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Financial planning in my 40'sCareer management
Being successful financially isn't just about how much you earn over time - it's about what you do with it. How much you spend, and how much you save and invest have a huge impact on your future lifestyle. It's never too early - or too late - to plan your future. And the great news is you don't need much income to build yourself a wealthier future. Many people believe that you need to be wealthy to be an investor - but the opposite is true as well. You need to invest to be wealthy. At any stage in your career you will need to think about saving for a comfortable retirement.
Starting or buying a business
Good on you for taking that step towards financial independence! However it does come at a cost and although it’s rewarding working for yourself, you need to put in the hard yards to really make it work. We can make it simpler for you. Here are some of the things you need to consider when starting or buying a business.
Already in businessGood on you for taking a major step towards financial independence! As you know, being in business can be very rewarding, and you need expert advice from professionals to keep your business on track. We have a specialist Business Services division that focuses on making planning for the future simple. As an introduction, here are some of the things you need to consider when starting a business, buying a business, or being in business.
Financial Planning
At Iconic Financial we’ll show you that YOU control your future - YOU control your destiny. We’ll empower you to design your own future. We will help you establish your goals by harnessing your dreams. It might seem like an impossible dream to build the kind of wealth you need to enjoy a great future of true financial independence. When you talk to us, we’ll show you how easy it can be. We’ll create a financial plan designed to specifically deliver on its promises and achieve your goals. And most importantly, we’ll make sure that you are well protected while you’re investing for your future. The main areas we cover in your financial plan are investment planning and income protection. You can download a PDF format example of a financial plan. Savings
Savings can provide income (from interest), capital stability and steady growth. Investments provide a mix of capital growth and income returns and involve more risk. Most people need a combination of solutions to help them reach their goals. This is where a financial plan with Iconic Financial can assist you in determining what is the best solution for you. Saving for your children’s or grandchildren’s education
Saving for investmentInvestment will help you reach your goals. Investments can help you achieve an independent income - meaning that you're living off your interest and dividends from your assets for a comfortable retirement. Putting a little aside for investing is a wise move, and we can show you how easy it is. Investment AdviceAt this stage in your life you will likely be considering investing to achieve your financial goals. This may be to save for a particular goal such as an overseas trip, or very likely for your retirement. You may already be investing but unsure if you are on target to achieve your goals, or whether you have the best portfolio for your needs. Most people would like to have an income greater than what their KiwiSaver savings scheme will provide; you may also like to retire earlier than the KiwiSaver scheme allows. Whilst investors currently have access to their KiwiSaver savings account at the age of 65, given overseas trends, it is likely the age of eligibility will change; possibly as late as age 70. So if you wish to be in control of when you retire and how much money you have to enjoy your retirement, you need a Financial Plan and an investment portfolio outside of your KiwiSaver account. Find out about what type of investments there are and what we recommend.
Investment Risk Profile
In addition to market risk, there are other risks investors can be exposed to like default risk - the risk that the investment money will not be repaid, and inflation risk - the risk that the return on the investment over time is lower than the rate of inflation and therefore the investment loses spending power, and opportunity risk - where the investment portfolio is limited and misses out on the growth in some sectors, for example many people who do their own investing have little in the way of global investments. There is no right or wrong portfolio, or risk profile … just the one that is right for you. Complete an Investment Risk Profile Questionnaire for yourself to find out what type of investor you are. The investor risk profiles we use at Iconic Financial are:Defensive InvestorYou are likely to have a shorter timeframe and require more stable returns. You likely want income with little risk your capital will go down at all. You will be prepared to accept lower returns to achieve this. To achieve this low volatility and stable positive returns, your portfolio will have a heavy weighting of cash and fixed interest investments. This may include government stock, local government stock and high quality, investment grade bonds.Conservative InvestorYou will be more comfortable with investments that are stable and have a lower level of risk. Your timeframe may be shorter and you may require a regular income from your investments. You will however want to protect your investment against inflation, and you are prepared to accept some risk to achieve this. Your portfolio will be heavily weighted towards income investments such described above, but the portfolio may include some investments in shares also. This portfolio have a lower volatility, however there is still a possibility of some shorter-term capital lossess.Balanced InvestorYou want to protect your capital but still achieve some growth. You will be prepared to accept a moderate level of risk (market volatility) and the likelihood that you will have some short-term negative returns. Your portfolio will have a fairly even weighting of income and grow investment assets. This portfolio suits medium to longer timeframes.Growth InvestorYou are interested in seeking good potential capital growth, and are prepared to accept a higher level of risk to achieve this. You are not too concerned about volatility (market ups and downs) because you have a medium to long-term investment timeframe. Your portfolio has a high weighting in shares, both in Australasia and globally. Your returns are largely achieved from capital growth. To look for these higher returns you are prepared to accept the fact that there is a high probability of shorter-term capital losses. High Growth InvestorYou are looking for high returns on your investments and are willing to have mainly growth investments in your portfolio. This will mean your portfolio is invested mainly in Australasian and Global Shares. You have a medium to longer investment timeframe and are not too worried about volatility. Your returns will come mainly from capital growth. The potential returns from this profile are higher than the previous portfolios and there is also a higher probability of shorter-term capital losses; some longer-term losses are also likely.Aggressive InvestorYou are likely to be an experienced investor with previous exposure to a wide variety of investments including local and global shares, and alternative investments such as futures, options and derivatives. You know that these investments have high potential returns, but also the risks are equally high and may involve longer term losses. Almost all of your portfolio will be invested in shares and alternative investments. To reduce the risk of loss we typically use investment funds with capital guarantees for alternative investments, but that does not alter the fact that this portfolio, whilst offering potentially high returns, has a high probability and short and longer-term capital losses.Special Risk ProfileWe sometimes find clients fall into a special category for one reason or another and they choose to have a custom built portfolio for their specific needs. One example is where clients bring their overseas superannuation to New Zealand e.g. from the UK. These clients will often request that their portfolio is held in pounds sterling based investments. We can achieve this while still getting a diversified portfolio of global shares. The risk profile of these portfolios is high; in particular there is a currency exposure between the invested portfolio and the New Zealand dollar. However an investor choosing this type of portfolio usually does so because they do not wish to undertake a change in currency on their portfolio.Currently WorkingIf you are currently working you are likely to have a longer timeframe before you need to use your portfolio; you may therefore be prepared to accept a greater level of volatility to achieve greater returns over the longer term. You may also be in the KiwiSaver scheme and you may wish to balance or adjust the risk profile between the two. Remember if you are in the KiwiSaver scheme it is equally important that you have chosen a portfolio appropriate to your needs, or you may find it does not perform to your expectations.KiwiSaver SavingsHave you taken the default option for your KiwiSaver scheme account? If you are in the KiwiSaver scheme and you are some time away from retirement, it is likely that the fund will provide a sizable portion of your retirement income. It should therefore be treated as a significant part of your portfolio; you should be with the right fund manager and in a portfolio in keeping with your risk profile. At Iconic Financial we often find people have taken a default option and will find their portfolio does not meet their expectations over the long-term.No Obligation Consultation at Our ExpenseContact us now, you have nothing to lose. We find we can usually add value to most people’s financial journey that’s why we offer you a no obligation meeting at our expense. It wont cost you anyting to find out what benefits you will gain. Contact us today and discover how to get yourself financially sorted.Buying a new home or investment propertyPaying your mortgage off fasterIf you are purchasing an investment property it is possible to use the equity you have in your own home and this can greatly reduce your costs. In this situation you can get the tax benefits on the full purchase value of your investment property.If you are purchasing a new home it is likely you will have equity in your home, so you are borrowing a smaller percentage of the purchase price than you did, say when you purchased your first home. This makes you more attractive to the lenders and increases your options. If you have 20% deposit, which can be the equity in your existing home, then with the income to support the loan you are in a good position. You may also be looking to pay your home loan off faster so you can be debt-free at retirement. We have exclusive software with formulas designed to help you pay off your home loan faster than you imagined. Our objective is to make you wealthy, and paying off debt is a huge step towards your financial freedom. Other things to considerAt this stage of your life the ownership structures of major assets, and your Estate Planning needs take on an extra significance. We can assist and guide you to make the right choices in this regard.Home and other asset protectionHome, contents and car need insuring and regular reviewing to ensure you are fully covered in the event of a disaster. Trying to recover from a disaster like an earthquake could ruin the best financial plan. Iconic financial is able to recommend the best type of protection for you and your family home, or investment property and advise of a reputable supplier. Contact us today.Planning for a comfortable retirement
Whatever your thoughts on retirement, it is likely that at some stage in your life you will wish to consider planning and investing to achieve your financial goals. The investment strategy that best suits your needs will be individual to you, but is likely to be determined, amongst other things, by your investment risk profile, your stage of life, your time to retirement, your personal preferences around investing, and your previous investing experience. When Iconic Financial constructs a financial plan and an investment portfolio, these factors and many others will be taken into consideration. Most people would like to have a retirement income greater than what the government may offer (if anything) and what their KiwiSaver savings will provide; you may also like to retire earlier than what the KiwiSaver scheme allows. While investors currently have access to their KiwiSaver scheme account at the age of 65, given overseas trends, it is likely the age of eligibility will change; possibly as late as age 70. So if you wish to be in control of when you retire and how much money you have to enjoy your retirement, you are likely to need a financial plan and an investment portfolio outside of the KiwiSaver scheme. Find out about what type of investments are available in NZ and what we recommend. Discover how much you need to save for retirement by visiting NZ goverment sponsored site: Sorted.orgYou can download a PDF format example of a financial plan including retirement planning. Investment Risk Profile
In addition to market risk there is also default risk - the risk that the investment money will not be repaid, and inflation risk - the risk that the return on the investment over time is lower than the rate of inflation and therefore the investment loses spending power, and opportunity risk - wherethe investment portfolio is limited and misses out on the growth in some sectors, for example many people who do their own investing have little in the way of global investments. There is no right or wrong portfolio, or risk profile … just the one that is right for you. Complete an Investment Risk Profile Questionnaire for yourself to find out what type of investor you are. Kiwi attitudes towards investment and adviceAcceptance of RiskResearch conducted by Dr Matthews from Massey University in 2011 found that nearly half of all New Zealanders are prepared to accept an average level of volatility in their investments in exchange for an average return, but about one third are only prepared to accept a low or very low level of volatility. It appears that there is an acknowledgement that an average return requires an acceptance of some risk. However, this is unsurprising in light of recent publicity over finance company failures and the high risk now associated with the high returns on offer. Other retirement savingsThe Massey research shows that more than half of all New Zealanders have other forms of investment or savings plans to help them in retirement.Proportion of Retirement Savings in the KiwiSaver schemeThe most popular type of investment is the simple bank deposit, held by nearly half of those with additional investments. However, nearly one third have some other form of superannuation scheme. New Zealanders’ preference for residential property investment is confirmed by this survey, with more than one quarter owning one or more residential investment properties. However, beyond property there is a good breadth of other types of investment. Other Types of Investments HeldFor most New Zealanders, their KiwiSaver scheme account makes up less than 20% of their retirement savings, which is not surprising at this point — this figure includes those who are not members of the KiwiSaver scheme. It is of some concern that 17% are unable to estimate the proportion of their retirement savings represented by their KiwiSaver savings account, which may reflect either a lack of knowledge about their KiwiSaver account or their other savings. Well over half (61%) of New Zealanders see their family home as part of their retirement assets. However, concerns have been expressed about the possible effect on the housing market if there is a simultaneous decision by many nearing retirement to try to realise the ‘savings’ value in their home. Currently WorkingIf you are currently working you are likely to have a longer timeframe before you need to use your portfolio; you may therefore be prepared to accept a greater level of volatility to achieve greater returns over the longer term. You may also be in KiwiSaver and you may wish to balance or adjust the risk profile between the two. Remember if you are in KiwiSaver it is equally important that you have chosen a portfolio appropriate to your needs, or you may find it does not perform to your expectations.KiwiSaver SavingsHave you taken the default option for the KiwiSaver scheme? If you are in the KiwiSaver scheme and you are some time away from retirement, it is likely that the fund will provide a sizable portion of your retirement income. Your KiwiSaver savings should therefore be treated as a significant part of your portfolio; you should be with the right fund manager and in a portfolio in keeping with your risk profile. At Iconic Financial we often find people have taken a default option and will find their portfolio does not meet their expectations over the long-term.No Obligation Consultation at Our ExpenseContact us now, you have nothing to lose. We find we can usually add value to most people’s financial journey that’s why we offer you a no obligation meeting at our expense. It wont cost you anyting to find out what benefits you will gain. So contact us today and discover how to get yourself financially sorted.Blending a Family![]() Inevitably, many mums and dads who find themselves without their life partner at some stage find a new partner. That new partner may have children of their own that they bring into the relationship, which creates a whole new set of challenges and blurred boundaries around what family means and how it works. A blended family is a stepfamily, a family in which one or both members of the couple have children from a previous relationship. No matter what type of family you have there are four functions that are key to success families. They are:
Family life is often not a fairy tale. Daily reality most often lies somewhere between Cinderella and the Brady bunch. It can be challenging, and very rewarding at times. While it’s not very romantic, you need to consider what happens to your children and your assets in the event of a relationship breakdown, or the death of you or your partner. This is where you need to get advice on protecting yourself and your assets through a Will, Enduring Power of Attorney, or Family Trust. Family TrustsTrusts are usually set up for five main reasons:
In New Zealand there is a widely held view that trusts are the best general-purpose asset protector. However, even the experts hold widely differing views of the efficacy of trusts. Law changes to trusts will come into effect in November 2011. At the moment, you can only gift up to $27,000 per year without paying gift duty. After November 2011 there will be no such restriction. But is a family trust right for you? It really depends on your situation. Say, for example you are self-employed a trust could benefit you by protecting your family home from creditors should things go awry. Trusts can also be useful if you’ve got a family and have large assets and you will be lending money to the next generation, and want to make sure that money stays within the family. The dilemma about family trusts is, like wills, they’re set up to protect and disperse assets in a way that safeguards the signatories, however these documents are only as safe as current legislation makes them. To understand your options, you need to consult with an expert. While Iconic Financial is not registered create family trusts we can steer you in the right direction if a family trust is the best option for you. Wills![]() Did you know that over 85% of Kiwi’s don’t have an up-to-date will? It's important to have an up-to-date will, so your assets go to the people you want. If you die without a formal will, your nearest and dearest automatically get your assets? No one wants to think about their own death, in fact we mostly try to avoid the subject altogether. But picture what happens after a death. Often the tears of grief are followed by a second round of pain as relatives and loved one’s squabble over the deceased worldly possessions. All too often bank accounts are drained in the ensuing protracted legal battle, which defeats the whole purpose. It all ends up in an undignified mess potentially with the deceased possessions ending up in the wrong (unintended) hands. This ugly scenario can be avoided with a will and family trust. The good news is that it’s simple and inexpensive, thanks to 2007 changes to the Wills Act, which relaxed many of the rules around wills. Some advisory services even offer them for free. The bad news is that, if you’ve remarried, or have a complex web of children (and stepchildren) from different marriages, you will need to seek professional advice before creating a will. Employing the services of a professional will lead to a legally watertight document. When a will is prepared properly, and that person dies, there is a clear legal process for those staking a claim. Iconic Financial cannot offer specific advice on creating your will, however, we can refer you to one of our trusted professional partners. Contact us today to find out more. Enduring Power of AttorneyWe can all suffer an injury or illness that, while not fatal, may leave us unable to make decisions about our affairs. Enduring Powers of Attorney (EPA) is a legal document that enables someone who you to trust act on your behalf if you become incapacitated. Say if you have a stroke or an accident that leaves you unable to sign cheques, pay bills, manage investments, or make wise decisions about your medical care. If no one has the legal right to act on your behalf, your loved ones would need to apply to the Family Court to be appointed as your manager. Not even your spouse can automatically act on your behalf if they are not legally appointed. Without these documents it can be messy and costly to sort things out. Only by acting in advance and giving someone authority through an Enduring Power of Attorney (EPA) will you have a say in who looks after your affairs if you are unable to. Trusts and EPA's are an important part of a package of solutions to deal with risk. Iconic Financial do not directly create EPA's. We give advice on the best structures to have in place to give peace of mind.Protecting yourself and your family![]() It’s all about protection. Knowing that the right steps have been taken to safeguard you, your family, and your assets. Doing the right thing is both noble, practical, and gives peace of mind that you are covered should there be an unforeseen event. At Iconic Financial, we will shop around for the best deal for you and your family. We will read the fine print to ensure correct cover and the best overall price. We make the paperwork as easy as possible, and will explain it in simple terms. Here’s a quick overview of the types of insurance available, not all will be applicable to you in your situation, that’s where we come in. With our experience we can assess what will be the best package for you. Even better – we’ll be there for you at claim time, should you need to make a claim. We will be your advocates, getting the best results for you. See some examples of how we’ve helped our customers at claim time in our case study and success story section. Income ProtectionWhen most people are asked what their greatest asset is they reply "my house". But who pays the mortgage? That's right, your ability to earn an income is your biggest financial asset and an important source of your future wealth. Imagine if you were unable to work because of illness or disability. How would you cope financially? Did you know that you'll probably earn between one million and three million dollars in your lifetime? Maybe even more than that! That is something worth protecting, so you need to look at income protection insurance. View more information about protecting your income.Life InsuranceProvides financial security for your family should you become terminally ill or die. This should be enough to pay off the mortgage, your debts, and provide for your family. Life insurance policies can have crisis cover, which means that you're also covered for serious illness, like heart disease, cancer, or stroke. View more information about life insurance.Private Medical InsuranceThis cover provides the funding to enable you to have private hospital treatment whenever you require more immediate access or a broader range of treatment options than are available to you through the public health system. For example access to cancer medication which may be the most effective type of treatment, but which is not subsidised by the government. View more detailed information about private medical insurance.Trauma InsuranceTrauma cover provides a lump sum payment should you suffer a major condition that by nature is serious and life threatening, and as a result can have a significant financial impact on you and your family. This type of insurance helps alleviate the financial worries and can reduce debt, purchase specialised equipment, pay for home modifications, provide additional care, or create an investment fund to generate ongoing income, amongst other things. The purpose of the funds is entirely yours to decide. View a list of Trauma conditions covered and more details about trauma insurance.Total and Permanent Disability Insurance (TPD)TPD cover provides a lump sum payment should you lose your ability to ever work again (or carry on normal task, if you are not employed), as a result of illness or injury. Most people figure they are covered by ACC, however does not cover illness, and it is very limiting in terms of payment. TPD cover can provide a lump sum to reduce debt, purchase specialised equipment, pay for home modifications, provide additional care, or create an investment fund to generate ongoing income, amongst other things. The purpose of the funds is entirely yours to decide. View more information about Total and Permanent Disability insurance.Mortgage Repayment InsuranceMortgage repayment cover provides a financial safety net should you suffer a total or partial disability which causes a reduction in your ability to meet mortgage repayments and which lasts longer than the chosen waiting period. The monthly benefit is designed to cover mortgage repayments on your behalf during treatment and recovery. View more information about Mortgage Repayment Insurance. Your home and other assetsHome, contents and car need insuring and regular reviewing to ensure you are fully covered in the event of a disaster. Trying to recover from a disaster like an earthquake could ruin the best financial plan. Iconic financial is able to recommend the best type of protection for you and your family home, or investment property and advise of a reputable supplier.No Obligation Consultation at Our ExpenseIf you want to find out more about insurance see us today. We offer a no obligation meeting at our expense. It wont cost you anything to find out what benefits you will gain by being fully insured. Contact us now and give yourself peace of mind that you've got it covered. |