Business Life 2011

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


What we cover tonight

• What is Control?

• Understanding cash flow

• Breaking the cycle of debt

• Tips to control your finances


What is control?

• Being in charge of…

• Giving orders to…

• Not submitting to…

money


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


Budgeting

• What a budget is not:

– Static

– Lifeless

– Restrictive

– Unrealistic

– Too hard to be bothered!


Budgeting

To budget well, you need

to understand your cash

flow, and how it works.


Knowledge is power

• Money is essential to survive in our

society

• What else is considered essential to

survive?

Water


Knowledge is power


Knowledge is power


Income is your

budget’s

lifeblood…

Knowledge is power


It fills your tank

Knowledge is power


Then you pay

your bills,

drawing

down on the

reserves…

Knowledge is power


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


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!


Budgeting

Expenses > Income = Bad

Expenses < Income = Good


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


Budgeting

• Tools:

– Paper (lots of work here)

– Spreadsheets

– Programs

– Online


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


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...


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


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



Insurance

• Back up plan, provides a safety net

• Transfers the financial risks

• Can be more cost effective

than building up

enough emergency

fund



Insurance

• Types of insurances:

– Renter’s or Homeowner’s Insurance

– Car insurance

– Health Insurance

– Disability Insurance

– Income Protection

– Life Insurance



Insurance

• How much is enough?

– Depends on what you are protecting, you

financial situation, and your family situation



Insurance

• Savings money on insurance

– Emergency fund ↑ Excess amount ↑

– Review regularly


Building Wealth

• Saving

– Putting aside additional cash on a regular

basis

– Different from your Emergency Fund


Building Wealth

• Investing

– Just like saving, but you buy different

things

– Only builds wealth if it pays you


Putting the pieces together

• Budgeting

• Paying off debt

• Avoiding new debt

• Emergency Fund

• Insurance

• Building Wealth



Thank you!

Business Life 2011

Documents

Transcript of Business Life 2011