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Future Financial Services Blog

by Alex McKenzie

Financial planning advice to guide you through your life stages. Financial advice for when you are looking to buy your first home, start a family or looking to retire. This blog aims to show the relevance of Superannuation, insurance and investment for everyday families.

13
November
2018

Cautiousness with Super

The Risk of Being Too Cautious with Superannuation

When people think about risk in relation to investments, they usually think about their money falling in value, this is only one risk. Another risk is opportunity cost, which is the risk of missing out on potential growth. Given the long-term nature of superannuation, this is an area where opportunity cost can really hurt us.

By far the biggest determinant in your investment performance is your exposure to growth and defensive assets. The more growth assets you invest in (shares and property), the higher the long-term returns. However, this also comes with higher volatility in the value of the investments. Conversely, more exposure to defensive assets will result in both lower volatility and lower returns.

Written by: Alex McKenzie Categories: Future Financial Services Blog

13
November
2018

Price & Value

The difference between price and value

When developing a spending plan (or budget), an easy trap to fall into is focusing on the cost of something as opposed to the value. Quite simply, just because something is cheap, doesn’t mean purchasing it is OK and, conversely, not all high cost expenses should be avoided.

My golden rule with developing a spending plan is that money spent on things important to you is, in general, money well spent. It is actually likely that the things that add most value to you are also going to be more expensive.

Written by: Alex McKenzie Categories: Future Financial Services Blog

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