Yearly Archives: 2017

Man Retires At 34 and Freaked Out on First Day

Sometimes when you read an article that resonates with you, well you just have to make a video about it!


In Warren’s latest #RetireRight video he shares some of the take outs from an article on Brandon, a 34 year old young man who achieved financial independence at the age of 34 and freaked out on his first day of retirement.



“Brandon wrote that financial independence was something I talked about and thought about so much that it just became this abstract concept in my mind and didn’t relate to anything in real life. It was a long-term goal that I guess I never actually pictured achieving.”


Check out Warren’s video where he discusses some of the learnings that are critical to giving yourself a choice about retirement. Here is the link to the article where Brandon is featured.


You’re never too young and never too old to start thinking about your retirement!


– Warren Hanna –

Is your financial news reliable?

In order to make your investment decisions, it is important that you consume the right information from the right sources and then take steps towards investing your hard-earned money in a specific investment or range of investment avenues.


Reliability on different sources of information is crucial but too much reliance on one newspaper, online blog or friends or family can prove to be damaging to your portfolio. Just the way diversification helps you get higher returns with less risk, consuming market information from various dependable sources helps you make an informed decision in order to make those intelligent investments.


Deloitte’s ASX Australian Investor Study 2017 report found that most investors are self-directed and choose to conduct their own research. Seeking some form of professional advice (financial planner, stock broker, accountant or lawyer) is the second most popular choice. The below chart shows sources of information used by investors as per household income of those of Australian investors:


It can be seen that the majority of the investors rely on their own research – which makes me think, where are we researching from and how reliable are those sources? The answer to this lies in the type of portfolio you have or the portfolio you want to build based on your investment goals.


For example, it is not necessary that whatever Warren Buffett suggests would be an ideal investment for you, hence there will be little relevance in that news for you because his investment goals can be different from yours.


Similarly relying on the so-called market experts that make headlines would not be recommendable as well. We touched on this in one of our Monday Markets, but to reiterate it, have a look at the below comments that made headlines in the leading financial newspapers at the end of Financial Year 2016:


–  ‘Investors are bracing for another year of event-driven volatility on the Australian share market, against a backdrop of subdued growth and earning’
–  ‘Parts of the Australian market are already in bubble territory’.
–  ‘The Australian market would at best struggle within a narrow range in 2016/2017, caught between bouts of market paranoia and a sobering backdrop of low growth, low inflation, and low returns.’


What happened though? The ASX 200 accumulation delivered a return of more than 13% in the Financial Year 2017!


Some of the reliable sources to stick to would be:

–  Your financial adviser
–  Proven academic theories that are easily available online
–  Company’s financial statements
–  Fundamental & Technical Analysis tools


With the advent of real time data and social media, information is available at your fingertips, but the extent to which it can be reliable is still a question.


If you would like to discuss any of the above with us, feel free to contact us. Don’t worry, we are licensed to be reliable!


– Aakash Mehta –

Taking time to reflect on your achievements

When we strive for better outcomes, it is important that we not only reflect on our failures to determine what we could do better but also acknowledge and celebrate our successes.


An important reason to acknowledge our success is it can help us continue to achieve. If we reflect back on what worked well and why, we can often repeat the process and hence continue to benefit over and over again. We essentially develop a formula, a formula for success.


Whatever we want to achieve, whether it be weight loss, debt reduction, reaching savings targets or other goals, it’s important that we reward ourselves when we successfully achieve them. This can be in the form of treats such has having a nice piece of cake after achieving a certain weight goal, or going on a holiday or to a nice restaurant once we achieve our financial goals (just don’t blow the budget and end up back where you started). Using rewards helps build a successful mindset as it creates our drive to really work hard and get to where we want to be.


Good goals are hard to achieve, they don’t just happen, and sacrifices need to be made. The more you reward yourself at the end, the happier you become and the more likely you are to make the necessary sacrifices to get you there. It’s a way to stay sane, think of professional athletes and their cheat meal. Usain Bolt was known to eat 100 chicken nuggets a day.


Finally we don’t need to celebrate on our own. We can share our successes with others, causing them to also feel motivated and allow them to achieve success. It becomes contagious with everyone feeding off other people’s successes. Have you ever noticed how successful people tend to hang out with other successful people?


We may feel that we never ever get to where we want to be. We always strive for more, never satisfied with where we are. While this can propel us to future successful endeavours, the one goal we should all strive to achieve is to be happy. What better way to be happy than to reflect back on our achievements and celebrate the little successes that have got us to where we are today.


– Liam Rutty –


Reflecting on your future income

The start of the new financial year provides the opportunity to reflect on your current salary and what this means for the future.


It is important to reflect on your future earnings potential as your income is the lifeblood to your dreams. Your income allows you (and your family) to enjoy the lifestyle you desire today and the lifestyle you want in the future, and this future income is likely to run into the millions. So it only makes sense to allocate appropriate time to reflect on what this means for you.


Many people we deal with at JBS have a demanding lifestyle, and through helping these people we have observed a lack of personal financial protection. A lack of insurance coverage to protect their most important financial asset, their ability to earn an income in the future. It takes a lot of effort to raise children, meet the family’s demands, work full time, play sport, live life and so on, so we can excuse these people of sometimes being a little ignorant to their personal protection needs.


However, that doesn’t excuse the need for appropriate financial protection.


The following table shows the potential earnings to age 65 for a person based on different levels of income per year.

*Salary increased by 3% per year


See where you fit on that table, and think about if injury or illness suddenly prevented you from following your passion and doing what you loved, what would the financial impact be?


You have a large earnings potential if everything goes to plan, and this earnings potential should be protected adequately at all times.


Think about the last time you reflected on your future income earnings, and what steps need to be addressed to ensure it continues in the future. Can you really afford the ramifications and the impact of your income not continuing?


– Glenn Malkiewicz –

Dreams | Aakash Mehta

It is said that when you really want something from all your heart, then the whole world conspires to make it happen. I can happily say that it has happened to me here in Australia. Getting a Vice- Chancellor’s 100% Scholarship to study at Deakin University was one such want.


Benefits of studying abroad cannot even be counted on fingers, trust me. Especially coming from India where I was raised in a typical family where mom took care of the house and dad made sure we were financially supported. After coming here, having to cook for myself, sign my own house lease, opening a bank account, paying the rent, doing my laundry, studying, working part time and don’t even get me started with the everlasting assignments. The 2 years of Uni have been extra ordinary and it has made me more responsible.


Australia has made me a ‘Global Citizen’ in the true sense. I have been able to study, volunteer, lead a student mentor program with international focus, tutor and work alongside people from diverse background. Coming from a cricket crazy nation to a footy crazy nation, I have certainly enjoyed the aspect of internationalisation here. I have made friends from a range of countries like China, Turkey, Vietnam, Sri Lanka, Pakistan, Greece, Malaysia, Mongolia, etc. Melbourne is such a multi-cultural melting pot.


Now working full time as a Client Services Administrator at JBS Financial Strategists is fun and challenging as well, because everyone except me is an Aussie, so apart from learning about superannuation, there are a lot of new Aussie slangs that I am learning! My knowledge about footy has certainly increased – Go Hawks! JBS is truly an amazing place to work and everyone there has accepted me as I am and I have also tried to fit in well. I am getting used to calling afternoon ‘arvo’, breakfast as ‘brekkie, the MCG stadium as ‘The G’ and to call my professors and boss by their first name.

Waking up early morning, travelling in the train with other office goers nicely suited up and rushing to work, I enjoy every bit of it. But I don’t know why people here cry about the crowded trains; I mean if you have travelled in the trains of Mumbai where you have to stand on one foot sometimes, getting to travel in the Metro with air-con and automatic doors is actually a luxury.


I believe there were challenges throughout, but if you love what you do, you will be rewarded for it. And to make it even more rewarding, I was awarded the Dean’s Merit List award by Deakin Business School along with other graduates who were in the top 2% of their course. Can’t ask for anything more than that!


The saying ‘it takes a whole village to raise a kid’ is very appropriate in my situation as Deakin has raised me as it’s child and I am getting a similar opportunity at JBS as well. All thanks to my parents and friends for supporting throughout.


Shukriya, meaning Thank you!

Rest & Reflection

If you’ve made it this far into the year, then congratulations you’re halfway to the festive seasons and if you’re like us, surviving the end of the financial year is also a big deal. At this point of the year you may start to feel a bit tired and look towards booking that next holiday, or even taking a holiday shortly to escape the wintery weather. Often we are so busy with work life, family life and social life, we don’t even stop for a moment to catch our breath. Throw in our modern lifestyle with social media, technology and all of a sudden it’s almost impossible for our bodies and brains to get some rest. So let’s look at what resting actually means and some benefits associated with having proper rest.


Most of us believe by going home, sitting on the sofa and watching TV whilst using our IPads is considered having a rest. With all these devices and entertainment distracting us, are we really getting that required break? Although we aren’t using the same level of concentration whilst watching TV and been on a tablet, effectively our brains haven’t switched off at all. Resting actually means switching off all devices, sitting down with a cup of coffee and emptying your brain of all thoughts. You may find it surprising but recent studies have in-fact found that being bored is actually the best way to rest. If this doesn’t work for you then perhaps taking the time to talk to the people around you. Chatting to your partner, kids or that old friend that you’ve been meaning to catch up with may also help you rest. Everyone has different ways they like to rest; the all-important fact is to disengage from your day to day routine.


Getting a decent break from your day to day stresses also provides many mental and physical benefits such as;


Contemplating and daydreaming – Resting your brain will give you the chance to contemplate certain things in your life and allows you to day dream, which relaxes the brain. Often we hear authors with writers block needing to stop what they’re doing and go for a walk to get inspired. Clearing your head will also build your creativity.


Provides time to reflect – With our busy lifestyles, we often focus so much on what lies ahead that we don’t even stop to reflect on other aspects of our lives. Slowing down will give you the opportunity to reflect on your achievements, on family and friends or even on your personal health.


Improved physical health – If you’re like me and want to improve your physical wellbeing, eating and exercising right is not enough. One of the most important factor is rest, which plays a role in improving physical wellbeing as well. Research has shown that a good night’s rest plays a crucial role to assist in weight loss and better mental health.


Rather than turning towards the people around us and ourselves to seek rest, we often turn to external sources such as social media to distract ourselves. With so much going on in our modern lifestyles we barely get the chance to reflect on what’s really important in our lives. Ask yourself when the last time you took the kids camping, or when was the last time you were able to go 1 week without TV and the mobile phone. If the answer is “not in a long time” then perhaps it’s time you get some rest.


– Andy Lay –

Home Loans – don’t be afraid to talk to you bank

Interest rates are always a hot topic especially in the JBS office. Most of the team are now home owners and we often discuss who has what rate and with which lender etc. It was after one of these discussions I discovered that after two years with my current lender, I didn’t have a very competitive rate.


I went online and checked my statements and found that in two years I had incurred three rate increases, even though the last time the RBA actually raised rates was November 2010. This raises a question – how many rate rises have you incurred from your lender?


So with this information I decided to look at other lenders, considering I wasn’t getting the best deal with my current lender. I spoke with a couple of lenders to find out establishment costs and if there were any ongoing fees. Without too much trouble (about 15-20 minutes on the phone) I had found several loans with a more competitive rate with the same, and in some cases more features than my current home loan.


I emailed my current lender with the rates I was quoted just to see what they could do. Within hours of my initial email I received a response explaining they would reduce my rate. Now they didn’t match the other lenders quotes as these would be introductory offers for the first 12 months. However this does show you that asking the question can’t hurt and can save you hundreds of dollars a year.


The below shows how even 0.05% can make a difference on an average home loan in Victoria –

–  $380,000 x 3.95% = $15,010 interest p/a
–  $380,000 x 4.45% = $16,910 interest p/a


My belief is the banks rely on the everyday person just accepting the increase thinking they have no choice. However you now have options, you can do what I did and ask for a rate reduction if you are happy to stay or shop around for a new lender to refinance.


The Government abolished exit fees on variable loans allowing people the choice to shop around and also have the option to pay off their loans earlier. Some lenders still charge “discharge fees” for legitimate administration costs or if you repay the loan amount within a stipulated time frame (say five years).


If you have a fixed loan you will need to check with your lender as break fees depend on multiple factors like the original loan amount, outstanding balance, how much time remains on the fixed term so best to contact the lender before making any decisions. You also need to check when your loan commenced as this may also play a part on whether it is beneficial for you to switch lenders.


My advice is don’t be afraid to talk to your lender about your interest rate. If you aren’t happy or know there is a better deal for you don’t be afraid to leave – most lenders even have mobile lenders that can come to you at a time that is most convenient for you, the other option is using a broker which can save you a heap of time also.


Whichever option you take, before making a decision it is important to truly understand the costs of leaving, and also understand the fine print of the new loan that you are committing to. That way you can make a truly informed decision.


JBS has our own ACL and also work very closely with a number of brokers who we would be happy to refer you to if you would like a review.


– Pj –

The Right Time to Start Saving is Right Now

Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Who are we to argue?


Compound interest is when interest is earning interest not just the original capital. I.e. you invest $100 at an interest rate of 5%. After year one you have $105. After year two however, not only does your original $100 earn another 5% interest, but the extra $5 is also earning 5% interest so that at the end of year 2, the money has grown to $110.25. Yay an extra 25 cents. Where compounding really gets interesting is when you extend it over long periods of time.


Let’s take two examples. Example 1 is a 25 year old who has a decent income and is able to put away $100 a week into an investment that generates 6% p.a.


In the second example, however, the person tends to spend all of their money on fun stuff, living life to the fullest until the age of 45 where they decide to start saving for retirement. They are on quite a bit more income than the first person who is only 25 and instead of being able to save $100 a week, they can save $400 a week.


Person 1 ends up with approximately $861,457 at age 65 after contributing $213,200 over the 40 years.


Person 2 ends up with slightly less at approximately $835,851 at age 65 however they have astoundingly put in $436,800. Over twice as much as person 1. Imagine what person 1 would have been able to do with the extra $224,600 that they didn’t need to contribute over the last 20 years? Me personally, I’m thinking holidays.


While returns are important when investing, the single most important thing that can grow your wealth the most is time. Compound interest makes this possible, and so when is the right time to start saving? No matter how old you are, the right time to start saving is right now.


PS. Compounding also works in reverse when you borrow money. Having to pay interest on interest deteriorates wealth just as quickly as earning interest on interest creates wealth.


– Liam Rutty –

Celebrating Achievements | Andy Lay

We all celebrate certain things in our lives. Whether it’s the arrival of a new baby, holiday, weddings, or our first home, the list goes on and on. However do we celebrate enough and do we use these achievements to our advantage? All these events are equally important to the person involved and we’ll be looking into how and why we need to celebrate these successes, once we’ve achieved them.


When we don’t meet our goals, we often put heavy emphasis on what didn’t work and all the negative effects that go with it. So why don’t we do the same thing when we achieve our goals? Once we’ve achieved our goal we would acknowledge it at first but then quickly move on. To give you an example, my wife and I had initially set ourselves a goal of saving enough for our own home several years ago. We initially made a commitment to ensure we had enough savings by the end of 3 years to buy our own home. To make things a bit more difficult, we didn’t want our son to be in child care, which meant my wife wasn’t working and I was the sole income earner. We didn’t let this get in our way and were able to reach our goal by the end of the 3 years. After we purchased our home, we both sat down and reflected on all the hurdles we had overcame and more importantly soaked in the fact that we achieved our goal even with hurdles along the way. This gave us a more positive outlook and motivation for future goals.


So why should we celebrate?
So it’s all great that we celebrate our achievements, but is there an actual reason why we do and will it help us in the future? Here are some important points relating to why we should celebrate success.


1.    To learn and replicate future achievements.
One reason we celebrate is to recognise what is working well and why. Furthermore you can learn and inspire yourself from your past achievements. So in turn means you can replicate your achievements in the future. In my case for example, we agreed that being able to save for a house whilst on 1 income was a huge achievement. However we’ve also reflected on what hurdles we had to overcome and how we can replicate this success in the future. We’ve since achieved smaller goals such as creating an education fund for our kids and next is to save for a new car.


2. Changing your mindset to focus on success
Whatever it is that you want to achieve, having the correct mind set can be difference between success and failure. Having a negative mindset and constantly focusing on hurdles and failures will affect your motivation and ultimately leads to a higher chance of failure.


A large part of success is about your state of mind – so it’s about having a successful mindset. No matter how minor, you need to celebrate all your successes. Put a large focus and emphasise on what you’ve achieved and less on past failures and what hurdles lie ahead. Telling yourself you’ve overcome hurdles before and that you’ve also achieved successes in the past will help build your self-confidence and create a positive outlook. Conversely not recognising your achievements or putting your success down to luck, will not have the same effects on your mindset and motivation.


3. Motivation and Feel Good About it
Motivation is another factor which determines the success and failure of our goals and is also connected to our mindset. In this case motivation comes in the form of us acknowledging all our successes. Not just the big ones but smaller millstones, actions and goals, will give us the extra push along. So always give yourself plenty of reasons to celebrate your successes. That way you continuously build motivation for future goals and accumulate momentum.


One of the best and most important reasons to celebrate your success is simply because it makes you feel good. Because feeling good is what it’s all about isn’t it? It’s the reason why we set off on our goal in the first place. Remember there’s nothing more important than for you to feel good about achieving your successes.


4. Sharing success
Celebrating your success doesn’t always have to be about yourself and your partner. You could also get your relatives and friends involved and join in with the celebrations. Informing your friends and family of a goal you have set can also assist your achieve it, as it will keep you accountable. Back to the example of us purchasing our first home, we initially brought up the topic with our parents and our friends. Although they weren’t going to keep us accountable, at the back of our minds however we really wanted to achieve our goal to prove to everyone that we were capable of reaching our goals despite encountering challenges along the way. At the same time, once we purchased our home, we got all our friends and family together and celebrated our success, which in our minds just spreads the positivity around to everyone.


A final point to remember is you have to recognise your own success if you want other people to as well and how you do it is up to you but just remember to have fun doing it.


– Andy Lay –

Success in Retirement

Regarding preparation for retirement, the terms ‘create,’ ‘protect’ and ‘enjoy’ encompass a variety of challenges; however, the acknowledgement of these challenges, and the subsequent methods of dealing with these problems can lead to success in the future.


The following two tables which show the lump sum requirements for both couples and singles when taking into account lifestyle upon requirement.


According to “The 2017 ASX Investors Survey,” the 2013/14 mean superannuation balances for households and individuals were $355,000 and $214,000 respectively; these figures, coupled with the data above, are indicative of some of the problems faced regarding ‘enjoy,’ as super balances somewhat dictate your quality of life.


Therefore, in order to ensure that enjoyment occurs upon retirement, creating wealth is imperative. The same ASX report states that 60% of Australian adults participate in at least one form of investment, however, the lack of activity by younger generations and engagement with their super contributes to lower super balances, across the board.


A global survey in “The Future of Retirement” report released in April 2017 by HSBC; indicates that only 34% of working aged people believe that they will be financially comfortable in retirement, whilst 58% thought that they will continue working to some extent in retirement because they have to.


In Australia the Superannuation system forces people to start saving for their retirement from an early age, however it still doesn’t ensure that these savings are working to their full potential.


These statistics further highlight the importance of seeking financial advice and putting a retirement plan in place from an early age because in our experience, clients who engage with an adviser will significantly improve their chances of being able to achieve your goals and enjoy their retirement.


At JBS, we run a Cash Coach and Retire Right program to specifically address these needs and help you to achieve the success you desire upon retirement.


– Richard Smart –