees invoiced directly to clients.

As I set about writing a blog on a subject that many advisers find difficult, a valued client reminded me of why we do what we do. I think these words are more insightful than anything I can write and, I hope, demonstrates what a pure advice relationship should look like.

"I'm confirming I'd like to continue with your ongoing services. In the current context of the Royal Commission into banking highlighting the dangers of hidden percentage based fees for investments and self-managed super, your open, fixed fee service shines as an example of how it should be done!" Ben -  Cardiologist

Posted in: News Wealth Creation Financial planning   0 Comments

Administration is killing me! There's an app for that...

Posted by Matt Connor on 12 April 2018
Administration is killing me! There's an app for that...
Practice administration costs are a bit like taxes - we (mostly) accept they're unavoidable, but we still want them to be as small as possible.

And just like taxes, deep down we know that administration is essential for keeping things running properly. Having said that, there are lots of good reasons for driving down admin costs as much as possible. And with the modern boom in apps and add-ons, there are plenty of tools to help you achieve that.

 

Spoilt for choice

Many accounting software companies are having their annual roadshows at the moment, showing off the features of the new versions of their software, and add-ons that connect to existing programs.

These events can be a bit like religious gatherings, and the mantra is that using their product will increase productivity and efficiency, and therefore make everyone's life better.

But despite all the new functionality this software offers, one thing has remained the same: if you input junk information, you'll get back junk insights.

One way to improve the accuracy of the information going into your accounting software is to automate as many of the inputs as possible.

 

Making admin automatic

In the bad old days (not so long ago), you had to manually enter every bank transaction into your accounting software. Not only was it enormously time consuming, it was also prone to human error.

Often what we would find is people would only enter the most basic data into the system the date and amount of each transaction for example. This meant when you tried to analyse the data for tax reporting and business decision making, you had no idea who was paid or whether GST was processed correctly or a host of other important facts. Junk in junk out.

This all changed with the introduction of bank data feeds into accounting software. Not only would all your bank data magically appear in your accounting ledger, you could program the software to automatically categorise recurring transactions. This new technology was as ground-breaking as the mobile phone (for accountants at least)

 

Join the automation revolution!

Bank data feeds are now almost universally available, but there are still many practices that aren't making the most of this incredible business hack. It really is a no-brainer. Once the data link is made and the recurrent transactions set you'll be amazed how much easier your monthly accounts are to manage.

In our next blog we'll dive into the detail of just how powerful automating your financial records can be.

Posted in: News Budget Owning a medical surgery Staffing Planning Risk management   0 Comments

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The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.

The financial planning services are provided by Medical Financial Pty Ltd trading as Medical Financial Planning (AFSL 506557)