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How the All Blacks Should Have Spent their $80,000 Bonus
10/12/03 by Gain Zohrab
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Well they didn't win it and instead the spoils went to England. However, had the All Blacks won the Wolrd Cup they would have received a $80,000 bonus. Here's what they should have done had the Aussies and England not stood in their way....
Time is against you!
Retirement, finance and investment are often seen as dry and boring subjects, particularly for the young and fit. It’s so easy for these to be subjects to be avoided for now – there’s plenty of time, isn’t there? Well, “No” actually. Time is relative to whatever you are measuring against. In your case you have two competing time frames – a very short time to earn from your sporting skills, yet a very long time to spend it.
And not just you to think about
You don’t just have yourselves to think about. Very often people need funds to pay off mortgages, help their children through university or look after ailing parents, rather than planning their own financial future. Consequently, many people find themselves with little knowledge of what to do next.
All apathy disappears when the income stream slows down. Anxiousness sets in and the prospect of a government funded retirement fades into obscurity with the realisation that the current automatic government super for us all is not likely to be there for you, at least in it’s present form, when you reach the eligible age.
Financial planning has suddenly become a reality.
So, what do you do?
First, prepare a personal financial audit to assess your current financial situation. Then identify your realistic objectives. Then plan the future. Progressing your plan from this point is often the most perplexing stage. Awareness of the following considerations will help focus your decision-making:
Time frame: How many years do you expect to be able to work and save?
Objectives: What is it you want to achieve – most people don’t want to die super rich but they do want a comfortable, worry-free retirement. Perhaps you want to travel, or buy a boat, or both!
Risk versus return: We all know the higher return you aim for, the greater the risk. But do you need to take on more risk to achieve your objectives? The mix of a portfolio of investments is very important, not just to achieve the objectives, but also to reduce volatility of the investment values.
Liquidity: The ability to access funds at short notice is crucial. You may need some or all of your money back quickly. Or the investment mix may need altering as world events change.
Diversification: “Don’t put all your eggs in one basket”. Managed investments are the best option as the funds of many investors are pooled, giving a greater spread to reduce risk and volatility.
And there’s more to it than that…
Obviously there is more to financial planning than these basic concepts – we haven’t even talked about estate planning, asset protection and tax strategies. If you are thinking about your financial planning, the insight of a professional financial adviser can be invaluable in identifying and evaluating opportunities.
An adviser’s thorough understanding of the financial planning process will ensure the results of your hard work is not severely eroded through misinformation or lack of experience.
Gain can be contacted on 09 271 1704
or by email: gzohrab@pak.e-spicers.co.nz
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