I was earning $500,000 a year at 30: Here are the 10 best pieces of advice I can give you about money

 by Cary Carbonaro, Business Insider Contributor Nov. 17, 2015

businesspeople london bankersFlickr / Herry Lawford

After graduating from college, my career moved quickly up the corporate ladder, including eight years on Wall Street.

I worked at JPMorgan Chase, I was a vice president at Citibank, and then a director at Lord Abbett Investments on the e-marketing and e-commerce side.

Every day a new company was going public, and I lived across the street from the New York Stock Exchange.

Every night before a business day, I would hear them setting up some crazy paraphernalia in the Street. There were giveaways on the Street because there was so much “silly” money. Anything with a dot-com got funded or went public.

For example, Pets.com was launched in 1998. In case you don’t know the story, the Pets.compeople spent half of the value of their company on a Super Bowl ad and by 2000 the company was defunct.

I was earning $500,000 a year at age 30, but I felt like I wasn’t making much money because I was in an established industry without big stock options. It was conservative and I was conservative. It didn’t fulfill me. I felt like I wasn’t making a good difference in anyone’s life.

Cary Carbonaro headshot

Courtesy of Cary Carbonaro

So I quit that job, moved to Central Florida and started my own financial advisory business. Everyone thought I was crazy. Who walks away from an amazing job like the one I had?

I had to reinvent myself as an entrepreneur. It took me a long time to build my firm, one client at a time, from scratch. I went from $500,000 income a year to almost zero the next. It challenged me personally, professionally and emotionally.

The beautiful side of the hard work is that I have a much better sense of my purpose in the world. I love being a practicing certified financial planner because it equips me to make a difference in my clients’ lives. I get to help them make all the right moves with money. It is rewarding to watch them achieve the goals we set out together, and I even wrote a book so I could reach a wider range of the population, from the young to the seniors who might not be able to afford a certified financial planner.

Now here are some of the best pieces of advice I can give you about money.

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1. Beware of FREE money

Credit cards are NOT free money. Use them as you would cash, or don’t use them at all. If you use them to stopgap your life, you will never have financial freedom.

Flickr / Alan Levine

2. Simplify budgeting

It’s simple. Know what you have coming in and going out each month. Do you know this? It doesn’t matter if you do it on a napkin or Mint or an app on your phone. This is so simple, yet so important. It is the building block of all financial planning.

3. Know your worth

Assets (what you own) minus liabilities (what you owe) equal net worth. And your net worth does NOT equal your self-worth.

Always remember that.

Thomas Lohnes / Stringer / Getty Images

4. Don’t be afraid

Personal finance is not just about math, and you don’t have to be good at math to learn it. Simplify, learn the basics, and just get started. It is never too late to learn.

The first step is knowledge. You can’t fix what you don’t know. Learning financial literacy is one piece of education that will be well worth your time.

5. Know your credit score

This is important for your entire adult life, and having a good or excellent score can save you hundreds of thousands of dollars.

Flickr / Mads Bødker

6. Teach your family about money

Financial literacy is a life lesson that should be passed down to your children. Learn it, share it, and your entire family will be better off.

7. Inflation hurts

You have to invest to outpace inflation and get growth on your money — otherwise you’re effectively losing money as time goes by. This means don’t hoard cash, and invest for the long term, which is greater than 10 years.

8. Never lie

Don’t lie about money or spending with your partner. Full financial disclosure is a key to a healthy relationship.

9. Plan for your future

Planning for your financial future is way more important than planning for vacations, parties, etc. Are you spending enough time on your financial future? This is a strategic conversation and you might need to hire a professional financial planner.

10. Just start

There are multitudes of free resources to learn the basics, and you can hire a certified financial planner when your situation gets more complex. Find a planner who suits your needs atLetsMakeAPlan.org.

Cary Carbonaro, MBA, CFP, is a managing director of United Capital of New York and New Jersey. See more about Cary and her bestselling book “The Money Queen’s Guide for Women Who Want to Build Wealth and Banish Fear” at MoneyQueenGuide.com.

Do You Need A Finance Broker Or A Financial Planner?

When taking the plunge into the world of home loans and property investment, the challenge often lies in knowing which expert to approach for help. Mortgage brokers and financial planners, although similar in their professional outlook, cater to different financial endeavours.

Mortgage brokers are qualified and must be either licensed or appointed to act as loan advisers. They have in-depth knowledge of loans and options suitable for a range of different financial situations. They negotiate with lenders to arrange loans and help manage the process through to settlement.

 “When it comes to talking about a client’s debt structure or interest rates, or the best way to set up a loan, it’s really something that needs to be done by a mortgage broker who is qualified to give credit advice,” says Luke Mellar, a lending specialist at Shadforth Financial Group.

Financial planners, meanwhile, assist with anticipating and managing longstanding financial outlook. They help sort through and select options for investment and insurance, with attention paid to retirement planning, estate planning and investment analysis.

“Planners take care of more of the long-term, wealth-creation strategy, as well as super and life insurance, and other sorts of wealth protection insurances,” Mellar says.

A financial planner’s work is wide-reaching and important to your long-term financial health and stability, options relating to loans and refinancing can only be recommended by a qualified broker authorised to do so.

There are some situations where it would be best to include both types of financial professional. For instance, if your broker is helping you refinance your loans in order to undertake a financial investment, a financial planner can step in to assess the best investment option for you.

“There is rarely a time when I am dealing with a client, just on the loan side of things, where I’m not thinking about how it fits with what the financial planner is talking about,” Mellar explains.

“In terms of whether the client’s choice is a viable investment strategy or whether it fits in with their long-term wealth goals, that’s something that we absolutely have to refer back to the planner to make sure that it fits in with their broader plan.”

The answer? It depends on your situation – for loans, see a broker, for investment advice, a financial planner. Of course, your broker can always refer you to a planner if you need one.

Contact an MFAA Accredited Finance Broker to find out how they can help you secure property or commercial finance, and ask them to recommend a financial planner they trust.

How To Pay Off Debt Fast Using The Stack Method MONEY

BY CRAIG DEWE

Just cause you can buy it doesnt mean you should.

Whether it’s consumer debt on credit cards, student loans or a mortgage, most people find themselves weighed down by debt at some point in their lives. This can keep us working jobs we hate just to pay the bills and keep our heads above water. By learning how to pay off debt fast you can release this burden and remove some of the stress from your life.

Today I’m going to show you how to pay off your debt as fast as possibleusing the Stack Method.

Step 1: Stop Creating New Debt

Most people do not receive training in handling money and how to live within their means. If you’re in debt then you’re probably one of these people and it’s time to bite the reality bullet. It’s going to be impossible to get out of debt unless you retrain your financial habits right now.

You must make a stand against all the marketers trying to take your hard earned money or offering easy finance. You don’t need more stuff to make you happy. What you need is financial peace of mind.

So cut up your credit cards or freeze them. I mean this literally. Put them in a container of water and stash them in your freezer. Then when there’s an opportunity to spend, you have time to thaw out (you and the credit cards) and really decide if you need that purchase.

Step 2: Rank Your Debt By Interest Rate

Make a list of all your debt with amounts and the interest rate. The highest interest rate should be at the top as this is what you’ll pay off first. Paying off your high interest debt is the key to the Stack Method and paying off debt as fast as possible.

Interest is a powerful weapon and right now the bank or other financial institutions are using it against you. Interest significantly increases the amount you need to pay back and often we’re completely unaware of how much that is.

For example, if you have a $10,000 credit card debt at 20% interest where you pay a minimum payment of $200 a month, you will end up taking 9 years and 8 months to pay off the actual amount of $21,680 including $11,680 in interest!

Step 3: Lower Your Interest Rates

You can often lower your credit card interest rates by doing a balance transfer. This means moving your credit card to another bank and they will lower the interest rate to get your business. Shop around and try to get the lowest interest rate for the longest duration (preferably until it’s paid off completely).

Just make sure you’re reading the terms and conditions carefully so you don’t get stung by the new bank in other ways. Once you’ve done this you can order your list of debt again if things have changed.

Step 4: Create a Strategic Spending Plan

This is where we improve on your financial control from Step 1. Take a piece of paper and write down your income after tax and all the expenses that you have. This will include the minimum payments on all your debt.

Look at your expenses and then rank them in order of importance to you. Look at the items on the bottom of your list and decide whether you’d rather have them or be financially stable. The objective is to create a Strategic Spending Plan where your expenses are lower than your income.

You also decide how much you are willing to spend on each area of your life. You can allocate amounts for rent, groceries, eating out, buying clothes and other activities however realize that once you’ve spent your allocated money there’s no dipping into other areas. It also helps to have a Fun Account that you can spend on what you like and an Emergencies Account in case your car breaks down etc.

You also want to include in your Strategic Spending Plan as extra amount you’re going to use to pay off debt. Can you afford $20 a week? $50? $100? $200 or more? It’s important that you get a realistic number that you can commit to each week without fail and this is your Stack Repayment.

Step 5: Create a Repayment Schedule

The first part of the Stack Method is to cover the minimum payment on every single debt you have. Any time you miss a payment, you incur fees and these add up quickly. This also includes making the minimum payment on the debt with the highest interest rate.

Then for the debt with the highest interest rate (your Target Debt) you’re going to add the Stack Repayment from your Strategic Spending Plan. You apply this Stack Repayment and the minimum payment until that debt is paid off in full.

As your official minimum payment decreases you add that extra amount to your Stack Repayment. So as your minimum repayment drops your Stack Repayment increases equally. This will compound how fast you pay off the Target Debt by adding even more to the repayments you’re making.

Step 6: Reward Your Progress

You want to track your Target Debt so you can see your progress along the way. You can also decide on milestones that you’re going to celebrate and reward yourself on. A reward doesn’t have to cost money but if it does then it comes from your previously allocated Strategic Spending Plan.

This is an important step as it will keep your motivation going when you feel your willpower fading. Just like you’ve trained yourself to brush your teeth and shower, you can train yourself to manage your money. Feel great that you’re now entering the 10-,20% of people who are actually responsible with money.

Step 7: Compound Your Results

Once you pay off your Target Debt you have a huge celebration and congratulate yourself. Then you move the Stack Repayment (which includes the previous minimum payment as well now) to the next debt with the highest interest rate. This becomes the new Target Debt and you are using your Stack Repayment amount plus the minimum payment for the new debt.

This is why the Stack Method is so powerful. As you decrease a debt you actually increase your Stack Repayment amount. This means the second debt will get paid off even faster, the third even faster than that, and so on and so on until you are completely debt free.

Step 8: Be Kind To Yourself

During this process your resolve is going to be tested multiple times. Maybe you’ll have an emergency like your car breaking down or the need to travel for a sick relative. The important thing is to not throw up your hands in despair while going back to your old habits.

Life will test your commitment to your new responsible money attitude and it’s up to you how you respond. When things go wrong (and I guarantee they will) you need to shrug it off and get back on track. Show compassion when you accidentally go over your Strategic Spending Plan and decide to do better next week.

Now You Know How To Pay Off Debt Fast…

The Stack Method is a powerful tool but it’s up to you whether you use it. If you really want results then print out this article immediately and start working through the steps. It’s only by the decision you make right now that you will enjoy a debt free future and live a financially responsible life.

Self-Manager Superannuation Fund

Need help with managing and setting up your Self- Manager Superannuation Fund?

SMSF

Like other superannuation (super) funds, self-managed super funds (SMSFs) are a way of saving for your retirement. The difference between an SMSF and other types of funds is that, generally, the members of an SMSF are also the trustees. This means the members of the SMSF run it for their own benefit.

You can set up your own private super fund and manage it yourself, but only under strict rules regulated by the Australian Taxation Office (ATO).

An SMSF can have between one to four members. Each member is a trustee (or director if there is a corporate trustee). Running your own fund is complex.  Our expert advisers can make this complex process simple for you.

When you run your own SMSF you must:

  • Carry out the role of trustee or director, which imposes important legal duties on you.
  • Use the money only to provide retirement benefits.
  • Set and follow an investment strategy that ensures the fund is likely to meet your retirement needs, but make sure it is updated as rules and regulations change.
  • Other changes will occur if children are added or a member dies.
  • Keep comprehensive records and arrange an annual audit by an approved SMSF auditor

If you want the flexibility of an SMSF, but not the worry then we at Wealth Plus have the expert staff to assist you to set up your SMSF to ensure that you meet all of the legal obligations and your SMSF is doing what you want it to do, to ensure you have financial security when you retire.

Important Links as a SMSF is controlled by the following entities:

  • Superannuation Industry Supervision (SIS) Act

http://www.austlii.edu.au/au/legis/cth/consol_reg/sir1994582/

  • The Trust Deed

http://www.ato.gov.au/Super/Self-managed-super-funds/Setting-up-an-SMSF/Step-5–Create-your-trust-and-trust-deed/

  • Corporations Act –

http://www.comlaw.gov.au/Details/C2013C00003

  • The ATO

http://www.ato.gov.au/Super/Self-managed-super-funds/

Contact us today and let us unravel the complexities of setting up your SMSF.

Did you know you could purchase your Commercial property through a Self-Managed-Superfund?

Investors look to direct property for reliable income

Investing in property is not new to Australian investors. Residential property is something we know and trust and has provided solid returns for many investors. Non-residential property, on the other hand, is less familiar to the average investor, largely because it has been out of reach for smaller investors. But this is changing and it’s well worth looking at the options.

The concept of investing in residential houses and apartments is well understood by most investors and is easily accessed and, in most cases, can be sold in a reasonable timeframe. In Australia, a long run of capital growth in the residential sector has strengthened its appeal, particularly for self managed super funds and individual investors.

Non-residential property such as shopping centres, industrial warehouses and office towers was until recently the sole domain of large super funds and institutional investors.

But commercial property is now becoming more accessible to smaller investors through managed property funds and syndicates. This has broadened the property investment options for individuals and SMSFs and opens up some good opportunities, particularly in the current low interest rate environment.

Why invest in Australian property?

The major categories of commercial direct property include:

These property categories have varying characteristics but there are a number of advantages for investors common to them all, including:

The major attraction of Australian property for investors is the stability of income it provides. Australian commercial property also has a solid track record when compared to the rest of the world, as can be seen in the chart below, which shows the returns from Australian commercial property compared to those from global property over the 10 years to 30 June 2014. While the capital growth component of the income varied, income from rent was very consistent over the 10 years.

Ladies! Forget Waiting for Marriage: 6 Things to Know If You’re Buying a Home on Your Own

May 28, 2015

It used to be the norm that women and men would wait for marriage before buying a home. But now, more singles than ever are taking that big life step alone. And here’s the awesome part: Women have been outpacing men in the real estate market for several years now. Single women in their 20s and 30s represent 14 percent of first-time buyers, compared with 8 percent of single men in that age group, according to realtor.org.

I purchased my first apartment at the ripe age of 24. And then I did it again at 31. And once more at 33. Below, a few pointers that have helped me—and hopefully will help you—secure an affordable mortgage and great home on your own.

first-home

Aim for 25 Percent. While most financial calculators say it’s totally fine to spend 30 percent of your take-home pay on your monthly housing payment, I say be a little more conservative. Remember, being a homeowner requires a lot more spending than renting does. You’ll also have to account for real estate taxes, home insurance, and annual upkeep, which can easily be another 2 to 5 percent of your paycheck. Bulk up your emergency savings account and have at least a six-month cushion in the bank before applying for a mortgage. Mortgage lenders will be impressed to see that.

Clean Up Your Credit. One of the first items lenders will want to analyze is your credit health, especially your credit score. According to FICO, which is the biggest credit score issuer and the one used by over 90 percent of lenders, borrowers with scores of 760 or higher are earning the best rates. To view your score, first check with your bank or credit card issuer—some offer customers a free look. If you find that your number needs some R&R, make sure you’re paying all your bills on time and knock down any outstanding balances on those credit cards. Within a few months you should notice a difference. In the meantime, avoid opening any new credit cards.

Get Your Docs in a Row. This, for me, is the most dreaded part of applying for a mortgage: submitting paperwork. If you have any interest in applying for a mortgage in the near future, do yourself a favor and try collecting all the documents now. This includes the last two to three years’ worth of tax return statements, recent pay stubs, the last 12 months’ worth of bank statements, and a letter from your employer stating that you are gainfully employed. Once you apply for a mortgage, expect that the review process can take anywhere from six weeks to a few months. Hang in there!

A Freelancer? You’ll Need More. If you’re self-employed, prepare for more scrutiny. In addition to all of the above, you’ll probably also be asked for a letter from your accountant or financial adviser stating that buying a home will not hurt your financial stability or your business. Banks sometimes also ask for an additional year of tax returns. They want to see that you’re making money consistently year after year.

The More Your Put Down, the Better. The days of putting down just 5 percent and getting a standard 30-year mortgage are pretty much over. Lenders got burned in the mortgage crisis, so they want borrowers who are willing to have more skin in the game. Prepare to have at least a 15 percent down payment ready to go. Twenty or 25 percent of the purchase price is even better. The more you can pay up front in cash, the more likely you are to qualify for a better interest rate on your mortgage from lenders. It’s one of your best bargaining chips.

Avoid Real Estate Envy. Finally, as you’re house hunting, zero in on places that are financially within reach. A quick measure is to multiply your salary by two or two and a half—that’s about as much as you really want to spend on a home. Your realtor may try to convince you to look at homes a little bit outside your budget, but that can be a slippery slope toward spending far more than you realistically can afford.

Photos: Getty Images

How will the unchanged Cash Rate affect you?

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Reserve Bank of Australia has today decided to leave the official cash rate unchanged at 2.00%.

The Reserve Bank has continued with its wait and see approach after a week of turmoil on financial markets as a result of the Greek financial crisis.

Even though the cash rate has remained unchanged, there are still daily changes in the finance market as a result of increasingly intense competition amongst lenders. So, it’s still wise for us to talk if we haven’t spoken in a while to ensure you’re still in the right finance solution.

Email Info@wealthpluslending.com.au or call 1300 974 974 to make sure you are taking advantage of daily changes in the increasingly competitive mortgage market.

Why Paying Off Your Credit Cards Is Not Enough

Getting your mortgage application together can require quite a bit of financial scrutiny. In order to figure out your serviceability, your potential lender will look deeply into your finances.

It’s a no brainer to take your credit card debts into consideration when applying for a mortgage. But what many people do not realise is that high credit card limits will not bode well for a home loan application.

If you have a high credit limit, you also have a high debt risk in the eyes of your lender. As the logic goes, there is no stopping you from boosting your credit card limit the day after your loan is approved.

“We have to take account of 3% of the total credit card limit, regardless of what the applicant owes,” says Homeloans Ltd BDM Sally Carmichael.

“If they had a $10,000 limit but they only owe $1000, we still have to assess $300 a month and that comes directly out of their liability. It does make quite a difference.”

Even if you haven’t put a cent on your credit card for the past five years, a high credit limit will negatively affect your serviceability. The best thing you can do is lower your credit limit, or cancel that credit account entirely.

“You need to pay out your credit cards and avoid having any other debt,” says Carmichael. “You need to be able to use your full amount of income.”

For those that have to pay off their credit account before dreaming of cancelling their liability, it is imperative that you pay your debt on time, according to your minimum repayments.

The first step towards finding your new home is speaking to an MFAA accredited finance broker to help to sort out your finances.