The Map To Millions for Millennials 1 sli.do/sbm2m
The MapTo
Millions forMillennials
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Any advice contained in this video is general advice only and does not take into consideration the
viewer’s personal circumstances. Any reference to the viewer’s actual circumstances is
coincidental. To avoid making a decision not appropriate to you, the content should not be relied
upon or act as a substitute for receiving financial advice suitable to your circumstances.
When considering a financial product please consider the Product Disclosure Statement.
Stanford Brown is a Corporate Authorised Representative of The Lunar Group Pty Limited. The
Lunar Group and its representatives receive fees and brokerage from the provision of financial
advice or placement of financial products. The Lunar Group Pty Limited ABN 27 159 030 869
AFSL No. 470948.
Disclaimer
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AGENDA
About Stanford Brown Common Mistakes Goal Setting Practical Tips! Questions
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ABOUT STANFORD BROWN
A financial advice firm servicing both private and corporate clients
In business for over 31 years Specialise in wealth management,
insurance and wellness benefits Privately owned and licensed
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ABOUT STANFORD BROWN
We are a multi-award winning firm including:
‘Great Place to Work’ 2017, 2018 & 2019
IFA Best Australian Boutique Private Wealth Firm (2016 & 2019)
IFA Wellness Program/Initiative of the Year (2019)
Women in Finance SME Employer of the Year (2019)
Women in Finance SME Wellness & Benefits Program of the
Year (2019)
IMAP Best Client Investment Offering (2018 & 2019)
CMRI (Jeans For Genes) Corporate Partner of the Year (2018)
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COMMON MISTAKES
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The Wisdom of Forrest Gump
“Lieutenant Dan got me invested in some kind of fruit company. So then I got a call from him, saying we don't have to worry about money no more.
And I said, that's good! One less thing!”
What are your financial goals for the next 10 years?
Own a house
Have a meaningful career Travel frequently
Start or grow your family
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How are we going to get there?
By not being stupid!
“It is remarkable how much long-termadvantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”
Charlie Munger, Legendary Billionaire Investor
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Career
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What can you do?
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Biggest Career Mistakes
Thinking you’ll ‘find’ your ‘dream’ job/career
Measuring your work in hours
Not prioritising organisation
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Property
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Is now the time to buy?
The investor of today doesn’t profit from yesterday’s growth –Warren Buffett
I don’t know
raise your hands
Where should I buy?
What you pay is more important than what you buy
Popular suburb ≠ Great Investment, Unpopular suburb ≠ Poor Investment
Cost of a 3 bedroom cottage 1977 2019 equivalent
Strathfield $65,000 $351,500
Gordon $60,000 $324,500
Mosman $57,500 $311,000
Bondi $55,000 $297,500
Engadine $37,000 $200,000
Darlinghurst $35,000 $189,000
Liverpool $33,000 $178,500
Leichardt $28,000 $151,500
Camperdown $25,000 $135,000
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Common Property Mistakes
Borrowing too much Being impatient Buying off the plan
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Isn’t rent wasted money?
Yes!But so are interest repayments!
That’s $22,500 per year ($430 per week)
You will spend
$677,000 on interest!
You pay it off over 30 years
You take out a $1m
mortgage at 3.8% pa
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INVESTING
Common Money Mistakes
Trying to get rich quick Investing with no idea what you’re doing
Investing with the belief you know what
you’re doing
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You don’t know what you don’t know
Be Careful
“Like all of life’s rich emotional experiences, the full flavor of losing important money cannot be conveyed by literature. There are certain things that cannot be adequately explained by words or pictures.” Fred Schwed Jr, Where Are the Customer’s Yachts?.
But I’m the next Warren Buffet!Let’s say you have $100,000 to invest in the market
You spend 6 hours a week studying the markets to gain an edge
You end up beating the market by 1%, earning $1000
You’ve spent 312 hours to earn an additional $1000 ($3.20 per hour)
If an Uber driver earns $20 per hour, you’d have to beat the market by more than 6% before trading becomes more profitable than driving Ubers
Don’t I need to start investing at a young age?You are already investing 9.5% of your income
What should you do?
Keep fees low Don’t be shy Get back to work
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Lifestyle
Common Lifestyle Mistakes
Marrying the wrong person Lifestyle creep
Borrowing money unwiselySpending money frivolously
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TESLA MODEL X
The dream can be a reality!
Cost of my dream car11 yrs of renting
@ 350pw
4 MBAs at Sydney University
Deposit on a $1m house
2/3 of a child
57 French Bulldogs
100 Return Flights to London
4 Weddings
Cost of a $50,000 car
1 MBA at Sydney University
1 Wedding
2.7 yrs of renting @
350pw
1/6 of a child
14 French Bulldogs
¼ of a deposit on a $1m house
25 Return Flights to London
You need to have clear priorities
Buying a home
Having a meaningful career
Starting a family
Travelling
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GOALSETTING
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Kicking Goals
It’s always a great time for change, but… only
8% of people actually achieve what they set out to
achieve
One of the most common resolutions in 2019 was to
SAVE MONEY
Two ways to increase the likelihood of achieving what you set out to achieve:
1. Increase motivation OR2. Make change easier Image: CollegeHumor
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Goal Setting
Harvard University study found that 3% of its MBAs make 10x as much as the other 97%
combined due to having clear, written goals and plans to accomplish them
Set a Financial Date Night! Where do you see yourself in 2y, 5y, 10y? What financial commitments do you have during
this period? What fun are you going to have along the way?
(Source: from the book What They Don’t Teach You in the Harvard Business School, by Mark McCormack)
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SMART Goal Setting
Goal Goal Amount Time Horizon Priority
Call bank and ensure home loan is competitive
Reduction in rate NOW 2
New car $30,000 1 year 4
Protect income Income insured NOW 3
A month long European holiday
$20,000 1 year 6
Build an investment portfolio
$10,000 p.a. 3 years 5
Save up for house deposit
$80,000 2 year 1
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Record your Goals
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Making it!These are the goals related to what you want to achieve during your career.
Inspiration:1. Further develop my network2. Negotiate a pay increase – is my salary
market rate?3. Be mentored by a senior
employee/friend/family member4. Study to further my career
Making it! – Career Moves• Ask for a pay rise – worst they can say is no. Ladies – this includes you too!
“Men are four times more likely than women to ask for a raise—and when women do ask, we typically request 30% less than men do”
Linda Babcock – Carnegie Mellon University Economics Professor
Turnover costs employers approx. $15,000 per worker.
• Talk to your boss/mentor about career progression. If your job doesn’t allow for this, then look at a job change.
• Self study and upskilling never hurts.
• Keep work work working
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Making it! - Lifestyle
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Making it! - Lifestyle
In order to be the best at work, you’ve got to look after yourself!Despite it being a buzzword, wellbeing is important.
‘Millennial Burnout’ occurs due to prolonged stress and causes emotional and physical exhaustion.
Try: Meditation and/or switching off including from work emails and socials Group exercise get a work out and socialize at the same time! Stop comparing yourself against others! Constant self-judgement doesn’t help you. Don’t worry about food trends just eat nutritious meals that work for you
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Spending it!
Try the MoneySmart Budget to work out your inflows and outflows.
The high tech can try MoneyBrilliant!
These are the goals related to you managing your money and cashflow
Inspiration:
1. Create a personal budget
2. Save up $80,000 for a house deposit by 2023
3. Pay off $10,000 debt by June 2020 and $20,000 by Christmas 2020
4. Become debt free
Spending it – cashflow & budgeting
Repeat the process of writing a budget every 3-6 months to ensure accuracy
Generate emergency savings
Surplus cash flow is key!
60/20/20 Rule of Thumb:
60% Necessary Expenses (Mortgage, Groceries, Transport, Insurance)
20% Wants (Eating Out, Entertainment – the fun stuff)
20% Future Spending (Saving for goals and retirement)
Automate savings!
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Spending it – practical tips
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Cook at home you don’t need to ‘brunch’ every weekend
Have a coffee at the office
Do you need all those monthly subscriptions?
Wait 24 hours before making a purchase – this will
reduce ‘impulse’ spending
Buy Now Pay Later can be useful but be careful!
Spending it – paying down debt Deductible debt vs non-deductible debt
Pay down non-deductible debt first – think credit cards,personal loans, home mortgage
Credit card debt is bad!
Pay it off monthly
If you can’t, cut it up and cut back on non essentials until it isrepaid
Consolidate/rollover under reduced/no interest period offers?
Consider consolidating your non-deductible debts
Don’t’ pay the lazy tax! If your home mortgage variable interest rateis over 3.25%, you’re paying too much
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Avalanche = pay off highest interest debt
first (most cost effective)
Snowball = pay off smallest debt first
(most motivational)
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Avalanche vs Snowball
Small
Debt
Medium Debt
Large Debt
START HEREDEBT SNOWBALL
START HEREDEBT AVALANCHE
EASIER & SLOWER
HARDER & QUICKER
Spending it – paying down debt
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Living it!
These are the goals related to spending your money on the things in life that you enjoy.
Inspiration:1. Go on a month-long European holiday2. Do a photography course3. Sign up to the Gym and go regularly
Living it– Be mindful
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Think carefully about your spending.Impulse buying can be an emotional relief – it’s not called retail therapy for nothing.
Forgive yourself for splurging.Remember the 60/20/20 rule.
Avocado on toast once a fortnight won’t break the bank.
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Making it Last!
These are the goals related to preserving your hard earned money
Inspiration:
1. Build a sound investment strategy and portfolio
2. Create a financial roadmap
3. Contribute more into my superannuation
Automate your investment plan
Consider micro savings/investments apps
Divert a percentage of bonus/salary increases – easier
to save what you don’t already earn
Look at your super! It’s your money for retirement…
make sure it’s invested that way
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Making it Last – Investing
$29K IN $33K OUT
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Making it Last – Investing in Property
Upfront Costs ($170,000)
20% deposit = $140,000
Stamp Duty = $27,000
Legal and other costs = $3,000 $80 per week
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Protecting it!These are the goals related to protecting your money and family from the unexpected.
Inspiration:1. Have enough insurance2. Minimise tax
Do you have Income Protection Insurance?
Do you have adequate Health Insurance?
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Transferring It!These are the goals related to transferring your money to your loved ones or your community.
Inspiration:1. Get my Estate Planning sorted2. Help children or grandchildren to buy a house3. Donate to a charity
Final thoughts…
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What will you do TODAY to enact some positive change to yourfinancial world?
How will you ‘not be stupid’?
What career, lifestyle and investing mistakes will you try to avoid?
What goals will you put in place? How will you measure these goals?
How will you alter your saving and spending strategies?
How will you look after your wellbeing?
How will you keep yourself accountable?
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