Welcome to the Money Maven's Financial Blog

Money Maven Blog by Sheryl Sutherland, Authorised Financial Adviser and Director of The Financial Strategies Group

Recommended Reading

Recommended Reading by Sheryl Sutherland: Girls Just Want to Have Fund$ - Every Women’s Guide to Financial Independence, Money, Money, Money Ain't it Funny - How to Wire your Brain for Wealth, and Smart Money - How to structure your New Zealand business or investments and pay less tax.

The Financial Strategies Group

We think for ourselves and make unique recommendations. We only recommend investments and insurances that are in the best interest of our clients.

The Financial Strategies Group

Most of us spend 40 years working to secure our financial future; the most important investment you can make is to purchase appropriate financial planning advice.

Contact us for a review of your investments and insurances.

Begin to experience the serenity that accompanies financial responsibility and integrity: email sheryl@strategies.co.nz, call 0800 64MONEY or visit our website http://www.strategies.co.nz

Monday, 18 May 2015

Everyday Money

Being in debt can be a stressful experience.

1.    Make a conscious decision to stop borrowing money
If you want to get out of debt fast, you have to stop using debt to fund your lifestyle. This means no more financing furniture, no more signing up for credit cards.

2.    Establish a starter Emergency Fund of $1000
You might be wondering, ‘Why is having an emergency fund important’? Well, if you don’t have any money in the bank and an emergency does happen, how are you going to pay for it?

3.    Create a realistic budget and stick to it
Developing a budget that tracks your income and your expenses is crucial to getting out of debt in a short period of time. The first way is to earn some extra cash. 
The second thing that you can do is trim your expenses.

4.    Organise your debt
This is paramount to mapping out a plan to pay off your debt. There are two approaches that are worth considering.  The first is where you list your debts smallest to largest regardless of the interest rate.

The other method is called laddering. This is where you list your debts, starting with the highest interest rate first and end with the debt with the lowest interest rate. This method makes the most mathematical sense, because you will save the most money in interest over time.  Regardless of which process you choose, the key is to stick with it.

5.    Throw any excess cash at your debt

Some good examples would be a tax refund, selling a car, an inheritance, winning a bet, etc. The more cash you can put towards your debt, the faster it will disappear.
Debt doesn’t have to be forever. Develop your financial game plan and start your journey toward being debt-free today.

Source: Clark Howard

Musings & Amusings

What Do Millionaires Know That We Don’t?

5 Surprising Facts About Millionaires

Most Millionaires Don't Feel Rich

When Spectrem researchers asked people with a net worth between $1 million and $5 million to put themselves on a sliding scale ranging from 0 (poor) to 100 (wealthy), the average response was 63.91 — or just above the middle. In reality, those with at least $1 million are wealthier than about 92 percent of American households.

Hard Work and Education Are Keys to Success

When asked how their wealth was created, a whopping 94 percent of millionaires surveyed by Spectrem credited hard work. The number two factor? Education, cited by 87 percent. That ranked it ahead of smart investing (83 percent), frugality (78 percent) and risk-taking (60 percent).

They Get Help From Experts

Millionaires typically don't see themselves as experts in investing. Only one in five considered themselves very knowledgeable. Another one in five admitted they weren't knowledgeable, while the majority — 60 percent — said they were fairly knowledgeable but still had a lot to learn.

Only one in four millionaires Spectrem surveyed said they were self-directed investors with no assistance from advisors. The other three-quarters said they were either "advisor assisted" (26 percent), "advisor dependent" (14 percent) or "event driven" (32 percent), meaning they hired financial advisors to help them deal with specific events in their lives such as impending retirement or divorce.

They’re Hands-on With Their Money

Even though most hire help, the majority remain hands-on with their money, Spectrem found. And the more money they have, the more involved they want to be.

The Wealthiest Households Enjoy Saving More Than Spending

Seven out of 10 of the wealthiest households — those with a net worth above $25 million — said that saving and investing their money gave them greater satisfaction than spending it.

 Source: Dailyworth



Who's Counting?

1. "Set out to make a ton of money, and feel perfectly OK about doing that." - Cindy Gallop
2. "Negotiate. Accepting the first offer they make puts you in a weak position from the beginning." - Kate Gardiner
3. "1. Watch the episode of Sex and the City in which Carrie faces the reality of her finances. 2. Repent." - Ruth Ann Harnisch
4. "Budgets help you claim back your power." - Chrysula Winegar
5. " Don't hoard revenue." - Susan McPherson
6. "Save 10 percent - always." - Carrie Hammer
7. "Using pre-tax dollars can save you thousands of dollars a year." - Allyson Downey * Think KiwiSaver
8. "If you wouldn't buy it at full price, don't buy it just because it's on sale." - Tory Johnson
9. "Set up an automatic transfer to a savings account NOT connected to your everyday bank." - Ali Brown
10. "Don't invest in or buy things or jump on the financial bandwagon that doesn't make sense to you at its core." - Danielle Gelber
11. "Live beneath your means. If you know you can live without a paycheck for six months, your options open up immensely." - Adrian Granzella Larssen
12. "You're responsible for your own life, economically and in every way. Never depend on anyone else." - Leslie Bennetts


Is This Where You Thought You’d Be? Take the 10-Year Test

So much of what we’re fed (be it in the self-help, career or otherwise success-oriented literature) tells us to fixate on the future: Set goals, draw up vision boards; picture yourself five, 10, 20 years from now. In other words, keep your eye on the horizon. There’s an optimism to that, and a danger, too — the temptation to assume that things will be better “when,” or simply better then; that all of life is designed to sweep infinitely upward, with more and more to come if we can just manifest it.

Look around — at your job, your home, your handbag. What do you do all day, and do you like it? What do you carry around with you and do you need it? What’s in your fridge, your bathroom cabinet, your bank account? Chances are, you may be worth more (perhaps quite a bit more) than you were ten years ago. But weighing the money against your mood, what is it worth, and what is it costing you?  

Look at your body: How has it changed, grown, worsened, improved? How would you describe it if it belonged to someone else (in fact, I bet you’d be a lot kinder). What do you love or admire about it? 

What about the people in your life. Who are they — and can you say that you’re glad they’re there? If you’re partnered, is this the kind of person you wanted to be with back then, and if not, why are you with that person now?

And now the big question: Is the person you are now the one you hoped you would be? 

I’m all for goal-setting, for thinking, dreaming and envisioning a fantabulous future. Keeping the twin engines of hope and ambition running is what gets me out of bed in the morning. But rather than try to just get ahead of or better than you are now, you’d be wise to stop every so often and check yourself against what a younger you would think. 

Here’s why: You owe it to her. The younger you had big plans and dreams, and quite frankly worked her butt off to get you to where you are now. With your 20/20 hindsight, it’s easy to look back and see how everything fell into place — but she didn’t know that! She had to do it blindly, with no idea how it’d turn out. You may think she owes you a debt of gratitude, but in fact, you owe her.

Source: Dailyworth


Finance & Investments

Understanding Behavioral Aspects of Financial Planning and Investing

People often view financial planning and investing as overwhelming, intimidating, and scary, especially if they must tackle these tasks on their own. They are fearful of making costly mistakes that could influence both their present and future financial well-being. Their trepidation often stems from a lack of background, education, or experience to help them adequately cope with the financial side of living. In reality, the world of financial planning and investing can be highly complex and difficult. What should investors do?
Investors sometimes find themselves in a similar position as Alice in Lewis Carroll’s Alice’s Adventures in Wonderland who, when coming to a fork in the road, asks the Cheshire Cat:
Alice: “Would you tell me, please, which way I ought to go from here?”
Cat: “That depends a good deal on where you want to get to.”
Alice: “I don’t much care where.”
Cat: “Then it doesn’t matter which way you go.”
Unlike Alice, investors should make decisions based on their goals and then determine the appropriate path to get there.

A large part of investing involves investor behavior. Emotional processes, mental mistakes, and individual personality traits complicate investment decisions.

Investors often allow the greed and fear of others to affect their decisions and react with blind emotion instead of calculated reason. In fact, emotions can help explain asset pricing bubbles and related market behavior. According to the old investment adage, investors can make money as a bull or a bear but not as a pig. In short, investors need to understand the psychology of financial planning and investing. Investor behavior often deviates from logic and reason.

Read more about this in Money, Money, Money Ain't it Funny.

Source: Journal of Financial Planning


In a remarkable shift from even a decade ago, the majority of working wives will out-earn their husbands in the next generation. In the majority of U.S. metro areas, single women with no children in their 20s outearned their male peers. In Dallas, for example, a 20-something woman makes $1.18 to a man's $1. 

Women dominate today’s colleges and professional schools--for every two men who will receive a B.A. this year, three women will do the same. Of the 15 job categories projected to grow the most in the next decade in the U.S., all but two are occupied primarily by women.  

One of the new female-oriented personal finance sites, reported that 90 percent of its readers said they were their families' chief financial officer--but two-thirds of them lamented that their planning and investing skills were below average. "Research has shown that women, even professional women with good jobs and successful careers, tend to be less financially literate than men.

Women tend to take fewer risks (a good thing for long-view investing), wait until a life-altering event to start saving (like having kids or going through a divorce), and have a greater preference to learn about money in person or in a group than a book, according to experts and studies cited in The New York Times. Others point out that women have unique challenges when it comes to financial planning: They have longer life spans, they earn less overall, and they tend to step out of the workforce to care for children and aging parents. 

Read more about this in Girls Just Want to Have Funds$.

Source: Huffington Post