Business Life 2011


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Business Life, Budgeting, Financial, Jigsaw, Insurance, Cash Flow, Debt

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Business Life 2011

  1. 1. RYAN DAVID GRANT Financial Adviser
  2. 2. General AdviceI, Ryan Grant, am an authorised representative (No. 322428) of Synchron AFS Licence No. 243313.Today’s presentation does not take into account any person’s particular objectives, needs or financial situation – which makes this General Advice.This presentation does not endorse, guarantee or indemnify any products or software referenced, nor does it recommend anything.Before making any financial decisions on buying or selling a financial product you should assess whether it is appropriate to your objectives, needs or financial situation. No responsibility is taken for anyone acting on the information provided. If you do, it is at your own risk.Today’s workshop is designed around building life skills that should be useful to most people, regardless of your income level, age, or situation.This information has been prepared by Ryan David Grant. This information was prepared as an information service and without assuming a duty of care. It contains general information only. It does not constitute financial advice and should not be relied upon as a substitute for financial or professional advice. Should you be interested in obtaining financial advice please speak to the representative who delivered this presentation. © Ryan David Grant 2011 The Financial Jigsaw 2
  3. 3. Is there a secret to financial success? • Why do some people seem to prosper? • Ever wondered if there is some secret trick? CONTROL The Financial Jigsaw 3
  4. 4. What we cover tonight• What is Control?• Understanding cash flow• Breaking the cycle of debt• Tips to control your finances The Financial Jigsaw 4
  5. 5. What is control?• Being in charge of…• Giving orders to…• Not submitting to… money The Financial Jigsaw 5
  6. 6. How do we do that?• Knowledge: – Know where your money comes from – Know where your money goes – Know where your money needs to go• First Step: – Create a budget The Financial Jigsaw 6
  7. 7. Budgeting• What a budget is not: – Static – Lifeless – Restrictive – Unrealistic – Too hard to be bothered! The Financial Jigsaw 7
  8. 8. BudgetingTo budget well, you need to understand your cash flow, and how it works. The Financial Jigsaw 8
  9. 9. Knowledge is power• Money is essential to survive in our society• What else is considered essential to survive? Water The Financial Jigsaw 9
  10. 10. Knowledge is power The Financial Jigsaw 10
  11. 11. Knowledge is powerIncome is your budget’s lifeblood… The Financial Jigsaw 11
  12. 12. Knowledge is powerIt fills your tank The Financial Jigsaw 12
  13. 13. Knowledge is powerThen you pay your bills, drawing down on the reserves… The Financial Jigsaw 13
  14. 14. Knowledge is powerWhat you need to find now are any other leaks… The Financial Jigsaw 14
  15. 15. Knowledge is power• Knowing your cash flow – the biggest difference between: people who can get ahead, and those that can’t The Financial Jigsaw 15
  16. 16. Budgeting• Rules: 1. You can’t spend more than you earn! • You cannot take water from an empty tank! 2. Money must go to the budget categories as soon as you get paid! The Financial Jigsaw 16
  17. 17. BudgetingExpenses > Income = BadExpenses < Income = Good The Financial Jigsaw 17
  18. 18. Budgeting• Simple Budget: • Allocate for primary needs, all other expenses must be met from the remainder• Simple Budget Example: • $1,000 income / pay on payday • ($500) set aside for rent/mortgage etc • $ 500 left to buy food, pay bills etc The Financial Jigsaw 18
  19. 19. Budgeting• Tools: – Paper (lots of work here) – Spreadsheets – Programs – Online The Financial Jigsaw 19
  20. 20. Budgeting• Detailed Budgeting: 1. Create an “Actual Budget (history)” 2. Design a “Planning Budget” 3. Monitor an ongoing “Comparison” 4. Adjust “Planning Budget” as required• Finding the spending (or leaks) that were not planned is a key part!• Look for ways to reduce expenses – Eg: debt payments The Financial Jigsaw 20
  21. 21. Breaking the Debt Cycle• Debt Snowball – Builds up as it rolls down the debt hill... – Make a list of your debts, all credit cards, personal debts, car loans, and home loans • Include the balance, and the repayment – Start with the smallest balance, put all extra repayments onto that loan – Once paid off, allocate that and the extra repayment you save, to the next loan... The Financial Jigsaw 21
  22. 22. Breaking the Debt Cycle• Business strategies: – Collecting accounts in a timely fashion – Reducing the amount of accounts receivable – Shorten the accounts timeframe (30 days to 15 days) – Make cash a preferred payment method (maybe charge a fee for accounts) – Proactive debt chasing The Financial Jigsaw 22
  23. 23. Dealing with surprisesEmergency Fund:• Provides a buffer to avoid small surprises pushing you into debt – Start with a small target, eg: $50 each pay, – Take out before paying bills – Build up to $500 over 10 pays• Put the money into a separate account – High Interest Online Savings account – Make this a regular part of your budget The Financial Jigsaw 23
  24. 24. Dealing with surprisesInsurance• Back up plan, provides a safety net• Transfers the financial risks• Can be more cost effective than building up enough emergency fund The Financial Jigsaw 24
  25. 25. Dealing with surprisesInsurance• Types of insurances: – Renter’s or Homeowner’s Insurance – Car insurance – Health Insurance – Disability Insurance – Income Protection – Life Insurance The Financial Jigsaw 25
  26. 26. Dealing with surprisesInsurance• How much is enough? – Depends on what you are protecting, you financial situation, and your family situation The Financial Jigsaw 26
  27. 27. Dealing with surprisesInsurance• Savings money on insurance – Emergency fund ↑ Excess amount ↑ – Review regularly The Financial Jigsaw 27
  28. 28. Building Wealth• Saving – Putting aside additional cash on a regular basis – Different from your Emergency Fund The Financial Jigsaw 28
  29. 29. Building Wealth• Investing – Just like saving, but you buy different things – Only builds wealth if it pays you The Financial Jigsaw 29
  30. 30. Putting the pieces together• Budgeting• Paying off debt• Avoiding new debt• Emergency Fund• Insurance• Building Wealth The Financial Jigsaw 30
  31. 31. Thank you! The Financial Jigsaw 31