Managing your Debt and Cashflow

Your loans often occupy most of your financial world, and invariably are the hungriest part of the budget.

We help you get the right mix in terms of loan structures, the right interest rate and the key features and benefits that help you manage your loans well.

It’s common sense that if you have more money going out than you do coming in, that you are going to struggle to stay on top of your finances.

We need to understand this in order to give you solid advice and build a long-term wealth creation strategy.

A crucial part of this is the understanding of your current situation.

Our cashflow and budgeting tool, which is powered by cutting edge technology, helps you and us understand exactly where your money is going.

It gives you:

• One complete and single view of your financial information, in one place
• It enables us to answer questions such as what surplus you have?
• What can you afford to invest and where that surplus has been going?
• Better still, we can link your agreed financial goals, so you can see how you
• Are tracking to plan ongoing
• By focusing on the flow of money we can help ensure you have the right banking and lending structures that promote positive spending habits, reduce interest payments, and allow you to take control of where your money is going.

Short of Money? Don’t blame your pay cheque

A few years ago two economics professors, Steven Venti of Dartmouth and David Wise of Harvard University, studied the issue of income versus wealth for the national bureau of economic research, using social-security lifetime earnings and net-income assessments for 3,992 households whose heads were near retirement age.

What they found was that:

• There is a huge variation in wealth at every income level. Many low-income families have almost nothing. But the same is true of many high-income families.
• Income alone does not explain wealth discrepancies. Some of the lowest earning households had managed to accumulate significant wealth. In fact, income differences explained as little as 5% of wealth dispersion.
• What the researchers called ‘chance events’ ie. Inheritances, unexpected expenses, marital status, number of children – all accounted for only 4% of wealth dispersion.
• Investment choices explained about 7% of the variations.
• In other words, the vast majority of the differences in wealth had nothing to do with income, chance events or investment choices.
• According to Venti and Wise the major determinant of wealth creation was simply based on how much individuals chose to save.

Those who made it a priority to save built wealth, regardless of their income level, individual circumstances, or choice of investment.

And while life can be unfair and sometimes deals devastating blows, it would seem that the people who survive and thrive tend to be the ones who have a plan and stick to it.

Business Day, December 1, 2006
Research reference: Choice, Chance and Wealth Dispersion at Retirement, U.S. National
Bureau of Economic Research, 2001.