As we near the end of a tumultuous year in financial markets, I thought it would be an opportune time to look ahead, rather than spend too much time looking in the rear-view mirror.
I don’t have a crystal ball, but what I do know is that unless you have a deliberate plan, you will get swept up in a rollercoaster of emotions, which will in turn lead to procrastination or even worse, bad and costly decisions.
So, what are some of the things you can and should be focusing on in the 12 months ahead?
1) Focus on debt repayment
With interest rates as high as they are, and likely to go higher still, repaying non-deductible (i.e. home loan) debt offers an attractive and risk-free rate of return.
Talk to your bank or broker to get the sharpest rate, as many banks are overcharging and one phone call or email can save you thousands of dollars in interest per year.
I recently did this for myself and a few clients, and every single time the bank obliged with a significant rate reduction.
Make sure you make the most of your offset facility and obviously every extra dollar you make in repayments, will lead to further savings.
2) Cash flow is king
The rising cost of living and interest rates, has put pressure on many household budgets, even for high income earners like doctors and dentists. For the first time in a long time, you might have to start making active spending decisions.
Expensive non-essential spending on lifestyle items such as cars and holidays might need to be curtailed or deferred, and now is a great time to reassess your financial priorities.
You could simply have a look at your credit card statements and highlight essential and nice-to-have expenses, and then start to cull some costs on that basis. I’m sure you will find a lot of ‘fat’ in your cash flow that can be redirected elsewhere.
3) Don’t be afraid to invest
While the share market falls might put you off from investing, arguably it is better to buy when the share market is low, as opposed to when it is booming. This is not to say that there won’t be any further falls, but investing smaller amounts at regular timeframes can help you smooth out market fluctuations.
It’s a good time to reflect on whether you are still on track with your retirement savings, and make any adjustments where needed.
If you need/want any help implementing these strategies, or have any other questions or issues you would like to discuss, please feel free to reach out directly on 0432 885 295 or Yves@affluenceprivate.com.au
I have some capacity to take on new medical clients in 2023, and I would be happy to offer a free initial consultation.
All the best for the Holiday season and 2023!
Yves
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