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You don't need excess to retire happily ever after

Fri, 28 Apr 2023 12:40:34 GMT

How much do you need to retire?

The advice provided on this document is General Advice Only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. If any products are detailed on this document, you should obtain a Product Disclosure Statement relating to the products and consider its contents before making any decisions.

I like reading about the Roman Stoics. In particular, Epictetus who was a slave and would go on to inspire the great Roman Emperor Marcus Aurelius. One of my favourite passages from Epictetus is: “It is quite impossible to unite happiness with a yearning for what we don’t have”.

This passage is very relevant in finance. For some it is “keeping up with the Joneses”…… you will never be truly happy continuing to strive for possessions you don’t need or don’t truly want. Besides the Joneses are miserable anyway.

For others it may be retirement. Sure you need to accumulate enough wealth to live a comfortable retirement, but once this is achieved why work in a job which may not be your passion?

You are wasting your one true asset, time to pursue the things you enjoy, for something which is not important, accumulating more wealth which you will never spend.

We have an article that discusses how much money you need to retire. It is an eyeopener that your retirement savings are usually going to be enough to provide for the life you want to live.

Your purpose. Well that’s up to you to find. Retirement kills the spirit of those who lose their purpose in life, so you must retire and have a purpose still.

However, thinking that you will be happier in the future once you obtain something will often leave you disappointed. Yearning for more will not make you happier. Understanding what you have is enough, will!

Let me know if you wish to discuss this topic further.

-Shaun Liddicoat

Crown Resorts- Shot by a water pistol

Fri, 28 Apr 2023 12:32:13 GMT

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The Baltimore Broker

Fri, 28 Apr 2023 11:59:26 GMT

The Baltimore Broker

Good afternoon,

There was once a Baltimore stock broker who was a cunning and deceitful man. He derived a strategy of attracting new investment to his investment firm by carefully manipulating would be investors minds.

In his local neighbourhood he initially wrote out to 1,024 households regarding his advice on one stock. To half of the households he told them that the stock was going to fall dramatically in price and to the other half he wrote stating that the stock price would rise. A month later the stock had risen substantially and the broker decided to write another letter. This time it was about another stock. However, those who received the first letter stating the first stock would go down, never heard from the Baltimore broker again. It was the other 512 households he was interested in where he had made the original correct decision.

Again, he wrote to half of the remaining households about a new stock which would fall in value and to the other half about the same stock stating it would grow in value. A month later the stock had grown in value and once again those households who received the wrong advice never heard from the Baltimore broker again. This left 256 households who had received two correct stock tips in a row.

The same strategy was repeated the next month and 128 households had now received three correct stock tips. The month after, 64 households received four correct stock tips. This strategy continued for 10 months by which time there was only one household left who had astonishingly received 10 correct stock tips. The Baltimore broker found it his duty to knock on this households door to introduce himself as the master behind these 10 correct stock tips and of course to ask the household to invest their life savings with him.

This strategy is still being used today. Just type in “share tips” in Google. There you will find an array of companies acting like the Baltimore broker. Each writing a story one day of how a company will go up in value and then writing a story a day later about how the same company’s share price will fall. Lo and behold, a month later they write a story about how clever they are in foreseeing the companies rise or decline and for a subscription fee of only $59.95 per month you too can receive more stock tips.

Don’t be a fool and subscribe to these companies.

Let me know if you wish to discuss this topic further.

-Shaun Liddicoat

2020 Federal Budget

Thu, 22 Oct 2020 01:53:14 GMT

What's in the 2020 Federal Budget for you?

The 2020 federal budget was delivered on Tuesday 6th October. There were no major impacts identified to

members financial strategies other than anticipated tax cuts and other stimulus measures .

As the table shows the 32.5% marginal tax rate will be lifted from $37,000 to $45,000 and the 37% marginal tax rate from $90,000 to $120,000. This is expected to save the average person earning $80,000, $1,080 in tax each year.

For those members who run a business with a turnover of less than $5 billion, there is an instant tax write off for the full value of any asset they purchase. This alleviates the need to depreciate assets over time and brings forward future tax deductions.

Also, for business owners the government introduced the JobMaker Hiring Credit which will give $200 a week to employers who hire anyone aged 16-30, and $100 a week for any worker aged 30-35. New employees must have been on JobSeeker, be given at least 20 hours of work a week and all businesses except for the major banks will be eligible.

For welfare recipients, including pensioners and disability carers, they will receive two cash payments of $250 — the first from December and the second from March. Other than this there were no changes to social security rules.

From an economic perspective, Australian net public debt is expected to increase from approximately 30% of GDP to almost 44% of GDP.

The amount of debt that the government is using is both necessary and will help stimulate companies earnings.

The debt pile is not an immediate issue, as with low interest rates, the loan interest payments remain far lower than previous decades. In fact loan repayments will be about one third of what they were during their peaks in the mid 80’s and

90’s.

In summary, the budget will help stimulate share prices over the next 5 years and keep interest rates low .

Looking for a financial planner in Geelong ? We can help

I hope you are well and please let me know if you wish to discuss the Federal Budget further.

Coping in Volatile Times

Tue, 07 Jul 2020 01:53:17 GMT

Investment markets have been extremely volatile over the past 3 months with the Australian Share Market falling approximately 33% , followed by a 22% recovery.

It is important during this time that you continue to be rational and appreciate that the share market is there to serve you and not to instruct you .

Imagine if a random stranger came knocking on your door, asking you to sell your home to them at a far reduced price. The rational reaction is to remain calm and tell the stranger to get off your doorstep.

Yet many people don’t act this way and sell perfectly good assets at reduced prices .

The stock market is the only thing that I can think of where people sell at a discount and buy at a premium and it is simply a device which transfers wealth from the impatient to the patient .

In the background we have a clear understanding of what your assets are worth and will only recommend you sell these assets at a premium or if you need the money. We will also be recommending you continue to acquire assets at low prices.

There are no secrets in investment markets and success is based more on qualities of temperament than qualities of intelligence.

I would expect a lot of volatility in the months to come as the world grapples with employment issues , a coronavirus vaccine , government stimulus and debt issues .

It is important to understand that these issues will eventually become distant memories and should not influence your long term goals and aspirations.

Want to talk more about your investment goals? Contact us

Investment Update:- March 2020

Mon, 06 Jul 2020 01:53:04 GMT

Prefer to read? Here is the full transcript below:

As previously communicated to members, over the past six months, Cloud Financial Planning has been busy working with Avalon Financial Services and ASIC, in obtaining our own Australian Financial Services Licence .

Things are progressing well with the application, and we are hopeful of having an outcome later in the year. This will act as a key protection mechanism for ourselves and you the member.

We remain conservatively minded on investment portfolios at this stage and continue to use a rational approach to investing.

The US has never printed so much money before and has never spent it so quickly either.

Some economists argue that government debt is no longer an issue in society. I would say if you believe that, then you must also believe in the tooth fairy. No one knows how much more of this easy money can be printed.

With the US being over $22 trillion in debt and with a cashflow deficit of over $1 trillion per annum, the US finds itself in a precarious position with many young people worried about their future….. and rightly so.

Much of this debt has found its way onto share market, which is inflating share prices and creating a large divide between the rich and poor. Generally speaking, there is a large disconnect between share prices and what companies are earning. This has created a heightened level of risk, especially if interest rates were to increase.

However, I expect this policy of excessive US government debt to continue if Donald Trump wins the next election or if Mick Bloomberg is elected President.

On the contrary, in the unlikely event of Elizabeth Warren or Joe Biden becoming the next US President, then I can foresee a change in direction and with that would bring increased taxation on the super wealthy and a major US share market correction.

While there are still some shares which trade at fair valuations, these are becoming harder and harder to find.

It is inevitable that share prices will once again realign themselves with company earnings.

It is not until the tide goes out that you realise who’s swimming naked and so I am encouraging members to be selective with their investment choices.

I wish you well and please be in contact should you wish to discuss anything further.