My parents are visiting after returning via Brisbane from a recent trip. While chatting over Mother's Day brunch yesterday, my mum reminded me of a saying her grandfather passed on to her during her upbringing - "Look after the pence and the pounds will look after themselves."
I could not help thinking that this is similar to the philosophy we use when talking through financial strategies with clients. Get what some might say are the "smaller" issues right and the larger issue - i.e. a successful financial outcome will look after itself.
So what are these "smaller" issues?
Firstly the importance of spending less than you earn - if you don't have any surplus money you will have nothing to invest. (including putting funds towards the mortgage or saving for a deposit)
Secondly, making sure you are not paying too much tax - just what you are legally required to contribute.
Thirdly, making sure you are keeping the fees and costs of investing to a minimum. We see this as a bit of a sleeping giant slug that sits in portfolios and sucks away the benefits from investments.
If clients can get these strategy, or "Pence", issues structured right, the "Pounds", will follow. (Another way of looking at this is that decisions about investments should be the last, not the first considerations for clients when setting in place plans for future or ongoing financial independence.)
Mums can be relied on to provide that special bit of wisdom - so thanks to all the mums who read our blog and hoping you all had a great Mother's Day. Have a great week and watch this space for a personal finance summary of the Federal Budget on Tuesday night - there should be some interesting points of interest.