I got a big wake up call last week. An embarrassing and infuriating discovery all the more ironic since I spend my days imploring clients to get their house in order when all the time mine was not in order at all. Let me elaborate. We are constantly pushing the point of Know What Is Going On! Find out about your family trusts! Who are the trustees? The beneficiaries? Imagine my dismay when I perchance studied the trust deed of our own “family trust” which revealed that neither my name, nor those of my children appeared AT ALL in the documentation, not as the appointer of trustees or as beneficiary (I am a trustee, but the “appointor” can change trustees at will). It refers to the “Principal” – you got it, my husband (who is named), and “his current or future spouse” – that’s me. Reduced to a role, and allowing for replacement. This documentation is apparently “standard” (tax reasons).
So why didn’t I know? My excuse is probably quite similar to that of many women, give or take a few details. When my hubbie and I set up the trust eleven years ago, we were recent and wide-eyed emigrants with two young children, and I was taking my first tentative steps in new roles at work and home. I was more than fully occupied and I just didn’t pay attention. And for all the years since I have assumed that, as it’s our “family trust”, we would both be equally represented, or hold equal powers.
But the most enlightening part of this whole situation was yet to unfold, which is this: when I declared to our accountant that the trust deed “will need to be changed”, he summarily informed me that he would “talk to my husband” about it. To effect the changes required, I will need to rely on the goodwill of my husband. All well and good if things are going swimmingly, as they are (to the best of my knowledge). Somewhat precarious, if not.
There are two reasons this is important. Firstly, marriage breakdown (or breakup.) Now I know in this situation the law dictates a fair division of property, which includes assets in family trusts. However, having assets (the house, superannuation, family trusts) under your direct control holds a power that is impossible to match. There can be a definite and deliberate sleight of hand take place at any juncture of the separation process: from preparation of balance sheets, to splitting of superannuation and allocation of assets, that can prejudice the “receiving” spouse, and potentially the children.
Secondly, if some misfortune befalls the “current spouse”, a so-called “future spouse” may turn out to be a stepmother in the fairy tale mould, may not be particularly predisposed to her newly inherited family, and could influence her new partner in ways that may not work in the favour of your children. This leaves them vulnerable, again something you’d rather insure against now if at all possible.
So, don’t take things for granted – check your status quo and work to change it if it isn’t fair and equitable to you and your children. Here’s hoping mine goes without hitch.
Posted:
30/08/2011 6:46:50 PM by
wisewomen | with
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You get to the ripe oldish age of 43(like moi!) and by this time you have observed and been a party to a fair few fights, disagreements and battles. In your marriage, family, friendships and work life you are a rare beast (or perhaps a beast without a discernible pulse) if you don’t occasionally end up on differing sides of a point of contention (and oh my, how many points of contention there can be!).
From my viewpoint and experience (a divorce and four siblings has provided me with the prerequisites needed for my commentary) people can be divided into 2 main camps. Ok, there is probably a few more camps but for the sake of this blog (and the point I am trying to make) just run with me on this.
There is the group of people who love a good barney, discharging every emotion and thought as they pass through their brains clear in their conviction of what (or who!) is right and wrong. Seemingly, conflicts barely raise their heart rates or ruffle their feathers. The fear of permanently damaging a relationship with the true weapons of mass destruction (our words) does not seem to enter their head as they keep at you and at you, driving home their perspective on the situation with a lack of empathy and ability to see others viewpoints.
Those residing in the other camp will run a mile from any prospect of speaking their mind and resolving an issue. They often seethe with resentment over their issues and have a memory like the proverbial elephant, storing grudges to be brought up later at the most inopportune moments.
As I said I am using extremes here. However, having recently witnessed an uncomfortable conflict in a work environment, it made me ponder the different styles that we all bring to the table and what to do when we feel there is an issue to raise. Keep the peace as much as possible or speak your mind as the dispute arises.
What I do know is that becoming a wise counsel to yourself is vital. Learning if, when and how to raise an issue is a life skill that unfortunately, for most of us takes a lifetime to cultivate. With some people you wonder if it is cultivated at all!
Whenever I used to tell my mother I wanted to give someone a good spray over something I perceived was unjust or unfair to me, she would often advocate the “people in glass houses” theory. This ran along the lines of – go ahead and spray if you must but bear in mind that when you do so you open yourself up to the person on the other end of your tirade equally expressing their views on your behaviour and position. Realising that perspective is just that – YOUR take on a situation and not necessarily the “truth” can teach you to take a cautious approach with your words or perhaps remaining silent.
That is not to say that walking away or turning the other cheek is always the way to go. Resolving conflict can be a pathway to a better relationship (be it a personal or business one) if there is not too much argy bargy or descent into mudslinging along the way.
As in all things, a measured and balanced approach is best. What exactly that approach looks like…sorry, I end this blog as a fence-sitter, only you can answer that for yourself!
Posted:
24/08/2011 8:55:48 AM by
wisewomen | with
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It’s well known that we humans feel a loss far more than we feel a gain of the same degree. So the past weeks have been particularly agonising for those of us invested in the share market. If this latest fall was a one off it may have been bearable, but it was just a few short years ago that we experienced a similar painful drop. Do we still have the nerve to dive into the turbulent waters that is the stock market? And do we need exposure to this volatile asset class in our portfolios at all?
Many investors will, understandably, take their money and run…onto dry land and into the relatively safe havens of term deposits and bonds. Capital protected and not a bad return - when the interest rates are 6%. But these assets are not the Holy Grail they may appear. While interest rates are high, yes it makes a compelling alternative to the growth assets of property and shares. But, (and there’s always a but!), we’ve spoken about the link between investment return and risk, and therein lies the rub with the so-called “safe” assets. Lower risk equals lower return in the long run. Cash and fixed interest securities do not provide capital growth, only income, and therefore are not wealth building assets.
For those with time on their side, ie: not retired or about to retire, the investment horizon is long term indeed, so we need to continue to actively grow our capital bases. That means not running for dry land, but rather holding our breath and going in for more. Taking the plunge involves courage and the realization that although there will be ups and downs, history has shown us the share market delivers over the long term. The long-run expected return from the ASX is around 9.5%, which is made up of a combination of dividends and capital gain. Over time this is materially higher than returns from defensive assets, because of the higher risks involved. The higher return ensures that our nest eggs are not eroded by inflation, but are hopefully growing over time.
Those of us closer to retirement still need some exposure to growth, but will be invested more conservatively. Dipping the toes is a sensible route to go – still refreshing but not an all out assault on the senses. Chat to your adviser for individual advice for your circumstances, but don’t put away your swimmers just yet.
Posted:
16/08/2011 3:35:55 PM by
wisewomen | with
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Ok – a show of hands! Who’s feeling demoralised by the stockmarket? Who’s feeling a pit of anxiety in their stomach every time they tune into the news and see drops across all sharemarkets of 5%? Who is feeling battered and bruised every time they look at their stagnating and often declining superannuation balance?
I know my faith in the long-term returns of shares is being sorely tested after the bloodbaths in the last few years let alone those earlier in this century (the dot com boom and bust is sooooo last decade!). Add to this a failing confidence in the abilities of governments, policy makers, investment bankers, ratings agencies etc. who seem to have all played their part in the train wreck that is this unfolding debt driven nightmare.
What is clear with the benefit of our oft-mentioned friend, Harry Hindsight, is that taking a more conservative approach towards our investments as we near retirement is a sensible, prudent approach. Yes, we may miss out on some of the glorious, exciting upside when the stockmarket is in “bull” mode, however, the impact on us when we lose large chunks of capital, at a time when we are visualising an end to our working lives and fulfilling some of our long held dreams and aspirations, is hard to bear for most of us with modest retirement balances.
How this conservative approach looks for each of us is of course an individual decision. What it does require is an inner resolve to get up close and personal with where our money is invested. No excuses for those of us who have a “head in the sand” or a “set-and-forget” policy. Having financial assets necessitates our involvement. Whether this involvement is a little or a lot is something you need to determine and depends on your interest and time constraints. A reliable adviser can be an objective sounding board for our anxieties, not to mention a welcome helping hand in mapping out the possibilities and choices we have for our investments.
But, still, I refuse to drown in a sea of doom and gloom. Having survived a few personal life changing events in the last few years (and who amongst us dodges these?) I am learning that life has a way of restabilising and adapting to new realities, as fortunately, do we. The sun still comes up, the world keeps turning and life demands that we get on and make the best of our circumstances. What other choice do we have?
Posted:
9/08/2011 9:49:52 AM by
wisewomen | with
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I for one have had it with being a “price-taker”. When I’m the one holding bargaining chips in the form of cash, particularly in this current climate of intense competition, I want to be courted. I want wooing, well considered foreplay followed by full satisfaction, guaranteed. And not just as a first time customer. Don’t take my loyalty for granted. It really annoys me to see my bank attempting to lure newcomers with tantalizing offers that represent a significantly cheaper deal than the one I, a longstanding and reliable client, am receiving. Not just with my borrowing, but also my lending. Yes, I too would like to receive that introductory term deposit rate. No? Well, I’ll go somewhere else then.
But am I deluded? Perhaps it’s us, the consumer that has to be doing the hard yards, and being proactive about finding the best value for money. We, the average Australian shopper, just don’t seem to be that flash at getting a good deal. We feel a bit embarrassed to ask for a better price. Maybe it’s our Western sensibilities and compliant natures that hold us back when our rationale tells us there’s a better deal to be had. All the while, others with more aggression and persistence are getting the goods.
So this bargain hunting obviously doesn’t come naturally to all of us – those of us with a more reticent nature need practice, even a bit of role-play. There’s the option of hightailing it to the markets of Africa or Asian bazaars, where negotiating before you part with your hard earned currency is deeply ingrained into the culture. But leaving exotic travel aside, we can flex a bit of muscle closer to home, starting with those (few) retailers who actively invite us to negotiate. Announcing proudly that they will match a lower price found elsewhere, we can take them at their word, do our research online, swallow our inhibitions, and yes, just ask.
How about all the press lately about increases in online shopping to the detriment of local businesses? There is another course to take – instead of trying it all on for size and discarding a pile on the change room floor heading off to purchase online, why don’t we steel ourselves and challenge our favourite boutique to simply match the online price? We walk out happy with an immediate purchase, after sales service and a good price. The retailer has cash in her pocket and stock out the door. A win-win.
So I suppose, as with any great relationship it’s a two way deal between us and our merchants – don’t take us, your customers for granted and we’ll keep you on your toes with a bit of hard work and some newly cultivated haggling skills.
Posted:
2/08/2011 8:32:01 AM by
wisewomen | with
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