Sunshine and Finance

We’re sharing these stats via one of 10thousandgirl’s financial experts, Sunshine Estivo of Omniwealth who is launching her timely book Buy Property Not Shoes this October 2011. While these facts are eye-opening, know that you can do something about it by taking an active interest in your finances and that increasing your financial efficiency now can make a big difference in the long run!

• Approximately 7 of 10 women will live in poverty at some time during their lives

• Most women’s superannuation is typically half that of a man’s at retirement age.

• 47 per cent of women over 50 will be single through choice, divorce, or death of their partner (This means they are financially responsible for themselves.)

• Women’s retirement income is less than that of men’s. This is because a woman is away from the workforce an average of 14.7 years compared with 1.6 years for men. (Women are typically the primary care taker of a home.) This, along with lower salaries, adds up to retirement benefits that are only about one-­‐quarter of those of men.

• 50 percent of marriages end in divorce. It’s the women who typically end up with the children, meaning she is solely financially responsible for herself -­‐-­‐ and her children.

• The number one subject couples fight about is money.

• In the first year after her divorce, a woman’s standard of living drops an average of 73 percent.

• As of 2000, women are expected to live an average of seven to 10 years longer than men, which means they must provide for those extra years. But married baby boomer women can expect to outlive their husbands by 15 to 20 years, on average.

• The average female born between 1948 and 1964 may likely remain in the work force until at least 74 years of age due to inadequate financial savings and pension coverage.

• Of the elderly living in poverty, three out of four are women -­‐ 80 percent of the women were not poor when their husbands were alive.

With the New Year comes the setting of resolutions and promises of new beginnings. While everyone has great intentions of keeping these, how many of you have already started to slide on these? There is a general phrase that it takes 21 days to form a good habit (or break a bad one). Now that we are in February, you should be able to assess how well you are achieving these goals.

Have you kept up your healthy eating plans and exercise? Have you dedicated more time for yourself? Have you started to get your finances in order?

Everyone has different goals in regards to finance and what is important to them. Regardless of what your goals are, the crucial fact is that in order to achieve your individual wealth goals, you need to set strategies that allow you to achieve these. The first step is to write these down. Success psychologists say that 95% – 97% of the people in the world do NOT have written goals and fail, while 3-5% have written goals and succeed.

Once you have written these goals down, you will need to assess that you have set SMART goals: that is specific, measurable, attainable, realistic and timely.

Specific: A specific goal has a much greater chance of being accomplished than a general goal. Like a weight loss goal of losing weight, setting a goal of saving money is too vague. To be successful you need to state specific figures, for example whether you are going to save $500 of your pay each fortnight towards saving, whether it be for investing in shares, to top up your emergency funds or purchasing your own home or an investment property.

Measurable: Establish strong criteria for measuring progress toward the attainment of each goal you have set. Setting a specific dollar figure to your goal will determine whether it is measurable and immediately show whether you are on track to achieving that goal or whether you are not. For example saving $500 per fortnight will equate to you saving $13,000 over the course of a year. By looking at your savings account, you will immediately be able to see whether you have reached this figure.

Attainable: When you identify goals that are most important to you, you begin to figure out ways you can make them come true. Having the right mindset will allow you to see that nothing is impossible. If you put your mind to it, you will be amazed at what you can achieve.

Realistic: To be realistic, a goal must represent an objective toward which you are both willing and able to work. For example, saving half your pay may not be realistic or achievable. You would be better to start your savings at ¼ or 1/3 of your pay and then top up your savings with any additional surplus funds. The use of budget spreadsheets on FIDO http://www.asic.gov.au/fido/fido.nsf/byHeadline/Budget%20planner or the guidance of a financial planner will help you to recognize what financial goals are realistic to your situation by taking into account your current income, expenditure and calculating any surplus you have that can be directed towards savings.

Timely: A goal should be set within a specified time frame. With no time frame tied to it there’s no sense of urgency. Having a date as to which you wish to achieve your goal will help keep you focused and remain motivated to achieving your goal. Not all goals can be achieved within the next 12 months and it’s easy to lose motivation and focus. The purchase of a big long-term investment like a property may take 2-3 years of savings. This requires planning and dedication to achieve your goal. The use of a financial planner will help you stay focused and assist you with any unexpected road blocks which you may face along the way and keep you on the straight and narrow.

Once you have visualised and set these goals, you must be accountable for these. Like an exercise buddy who motivates you on those cold mornings, a financial planner can encourage you to stay on track with your savings and develop a plan for your long term wealth. Whether that is saving for a holiday, paying off those pesky credit cards (which probably increased with the Christmas sales) or saving for an investment property or shares, a Financial Planner can help develop a strategy that is right for you.

Omniwealth is hosting a seminar on 22nd March 2011 with a range of professional speakers to educate, inspire and motivate women to take action and build wealth. Come along and find out:
•    How to secure your future with a tailored financial plan
•    Must Knows for successful wealth creation
•    The three keys to a winning result
•    How winning needs a well executed plan

One of our speakers is Kerri Pottharst, Olympic Beach Volleyball Gold Medalist of the Sydney Olympics. Kerri will teach you the secrets to goal-setting success, how to develop invaluable communication strategies and learn new skills that will allow you to achieve your full potential. Be inspired by her stories of setback, injury and defeat. Learn how she overcame them all to compete in 3 Olympic Games and win 2 Olympic Medals by setting goals. Discover how she turned her Bronze into Gold!

Our seminar is designed for women who want financial information that’s presented simply. The seminar will demonstrate how you can set goals, learn about investment options and provide you with information to make your own decisions about investing your money today to maximise your lifestyle tomorrow.

Make sure 2011 is the year that you achieve your goals and stick to your New Years Resolutions!

Further information can be found on our website:
http://www.omniwealth.com.au/champion

Sunshine is passionate about helping people create freedom through real wealth creation. She is a practicing Financial Planner with over 10 years of experience and is currently a Partner and the Managing Director of Omniwealth, one of Australia’s leading independent financial services companies. Sunshine, a pro-active investor herself, started out with her first investment property at the age of 23 and subsequently accumulated 10 properties by age 30. Her first book will be released in the second half of 2011 entitled ‘Buy Property Not Shoes – A Girls Guide to Financial Independence’. Sunshine is a keen supporter of women creating financial independence and with her energy and enthusiasm, brings a fresh new perspective  to creating a professional and effective Financial Planning Industry in Australia.

Christmas is a time to be merry and celebrate everything we are grateful for with friends and family. Amongst all this festive celebration it is easy to lose focus on our long term financial goals when there are so many tempting sales, delicious foods, Christmas drinks and fun things to do. This can lead to budgets blowing out and people turning to their credit cards as a last resort. If you feel yourself sliding down this path here are a few handy hints to help you avoid getting caught by the credit card monster.

Tip 1 – If possible pay off your credit card in full each month so that you don’t incur any interest charges. I have seen that some of my clients don’t want to use their hard earned savings to pay off their credit card balance. Most credit cards charge interest of around 18-25% p.a. on your outstanding balance, whereas, money sitting in your bank account is earning around 5-6% p.a. However, when you take into consideration inflation which is currently running at about 3% p.a. you are actually earning a real return of about 2-3% p.a.  So, by not paying off your credit card with your savings you are getting a negative net return on your money, which is the difference between your real credit card interest rate and the real return on your savings.

Tip 2 – Make sure you monitor your cash-flow over the Christmas season so that you don’t have to resort to making a cash advance on your credit card. The interest on your cash advance is compounded daily at a higher interest rate (this isn’t the type of compounding interest you want to achieve) and there are normally no interest free days on this transaction. In addition, when you make repayments on your credit card some financial institutions leave the money that has the highest interest rate until last so they ensure you pay the highest interest rate for the longest period of time.

Tip 3 – Don’t be fooled by advertising and reward points – before you sign on the dotted line for a credit card you need to weigh up whether the reward scheme is justified by the fees that the credit card provider is charging. Always remember if the rewards sound too good to be true….they probably are. So, if you are planning to accumulate your credit card points to purchase a yacht make sure you read the terms and conditions and understand the fees so you’re not blinded by unrealistic rewards.

Tip 4 – Boxing-day Sales – the best way to use your credit card in the Boxing-day sales is…. not at all. To stop your credit card balance blowing out leave it at home during sale time when you may be tempted to spend excessively. This gives you the chance to consider your purchase instead of getting caught up in the sale mayhem and instinctively whipping out the plastic.  By sleeping on it you can rationally decide whether you actually need another little black dress when you already have 4 in your wardrobe. I always designate a certain amount of money that I can afford to spend and transfer this from my savings onto my debit card. Also, writing a shopping list always helps to keep you on track, this allows you to focus on discovering a bargain on something you actually need.

Happy shopping!

Sunshine is passionate about helping people create freedom through real wealth creation. She is a practicing Financial Planner with over 10 years of experience and is currently a Partner and the Managing Director of Omniwealth, one of Australia’s leading independent financial services companies. Sunshine, a pro-active investor herself, started out with her first investment property at the age of 23 and subsequently accumulated 10 properties by age 30. Her first book will be released in the second half of 2011 entitled ‘Buy Property Not Shoes – A Girls Guide to Financial Independence’. Sunshine is a keen supporter of women creating financial independence and with her energy and enthusiasm, brings a fresh new perspective  to creating a professional and effective Financial Planning Industry in Australia.

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