What is cash flow management?

Cash management refers to the process of managing an individual’s cash flow to optimise the income received. It involves various activities such as tracking income and expenses, budgeting, saving, and investing.

Understanding and managing your cash flow is a core component of any financial plan. As the saying goes, “Watch the pennies, and the dollars will take care of themselves!” We will help you achieve this.

Our process

The first step is for us to understand your current financial situation, as well as your future goals and objectives. Once this has been achieved, we can then use various tools and techniques to look at your situation and provide recommendations. These may include creating a budget, setting realistic financial goals, tracking expenses, saving money, minimising your tax liability, establishing an investment strategy, and debt management.

Outcome

At W2 Wealth, we believe that effective personal cash management is one of the most critical areas of a financial plan. Good cash flow management will allow individuals to achieve their financial goals, such as saving for retirement, paying off debt, or making a major purchase. It also helps individuals to avoid financial difficulties, such as overspending, falling into debt, or failing to meet financial obligations.

The word ‘budget’ need not be scary. One the most understated ways to create wealth is also the simplest – spend less than you earn.

What is debt management?

Debt management is the process of managing debt in such a way that an individual can reduce their debt burden and improve their overall financial stability. Taking control of your finances is critical to your long-term financial health.

Whether you are borrowing to buy a home or to invest, there should always be a plan to repay the debt. We will help you plan, establish and manage debt strategies.

Our process

The first step to assess your current debt situation. We will help you by making a list of all your debts, including the amount owed, interest rates, and minimum monthly payments. We can then get a clear understanding of your debt load and prioritise the components of your strategy.

The next step involves creating a budget that will help you manage your debt. A budget is a plan that outlines your income and expenses and helps you allocate your money to meet your financial goals. We start by identifying your monthly income and then subtract your essential expenses like housing, utilities, groceries, and transportation. Once these expenses are covered, we then allocate the rest of your income towards paying off the debt.

We may also look at other strategies such as debt consolidation*, additional regular or lump sum payments or even the sale of assets.

Outcome

To achieve your goals, debt management might mean cutting back on discretionary expenses like dining out or entertainment. It may be as simple as better understanding your budget and cash flows and having a debt management plan in place. Either way, actively managing or eliminating your debt, will put you in a much stronger financial position.

*To facilitate debt consolidation, you may need to receive credit advice. W2 Wealth does not provide this type of advice. However, we can work with you and an accredited mortgage broker.

What is superannuation?

Superannuation, also known as a pension or retirement savings, is a system where individuals contribute a portion of their income throughout their working lives to a fund. This can then be accessed upon retirement. The single aim of superannuation is to provide an individual with a source of income in retirement that supplements any government-provided pension or other retirement benefits.

Our process

The first step is for us to understand where your superannuation balances are currently held, how the funds are invested, their tax effectiveness and the costs involved. We can then provide advice on whether your current superannuation fund is appropriate or provide alternative options as required.

The next step involves reviewing how superannuation may fit in with your wider financial plan. We will consider additional contributions, whether before or after tax. We may also look at how your superannuation may be used to help provide certain forms of personal risk insurance and how it fits in with your wider estate plan.

Outcome

Superannuation may be complex, but it should still be considered as a potential cornerstone for any financial plan. We can explain the rules and help you implement and manage personalised strategies.

What is wealth protection?

Aside from building wealth, you also need to protect it. This is where personal risk insurance plays a key role. You may need to consider several forms of insurance: income protection, trauma, total and permanent disability (TPD), and death cover.

Our process

Initially, we will help you understand the policy types available, the levels of cover required and any trade-off or potential issues (such as previous medical history), that will need to be managed.

Next, we will research the various insurers to find the highest quality of cover for the most reasonable cost. It may be that our proposal includes several providers. We will also consider the most appropriate ownership of the policy. For example, within or outside of superannuation.

Finally, once we have agreed on the best insurance provider and levels of cover, we will manage the application process for you. We will function as an intermediary with the underwriter and help collect information from third parties such as medical professionals.

Outcome

Personal risk insurance can provide a safety net that can help protect you and your family from financial hardship during challenging times. We believe that it provides an important safety net and should be considered as a risk mitigation tool within any financial plan.

What is estate planning

Estate planning is the process of arranging how an individual’s assets and property will be managed, preserved and distributed during times of incapacity and for death. Typically, required documentation may include: a Will, Testamentary Trust(s), Powers of Attorney, Advanced Care Directives and Superannuation Death Benefit Nominations.

Our process

Initially, we will explain the key documents that should be considered within any comprehensive estate plan. We will then collaborate with you to understand your goals and objectives and review any existing documents that you might have in place.

Next, as part of a wider financial plan, we will provide high level advice on documentation and structures for you to consider. We will link this to your goals and objectives, but also overlay other considerations such as taxation and asset protection.

We are not estate planning solicitors and do not draft legal documents. Therefore, the last part of the process is for us to meet with you and a solicitor to complete the necessary documentation. We will review the drafts with you and help complete the signing process.

Outcome

Estate planning is an area often overlooked by clients. However, it is an important process that can help ensure that a person’s assets are tax-effectively distributed according to their wishes and can help minimise stress and confusion for their loved ones after their passing. It is also vital should an individual be incapacitated due to injury or sickness.

What is retirement planning?

Retirement planning is the process of setting financial goals and creating a strategy to achieve a comfortable and secure retirement. It involves determining how much money you will need during your retirement years, estimating your future expenses, and implementing savings and investment strategies to accumulate the necessary funds.

Our process

Initially, we will assess your current financial situation. This will enable us to understand where you are today and what base you can build upon to reach retirement. We will also be able to identify any gaps or shortfalls between your current situation and where you would like to be.

We will then take some time to better understand your retirement goals. For example, when would you like to retire, what lifestyle would you like to live in retirement and what expenses and expenditure you expect to have to meet? We would identify what your likely outgoings are going to be.

Next, as part of a wider financial plan, we will look at whether your goals are attainable. We would look at retirement savings strategies. This may include cash management, debt management, tax-minimisation and investing. We will also look at social security and pension considerations. Superannuation is a cornerstone of any retirement plan. Focusing on this area can save you tax and really make a difference to how your funds will last during retirement.

Once we have helped you implement your plan, we will then collaborate with you on an ongoing basis to monitor and adjust that plan. This is essential as your circumstances may change, as might taxation and superannuation legislation. You may also need to manage periods of market and investment uncertainty. A retirement plan needs to be tailored to the individual. It should be structured, but fluid.

Outcome

Retirement planning is crucial to ensure financial security and a comfortable retirement. Starting early and consistently saving and investing can help you build a nest egg that will support your desired lifestyle during your retirement years. Our advisers can help you achieve this goal.

What is?

Portfolio management refers to the professional management of a collection of investments, known as a portfolio, on behalf of individuals or institutions. The primary objective of portfolio management is to maximise the returns on investments while managing risk according to the investor’s goals and preferences.

Our process

Our portfolio management service involves several key activities:

Asset allocation: This is the process of determining the optimal mix of different asset classes, such as shares, bonds, cash, and alternative investments, within a portfolio. This allocation is based on factors such as your risk tolerance, time horizon, and investment goals.

Investment selection: Once the asset allocation is determined, we can help you select specific investments within each asset class. This involves researching and analysing individual securities or investment vehicles, considering factors such as financial performance, market trends, and risk characteristics.

Risk management: Our goal is to balance risk and return within a clients portfolio. We employ strategies to mitigate risk, such as diversification, which involves spreading investments across different sectors, industries, and geographic regions to reduce the impact of any single investment’s performance on the overall portfolio.

Performance oversight: Our team provides regular oversight of all investments held on our Approved Product List (APL). We assess the financial performance, market conditions, and other relevant factors to determine if adjustments or rebalancing are necessary.

Rebalancing: Over time, the asset allocation of a portfolio may deviate from the original target due to market fluctuations. Our team periodically rebalance the portfolio by buying or selling investments to bring it back in line with the desired asset allocation.

Reporting and communication: We will provide regular reports to our clients, keeping them informed about the performance of their investments and any changes made to the portfolio. We also communicate with clients to understand their evolving financial goals and adjust the investment strategy accordingly.

Outcome

Our goal is to help you maximise your investment returns whilst managing any related risks. For younger clients accumulating wealth, we will educate you and help keep you on track for your retirement plan. For retirees, we want to try to protect your capital whilst providing a reliable income stream. This can then be used to meet your ongoing living expenses.

What is a deceased estate?

A deceased estate refers to the assets, property, and liabilities left behind by a person who has passed away. It encompasses all the belongings, real estate, investments, bank accounts, and personal possessions that form part of the individual’s estate. Separately, it will also include any superannuation assets.

Managing a deceased estate typically involves tasks such as identifying and valuing assets, settling debts and taxes, and distributing the remaining assets according to the deceased person’s will or applicable laws of inheritance.

Our process

Initially, we can help you find information relating to the assets and liabilities of the estate. This may include identifying superannuation funds and investments held as well as the underlying capital gains tax (CGT), cost bases.

Until the time that they are distributed, we can help the Executors manage any investment portfolios held within the estate. This may also be a suitable time to help educate the Executors and beneficiaries if they are not familiar with the investment assets within the estate. We will also collaborate with your solicitor and accountant to help work out the most tax effective way to manage and distribute the estate. Often, we also provide the beneficiaries of the estate with appropriate and personalised advice to ensure that they maximise the benefits of receiving their inheritance.

Outcome

Managing, distributing and receiving a deceased estate can be an emotional, complex and time-consuming process. Our role is to support the Executors and beneficiaries and to provide ease of management. We believe that this provides better final outcomes both in terms of tax minimisation, overall efficiency and enhancing the assets received by the beneficiaries.