Here’s how much you need to save each month to send your kids to private school

Earlier this year, The Australian published an eye opening article, which outlined the cost of sending your children to private school. The article goes on to talk about how much private school fees have jumped over the past decade, and that schools need to justify fee increases on the back of a slowing economy and sluggish wage growth.

Here’s the state of play:

Private school fees

It’s all too easy to look back and grumble at what has happened, and frown upon the so called ‘elitist’ education system. As long as consumers can see the value in a service, no matter what the service is, consumers will pay the price. Someone once told me, “price is an issue in the absence of value,” and I think this is true.

According to ASG, the largest provider of education scholarships in Australia, the cost of sending your child to private secondary school is approximately $395,406.

Like most things in life, whether it’s the purchase of a new home, an investment property, a new car, that big holiday, without planning for, and putting in place a savings program (in advance), it can be very expensive! These big ticket items become a lot easier to not only purchase/acquire, but also manage when you’ve got a strategy, a plan – your game plan.

During a conversation with a client today, he described to me how comfortable his retired parents were, and that they no loner have to worry about money every again. He went on to say that the only reason they were able to live their life this way, is because they had been planning and managing their lives and finances prudently for a long time. Let’s image they hadn’t planned or managed their affairs at all over the years. The probability of them living the lifestyle they live now, is probably quite low.

If you’re serious about planning for you future, and the education of your children is important to you (through private school), here’s how much you need to save each month to have enough money to send your child to private school (secondary education only).

Find the age of your child on the left hand column, and select the rate of return you expect to receive on your investment, and the corresponding number is how much you need to save/invest each month.

If you’re investing in markets like property or stocks, you probably want to refer to rates of return on the far right. If you’re investing in markets like cash or fixed income, you probably want to refer to rates of return on the far left. And for those of you with diversified portfolios, well, somewhere in the middle.

Private school fees

Here’s the key points:

  1. If you want to send your kids to private school, design a plan, and execute it.
  2. The longer you go without investing for it, the more you need to save, or the more risk you need to take, or fund it from cash flow later.
  3. The younger you are, the less you need to save.
  4. Investing in cash for long periods of time doesn’t seem like a good idea over the long-run.
  5. Investing in property and stocks should reward you over the long run, and help reduce the level of monthly savings.

 

Here’s how much you need to save each month to have $1,000,000 at age 65

I’ve had a few people asking me this question lately, so I decided to crunch the numbers and summarise it into a simple matrix for all. I hope it gives you some inspiration.

Find your age on the left hand column, and select the rate of return you expect to receive on your investment, and the corresponding number is how much you need to save/invest each month in order to reach the target amount at age 65.

If you’re investing in markets like property or stocks, you probably want to refer to rates of return on the far right. If you’re investing in markets like cash or fixed income, you probably want to refer to rates of return on the far left. And for those of you with diversified portfolios, well, somewhere in the middle.

Here’s how much you need to save each month to reach $1,000,000 by the time you’re 65

Here’s how much you need to save each month to reach $2,000,000 by the time you’re 65

Here’s how much you need to save each month to reach $3,000,000 by the time you’re 65

Here’s the key points:

  1. If you have a goal, design a plan, and execute it.
  2. The longer you go without investing, the more you need to save, or the more risk you need to take.
  3. The younger you are, the less you need to save.
  4. Investing in cash for long periods of time doesn’t seem like a good idea over the long-run.
  5. Investing in property and stocks should reward you over the long run, and help reduce the level of monthly savings.
  6. Mandatory superannuation contributions are such an easy way to help achieve these goals. For example, if you’re 40 and saving $25,000 pa, with an annual return of 8% pa, you should have about $2,000,000 by the time you’re 65.

5 Ways to Lose a Client

lose client

We recently met a prospective family who sold a business for a small amount of money, enough for them to retire on comfortably. Following a few meetings and presentations, they advised us they’ll be proceeding with us (woohoo!). This decision meant that they no longer required the services of their existing adviser.

Finding and winning new clients isn’t easy – anyone running their own business knows this too well. With competition increasing each and every day, especially with the ease and speed of technology, businesses are investing a lot of time and money in marketing their products and services – to not only attract new clients, but also retain existing clients. Unfortunately, it can only take a single, simple mistake to lose even your most loyal client.

Here are five ways to lose a client:

1. Slow to respond

You know when you want an answer to something, and you want it right now? Welcome to 2017. More often than not you’re probably receiving emails from your clients, or if they need your advice on something sooner, they’re probably giving you a call. And they probably expect a response reasonably quickly. Responding to your clients a week later, is not reasonably quickly.

Clients have engaged your services primarily because they are time poor and prefer to spend their time on other things in life. So when they need your help, they need your help now. Get back to them within 24-48 hours. It doesn’t have to be with the answer their looking for, but at the very least acknowledge their contact and give them an indication of when you’re likely to have an answer, and find out whether that time frame works for them.

2. Unavailable

We’re all busy. I get it. Don’t forget the reason why your clients engaged you from day 1. They need your help. Being unavailable isn’t very helpful. They’ll bear with it for a little while, but if this becomes a theme, they’re gone. Surround yourself with professional, competent, reliable, and trustworthy people. Introduce them to your clients and make sure someone is always available (and helpful!). Oh, and refer to point 1.

3. Charge hidden fees

Do I really need to explain this one? It’s enough to create doubt and question everything you’ve ever told them. It’s about trust. Because it takes years to build, seconds to break, and forever to repair.

4. Lack communication

It’s okay, your clients will forgive you. I mean, you’re busy, right? Get real! Your clients have engaged you to keep them informed, to keep them up to date, to filter what is going on in the world and translate this back to what it means for them. We all feel a little shaky in times of uncertainty, it’s normal. Put yourself in your clients shoes.

5. Out of touch

If you’re not in touch with your clients’ lives, how on earth do you expect to advise them properly? If you don’t know your client is selling or buying a home, an investment property, a business, or taking that dream holiday that’s going to cost them an ‘arm and a leg’, someone else is going to find out and give them the time and advice they deserve. Give them a call, check in from time to time – not only when you want to sell them something.

Stop wearing your underpants on the outside and start doing the things that would put you out of business if someone else did them. Otherwise they will.