Christmas budget tips - you know you need them

I have to be honest, I was pretty happy with myself for having most of my Christmas shopping done by the end of October this year.  Let's face it, if we're not super organised, Christmas can be pretty stressful instead of the fun and happy time that it should be.

I'll never forget my brother ringing me in total panic about 10 years ago because he hadn't bought a present for his then girlfriend (now wife) Jenny.  The reason he was panicking was that it was 7pm on Christmas Eve and he'd mistakenly thought the shops were open until midnight.  D'OH!!!!!!

Funny now, but at the time...

If you didn't catch my recent newsletter article then just click here for my easy and practical tips for Christmas spending.  It may be a little too late this year for some of the tips, so feel free to make use of them in 2014!

Talk soon,

Caren

PS. Please don't keep me a secret.  If you know someone who'd enjoy this or find it useful, pass it on!

How to improve your business over the Christmas break

It's almost Christmas, which is pretty exciting.  I'm unashamedly obsessed with Christmas - I had most of my Christmas shopping done by the end of October and my tree and decorations were up by 9 November!

I love the feel of this time of year, I love the Carols and I love the Christmas parties.  I love the way everyone talks about Christmas.  Mick proposed to me on Christmas Eve - 4 years ago mind you!!! - and we go back to the same restaurant every Christmas Eve.  So there's a lot about Christmas I love but most of all I love the holiday!!!!!!

The thing about being a business owner though is that even if we're on holiday we don't stop being business owners.  Even if we're not actually working - we're often still thinking about the business.  If you're in business with your spouse then often you're talking about business on your holiday as well.

So don't fight it - make it effective.

The Christmas break can be a great time to review your business and set goals for the next 12 months.

In our own business we're constantly setting short-term and long-term goals.  The reason we do this is because if you don't have goals it's pretty hard to achieve anything concrete.  You may have heard the saying most people aim at nothing...and they hit it with amazing accuracy.

To ensure that our strategy remains appropriate through different economic climates, industry fluctuations, tax and legislative, changing lifestyles and financial needs, you need to review your business and your short and long-term goals on a regular basis.

Once you've chosen the goals you want to focus on for the next twelve months you need to prepare a plan for each goal and set sub-goals.  What are the things that need to be done to make sure you achieve each goal?

It's really important that you're able to visualise each goal and its purpose and most importantly each goal needs to be achievable.  There's no point setting yourself up for failure - that's never fun.

So there you go, I've just given you some Christmas homework!  If you're like me and your business brain doesn't necessarily shut down for Christmas when the business does, then reviewing and resetting your goals can be an effective use of your holiday time.

But of course it's only worthwhile if you then go back to work and move your ideas into the real world and start making them happen.

Click here for a paper that Mick and I wrote earlier this year about making sure your business and personal goals are in alignment.  Not only does it give you a step by step example of how to go about setting your goals but also highlights why you need to also consider your personal goals when setting your business goals.

Talk soon,
Caren


PS. Please don't keep me a secret. If you know someone who’d enjoy this or find it useful, pass it on! 

Gearing explained in plain English

I have a client who is a really smart guy.  He has a list of qualifications as long as your arm (not my arm coz that would be pretty short) and he's one of the best in his field.  But when I told him that gearing involved borrowing he was positively stunned.  No one had ever told him that before.

What's the point of telling you this story?  Simply that gearing isn't necessarily a straightforward investment concept and if it's a subject you find confusing - well, you're in good company!

We've prepared a simple fact sheet that explains all the important points about gearing in plain English! Click here to read it, and if it's something you'd like to explore further, just give us a call.

By the way, my client told me I should tell as many people as possible his story in the spirit of financial eduction.

Talk soon,

Caren

PS. Please don't keep me a secret.  If you know someone who'd enjoy this or find it useful, pass it on!

How to write "right" in business

As business owners, we also need to be reasonably competent “writers”.

It’s always been important, but in this new age of the internet and social media, we’ve kinda been foisted into the world of publishing whether we like it or not.

And let’s be honest – most business owners don’t like it!

I’m lucky because I have had training in writing, and have a degree in literature BUT as I’m about to explain, even that doesn’t mean I get it right all of the time.

Click here to find out how I got it so wrong, and how you can get it so right! (write… love a pun…)

Talk soon,
Caren

We have a new Government, but what does that mean for investment markets?

The simple fact is our elections don't generally move markets as they do in some other countries.  The reason for this is that our major parties (Liberal/National and Labour) just don't differ enough in policy to have a huge impact.

But of course there have been some unique circumstances in the years leading up to this particular election, which may have greater impact than usual in a few key areas:

A few points which seem worthy of raising include:

• The policies of the new Government if implemented are likely to lead to smaller government, less regulation and over time improved productivity and economic growth.
• Expect a mini-budget around November that may contain more aggressive budget savings.
• The historical experience combined with the more business friendly approach of the Coalition suggests a positive share market response over time.
• The key uncertainty relates to the new Senate.

For more on how we're likely to be effected, especially with regards to investment markets, I recommend taking a look at economist Dr Shane Oliver's latest article.  As always, he cuts to the chase and is an interesting read. Click here to read Dr Oliver's insights.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,
Caren 

PS. Please don't keep me a secret.  If you'd know someone who'd enjoy this or find it useful, pass it on! 

Do you remember "New Coke"? A lesson for every business.

Can you guess the most recognised brand in the world?  If you guessed Coca-Cola, you'd be right.  

But does anyone remember "New Coke"?

In 1985 the Coca-Cola Company tested a new formulation.  This formulation was largely perceived to be better than Coke and Pepsi in the "blind" taste tests.  However, five years and millions of dollars later, the product refused to sell.

In fact, consumers demanded that the "old" Coke be brought back!

This was despite the fact that market research showed that the vast majority of people either preferred the taste of New Coke or couldn't tell the difference.  So what's all that about?

Loyalty to the brand name folks.

Believe it or not, the value of Coke's brand name is about 100 times more than its actual product!

I often get asked about the importance of branding for smaller businesses compared to big companies.  Frankly, your branding is crucial regardless of size.

Click here to find out what you should be considering for your brand!

And if you'd like to hear more of what I have to say on the matter click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,
Caren 

We know what you really want to hear about - PROPERTY!

Click here for your invitation to our FIRST EVER PROPERTY SYMPOSIUM.

What a month - a 5 year record high for the Australian sharemarket, the US market keeps going gangbusters, and we have a new Government (more on that next month)!

So what about our property market?

It was only twelve months ago that we were worrying about a major fall in house prices, but now everyone's talking about another housing bubble!

The annual capital city average house price growth is running around 5%, and property is still a HOT topic.

As a Financial Planner I'm often accused of a bias to shares and of not liking property, which is simply untrue - I've owned investment properties in my portfolio since my early 30s.

However, my experience as both a Financial Planner and a Landlord has taught me that there are risks involved in property investment and you can get it wrong.

So what do you do?  Your homework of course!

In particular, we always recommend giving particular consideration to:

1. Which property you should buy - type, location, age, growth potential, income potential.
2. The best way to finance your property - institution, interest rate, type of loan, term, repayments.
3. Managing and renting the property - self-manage vs an agent, rent, tenants, maintenance.
4. Tax - avoiding paying more tax than you have to, what's deductible, negative vs positive gearing, capital items vs income items, after-tax cashflow.

Get expert advice in all four areas before you sign the contract.  It may seem time consuming BUT it may save you a lot of time in the long-run.  Let's face it, spending a bit of time with a few experts is negligible compared to the cost of a poor decision...

And if you are thinking about buying a property, we've made it really easy for you by getting the experts in one room and one time at our FIRST EVER Property Symposium - "Buying your next property - the full story."

We've sourced four experienced specialists for an enlightening and content-driven evening to help you make informed decisions about your next property purchase.  You'll hear educational presentations about buying your property, financing your property, managing and renting your property and the tax tips you need before you sign a contract.  This is your chance to hear what the experts have to say and ask all your questions about buying your next property.

The symposium is aimed at people who already have at least one property, but if you're buying your first and would like some extra information you're very welcome. 

The symposium will be held on Tuesday 15th October at 7pm, and it's just $25 per ticket (and you'll receive a free ticket so that you can bring along a partner, friend, colleague or family member).

Click here for full details including how to register.

Talk soon,

Caren 

We have a new Government, but what does that mean for investment markets?

The simple fact is our elections don't generally move markets as they do in some other countries.  The reason for this is that our major parties (Liberal/National and Labour) just don't differ enough in policy to have a huge impact.

But of course there have been some unique circumstances in the years leading up to this particular election, which may have greater impact than usual in a few key areas:

A few points which seem worthy of raising include:

• The policies of the new Government if implemented are likely to lead to smaller government, less regulation and over time improved productivity and economic growth.
• Expect a mini-budget around November that may contain more aggressive budget savings.
• The historical experience combined with the more business friendly approach of the Coalition suggests a positive share market response over time.
• The key uncertainty relates to the new Senate.

For more on how we're likely to be effected, especially with regards to investment markets, I recommend taking a look at economist Dr Shane Oliver's latest article.  As always, he cuts to the chase and is an interesting read. Click here to read Dr Oliver's insights.

If you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Money" radio segment on 98.1FM Radio Eastern.

Talk soon,
Caren 

PS. Please don't keep me a secret.  If you'd know someone who'd enjoy this or find it useful, pass it on! 

How to find out what your customers want (what they really, really want...)

I own a business, work full-time, and there are currently 10 people living in my home.  Now I'm not complaining, I wouldn't have it any other way, BUT I definitely don't need any unnecessary stress or complications.  For this reason I like to keep things simple wherever possible.

One of the things I believe makes me unique as a business adviser is I don't feel the need to make myself look clever with overly complex business concepts.  If I have the answer, I'll give it to you straight.

So can I answer the question about what your clients or customers really want?  Absolutely!  And it's so simple that of course you already know it, but a reminder never hurts...

The answer?

Drumroll please.....

"Ask them".

Your customers/clients are the only people that truly know what they want from you and your business.  More importantly, you should be looking at your customer base and determining the ones you really enjoy doing business with - your target market - and actively finding out what it is that they value, or would value if you offered it to them.

SO HOW???

Online or paper surveys are a quick and inexpensive way to get feedback from your customers/clients. Just be aware that surveys of this nature generally only receive a response rate of around 20%-30%.

A far more effective feedback forum is a Focus Group or Client Advisory Board.  This involves getting a cross-section of your existing customers together and discussing how your business could be even better.  It's incredibly powerful, because it lets you know:

• What your customers and clients feel and think about your business and what you do.
•  What your customers and clients really want from your business (rather than what we, as owners think they want!) and how to improve it from your customer's point of view.
• What you need to do to significantly improve your business.
• The 'hot buttons' to use in your sales and marketing to make it easy for potential customers to spot the differences (like why you're better!) between you and your competitors.
• How to increase the results you get from the marketing dollars you spend.

Click here to find out how to hold a Focus Group, how to get your customers to attend, and the results you can expect.  And by the way - I'm an awesome facilitator if you need one :)

Of course, if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

Caren  

Quick Tax Tips for 2013

I really enjoyed writing last week's blog because I shamelessly cashed in on Dean's intellectual property.  I actually enjoyed it so much I'm going to do it again!!!

Dean has prepared a fantastic tax newsletter this year - filled with facts you need to know before you lodge your return, and some fundamental advice about deductions.  If you haven't read it yet, it's only two pages and a really easy read, just click here for a copy.

Talk soon,

Caren

To claim the home office or not to claim the home office; that is the question.

Let's get one thing straight - I'm not an Accountant.  I do not own, nor will I ever own, a brown cardigan!  Oh actually I just realised that's a lie - I do remember owning a brown cardy once - but brown was waaaaay cooler in the 70s...

I'm a Financial Planner who is completely surrounded by tax experts - my partner, my father, my brother, my uncle, even my 19 year old step-daughter is at Uni studying tax!  So I do get asked a lot of tax questions, especially at this time of the year.

One of the most common (not to mention the most commonly misunderstood) is what's deductible when it comes to the home office.  And it's important to understand that from the tax office's perspective there's a significant difference between "working from home" and "working from a home office".  So first you need to....

Hang on!  I just mentioned I'm surrounded by tax experts, so why should I do the hard work?

Click here for a short and easy to read ePaper written by Dean Hendrie (the brother tax expert), outlining what qualifies as a "home office" and what deductions you can claim.

Of course, if you'd like to hear more of what I have to say on the matter, click here for a recording of my most recent "You & Your Business" radio segment on 98.1FM Radio Eastern.

Talk soon,

Caren

The doctor's thoughts on keys to successful investing

Regular readers will know that I have two favourite Australian economists (there's no way for that not to sound nerdy) - Felix Stephen and Shane Oliver.

Shane Oliver - sorry Doctor Shane Oliver - recently wrote a great article on Keys to Successful Investing, which I found to be relevant, easy-to-understand and entertaining.  All of which you have to admit is fairly surprising given it was written by an economist :)

A lot of his points confirm issues I've raised in previous blogs (a fresh perspective is always valuable), and he highlights some areas where he feels investors may have lost sight of what's really important.

His key points include:

• Four investment market realities: there is always a cycle; it's a mad, mad, mad world; starting point valuations matter a lot for returns; and the power of the compound interest.

• Keys to successful investing: know yourself; seek advice; invest for the long term; diversify; turn down the noise; avoid short-termism; focus on investments offering sustainable cash flow; recognise there is no free lunch; buy low, sell high; don't fret the small stuff; don't over rely on expert forecasts; recognise the aim is to make money, not to be right; beware the crowd at extremes; and if you have the right strategy, never despair.

Anyway, I don't believe in re-inventing the wheel, so click here if you'd like to read a full copy of the article.  I really do recommend it.

Talk soon,

Caren

Business owners need to really understand the language of sales

Let's be brutally honest, most of our potential customers don't really care about us, they mostly care about what it is we can do for them... They are looking to have a problem solved or a need fulfilled and are looking for the best business to help them.

I call this the "What's In It For Me" principle or WIIFM.

As business owners we already know that the most effective "sales" technique is to show our clients or customers the benefit to them of our service or product.

We're always being told how important it is to distinguish the benefit of what we do from the features, but this isn't always easy.  Often it takes some real drilling to get to the actual benefit.

I've found two simple phrases that help enormously when you're trying to get down to the nitty gritty of the benefits of what you do:

"so that..."

and

"this means..."

Once you start using these phrases when describing your services, the benefits just flow quite naturally.

Click here for a detailed explanation of how this simple but powerful sales strategy works.

Or if you'd like to hear more about how to use WIIFMs to improve your business click here for a recording of my most recent "Your & Your Business" radio segment on 98.1FM Radio Eastern (or ask me about a one-on-one session to help you get better results from your market strategy).

Talk soon,

Caren

“Would you like shoes with that?” How the banks are selling credit cards to our kids!

In our last 4 Ways Bulletin I included an article on teaching our kids about credit cards.  Since then I've been quite shocked to learn exactly how hard some banks are pushing credit cards on them.

A few weeks ago our 19 year old Ashlee received a marketing call from one of the 4 major banks where she holds an account.  It was a fairly young guy who was extremely friendly, asking her about what she was doing at uni and how she was going etc.  He then led the conversation to how she really should have a credit card.  First he used scare tactics - did she realise she'd never be able to get a home loan without a credit rating and a credit card would help her with that?  But then he went in for the real kill - "haven't you ever seen a pair of shoes you really wanted but couldn't afford..."!!!!!!

Terrific!  In one sentence, this guy had tried to undo years of us teaching our kids the value of saving for what they need, any not going into unnecessary debt.

When Ash explained she needed time to think about it, and might look at it in her uni holidays, he told her she shouldn't really wait when she could do it now, and told her he was putting her through to a Financial Planner, presumably to "seal the deal".  Again, the chap was very friendly when he started chatting to Ash, but when she explained that she really didn't want to commit on the spot, his attitude changed quickly and he all but hung up on her.

Some facts about Ash:

• She is only 19;
• She is studying Accounting at uni and does not have a full-time job;
• She has just $50 in an account with the bank that called her;
• She does love shoes;
• She did go online afterward and applied for a card herself, but thankfully was declined!

As you'd imagine, finance is a fairly common topic in our household (1 Financial Adviser + 1 Accountant = wild family fun times) so Ash told Mick and I about the whole ordeal over dinner that night and we were able to have a frank discussion about the pros and cons of credit cards.  But I shudder to think about how many kids might get into credit card debt before anyone even realises they'd been given the card!  Or should I say "sold" the card.  Because I'm sorry, but if you dangle shoes in front of most females as the proverbial carrot, that's a hard sell!!!

I'd really like to encourage all parents to have the credit card conversation with your kids before the bank does.  To that end, if you didn't catch my article in the 4 Ways Bulletin, just click here as it highlights some important issues everyone should know about the so-called "fantastic plastic".

Talk soon,

Caren

Did you know there are only 4 ways to grow your business?

It may sound a little simplistic, but there really are only 4 fundamental ways to successfully grow your business - in other words to make it more valuable:

• Increase the number of customers (of the type you want to have);
• Increase the number of times customers come back;
• Increase the average value of each sale;
• Increase the effectiveness of each process in the business.

It's interesting to contemplate the fact that all of the business development strategies you might implement will fall into one of these 4 categories.

Any other strategy that does not belong in one of those 4 ways, for example cutting costs, may help you temporarily, but it won't grow your business.  Cutting costs won't make your business more valuable unless you turn around and re-invest the money into one of the 4 ways.

These 4 ways work best when used together in an overall strategy, but the mistake many companies make is to focus on just one of these 4 ways, and thus miss out on significant growth opportunities.  In particular, many business owners focus on winning new customers, often ignoring the other (often less expensive) ways to grow their business.

Let's look at an example of how the 4 ways can work together for you.

Let's say you have a customer base of 1,000.

1. You are able to increase the amount of inquiries (and thus new customers) by 10%. This means your customer base would increase to 1,100.

2. You are able to increase the number of times each customer purchases from you during their lifetime by another 10% (e.g., from once to 1.1.)

3. You manage to increase your average sale (or transaction value) by 10%, taking it from $100 to $110.

4. And improvements in your business processes have allowed the first 3 increases to occur.

Sooooooo, assuming everything else is equal, does it make sense to say that overall business would grow by 10%?

Well simplistically it looks like the business grows by 10% BUT something completely different happens.

When all 4 areas are increased by 10%, it has a multiplier effect of 33.3% - or $33,100 more income!

ie. 1,100 x 1.1 x $110 = $33,100

That's a pretty dramatic effect on the bottom line for a relatively small increase in each area!

For a handy reference diagram on the 4 ways to grow your business, just click here.

And if you'd like to hear more details about the 4 ways to grow your business, click here for a recording of my most recent "You & Your Business" radio segment on 98.1 Radio Eastern (or ask me about a one-on-one session to help identify the 4 ways you could grow your business.)

Talk soon,

Caren

Your relevant Budget summary. The short version or the long version – your choice.

I’m prepared to accept that there may be some people out there that find the Federal Budget a little boring. Hey, stop yawning – I haven’t even started!

For anyone who just wants an absolute bare bones budget breakdown, I’ve prepared a summary of the main points below. At the very least you can pretend to care if one of your friends or family members raises the matter.

And for anyone who would like a more comprehensive look at what this year’s Federal Budget involved, I’ve catered for your tastes too.

First, the breakdown.

Wayne Swan’s 6th and possibly last budget (his Swan Song??) was not as tough as expected. He’s anticipating savings of $44 billion over four years, with the budget expected to be back in surplus in three years time.

From an investor perspective, there were not many new announcements, as most of the changes to superannuation were announced a few weeks ago.

A summary of some of the changes that may impact investors are:

• The personal income tax cuts scheduled to commence on 1 July 2015, will be deferred. These tax cuts had already been legislated so this will actually require an amendment to the legislation. The changes were to be funded by the carbon pricing, which has been lower than anticipated and therefore will be deferred until the carbon price hits $25.40.
  
  
• The Medicare levy will be increased by half a percentage point from 1.5% to 2% from 1 July 2014 to provide funding for DisabilityCare Australia. This has already been introduced into Parliament and will most likely be passed before the election.
  
  
• The proposed increase to the Medicare levy will take the top marginal tax rate to 47% (previously 46.5%), which means a number of other tax rates based on this combination will also be increased to 47% from 1 July 2014. These include increasing Fringe Benefits Tax and the tax rate on excess non-concessional contributions.
  
  
• The Medicare levy low-income threshold for families will increase to $33,693 for the 2012-13 year, with effect from 1 July 2013.
  
  
• The net medical expenses tax offset (NMETO) will phase out from 1 July 2013, with a two year “phase-out” arrangement for those currently entitled to the offset.
  
  
• Swan announced a pilot program for age pension recipients when downsizing their home. Rather than having “leftover” sale proceeds means tested, they will be able to deposit up to $200,000 in a special bank account and it will be exempt from testing for 10 years (including the earnings). Importantly, the funds are only exempt if you do not make a withdrawal. This will be trialled over a 3 year period.
  
  
• There have been a number of changes which may impact families including removing the Baby Bonus in July 2014, changes to Family Tax Benefit A which is now only paid until the calendar year when the child finishes school, and “pauses” on indexation for certain family based payments (Paid Parential Leave,  Family Tax Benefit A & B) and child care rebate.
  
  
• The annual amount claimed as a tax deduction for self-education expenses will be limited to $2,000 per person. This doesn’t apply to employer funded expenses where there are currently no limitations (this doesn’t include salary sacrifice).
  
  
• Something that wasn’t mentioned in the budget was further discounting of the minimum pension from July 2013. We can probably assume by the omission that the discounted rate hasn’t been extended and will most likely refer to standard rates on 1 July 2013.

If you’d like to hear more of what I have to say on the matter, click here for a recording of my most recent “You & Your Money” radio segment on 98.1FM Radio Eastern and click here for your more detailed Budget report.

If you’d like a youtube update that runs for less than 4 minutes, just go to https://www.youtube.com/watch?v=xB2fpMSsZ3U

Talk soon,

Caren

How can your business compete against 7,000 other marketing images per day?

If you’re a business owner, then I don’t need to tell you that there’s a lot of competition out there. It can be hard to get your message across when there are soooooo many other messages in your space alone.

I attended a webinar recently where the speaker advised us that we’re exposed to a whopping 7,000+ marketing and sales images every single day – and you’re trying to compete against that!!!

So what’s the answer? You must be unique! Actually, it’s more than that. You can’t just be unique, you have to be able to articulate and promote your uniqueness.

Essentially, you need to give your target market a compelling reason to buy from you rather than someone else. It’s these differences that make one business, product, or service more attractive than another in the customers’ eyes.

So how do you develop a Unique Service Proposition? Well there are three main types:

1. An 'Actual' Unique Service Proposition. That is, there's something genuinely unique about your business, the products, or services you provide or the way in which you provide these products and services.

Creating your Unique Service Proposition will revolve around expressing that actual uniqueness in a way that's meaningful to your potential customers and clients. This is often easier to do if you sell a product rather than a service.

2. The second is a 'Created' Unique Service Proposition. That is, you create a point of differentiation between your business and your competitors.

You may have heard me talk about "Paddy the Dentist." It's one of my favourite (true!) stories. Paddy openly acknowledged that there were a lot of other good dental practices in the area, so he knew he had to make his practice unique if he wanted to do really well. He interviewed his clients to find out what they hated most about going to the dentist. Turns out the overwhelming majority claimed it was the waiting room - the smell, the noise, the anticipation of pain.

So Paddy turned his waiting room into a tea salon! When you arrived at his surgery there was classical music being piped through the waiting room, you were shown to a comfortable seat and handed a menu to choose from a selection of over 50 tea varieties. It was served to you from a pot in a fine china cup and saucer. The experience was indulgent and relaxing. Can you guess the result for Paddy’s business? Phenomenal! Paddy had created a difference that certainly gave customers a compelling reason to go to him, stay with him, and refer him to others.

3. The third kind of Unique Service Proposition, the ‘Perceived Service Proposition,’ is also critically important - your Unique Services Proposition does not (in fact) have to be unique.

You may not have anything in your business that’s totally unique. But if you’re the first one to articulate a difference (even though others do the same), you’ll stand out in the marketplace as if you are unique.Simply because you’ve been the first to articulate it.

I mentioned earlier that not only do you need to offer something unique, but you need to articulate it. It sounds obvious, but most businesses have never articulated those differences. They expect people to buy from them simply because they’re in the marketplace. Most simply say ‘buy from us.’ But they don’t give the potential customer a clear and compelling reason why they should do so. 

Those things that make you unique, must permeate your entire business: the way your team members present themselves, the way you deal with your customers or clients, the way your business itself is presented, all your marketing material, even your signage, if possible.

I hope this has started the creative juices flowing, and that you’ll take some time to work out the key point of differentiation between you and your competitors to help the customers identify that they really do need to choose you over anyone else. 

For a detailed fact sheet on developing your Unique Service Proposition (including lots of examples), just click here

And if you’d like to hear more of what I have to say on the matter, click here for a recording of my most recent “You & Your Business” radio segment on 98.1FM Radio Eastern (or ask me about a one-on-one session to help identify a Unique Service Proposition for your business).

Talk soon,

Caren

4.4 billion reasons to protect your family (of which you may not have been aware…)

It always surprises me when people say that one of the reasons they won’t protect their family is because insurance companies don’t want to pay out claims. My response is usually a confused “Huh? Whaddya mean? Ummmmm, that’s their job…”

I’m a member of a great service called the Risk store which publishes insurance claim statistics each year. According to their figures, more than *$4.4 billion dollars was paid out in life insurance claims last year! We’re talking death cover, total and permanent disability, income protection, and trauma.

That’s $4.4 billion dollars paid out to help re-build family lifestyles, assets, and businesses after the devastating effects of illnesses and injuries.

To really break it down –an average of $17.6 million was paid to Australians every working day in 2012.

Ok, now think on this - not one of these claimants expected to claim on their insurance.

That’s a lot of people who didn’t ever want to claim – but had to. How glad do you think they and

their family were, to have been wise enough to plan for the unexpected?

And something else to think on - if these claimants hadn’t had insurance policies in place, where else would they have got that kind of money?

Don’t get me wrong, I have no doubt there are people with very legitimate grievances against their claim process, my point is that it’s a rarity and that there are at least $4.4 billion reasons in the last year alone to protect yourself and your family’s financial security.

In most cases conflicts over claims come down to the quality of the specific company or the definitions within the policy. That’s why you should always get professional advice from people (like us!!!!) who can not only help you select the best company and policy for you - but even more importantly - in the event that something unforeseen does happen, we deal with as much of the claim work as possible on your behalf.

We feel this is the most valuable part of our insurance service, and obviously our clients do too because we recently received this email from one of our clients after the claims process: “Thanks Michael for a tremendous result. You have been very professional & balanced in your advice through this somewhat unsettling period.”

So next time you’re tempted to justify not protecting your family by saying insurance companies don’t pay their claims, just remember that over $17 million dollars was probably paid out between breakfast and dinner.

Clearly this is a personal soapbox of mine, and if you’d like to hear more of what I have to say on the matter, click here for a recording of my most recent “You & Your Money” radio segment on 98.1FM Radio Eastern.

Talk soon,

Caren

With thanks to the Risk store for all statistics, and thought provoking claims information.

*Statistics based on claims from AIA Australia, AMP/AXA, Asteron/Suncorp, BT, Clearview, CommInsure, OnePath, Macquaire, MLC, TAL, Zurich.

The success you can achieve when your personal & business goals are in alignment

The most successful businesses are run by people who love what they do. This is great, but of course there’s real danger that your business can become all-consuming when you love what you do.

Your personal goals (family, lifestyle, community, spiritual) need to be in harmony with your business goals. When they’re not, tensions develop, breakdowns occur, and achieving any of your long-term objectives becomes almost impossible.

And it’s a lot more involved than simply striking a “work-home” balance. It’s about ensuring your fundamental values and purpose are aligned for both yourself and your business. This involves:

   ∙  Planning

   ∙  decision making;

   ∙  careful execution;

   ∙  asset protection;

   ∙  regular review; and

   ∙  a clear picture of the “ultimate” reward you expect from

      your business.

 

I guess I understand this because Michael (Moschetti) and I live and breathe it. As partners at home as well as the office, we realised a long time ago that we could only achieve true success by reconciling our business aspirations with what we wanted from life personally.

Because it’s so important, we recently wrote an e-Paper together called “Business – it’s Personal”. In this paper, we share our story, as well as give practical tips and strategies for you to implement in your own business including:

   ∙  How to align your personal and business goals

      (a step by step guide);

   ∙  How to protect against obstacles and risks that may

      prevent you from reaching your goals; and

   ∙  The steps you must take now, to achieve the financial

      and personal rewards you’re working towards.

To read "Business - it's Personal", just click here - we’ve tried to keep it as entertaining and jargon-free as possible.

You may also like to click here to listen to a recording of my most recent “You and Your Business” segment were I talk about this topic on Radio Eastern 98.1FM.

Talk soon,

Caren

Is now the right time for Australians to invest?

Many Australians are wondering whether right now is a “good” time to invest. I know this because suddenly my friends and family care about my opinion! What’s happening here is largely psychological. You see we all know that the best time to buy is while the market is down, but when we actually make a decision to invest it can be hard to resonate logic with emotion when we’re seeing negative numbers. So when we see positive numbers after a sustained period of under-performance we think – oooooh, things were bad, now they’re looking good, should I jump in quickly before I miss the boat? It’s simply human nature to react this way.

Investing is a long-term commitment and you should expect to experience a number of different market cycles during your investment term. A sensible time-frame underpinned by a diversified portfolio of quality investments should perform to expectation over the long-term, regardless of the “ups and downs” in between (thankfully a GFC should only be a 1 in 50 year event!!). So it’s really about “time-in” the market rather than “timing” the market.

That said, if the market is clearly undervalued then yes it presents a pretty terrific opportunity.

BUT, there’s a key difference between companies or even countries that are struggling, and those that are under-valued. Just because the price is low doesn’t automatically make it a sensible investment – it might be a dog. The basic fundamentals need to be strong to be well-placed for recovery.

If a company or country is struggling because of poor management, high debt levels, inefficiencies etc, then you probably want to steer clear. If it’s a case of the market simply not recognising their value because of the current environment then, it may be worth a good look for future performance potential.

When it comes to the overall Australian sharemarket at the moment it’s neither cheap nor expensive, and any time is a good time to invest if you have the right time-frame. But of course if you happen to be in a position to invest when the market is low, then it’s a particularly good time. So if you’re looking to do some “contrarian investing” (ie. buy low, sell high) while the market is still in recovery mode, just make sure you know why the price is low when making your investment decisions.

Talk soon,
C

Women and Super

Last Friday was International Women’s Day, so I thought it was appropriate to reference something I read in the Herald Sun from 6 March (there was no one in the lunch room to “quiz me” so I had to actually read the paper…). According to the article, a recent Canstar research report claims that stay-at-home mums miss out on $160,000 - $290,000 in superannuation savings.

Yikes, that’s a lot of money!

I’m definitely not suggesting that women who choose to stay at home with their children should now rush back to work to improve their super balance, but it does mean that somewhere along the lines you may need to address the “hole” and make sensible financial decisions to get back on track.

But what is “on track”?

Last week I mentioned that a typical rule of thumb is that you’ll probably need about 60%-80% of the annual income you earned before retirement to maintain a similar standard of living.

And if you like your statistics, the Association of Super Funds Australia (ASFA) release national figures each quarter benchmarking what most Australians need to spend to achieve a modest or a comfortable retirement.

According to the latest the ASFA Retirement Standard figures, a couple looking to achieve a comfortable retirement needs to spend $56,339 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $32,555 a year. The figures for a single person are $22,585 and $41,186 respectively.

Of course, everyone’s different, but these figures can be a helpful guideline when you’re working out whether you’re likely to have a “super hole” (yep, double entendre deliberate) to fill in retirement - male or female!

Click here if you’d like to read a copy of the Herald Sun article, and click here for full details of the ASFA Retirement Standard including assumptions and their definitions of modest and comfortable.

Talk soon,

C

Preparing for retirement: How much? Where to invest? When to start?

Blogging about retirement last week put me in mind of a particular client that came in to see us a year or so ago concerned about his retirement plans following the GFC. The reason he’s memorable because of his great turn of phrase. He told us -“I think I’m up that proverbial creek.”

So the first thing we did was prepare some projections to get a realistic picture of what his income position was likely to look like in retirement. He was very pleased (and surprised) to learn that based on his current financial position, it was very likely that he would still be able to achieve a reasonably comfortable level of income in retirement.

On top of that, we were able to give him some advice on some simple strategies he could put in place now to achieve a significantly better result and to be able to retire when he had originally hoped.

A great result for him, but the real point of relating that story is to again illustrate the importance of addressing the situation before you retire rather than leaving it to chance.

Picture this scenario. You’ve just retired, your last pay cheque has been paid into your bank account, and the realisation hits you - your super and savings need to fund your living needs – for the rest of your life! What if the money runs out too soon? How can you know if you have enough for all your retirement plans, as well as paying the usual bills? Knowing is definitely better. Which begs the question…

How much is enough?

Everyone’s living needs are different, but a typical rule of thumb is that you’ll probably need about 60%-80% of the annual income you earned before retirement to maintain a similar standard of living. Other factors to take into consideration include:

• your (and your partner’s) life expectancy;
• the annual rate of interest or investment return you can reasonably achieve on your retirement savings;
• the annual rate of inflation;
• the type of lifestyle you’d like to maintain, and any plans that might require lumps sums (eg. travel, upgrading the car or home etc);
• the amount of tax you will have to pay;
• any other potential sources of income.

Where should you invest your savings in retirement?

The most secure investments are generally interest bearing and capital stable, eg. cash, bank accounts, government bonds, savings bonds, and term deposits. However, if you invest your retirement savings solely in a conservative spread of investments producing a return of, say, 4%-6%, you may not earn enough income to cover your needs. Other markets, such as shares or property, shouldn’t be ignored altogether. These types of investments are likely to bring higher long-term returns and greater capital growth.

The right mix of investments, and the quality of the underlying assets are really important to the amount of income you can earn and the longevity of your savings. You also need to decide upon the most appropriate, and tax effective strategy for your income needs - annuities, allocated pensions, superannuation, managed funds, term deposits, bank accounts etc.

When’s the right time to start preparing your finances for retirement?

There’s no magic age to start the planning process but at least five years before you retire would seem sensible. And anyone who is 55 or over should definitely be looking at the very attractive tax savings available to you and the difference they could have to your retirement balance. For a lot of people we’re talking tens of thousands of extra dollars…

As I mentioned last week, a very sensible first step is just getting some projections done so that you know where you stand. If you’d like to know more about what is involved in our projections service, click here.

And if you’d like more detail, please tune into my weekly local radio program “You and Your Money” Radio Eastern, 98.1FM, straight after the 9am news on Thursday.

Talk soon,
C