Bad Retirement Decisions and How To STOP Making Them...

Why Your Spare Bedroom Might Be The Key to Financial Independence

Over the past 24 months as the COVID 19 pandemic unfolded and progressed... it revealed an inconvenient truth about just how precarious the financial affairs of middle class households really are. We now have much greater clarity and certainty around the fragility of our finances – with around 80% of households forced to confront the fact they don’t have enough savings and are around 1 month away from losing their homes. Inadequate savings, lack of financial planning, and with little support from family and the government... Several things have become abundantly clear, We need to understand our debt position and how much savings are required to weather a storm (such as a loss of job, pandemic, health issues) and we also need to better use the assets that we already have available to us to protect against future catastrophes and shore up our overall health as we build wealth for our families and prepare for retirement. Sometimes opportunities lie in the strangest of places... While there are reports that we are heading into a decade long housing supply crunch, with reports that affordable housing is at all time lows and Sydney reporting a five year low vacancy rate of 1.7% (with many regional areas reporting less than 1% vacancy), there are 13.5M unused bedrooms in 10m residences across Australia. Bio Ludwina Dautovic is the CEO and Founder of The Room Xchange, Australia’s first verified house-sharing platform. The Room Xchange makes it easy for people to find their ideal housemate based on personality, values, and lifestyle. And you can choose to rent or rent offset giving you the choice on how you want to use your asset. Today Ludwina and I will be talking about how you spare bedroom could be worth $10k a year in rent or over 300 hours of household help. Financial Foreplay® Highlights: 1. 13.5M unused bedrooms in 10m residences across Australia and yet we have a housing shortage and an affordability crisis. 2. A spare bedroom can return around $200 a week in rent or 8 hours of help. 3. Your spare bedroom is an asset that could be making you money – it’s no different than renting our your spare car, garage, caravan, or power tools for extra cash 4. Having verified profiles means you can pick someone that shares your lifestyle and values. 5. There are a myriad of reasons why people want to house share post COVID. 6. The rental market is very slim and people (of all shapes and sizes) are looking for viable alternatives to the traditional share model (that really appeals more to students). 7. The experience can enrich your life and add value to your life/family. 8. Our tribal way of living has changed so much in the last 20 years and this is one unique way of creating a new sense of community, dialogue and connection. 9. $12,000 a year in incremental income could almost double the amount of principal that a family with a mortgage of $500,000-$600,000 is able to pay down each year. 10. Australia is the only country in the world where 76% of citizens are living in “severely unaffordable housing” defined as housing valued at 6+ times your annual salary. 11. If all the unused spare bedrooms within 30 minutes of the CBD in Sydney were housed by a working adult, it would increase GDP by $750m annually according to a study by Ernst and Young. Get in Touch: * Link to company update - https://finance.yahoo.com/news/room-xchanges-ceo-ludwina-dautovic-220000722.html [https://finance.yahoo.com/news/room-xchanges-ceo-ludwina-dautovic-220000722.html] * Linkedin: https://www.linkedin.com/in/ludwinadautovic/

What if There Were an Easier Way to Choose Profitable Investment Properties?

Investing in property is a time-consuming, stressful and non-transparent process. It is estimated that investors spend on average 200 hours looking for a property, including frustrating Saturday morning inspections. Typically there are 5-10 stakeholders involved, the process is unclear, and most are worried about making a wrong/poor decision. It is extremely hard to find the data and insights to know where and what to buy and at what price. Bio Mickael Roger is co-founder and co-CEO of PropHero, a data-driven digital platform for property investment. PropHero helps you find, buy and manage the best investment properties. Before founding PropHero, Mickael was an Associate Partner at McKinsey & Company, where he was leading the Data & Artificial Intelligence practice, serving clients in the Telco/Media/Tech, Private Equity and Financial Services industries. In 2017, he launched a new AI-powered commodity price forecasting capability for McKinsey, serving some of the largest commodity producers and traders to predict prices using artificial intelligence and develop advanced trading strategies. Prior to joining McKinsey, Mickael worked as a Senior Consultant at Roland Berger Strategy Consultants in Paris and North Africa, where he focused on both strategic and restructuring topics, while developing M&A and financial advisory activities. Mickael Roger began his career as an M&A investment banker for UBS in London in 2011. Mickael Roger holds a Master's Degree in Engineering from Telecom ParisTech and an MSc in International Finance from HEC Paris. Financial Foreplay® Highlights: PropHero is an AI-driven digital property investment platform that helps you find, buy and manage the best investment properties.  PropHero is designed to help investors build wealth and make property investing simple, transparent and more profitable. * Simplicity: Save up to 95% of the time usually spent to find an investment property with the help of your dedicated Property Coach and via our user-friendly digital platform simplifying each step of the property investment process * Transparency: We share with you all the data and model insights to help you understand the potential of the properties we find for you * Greater profitability: We use Data and AI to locate the next 'hotspots' and find superior investment opportunities

How Sexually Transmitted Debt is Creating a Revolution in Banking

Apple is putting the finishing touches on a service that will let consumers pay for any Apple Pay purchase in instalments over time – which is a direct foray into the “buy now, pay later” market where key players such as Paypal, Klarna, Zip and Afterpay have dominated. This new Apple service will be backed by Goldman Sachs Group as the lender for the loans that support the instalments. This new buy now, pay later system could further drive and entrench Apple Pay adoption. Even more importantly, it’s likely to influence more consumers to use their iPhone to pay for items instead of standard credit cards. This is a huge shift since recent studies out of the UK estimate that BNPL took a 20% chunk out of the credit card market during the 2020 Christmas shopping season. As I understand it - when a consumer makes a purchase via Apple Pay on any Apple device, they will have the option to: * pay for it in four interest-free payments made every two weeks, or * spread the payments across several months with interest Consumers will be able to choose any credit card to make their re-payments over time which will add another 30 days to the equation. Now you may be asking yourself, why is this so significant? We already have several BNPL schemes that have embedded themselves in the retail landscape. Apple's announcement isn't significant because of its direct impact on the BNPL landscape. It is significant because it proves the structures of banking and finance are fundamentally changing. This week alone we saw irrefutable evidence that banking as we know it is dying and that the rigid foundations that have propped up our banks, are no longer rigid at all. The recent acquisition of Afterpay as a prime example of this. Afterpay has NEVER made a profit. Afterpay has no history of paying dividends to shareholders and has less than $1 billion in net assets on its Balance Sheet. And yet, it was acquired for an implied $39 billion by Square, with Afterpay shareholders set to pocket Square shares instead of cash... where Square shares on this transaction were aggressively priced at 120 times forward earnings! Bio: Kane Jackson is the Founder and CEO of Maslow, a financial services start-up with a goal to rebuild consumer banking and finance on a platform of inclusivity and alignment with the consumers it serves and has, at times, previously taken for granted. Maslow has the backing of a number of significant investors, including the ex CEO of PWC and Carlton Football Club President. Previously to Maslow, Kane was responsible for registering Australia’s first retail derivative fund and is astutely aware of the significant responsibilities that come with offering a retail financial services product. Financial Foreplay® Highlights: 1. Significant increase in bad debts likely led to need to source an acquisition partner 2. BNPL is predicated not on the 6 per cent return but the fact that capital is recycled 3-4 times a year making the annual return earned in the 30 per cent range 3. BNPL model is built upon the assumption they would be able to upsell customers into traditional banking products – the jury is still out on whether that is realistic or not 4. Banks were never really worried about BNPL because it only affected a small portion of their revenue base 5. Apple’s proposition is risky because it completely removes friction AND conscious consideration by the customer of what the bank does (and whether they even need a bank in their lives) 6. Questions for us to ponder -- How could we harness what we have learned from BNPL to innovate in the area of savings, investing etc.? How could we teach people to manage their money more wisely and make it fun/engaging? Get in Touch: Linkedin - (1) Kane Jackson | LinkedIn [https://www.linkedin.com/in/kanejackson1/]

Bad Retirement Decisions and How To STOP Making Them...

Emergency access to superannuation granted by the Australian Federal Government during the COVID-19 pandemic has triggered a discretionary spending spree for some Australians, who are splashing cash on some shockingly non-essential items - gambling, alcohol, apps, luxury fashion items, and takeaway food. Roughly 3m Australians withdrew almost $36 billion from their super accounts under the COVID-19 scheme. This is sharply contrasted with what happened in Canada where Canadians continue to be subject to withholding taxes on retirement funds removed from RRSPs unless the funds were taken by home buyers or lifelong learning. In the USA, the Federal CARES Act, made it easier for Americans under age 59½ to access the funds stashed in eligible retirement accounts – Americans were entitled to take out up to $100,000 from eligible retirement plans without incurring the usual 10% early withdrawal penalty and they were given up to three years to pay the tax liability on the money removed. While it’s hard to get an official estimate on how much money was withdrawn early, both Fidelity and Vanguard reported that roughly 3% of their customers drew down on their retirement savings due to Covid. Best estimates suggest that roughly 4.530m Americans withdrew something close to $22.65b in retirement savings. Let’s come back now to a quick summary of what the funds were spent on – and to do that I want to highlight some research conducted by the advisory firms Alpha Beta and Illion. What this research shows is that the overwhelming majority of those dipping into their retirement nest eggs have increased spending on lifestyle items, rather than using the cash as a lifeline for rent, utilities, medical expenses, or groceries. According to this research, those who drew down on their superannuation (the Australian retirement income scheme) increased their spending in the next fortnight by $2,855: * Australians used this money to increase their spending, not to maintain prior spending levels * 14% to repay personal debts * 64% of spending went on discretionary items such as clothing, furniture, restaurant food, gambling and alcohol * 40% did not actually suffer a drop in their income so far during the COVID-19 crisis * 21% saw an increase in their income of more than 10% but drew down anyway * Men and women spent the funds differently: * Men – gambling was at the top of the list * Women – fashion items topped the list Supplied: AlphaBeta/Illion These statistics are disturbing. They highlight a couple of things: * On average most individuals did not have enough money in their savings account to sustain themselves (household) more than 2-3 weeks when the pandemic hit * Australians in particular demonstrated low levels of financial literacy – their decisions to remove money early from superannuation significantly impacted their future retirement savings (by tens if not hundreds of thousands) AND the money was largely spent on discretionary items that were not needed to sustain themselves during the pandemic While I can relate to the fear factor as 2020 was a highly uncertain and frightening time with Covid 19, it disturbs me that millions of Australians felt they needed up to $10,000 (for whatever reason), and they seemingly: * had no understanding of how to raise those funds via other means or * what the actual impact would be on their future retirement savings if the amount were withdrawn early Bio:Derek Condrell is the co-founder of mSmart, a world-class software program that projects investment values so that you can confidently determine whether you will have enough income to retire when you want to. Rather than guess, or make bad decisions because you have no idea what the impact of a withdrawal might be, fintech innovators like Derek are working hard to create products that give you a very clear picture, help you make better decisions and avoid disasters just like the one likely to be faced by roughly 3m Australians who stripped money out of their retirement savings because they didn’t know better. Financial Foreplay® Highlights: 1. Early withdrawal may very well make sense in extreme financial hardship or a medical emergency. 2. Spending varied greatly depending on the age bracket – over 38s tended to use the money more wisely while those under 38 gravitated towards discretionary spending 3. Most people are simply not evaluating the impact BEFORE they actually decide to withdraw and largely that is because there is no easy way to assess the financial impact of the withdrawal on the end lump sum or annual retirement income. 4. Lump sum is a much more dramatic, headline grabbing amount but it fundamentally makes more sense to focus on the impact on annual retirement income – and this should always be done in present day dollars to put some relevance and context around the numbers. 5. Even if you made the mistake of withdrawing early, there are ways to make it up now: 1. Via over-contributions (which are taxed much lower than your marginal rate) 2. By shifting the mix of your portfolio from default (which is where most people are) to growth/equity. 6. Please consult your financial advisor as you are much more likely to get advice that is tailored specifically to your needs than if you guess, use Google, listen to a friend etc. Tailored advice is always preferable to generic advice. MSmart Example: Get in Touch: Email – Derek@msmart.com.au Website - www.msmart.com.au

Getting Clear About What You Want... and Don't Want

Goal setting is a powerful process for thinking about your ideal future, and for motivating yourself to turn your ideas [for the future] into reality. The process of setting goals helps you choose where you want to go in life. By knowing precisely what you want to achieve, you know where you should concentrate your efforts.  You'll also quickly spot the distractions that would otherwise lure you away from your intended direction/goal. Properly focused goals can be incredibly motivating, and as you get into the habit of setting and achieving them, you'll find that your self confidence improves and your vision grows. Goal setting techniques are used widely in business, sport, academic achievement and also in everyday life. They give you long term vision and short term motivation. They focus your quest of knowledge and help you to organise your time and your resources so that you can make the very most of your life. By setting sharp, clearly defined goals, you can measure and take pride in the achievement of those goals. You can see forward progress in what might previously have seemed a long pointless grind. By setting goals, you will also raise your self confidence, as you recognise your ability and competence in achieving the goals that you have set. From the Book ‘On the Shoulders of Giants’ by Rhondalynn Korolak"You control your future, your destiny. What you think about comes about. By recording your dreams and goals on paper, you set in motion the process of becoming the person you most want to be.  Put your future in good hands – your own." ~ Mark Victor Hansen ~ You have to know what it is you are seeking to achieve in life otherwise it’s too easy to drift aimlessly. Years pass like days and next thing you know 20 years have passed and you’ve still not finished that novel that you started to write, not gone back to school to get that degree, not sorted your financial affairs, never bothered to get around to learning a second language etc. There is one thing that we need to touch on in the context of goal setting – it is the distinction between goals and dreams. And it is this distinction that makes all the difference. Too often, traditional goal setting can seem like a very clinical exercise. Pick up any self-help or business book and it will tell you how to set SMART goals – specific, measurable, achievable, realistic and time bound. While I agree with the necessity of these basic factors, I also think it is absolutely crucial to incorporate the element of "dreams" and the "imagination". By their very nature, dreams are illogical, irrational, non-sequential, without specific steps and difficult to measure. However, too many of us get limited in our goal setting by the constraints of our own imagination. We would all like to make an extra $100,000 a year but we have no powerful, compelling reason ‘WHY’. What exactly would you do with another $100,000? That is the critical question to ask yourself … Connect with ‘what’ or ‘why’ and the ‘how’ will make itself known to you in the most miraculous ways. Even so, $100,000 is not a huge stretch in today’s terms. But most never dare to aspire to double or triple their income. Why is that? The missing element is the realm of dreams and imagination. By its very nature, a dream is something that is potentially unrealistic. However, dreams are incredibly powerful and compelling because they are about who you are becoming, not who you are now. Dreams and imagination lie within the domain of the subconscious mind. By incorporating this additional element into the goal setting process, we connect to the infinite resourcefulness of the subconscious and ignite a passion that will inspire and drive us towards our goals. Financial Foreplay® Highlights: Define your Goals:1.When setting goals it is very important to remember that your goals must be consistent with your values. 2. A goal can not contradict any of your other goals. For example, you can't buy a $750,000 house if your income goal is only $50,000 per year. This is called non-integrated thinking and will sabotage all of the hard work you put into your goals. Non-integrated thinking can also hamper your everyday thoughts as well. It pays dividends to continually strive to eliminate contradictory ideas from your thinking. 3. Develop goals in the 6 areas of life: Family and Home Financial and Career Spiritual and Ethical Physical and Health Social and Cultural Mental and Educational Setting goals in each area of life will ensure a more balanced life as you begin to examine and change the fundamentals of everyday living. Setting goals in each area of live also helps in eliminating the non-integrated thinking we talked about in the 2nd step. 4. Write your goal in the positive instead of the negative. Work for what you want, not for what you want to leave behind. Part of the reason why we write down and examine our goals is to create a set of instructions for our subconscious mind to carry out. Your subconscious mind is a very efficient tool, it cannot determine right from wrong and it does not judge. It's only function is to carry out its instructions. The more positive instructions you give it, the more positive results you will get.  Thinking positively in everyday life will also help in your growth as a human being. Don't limit it to goal setting. 5. Write your goal out in great detail. You must give the subconscious mind a detailed set of instructions to work on. The more information you give it, the more clear the final outcome becomes. The more precise the outcome, the more efficient the subconscious mind can become. 6. By all means, make sure your goal is high enough. 7. This is the most important, writing down your goals creates the roadmap to your success. Although just the act of writing them down can set the process in motion, it is also extremely important to review your goals frequently. Remember, the more focused you are on your goals the more likely you are to accomplish them. Sometimes we realise we have to revise a goal as circumstances and other goals change. If you need to change a goal do not consider it a failure, consider it a victory as you had the insight to realise something needed adjustment. MY RESULT Goal Setting Formula Whilst you need the capacity to dream you also need to be able to move that vision from the ethereal to the material and that is where MY RESULT goal setting methodology comes in: M          Measurable result. How will you know when you get there? What does the end step look like? Y            Why? For what purpose/intention do you want it? Do not be afraid to dream BIG here! R            Realistic and achievable. Don’t be afraid to set a longer-term goal that is a stretch or a challenge. E            Ecological – is it good for you, others and the planet? S            Specific, clear and concise goals – ensure you subconscious mind knows what it is working towards. U           You have it now. The goal must be written in the present, as if you have it now and signed by you. L             Looking toward your goal - not moving away from what you do not want. Action-oriented. T            Time bound - must have a specific achievement date.