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Be mindful in May about your wealth

Chris Morcom
Partner/Private Client Adviser
8 May 2018

I noticed this morning that it’s “Mindful in May” month.  It seems that mindfulness is the catchcry of the current age, with all sorts of recommendations to ensure we are living in the moment and not letting life pass us by.

When it comes to wealth management, or more precisely cash flow management, being mindful is an important skill to utilise on the road to success.

As financial advisers we often come across situations where individuals and families have seen their incomes grow substantially over time but have little in the way of accumulated wealth to show for their toil.  Our observations have often shown that expenditure has a habit of growing as our income grows.

For those who have experienced this, it can be frustrating. You’re working hard and being rewarded well but the results don’t seem to show in your assets.

A solution is to take stock of where you are at.  No matter what your income or wealth level, you can always sit back and review your level of earnings and expenditure and critically analyse both to ensure you are maximising your opportunities.

Knowing where you spend your money is half the battle.  I am not advocating a forensic review of your bank account or credit card statement.  But you do need to know where your money is being spent, and this will require some work on your part.  Remember it is not what you wish you spent but what you have actually spent that counts.  

Goal setting is also an important part of the process.  For those starting out, a house deposit might be the goal.  If so, count the number of coffees and lunches you buy each day.  For example, two coffees a day plus buying lunch easily adds up to $25 per day.  It doesn’t sound like much but over a 48 week year that adds up to $6,000…not a bad start to savings!

What about your annual holiday?   You work hard and deserve a good break. But have you set an annual limit on your holiday spending? Is there money being set aside each pay period so you know how much you have to spend while you’re away? Small steps can have a big long term impact.

Actively thinking about your expenditure as you go through your day can also assist. Rather than simply handing over that credit card, think about your goals and whether the item you are about to purchase fits into those goals or makes it harder for you to achieve them.

Finally… consider your longer term wealth accumulation goals.  Retirement, repaying your home loan, private school education, maybe a holiday house and financial security for you and your family are important to many people.  You need to quantify what this means to you, then review your income and expenditure to ensure you have a plan in place to achieve your goals.

A qualified, independent financial planner can assist you to quantify your goals and help you develop a plan to achieve them in a reasonable timeframe. 

If you are in this boat, please contact us to make a no obligation appointment.

Hewison Private Wealth is a Melbourne based independent financial planning firm. Our financial advisers are highly qualified wealth managers and specialise in self managed super funds (SMSF), financial planning, retirement planning advice and investment portfolio management. If you would like to speak to a financial adviser on how you can secure your financial future please contact us 03 8548 4800, email info@hewison.com.au or visit www.hewison.com.auPlease note: The advice provided above is general information only and individuals should seek specialised advice from a qualified financial advisor. The views in this blog are those of the individual and may not represent the general opinion of the firm. Please contact Hewison Private Wealth for more information.