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Ben Kingsley Blog post by Ben Kingsley

Finance Talk: Seek Help For Those Big Life Decisions

We all know that buying your first home is at that moment in time most likely your most confronting finance and one of a big life decisions as well, but from that moment on throughout your life you are going to be faced with making big decisions about your finances, your well being, your future etc, etc. So it’s only logical that you seek advice from a qualified professional who can help you make the best decision regarding options.

I’m speaking from direct, real life experience to say that those who choose to seek advice as opposed to those who choose to simply select a loan are the folk who are more likely to be better off financially. Why?

Well, let me share a couple of the countless examples we have within our business:

1. A couple came to see me about buying a property in a new estate area. I asked them what was their motivation for living there; they said that believed the new area with new houses would mean that values will grow better. The advice I gave them clearly showed this would not be the case. They have since purchased in a better area where the values have grown at a much faster pace than the area they first considered, meaning their overall wealth position is better than it would have been.

2. This next example is the classic mistake most who don’t seek advice make. A couple came to see me about upsizing into a new property and selling their existing home. I explained to them that, base on their income, surplus cashflow and the rent they would get along with the tax benefits they would be able to afford both assets. This resulted in them buying their new home and turning their current property into an investment property. Net result is they now smartly control assets worth over $1 million dollars and have a regular income (rent) coming from their first property. In fact their first property is cashflow positive, meaning they are actually making money each week from their passive investment. They are sure to prosper greatly from this decision.

3. A client was considering purchasing a car with a car loan/personal loan. The lender was offering a rate of 8.5%, but there was enough equity in the property to set up a new loan secured by their property and the rate was 2% cheaper therefore saving the client on interest payments. This together with the flexibility of the loan term means we can either pay the loan off quicker without any penalty or if their circumstances change we can adjust the repayments to accommodate any short term event without causing any cash flow headaches.

 

I could go on and on, as pretty much every day in our business we are advising clients and helping them structure their finances better and our strategic advice is resulting in much better awareness of their money and their potential to improve their financial position. That’s my personal position but I’m supported by market research which also highlights the following findings regarding seeking out professional finance and financial planning advice:

– Those who seek Advice are Wealthier, Happier, more financially aware and more Purposeful*
– Those who use a Financial Planner save an additional $2,457 each year compared to those who don’t **

*Research conducted by Coredata – Brandmangement 2010
** Research conducted by KPMG Econtech 2009

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