happy new (financial)year

Happy New (financial) Year to you all.

Unless you work on Saturdays, today is the last working day for financial year 2011 – 2012. I don’t know about you but for some reason I seem to have only two dates in my calendar: Tax Time and Christmas – what happens between these two date is a blur to me. Have you heard the old saying “as you get older, the years go faster”. Boy, do I get it now!

So what have we learnt in the last 12 months? – I am thinking: PROBABLY NOTHING. We still don’t understand:

-          why the Greeks and the Spaniards can cause so much havoc to the world economies

-          why our super funds have not done as well

-          why our property values have gone down

-           why we have more wrinkles on our faces

I could go on for ever but I am sure you don’t have the time because you probably have already received 10 more emails or updates while reading my blog and you haven’t even got to the end.

My advice is to forget about the last 12 months and start planning for the next 12 months. You can not change the past but may be you can make changes that will make it easier for you in the future by not making the same mistakes. Let’s see if I can help you with some basic “common sense” advice.

1. We live in volatile and unpredictable times - so go with the flow. Don’t react to the markets, whether it’s shares, superannuation or property. The markets will always sort out over the longer period of time.
2. Most common mistakes? It’s the old “fear and greed”. The “greedy” simply invest for the wrong reason – either tax or quick returns. When the markets are going up they jump in because they don’t want to miss out even if they can’ afford it and when the markets are down and they read that the world will collapse, they quickly get out and lose…..
3. If you are going to invest – only invest within your own capabilities and cash flow and always invest for the longer term. DON’T OVER COMMIT.
4. Shares or Property? Best advice is learn what their advantages and disadvantages are before you decide – don’t just take advice form the real estate agent or the stockbroker.
5. Buying property in US? Are you crazy??
6. Rent or Buy? Given what the property prices are, for young people most of the time it is better to rent and save the difference. Only when you have saved a deposit of at least 20% will buying start to make sense.
7. Should you be cashed up? Yes, always have funds in a bank account for “rainy days”.
8. Should repaying the mortgage be a priority? Absolutely.
9. Learn to BUDGET
10. Learn to SAVE regularly

Feel free to ask for advice - my business is giving “financial advice”.