The Map To Millions for Millennials sli.do/sbm2m 1 Disclaimer - - PowerPoint PPT Presentation

The Map To Millions for Millennials

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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.

Disclaimer

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AGENDA

• About Stanford Brown
• Common Mistakes
• Goal Setting
• Practical Tips!
• Questions

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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

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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)

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COMMON MISTAKES

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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!”

What are your financial goals for the next 10 years?

Own a house Have a meaningful career Travel frequently Start or grow your family

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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

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Career

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What can you do?

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Biggest Career Mistakes

Thinking you’ll ‘find’ your ‘dream’ job/career Measuring your work in hours Not prioritising

• rganisation

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Property

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Is now the time to buy?

The investor of today doesn’t profit from yesterday’s growth – Warren Buffett

I don’t know

raise your hands

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

1977

2019 equivalent 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

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Common Property Mistakes

Borrowing too much Being impatient Buying off the plan

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Isn’t rent wasted money?

Yes!

But so are interest repayments!

That’s $22,500 per year ($430 per week) You will spend $677,000 on interest! You pay it off

• ver 30

years You take out a $1m mortgage at 3.8% pa

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INVESTING

Common Money Mistakes

Trying to get rich quick Investing with no idea what you’re doing Investing with the belief you know what you’re doing

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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?.

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

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Lifestyle

Common Lifestyle Mistakes

Marrying the wrong person Lifestyle creep Borrowing money unwisely Spending money frivolously

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TESLA MODEL X

The dream can be a reality!

Cost of my dream car

11 yrs of renting @ 350pw 4 MBAs at Sydney University Deposit on a $1m house 2/3 of a child 57 French Bulldogs 100 Return Flights to London 4 Weddings

Cost of a $50,000 car

1 MBA at Sydney University 1 Wedding 2.7 yrs of renting @ 350pw 1/6 of a child 14 French Bulldogs ¼ of a deposit on a $1m house 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

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Kicking Goals

It’s always a great time for change, but… only

8%

• f people actually achieve what they set out to

achieve One of the most common resolutions in 2019 was to

SAVE MONEY

Two ways to increase the likelihood of achieving what you set out to achieve: 1. Increase motivation OR 2. Make change easier

Image: CollegeHumor

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Goal Setting

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 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)

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SMART Goal Setting

Goal Goal Amount Time Horizon Priority

Call bank and ensure home loan is competitive Reduction in rate NOW 2 New car $30,000 1 year 4 Protect income Income insured NOW 3 A month long European holiday $20,000 1 year 6 Build an investment portfolio $10,000 p.a. 3 years 5 Save up for house deposit $80,000 2 year 1

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Record your Goals

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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

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

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Making it! - Lifestyle

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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

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Spending it!

Try the MoneySmart Budget to work out your inflows and outflows. The high tech can try MoneyBrilliant! 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

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!

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Spending it – practical tips

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• 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!

Spending it – paying down debt

• Deductible debt vs non-deductible debt
• Pay down non-deductible debt first – think credit cards,

personal loans, home mortgage

• Credit card debt is bad!
• Pay it off monthly
• If you can’t, cut it up and cut back on non essentials until it is

repaid

• Consolidate/rollover under reduced/no interest period offers?
• Consider consolidating your non-deductible debts
• Don’t’ pay the lazy tax! If your home mortgage variable interest rate

is over 3.25%, you’re paying too much

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• Avalanche = pay off highest interest debt

first (most cost effective)

• Snowball = pay off smallest debt first

(most motivational)

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Avalanche vs Snowball

Small Debt Medium Debt Large Debt

START HERE DEBT SNOWBALL START HERE DEBT AVALANCHE

EASIER & SLOWER HARDER & QUICKER

Spending it – paying down debt

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Living it!

These are the goals related to spending your money on the things in life that you enjoy. Inspiration:

• 1. Go on a month-long European holiday
• 2. Do a photography course
• 3. Sign up to the Gym and go regularly

Living it– Be mindful

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Think carefully about your spending. Impulse buying can be an emotional relief – it’s not called retail therapy for nothing. Forgive yourself for splurging. Remember the 60/20/20 rule. Avocado on toast once a fortnight won’t break the bank.

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Making it Last!

These are the goals related to preserving your hard earned money Inspiration:

• 1. Build a sound investment strategy and portfolio
• 2. Create a financial roadmap
• 3. Contribute more into my superannuation

• Automate your investment plan
• Consider micro savings/investments apps
• Divert a percentage of bonus/salary increases – easier

to save what you don’t already earn

• Look at your super! It’s your money for retirement…

make sure it’s invested that way

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Making it Last – Investing

$29K IN $33K OUT

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Making it Last – Investing in Property

Upfront Costs ($170,000)

• 20% deposit = $140,000
• Stamp Duty = $27,000
• Legal and other costs = $3,000

$80 per week

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Protecting it!

These are the goals related to protecting your money and family from the unexpected. Inspiration:

• 1. Have enough insurance
• 2. Minimise tax
• Do you have Income Protection Insurance?
• Do you have adequate Health Insurance?

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Transferring It!

These are the goals related to transferring your money to your loved ones or your community. Inspiration:

• 1. Get my Estate Planning sorted
• 2. Help children or grandchildren to buy a house
• 3. Donate to a charity

Final thoughts…

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• What will you do TODAY to enact some positive change to your

financial world?

• How will you ‘not be stupid’?
• What career, lifestyle and investing mistakes will you try to avoid?
• What goals will you put in place? How will you measure these goals?
• How will you alter your saving and spending strategies?
• How will you look after your wellbeing?
• How will you keep yourself accountable?

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THANK YOU!

Phone:

02 9904 1555

Email:

info@stanfordbrown.com.au

Website:

www.stanfordbrown.com.au

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THANK YOU!