RYAN DAVID GRANT

Financial Adviser

The Financial Jigsaw 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 particularobjectives, needs or financial situation – which makes this General Advice.

This presentation does not endorse, guarantee or indemnify any products orsoftware referenced, nor does it recommend anything.

Before making any financial decisions on buying or selling a financial productyou should assess whether it is appropriate to your objectives, needs orfinancial situation. No responsibility is taken for anyone acting on theinformation provided. If you do, it is at your own risk.

Today’s workshop is designed around building life skills that should be useful tomost people, regardless of your income level, age, or situation.

This information has been prepared by Ryan David Grant. This information was prepared as aninformation service and without assuming a duty of care. It contains general information only. Itdoes not constitute financial advice and should not be relied upon as a substitute for financial orprofessional advice. Should you be interested in obtaining financial advice please speak to therepresentative who delivered this presentation.

© Ryan David Grant 2011

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

What we cover tonight

• What is Control?

• Understanding cash flow

• Breaking the cycle of debt

• Tips to control your finances

The Financial Jigsaw 4

What is control?

• Being in charge of…

• Giving orders to…

• Not submitting to…

money

The Financial Jigsaw 5

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

Budgeting

• What a budget is not:

– Static

– Lifeless

– Restrictive

– Unrealistic

– Too hard to be bothered!

The Financial Jigsaw 7

Budgeting

To budget well, you need

to understand your cash

flow, and how it works.

The Financial Jigsaw 8

Knowledge is power

• Money is essential to survive in our

society

• What else is considered essential to

survive?

Water

The Financial Jigsaw 9

Knowledge is power

The Financial Jigsaw 10

Knowledge is power

The Financial Jigsaw 11

Income is your

budget’s

lifeblood…

Knowledge is power

The Financial Jigsaw 12

It fills your tank

Knowledge is power

The Financial Jigsaw 13

Then you pay

your bills,

drawing

down on the

reserves…

Knowledge is power

The Financial Jigsaw 14

What you need

to find now

are any other

leaks…

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

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

Budgeting

Expenses > Income = Bad

Expenses < Income = Good

The Financial Jigsaw 17

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

Budgeting

• Tools:

– Paper (lots of work here)

– Spreadsheets

– Programs

– Online

The Financial Jigsaw 19

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

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

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

Dealing with surprises

Emergency 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

Dealing with surprises

Insurance

• 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

Dealing with surprises

Insurance

• Types of insurances:

– Renter’s or Homeowner’s Insurance

– Car insurance

– Health Insurance

– Disability Insurance

– Income Protection

– Life Insurance

The Financial Jigsaw 25

Dealing with surprises

Insurance

• How much is enough?

– Depends on what you are protecting, you

financial situation, and your family situation

The Financial Jigsaw 26

Dealing with surprises

Insurance

• Savings money on insurance

– Emergency fund ↑ Excess amount ↑

– Review regularly

The Financial Jigsaw 27

Building Wealth

• Saving

– Putting aside additional cash on a regular

basis

– Different from your Emergency Fund

The Financial Jigsaw 28

Building Wealth

• Investing

– Just like saving, but you buy different

things

– Only builds wealth if it pays you

The Financial Jigsaw 29

Putting the pieces together

• Budgeting

• Paying off debt

• Avoiding new debt

• Emergency Fund

• Insurance

• Building Wealth

The Financial Jigsaw 30

The Financial Jigsaw 31

Thank you!