DO YOU HAVE RIGHT AMOUNT OF MONEY BUT JUST DON'T KNOW IT YET?
September 13, 2022
There are many people in Australia aged 45+ who have the right amount of money to live the life they want, but they just don't know it yet. You could be one of them.
If you don't know what your financial future looks like, then you may be missing out. This may mean:
- You work longer than you need to, even though you wanted to retire 5 years ago or at least reduce your working hours.
- You take more investment risk than what is necessary.
- You spend on lifestyle items and then feel guilty about it.
- Or you cut back and go without.
- You don't live your life to the full.
This is not a way to live, but many people do so because no one has ever shown them any different. I come across these people all the time, especially those who are wanting to retire however are too afraid to do so due to lack of financial security.
Via a Lifestyle financial planning approach, Luminosity Wealth can show you what your financial future looks like and outline the steps you need to take to secure your future, so you know you're going to be ok, that you can relax, and you can enjoy your lifestyle without worry.
Doing so may help you stop worrying when you use to worry. It may give you more freedom when you thought you had none, and most importantly, give you more life.
Remember,
Life is not a Rehearsal.
Did you know share market falls happen as often as your birthday? During any calendar year, the share market will fall -16% on average at some point during the year (see 2025 where the US share market fell by -19% during the year, however still ended the year up +16.4%). Around 80% of calendar years result in a positive return. Our friends at Humans Under Management outline this in the chart above, showing inter-year falls and the total return for any given year. At times of investment market volatility, this time due to the conflict in the Middle East, it's important you're making the right decisions with your investment approach. If we use history as our guide (it’s the only guide we have), there are no factual details about the future until it happens. The share market, which is a collection of real businesses controlled by adaptable humans, has historically proven able to overcome every event it has encountered. "The first rule of compounding: Never interrupt it unnecessarily" - Charlie Munger The share market has historically fallen frequently (refer to the chart above), and occasionally in an extreme manner. But we believe these declines are a feature, not a bug, of the share market. Rather than trying to avoid these declines, we believe staying invested to participate in the share market's long-term growth is more important for long-term investors. As such, remaining invested is usually always the best approach. Some counterintuitive thoughts to consider as you wait for clarity on how the current crisis will unfold: A declining share market is good news for regular buyers of investment units (these are your superannuation guarantee contributions, personal super contributions, regular investments into your investment accounts, dividend reinvestment plans). During these periods, you’re buying cheaper units, and historically, these periods have tended not to last for long. We encourage you not to look at your portfolios during this turbulence, after all, you know what you’ll see. The less you look, the better you’ll feel and ultimately perform. Think long term; depending on your age, your 20 - 30 year investment horizon should not be derailed (in any way) by the last 4 weeks of news. If your portfolio has been constructed correctly, your incredible, diversified portfolios have given thought to periods of uncertainty. If you wish to discuss your investment approach and if it's aligned to your needs and future goals, feel free to reach out. Getting the sufficient return required for your situation is a more precise approach than maximising investment returns. Compliance disclaimers: “The value of investments and any income from them can fall as well as rise. You may not get back the full amount invested. Past performance should be used as a guide only and is not a guarantee of future performance.”
This story from from a client will make you cringe. Robert, 62, recently divorced. After the settlement, Robert had around $850,000 in superannuation and investments. Felt "behind" because he'd lost half his wealth in the divorce. His plan? Work until 70 to "catch up." Maybe longer. Robert was stressed, exhausted, and convinced he'd never have enough money. The divorce had shaken his confidence completely. We then calculated how much money he needed to fund his future desired lifestyle. The result? Robert could retire immediately. His $850,000 was actually more than enough for his lifestyle - especially since he was no longer supporting his ex-wife's expensive tastes. Robert almost wasted 8 years of his life working unnecessarily because he was making decisions based on fear, not facts. He's not alone. We see this constantly - successful people making life-changing decisions without knowing their actual numbers: Working longer than necessary (like Robert almost did). Taking excessive investment risks because they think they're "behind". Saying no to family experiences they could easily afford. Living stressed when they could be living confidently. The tragedy? Most of these people already have enough money. They just don't know it. That's exactly what Chapter 12 of the Enough book calls "The Just Rights" - people who have the right amount but are living like they're broke. Don't be Robert. Don't waste years of your life on wrong assumptions. Know how much money you need for the rest of your life and retirement. Find out where you stand financially, what financial future awaits, and the steps you need to take to secure it. Grab your free copy of the Enough book here to get yourself started on the right path
How much money is enough? (and how do I get it?) No doubt that question has floated through your mind at some point. For those people aged 45+, your brain probably sends you constant reminders of this as you're now starting to realise that time is running out and you need to start planning for the future. So if you feel like this, you're not alone. The reality is we all need to know how much money is enough - how much we need to fund and support our life going forward. For people with a big lifestyle, you need a big number. For those with a small lifestyle, that number is smaller. Whatever number you need (it is $1 million, $3 million, more or less?), the first step to achieving it is knowing your number. Secondly, it about planning to get it. This is where Luminosity Wealth helps you. We help you understand how much money you need based on the lifestyle you want for the future. We then outline the steps you need to take to achieve it. The end result - living the life you want without fear of ever running out of money, no matter what happens. It's why we have many clients who are living life, retiring earlier, with more freedom, more time, more choice whilst maintaining continuous clarity around their financial future. Stop hoping and start planning. Life is not a Rehearsal remember!
