You may have noticed that we tend to do things a little differently at Bounce Financial. The whole reason we started this business is we wanted to bring financial advice to people like us. People who believed that a financial plan shouldn’t be the goal but should be used to create the lifestyle you want.

Every day we have amazing conversations with our clients about their hopes, their dreams, their fears and their goals. Sometimes we talk about superannuation, investing and insurance but only so far as it relates to achieving the lifestyle they want. One thing we talk about also is our personal investment plan. Whilst many financial planning firms would never reveal their personal investment strategies, we think it’s important that our clients understand that we believe what we say and follow the same strategies. We aren’t rich by any stretch of the imagination but with good financial planning and a bit of discipline, we are well on the path to becoming comfortable.

One thing that tends to happen when we explain our financial plan is people are surprised by its simplicity. Everyone expects that we would have a SMSF with negative geared property holding high risk investments in emerging markets. Instead what they see is a simple plan executed with discipline over a long period of time. In short, our investment philosophy is to KISS (Keep it simple, stupid).

So what is it? Well it starts with my wife and I formulating a plan about how much we want to spend each year. We sit down and do up a budget for all of our expenses and we include in it the fun things we want to do. Now being business owners, our income can be a little variable so we plan around that. Once we have identified how much we want to spend, we do some modelling. Does this fit our goals both short term and long term? Does this suit what we want to achieve in life? Sometimes we find we can either plan to underspend in the year or overspend. Both affects our goals for the future. Once we have found a spending level we are comfortable with, we direct our excess incomes towards our other goals.

For our very short term goals (for example, getting a new car), we might put some aside in a bank account. We have goals around our homeloan and have money in an offset account for that. We have goals that are longer term but pre retirement and for that we have a diversified investment portfolio. Finally, we have goals around retirement and regularly review how much money we are putting into superannuation with a view to reducing tax payable. It may seem simple on the surface but the underlying mechanisms mean that we have thought about all the things we want to do and have made informed decisions about how much we want to save compared with how much we want to spend.

We then repeat this every year and sometimes even more often. Why? Because life doesn’t stay the same. You don’t set goals one day and stick to them for the rest of your life. Things change. Suddenly a bigger holiday becomes more important or you decide you want to study again. Life is fluid and your financial plan should be ready to respond to it.

We truly believe a good investment strategy doesn’t need to be complex, but it does need to take into account your personal circumstances. So don’t assume because somebody has complex investments that they have it all figured out. In fact, those who have put the most thought into their investments usually agree it’s important to keep it simple, stupid.

As always, please get in touch if you have any questions.

This post is from our resident Financial Planner Ben Brett, check out his details in the About Us section.

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Posted in: Ben BrettFinancial Planning, Investments

About the author: Ben Brett

Ben Brett owns and operates Bounce Financial with his wife, Cara. Having started his career as a Corporate Lawyer, Ben has always had a passion for helping make the complex things simple. Follow Ben on Instagram @benbrett14 or on LinkedIn at www.linkedin.com/in/ben-brett/