The Map To Millions for Millennials sli.do/sbm2m 1
Disclaimer Any advice contained in this video is general advice only and does not take into consideration the viewer’s personal circumstances. Any reference to the viewer’s actual circumstances is coincidental. To avoid making a decision not appropriate to you, the content should not be relied upon or act as a substitute for receiving financial advice suitable to your circumstances. When considering a financial product please consider the Product Disclosure Statement. Stanford Brown is a Corporate Authorised Representative of The Lunar Group Pty Limited. The Lunar Group and its representatives receive fees and brokerage from the provision of financial advice or placement of financial products. The Lunar Group Pty Limited ABN 27 159 030 869 AFSL No. 470948. 2
AGENDA About Stanford Brown Common Mistakes Goal Setting Practical Tips! Questions 3
ABOUT STANFORD BROWN A financial advice firm servicing both private and corporate clients In business for over 31 years Specialise in wealth management, insurance and wellness benefits Privately owned and licensed 4
ABOUT STANFORD BROWN We are a multi-award winning firm including: ‘Great Place to Work’ 2017, 2018 & 2019 IFA Best Australian Boutique Private Wealth Firm (2016 & 2019) IFA Wellness Program/Initiative of the Year (2019) Women in Finance SME Employer of the Year (2019) Women in Finance SME Wellness & Benefits Program of the Year (2019) IMAP Best Client Investment Offering (2018 & 2019) CMRI (Jeans For Genes) Corporate Partner of the Year (2018) 5
COMMON MISTAKES 6
The Wisdom of Forrest Gump “Lieutenant Dan got me invested in some kind of fruit company. So then I got a call from him, saying we don't have to worry about money no more. And I said, that's good! One less thing!” 7
What are your financial goals for the next 10 years? Start or grow your family Own a house Travel frequently Have a meaningful career
How are we going to get there? By not being stupid! “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” Charlie Munger , Legendary Billionaire Investor 9
Career 10
What can you do? 11
Biggest Career Mistakes Thinking you’ll ‘find’ your Not prioritising Measuring your work in ‘dream’ job/career organisation hours 12
Property 13
raise your hands Is now the time to buy? The investor of today doesn’t profit from I don’t know yesterday’s growth – Warren Buffett 14
sli.do/sbm2m Where should I buy? What you pay is more important than what you buy Popular suburb ≠ Great Investment, Unpopular suburb ≠ Poor Investment Cost of a 3 bedroom cottage 2019 equivalent 1977 Strathfield $65,000 $351,500 Gordon $60,000 $324,500 Mosman $57,500 $311,000 Bondi $55,000 $297,500 Engadine $37,000 $200,000 Darlinghurst $35,000 $189,000 Liverpool $33,000 $178,500 Leichardt $28,000 $151,500 Camperdown $25,000 $135,000
Common Property Mistakes Borrowing too much Being impatient Buying off the plan
Isn’t rent wasted money? Yes! But so are interest repayments! You take out You will That’s You pay it off a $1m spend $22,500 per over 30 mortgage at $677,000 on year ($430 years 3.8% pa interest! per week) 17
INVESTING 18
Common Money Mistakes Trying to get rich quick Investing with no idea Investing with the what you’re doing belief you know what you’re doing
You don’t know what you don’t know Be Careful “Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. There are certain things that cannot be adequately explained by words or pictures.” Fred Schwed Jr, Where Are the Customer’s Yachts? . 20
But I’m the next Warren Buffet! Let’s say you have $100,000 to invest in the market You spend 6 hours a week studying the markets to gain an edge You end up beating the market by 1%, earning $1000 You’ve spent 312 hours to earn an additional $1000 ($3.20 per hour) If an Uber driver earns $20 per hour, you’d have to beat the market by more than 6% before trading becomes more profitable than driving Ubers
Don’t I need to start investing at a young age? You are already investing 9.5% of your income What should you do? Keep fees low Don’t be shy Get back to work
Lifestyle 23
Common Lifestyle Mistakes Marrying the wrong person Lifestyle creep Spending money frivolously Borrowing money unwisely
TESLA MODEL X 25
The dream can be a reality!
Cost of my dream car 11 yrs of renting @ 350pw 4 MBAs at Sydney 2/3 of a University child 4 Weddings Deposit on a $1m house 57 French Bulldogs 100 Return Flights to London
Cost of a $50,000 car 2.7 yrs of renting @ 350pw 1 MBA at Sydney University 1/6 of a child 1 Wedding ¼ of a deposit on a $1m house 14 French Bulldogs 25 Return Flights to London
You need to have clear priorities Buying a home Having a meaningful career Starting a family Travelling
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GOAL SETTING 32
sli.do/sbm2m Kicking Goals One of the most common resolutions in 2019 was to SAVE MONEY It’s always a great time for change, but… only 8% of people actually achieve what they set out to achieve Two ways to increase the likelihood of achieving what you set out to achieve: 1. Increase motivation OR 2. Make change easier Image: CollegeHumor 33
Harvard University study found that 3% of its MBAs make 10x as much as the other 97% combined due to having clear, written goals and plans to accomplish them Goal Setting Set a Financial Date Night! Where do you see yourself in 2y, 5y, 10y? What financial commitments do you have during this period? What fun are you going to have along the way? (Source: from the book What They Don’t Teach You in the Harvard Business School, by Mark McCormack) 34
SMART Goal Setting 35
Record your Goals Goal Goal Amount Time Horizon Priority Call bank and ensure Reduction in rate NOW 2 home loan is competitive New car $30,000 1 year 4 Protect income Income insured NOW 3 A month long European $20,000 1 year 6 holiday Build an investment $10,000 p.a. 3 years 5 portfolio Save up for house $80,000 2 year 1 deposit 36
Making it! These are the goals related to what you want to achieve during your career. Inspiration: 1. Further develop my network 2. Negotiate a pay increase – is my salary market rate? 3. Be mentored by a senior employee/friend/family member 4. Study to further my career 37
Making it! – Career Moves • Ask for a pay rise – worst they can say is no. Ladies – this includes you too! “Men are four times more likely than women to ask for a raise—and when women do ask, we typically request 30% less than men do” Linda Babcock – Carnegie Mellon University Economics Professor Turnover costs employers approx. $15,000 per worker. • Talk to your boss/mentor about career progression. If your job doesn’t allow for this, then look at a job change. • Self study and upskilling never hurts. • Keep work work working 38
Making it! - Lifestyle 39
Making it! - Lifestyle In order to be the best at work, you’ve got to look after yourself! Despite it being a buzzword, wellbeing is important. ‘Millennial Burnout’ occurs due to prolonged stress and causes emotional and physical exhaustion. Try: Meditation and/or switching off including from work emails and socials Group exercise get a work out and socialize at the same time! Stop comparing yourself against others! Constant self-judgement doesn’t help you. Don’t worry about food trends just eat nutritious meals that work for you 40
Spending it! These are the goals related to you managing your money and cashflow Inspiration: 1. Create a personal budget 2. Save up $80,000 for a house deposit by 2023 3. Pay off $10,000 debt by June 2020 and $20,000 by Christmas 2020 4. Become debt free Try the MoneySmart Budget to work out your inflows and outflows. The high tech can try MoneyBrilliant! 41
Spending it – cashflow & budgeting Repeat the process of writing a budget every 3-6 months to ensure accuracy Generate emergency savings Surplus cash flow is key! 60/20/20 Rule of Thumb: 60% Necessary Expenses (Mortgage, Groceries, Transport, Insurance) 20% Wants (Eating Out, Entertainment – the fun stuff) 20% Future Spending (Saving for goals and retirement) Automate savings! 42
Spending it – practical tips Cook at home you don’t need to ‘brunch’ every weekend Have a coffee at the office Do you need all those monthly subscriptions? Wait 24 hours before making a purchase – this will reduce ‘impulse’ spending Buy Now Pay Later can be useful but be careful! 43
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