Good Income. Where’s the Wealth?

all right so what is financial planning so how would you explain financial planning to someone who has no idea where to start

So think of your finances as a big puzzle, right? There are lots of pieces.

So there'll be your income, your mortgage, your super insurance, planning for your retirement, family commitments, tax, kids, school fees, all of that, right? So all of those pieces.

And then on top of that, there'll be things you want to do.

You might want to buy a car go on holiday you know help out with your parents whatever it is right so financial planning is about putting all of those pieces together in a way that it makes sense basically right so that's the easiest way to explain it so where are you now where do you want to be and what are the decisions that we can make today between those two points to get to you there basically so um that's where we come in so it's not about selling a product like that is very much secondary to what we do in planning right so products are really tools that we can use to execute the strategy the strategy is the most important part right so um without a plan money will just disappear right you'll live from paycheck to paycheck but with a plan you can really you know plan smart and do good things with it so yeah

So somehow you touched a bit on tax there, right? So there are individuals out there or some individuals who might be listening to this podcast episode going, oh, I'm good with money.

I know how to budget.

And I have my accountant who can help me save on tax, right? So how is it different? How can a financial planner help these individuals who think they're good at budgeting or who have an accountant to help them save tax but what differentiates a financial planner

so what you mentioned are two parts of the puzzle that i spoke about right so your budget will help you manage your cash flow you know what's coming in what's going out and then if you're good at budgeting great right that's one part of it tick your accountant usually helps you look at things like tax compliance things like that and they're typically tend to be backward looking.

So you go to your accountant after the year is done most of the time.

I mean, there are people who try and plan a bit in advance, but majority of people will see their accountant after the financial year is done, right? And they will help you with the taxes and things like that.

So again, another part of the bigger financial puzzle.

But with the financial planner, we look forward.

We look at what your goals are, what you want to do.

We look at things like super, right? Because super is a huge asset that you sit on.

But a lot of people aren't even aware of it, right? We look at if you want to buy a property, how do you go about doing that? With all of these things, we look at, do you want to invest in property or other asset classes or diversification, things like that.

And with all of that, then we look at, okay, we are doing all of this, but are you adequately protected if something goes wrong? We look at the risk mitigations of all your strategies that we are going to put through.

And then we also talk about things like retirement.

Would you have enough to retire on? So there's a lot of things that we look at on top of what an accountant would look at.

And having just a budget is not going to solve any of these other things that I told you

about.

Those two are ticks.

Those are part of a bigger plan, basically.

And of course, the financial planner works closely with an individual's accountant.

Financial planners are not accountants.