Take Stock Of Your Financial Goals

Sun Herald

Sunday January 4, 2009

Bina Brown

You've probably already made a few resolutions but don't forget your fiscal plans. Spending sensibly and paying down debt are likely to top the list in 2009. Bina Brown talks to four people about their strategies.

JAMES THIER

Executive director

Australian Ethical Investments

JAMES THIER intends to keep practising what he preaches.

Having already established a solar-passive weekender on the NSW Central Coast, Thier is considering renovating his Sydney terrace house.

"I'm tossing up whether to put in solar power and other renewable energy solutions," he says.

Topping up his superannuation - with a focus on companies looking to sustainable solutions - is also on the agenda.

"The current climate is bad but super is for 20 to 30 years. At the end of the day the current situation could last two to three years, which in a 30-year period is no big deal," he says.

"I see these as good times to be putting more in, especially in areas that are likely to do well out of climate-change policy, sustainability and efficient transport.

"Good companies are still good companies despite the ructions of the global market places. Things like efficient transport, renewable energy, waste management and adaptive technologies must benefit from social reconditioning through to government regulation," he says.

On a more personal level, Thier is going to review his spending habits, particularly when it comes to chocolate.

"I might reduce my chocolate intake but increase the quality," he says.

To counter his sweet tooth, Thier intends to put in a vegetable patch at the weekender so he can grow his own "healthy food".

LISA MONTGOMERY

Head of marketing and consumer advocacy

Resi Mortgage Corporation

A CONFESSED devotee of property as an investment, Lisa Montgomery has done the sums on what lower interest rates mean and plans to take advantage of them.

"Being highly leveraged when interest rates were high, I plan to go back and audit my finances and look at what I am paying now," she says. "Just knowing that paying the same amount of interest on a $300,000 loan now as I did in July will save me 13 years and $100,000 in interest is a good reason to review things.

"I'm going back to basics and intend to start to use those properties and loans as a wealth-creation tool, which is what they should be. With property prices coming back, I might look at investing in another property in the next 12 months but I will be prudent about it."

Holidays are now on hold following fiance Drew's near-miss during the recent terrorist attacks in Mumbai. As well, there is the cost of a wedding towards the end of the year.

"The simple things in life have become a lot more attractive to us," Montgomery says. "We plan to batten down the hatches and be prudent. Sticking close to home is more palatable right now."

ANDREW HEAVEN

Principal

Wealth Partners Financial Solutions

THE sharp cuts to interest rates towards the end of last year will see Andrew Heaven continue to focus on reducing the mortgage on his Sydney home.

"A number of us got a rude shock when interest rates rose so quickly during the year and now I am going to take advantage of the fact they have fallen quite a lot," he says.

Then he'll be watching the cash flow.

"I think 2009 will be challenging, although hopefully the future will be better and I can take advantage of the growth potential," Heaven says.

With school-age children, there are no plans for retirement just yet but Heaven says he will keep monitoring his super to make sure it is on track with his longer-term plans.

"Given my superannuation has been smashed I'll be checking I'm still in line with my retirement objectives. It may mean putting more in," he says.

As there is believed to be a strong link between stress and health, Heaven intends to totally switch off before the new year kicks into gear again.

"Health professionals say if you are going to have a break you need to have a two-week solid break, so the Blackberry and the laptop will be off," he says.

SEAN KAVANAGH

Designer and production manager

Kavanagh Balloons

WITH a Sydney mortgage to contend with, Sean Kavanagh, 37, a manager with Australia's only manufacturer of hot air balloons, plans to focus on paying that down and possibly buying another property.

"As much as Kevin [Rudd] would like us to go crazy and spend money, it is not going to happen," Kavanagh. "I plan to save as much as I can.

"If there is a continued slump in real estate prices and interest rates stay down, then I'd like to get another property. If the rental market stays strong I might live in a smaller place and rent mine out."

As he has no great interest in the sharemarket, Kavanagh isn't about to start now just because prices are low.

"I've always taken the attitude with the stockmarket that you really only play with it when you have got spare money and nothing to lose," he says.

"I'm not tempted to get in because I haven't got the spare cash to do it. I'd be playing with such small numbers it would not be worth it."

Not having a "flashy or outrageous" lifestyle, Kavanagh has no plans for a significant change and plans to stick with racing (other people's) yachts, kite surfing and hot air ballooning.

His focus is more on the business, which like most is bracing itself for any economic downturn, and the prospect of expanding intooverseas markets.

© 2009 Sun Herald

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