FINANCIAL CROSSROADS
NAVIGATED
“A life time of memories is more valuable
than a pocket full of money”
The following is an excerpt from the 79 page book “Health, Money, Happiness“.
The numbers in the following contents section refer to the pages in the book.
You can click on the headings below to read those sections on this web page.
TABLE OF CONTENTS
What haven’t you done that you have always wanted to do?
CHALLENGES AND OPTIONS
Procrastination
The high costs of delaying a long-term investment strategy can result in a substantial loss in future accumulated values.
Procrastination puts at risk accumulated savings through the need to chase risky investments to make up shortfalls in retirement savings.
Note: Numbers have been rounded for illustrative purposes, based on an annual growth rate of 6%.
Financial Rule of 72
Dividing 72 by any rate of return determines the number of years it will take the investment to double in value at that rate of return.
72 ÷ 6% =12 years
72 ÷ 8% = 9 years
72 ÷ 9% = 8 years
Interest Rate 6.00% Therefore divide 6% into 72 = 12 years
A valuable rule to apply before investing as it allows you to determine the possible value of an asset at a future date & time.
Taxation & Inflation at Work
WEALTH ACCUMULATION
Will you work all your life for money?
…Or will your money work for you?
Money at Work will one day fund your lifestyle.
ESTABLISHING A BUSINESS
Valuing a Business
There are five key considerations when valuing a business, with the elephant in the room being the exit strategy.
Equipment
The life usage is the first consideration as replacement and installation can be high especially if the premises lease expires before replacement is necessary
Capital
The business plan predicts capital needs in addition to the cost of purchase for without adequate ongoing capital the business will struggle.
Staff Retention and Skills
Retaining key employees provides confidence to both suppliers and customers
Lifestyle
In 24/7 businesses, the P/E ratio is priced down because of the loss of family time.
Goodwill – Price/Earnings Ratio
Is the profit multiplied factor based on all of the above except Equipment and Stock. Goodwill can vary from One times to Several times profit depending on the complexity of the business.
Managing Business Cash Flow
INVESTMENTS
Risk Versus Projected Yields
Planning for the future requires knowledge of the capital requirements to finance future lifestyle. Forecasted values need to be balanced against attitudes towards investment risk.
TYPES OF INVESTMENTS
Hobbies
Pleasurable pastime activities may turn into successful and very profitable businesses with many upsides through associating with people with similar interests.
Hobbies can also be a key source of a second income during your employment years. In retirement, hobbies can provide purpose for the retiree maintaining a feeling of being relevant.
As hobbies can often involve a lifetime of collection, the financial worth of the asset could be more than if the same level of funds had been invested in the equities market.
One man’s trash is another man’s business.
MACKIEHANS LIFE ADVISORS
Coordinating the Advisors
Having all professional advisors working to your known objectives, reduces the possibility of stumbling into pitfalls along the way.
GET YOUR PRIORITIES RIGHT!
HEALTH is your most valuable asset.
It allows you to earn an income.
HAPPINESS is the accomplishment of
dreams, wants and needs.
MONEY is a poor third, for without good
health, money has little value.
Mackiehans Life Advisors Pty Ltd Corporate Authorised Representative of Madison Financial Group www.lifeadvisors.com.au (AFSL 246679, ABN 36 002 459 001) Level 1, 160 Edward Street, Brisbane QLD 4000 GPO Box 2285, Brisbane QLD 4001 TEL: (07) 3221 8533
All copyrights in this document are the property of Mackiehans Life Advisors Pty Ltd and are specifically reserved. It is a breach of copyright to photocopy or duplicate this by any means. It is an essential condition of supply of this document that each copy is authorised by Mackiehans Life Advisors Pty Ltd
DISCLAIMER — This document is of a general nature only and neither represents, nor is intended to be specific advice on any particular matter. You should seek appropriate professional advice based upon your own personal circumstances. Although we consider the sources of for this material reliable, no warranty or liability is accepted for any statement..
Artwork production of Financial Crossroads Navigated is the work of David Comas M: 0488 642 963 E: djc.elements@gmail.com