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Protecting your hard earned money.
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Latest  /  Financial Planning

Expert strategies for protecting your hard earned money.

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The future has never been as unpredictable as it is now. Can you afford to risk your future financial security by failing to adequately take control of your finances today? Most people think about their finances regularly; whether they should spend money, save it for the future or a little bit of the best of both worlds. When it comes to planning for retirement everybody knows that the more you save in your earlier stages of life, the more likely you are to be financially independent.

But what does that actually look like? How do we balance the competing interests in our lives to ensure we maximise our financial potential? Here is what the experts in financial solutions Brisbane suggest on saving and increasing financial health:

• Automate your savings for the present and future

Automation is one of the key advances of this generation. With modern banking systems being almost entirely digitised, most people are familiar with being paid by direct deposit, setting payment schedules and organising automatic direct debits for some bills and services. Many banks also allow for the creation of multiple accounts that are linked to one primary account. Funnelling your earnings automatically into different accounts for different uses can be beneficial in meeting your savings targets more effectively. For example, you could create 3 separate accounts for your regular wage deposit to be split into 3 parts: one could be used to pay household bills, a second to help save for an overseas trip and the third account could be used as an emergency fund. This philosophy, often used by large companies, can greatly increase your contributions over time without effecting your current goals.

• Maintain an appropriate asset allocation

Maintaining an appropriate allocation of assets is critical to ensuring the long term suitability and stability of your finances. The importance of appropriate asset allocation only increases the closer your retirement approaches. Choosing the right diversification mix is dependent on a number of factors including your age, national and international market movements and your tolerance to risk. Finding independent financial planners can help you to navigate the often confusing asset allocation landscape. Many financial market operations experts recommend a majority of assets (around 60% of your total portfolio) to be placed in equities holdings. This balance shifts the closer you get to retirement; with experts recommending a shift to more stable asset classes such as short-term bonds, money markets and commercial deposits.

• Plan to minimise income taxes

Australia is a land of many taxes, it is hard, but of utmost importance to ensure the absolute legal minimum of your hard earned income flows back to the Government in the form of tax. Kerry Packer summed it up perfectly - "If anybody in this country doesn't minimise their tax they want their head read". Simple steps can be taken throughout the year to document any deductible expenses and depending on your position you may benefit from increasing your personal Superannuation contribution. However, due to the complex nature of Australian tax law an independent financial planner is often best equipped to pinpoint and utilise tax minimisation schemes that best suit your personal circumstances.

• Invest in appropriate insurance cover

Nobody purchases insurance cover in the hope that something terrible will happen. In such a complicated and uncertain world, insurance policies allow us to protect ourselves from a variety of risks that have the potential to adversely affect our financial security. Advertising for cover for death, liability, income protection, medical expenses, funeral expenses, car damage, pet sickness and pretty much any insurance you can think of is put under our noses every day. Finding insurance cover isn’t the hard part, it’s finding the right insurance cover for your personal circumstances that is becoming harder and harder every day. Consulting the best insurance adviser in Brisbane is an important first step in ensuring your insurance needs are adequately and economically met.

There are countless ways to ensure your personal finances and future financial security is protected in a time of great uncertainty. You don’t have to spend sleepless nights outlining and comparing the options in your head, independent financial planners are available to discuss and help implement any number of these recommendations to ensure your hard earned nest egg is well cared for.