Five ways to make finances match fit
LIFE is all about footy for some Aussies, and lessons learned on the field can be applied elsewhere – especially in finance.
Former Sydney Swan Ted Richards – now director of business development for robo-investment service Six Park – says football taught him five money lessons.
1 STRATEGY
“A good team formulates their game plan with a brand of football that suits their playing style and then they stick with it,” Mr Richards said. “Investing is no different. Investors need to have their own investment strategy and stick with it.”
2 BEHAVIOURAL BIAS
“You probably go into games thinking your team (is) better than they are,” he said.
“As an investor, you probably think your investments are worth more than they really are.”
Mr Richards said fans and investors also get caught up in recent performances of their team, or assets, which can cloud their long-term view.
3 EXPERTS GET IT WRONG
“Having more experience at football doesn’t necessarily make you better at tipping winners,” he said.
“In the same way, most active fund managers actually underperform their benchmark (after) fees.”
4 DEFENCE IS KING
“Premierships are usually won by the best defensive teams,” Mr Richards said.
“In investing, the best portfolios have a strong defensive element.”
5 DIVERSIFY
“You shouldn’t go into the season with just one ruckman, key forward or defender,” he said.
“A well-diversified investment portfolio is spread across asset classes, countries and industries. It should include exposure to growth assets like shares, but also the resilience to handle different economic conditions.”
Omniwealth financial planner Andrew Zbik believes Australians need to get their plans together early to be secure in retirement.
“Don’t follow in the footsteps of your parents because a lot has changed … start planning for your financial future now,” he said.
“In my opinion, a couple living in Australia needs around $85,000 per annum to live a comfortable retirement.”
“It is a prudent investment to sit down with a financial planner who knows how to properly construct shortterm, medium-term and longterm retirement goals.”