For many, the thought of managing money is daunting. We are not taught this skill, and there are so many stories of people being “ripped off”, scam’s, dodgy advisers and on the flip side “friends” who have hot tips, a friend’s husband who “trades shares and does well” and of course there is always bitcoin.
It doesn’t get easier because as soon as you turn on the news, radio, or get online, thousands of advertisements try to convince you to invest money here or there.
No wonder so many people either:
- Do nothing!
- Do the wrong thing!
Imagine how much harder this becomes if you have recently come into money or complexity due to divorce or loss of your partner.
Not only is this an emotional and stressful time, but now you have this “money” to look after.
Who do you trust?
Where do you go?
At Arch Capital, we have become specialised at helping clients go through precisely these situations.
Why – well my Mum was my first “client”. I was a bit younger than I am now when my parents divorced and in my early 20’s Mum received some bad advice from one of Australia’s best known brokers; I was so shocked that it spurred me into this profession. Well, I call it that now, but I can assure you in the early 2000’s financial advice was at best a game of “who sells the most wins.’
To cut a long story short, over the last 20 years, I’ve worked as an adviser with a passion for helping people get the right advice.
For me and the team at Arch Capital, that is all that matters, that our clients get the right advice and never have to worry about money again.
We start with a “discovery meeting” where we ask questions and listen.
If we can add significant value, we will hold a “strategy meeting” and uncover what may be the most appropriate strategies to consider.
We then will hold a “mutual commitment meeting” to discuss whether we are the right fit for each other and go through our terms of engagement.
It may seem like a drawn-out process, but it is essential we spend time at the outset as we plan to have a long relationship with all those we work with.
We enjoy helping clients like my Mum, who need trusted advice and an independent sounding board from professional advisers.
Here is an excerpt from my book “The Super Secret”
It’s Your Money, Manage It Well
“To invest successfully does not require a stratospheric IQ, unusual business insights, or inside information”, Warren Buffett says in the foreword to Benjamin Graham’s ‘The Intelligent Investor. “What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework.”
All Australians are or will be investors. For many, this is by default via your superannuation fund. Your compulsory savings of 9.5 per cent of your salary are being invested by your superannuation fund in banks, mining, health care and infrastructure operations — roads, ports, airports, telecommunications, and electricity distributors.
You may also become an investor by receiving an inheritance, buying a property, or saving for a holiday.
You may dream about buying a boat, travelling the world, or taking a cruise. All these goals require investing. The better an investor you are, the better your life will be.
Money is important to you for different reasons than to me, and we will all have different amounts of money at various times of our lives. How we manage this money to provide the outcomes we seek for ourselves and those we care about is very important.
While many people understand that their superannuation fund invests in shares, you may also have investments in bonds, cash, property, private equity, options, and unlisted assets such as infrastructure. Many of these investments have names and descriptions you are not familiar with terms like ‘dividend’, ‘yield’, ‘franking credit’,
‘hybrids’, ‘return of capital’, ‘return on equity, ‘capitalisation’, ‘Dow Jones’, ‘All Ordinaries’ mean absolutely nothing to many Australians. These vague terms and jargon have helped keep investment the domain of your investment managers, safe from you ever taking control or knowing enough to be sufficiently confident to make a change.
Do you know what you are invested in? Do you really know what you should and, more importantly, what you should not be invested in?
You are not alone if you answered no. Very few people do know. Yet your superannuation and investments have the ability to enhance your life, to enable you to live your dreams and do the things you really want to do!
It is important you have the knowledge and skills to know if your money is being well managed, but it’s not a subject that is taught at school. Financial literacy in Australia is very low, despite our relatively high level of education.
As personal finance is not taught, it is no surprise that most investors make the same mistakes, such as trying to pick stocks or time markets and try to buy in the highs and sell in the lows.