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Welcome to the latest edition of our client newsletter,
Our articles cover a range of topics which we hope you will find interesting. We aim to keep you informed of changes as they happen, but we also want to provide ideas to help you live the life you want – now and in the future.
In this edition we discuss “How mindfulness can improve the way we work” and provide you with information on “Give your finances a shakeout in 2024” and “Don’t set resolutions, set goals”.
If you would like to discuss any of the issues raised in this newsletter, please don’t hesitate to contact us.
In the meantime we hope you enjoy the read.
All the best,
Planet Wealth
How mindfulness can improve the way we work
Social psychologist and Harvard University Professor Ellen Langer says increased mindfulness can deliver measurable benefits.
It’s fair to say the pandemic has changed the Australian workplace. Flexibility has become the new norm, with many of us working from home at least some of the week, despite the ongoing conversation about getting back to the office.
And while it’s great to enjoy a work/life balance that our parents and grandparents could only have dreamed of, it does come with pressures of its own.
As we juggle the demands of work and family life – not to mention cost of living pressures – it’s more important than ever to take a step back and be mindful about how we live and work.
Mindfulness is often described as simply another form of meditation. But it’s much more than that. Mindfulness is the simple art of noticing new things. Paying attention. Never assuming.
Social psychologist and Harvard University Professor Ellen Langer has been studying mindfulness for more than 40 years.
Professor Langer says mindfulness is an active state of mind characterised by being:
Her research shows increased mindfulness translates to measurable benefits for our psychological wellbeing, physical health and productivity1.
When 1+1 can equal 3
It’s all too easy to slip into mindlessness—the opposite of mindfulness. Mindlessness is grounded in accepting absolute truths.
Professor Langer says, “When you’re asked a question to which you think you know the answer, there’s probably another way to look at it.”
Does 1+1 always equal 2? In a rigid theoretical mathematical context, yes. In the real world, with all the real world’s variables, not necessarily.
By being mindful, and uncertain, you question everything. And this can lead to meaningful change.
Professor Langer says, “Rather than the illusion of stability, exploit the power in uncertainty.”
With only subtle shifts in our thinking and expectations, we can begin to change the ingrained behaviour that saps health, competence, optimism and vitality from our lives.
Try again. Fail again. Fail better
The fear of making mistakes can be a roadblock to change. And failure in one thing can result in success in another. Professor Langer cites a famous example of a company turning a failed glue that didn’t stick properly into the hugely successful concept of the post-it note.
Mindful optimism can be a more productive mindset than defensive pessimism, where you hope for the best but expect the worst. The alternative is to make a plan, and then get on with living.
Mindfulness can have some startling benefits. Many of Professor Langer’s studies focus on how changing mental perceptions can lead to improved physical outcomes.
Her famous Counterclockwise study showed the mind and body are more attuned than we might think. The researchers changed the external environment for a group of elderly men and turned the clock back 20 years. The participants didn’t simply emerge with a more youthful mindset, they rolled back the years in terms of their physical capabilities and even their appearance.
5 ways to create a more mindful workplace
Mindfulness doesn’t only deliver personal benefits. It can also lead to better business outcomes. In a study of salespeople, participants who were encouraged to deviate from a set script and think about what they were doing ended up selling more magazines.
And mindfulness is contagious. In a collaborative workplace, there can be a knock-on effect. When you see someone else exhibiting mindful characteristics, you tend to increase your own mindfulness.
Here are a few tips from Professor Langer to create a more mindful workplace.
A workplace dominated by fixed mindsets can lead to problems as people become afraid a lack of knowledge will be discovered.
A workplace dominated by flexible mindsets can free people up to make meaningful change as they accept they don’t necessarily have the best way of doing everything.
“Lack of expertise is what keeps us interested in what we’re doing, and by extension, keeps us interesting to other people”, Professor Langer says.
“If we increase our mindfulness, we increase our effectiveness, health and wellbeing.”
Current as at Jan 2024
1. AMP Amplify Digital Series
Give your finances a shake out in 2024
Like trees losing their leaves in autumn, why not take a leaf out of their book and choose the new year to shed some of your own financial baggage.
In the style of Marie Kondo, the Japanese organising whizz who has inspired millions to clean out their cupboards, decluttering your finances can bring many benefits.
While you work through all your contracts, investments and commitments, you will no doubt discover many that no longer fit your lifestyle or are simply costing you in unnecessary fees.
And if that is the case, then it is likely that such commitments will not be sparking any joy. And joy is the key criteria Kondo uses to determine whether you hold on to something or let it go.
So how does decluttering work with your finances and where do you start?
Where are you?
The first step is probably to assess where you are right now. That means working out your income and your expenses. There are many ways to monitor your spending including online apps and the good old-fashioned pen-and-paper method.
Make sure you capture all your expenditure as some can be hidden these days with buy now pay later, credit card and online shopping purchases.
The next step is to organise your expenditure in order of necessity. At the top of the list would be housing, then utilities, transport, food, health and education. After that, you move on to those discretionary items such as clothes, hairdressing and entertainment.
Work through the list determining what you can keep, what you can discard and what you can adapt to your changed needs. Remember, if it doesn’t spark joy then you should probably get rid of it.
Weed out excess accounts
Now you need to look at the methods you use when spending. Decluttering can include cancelling multiple credit cards and consolidating your purchases into the one card. This has a twofold impact: firstly, you will be able to control your spending better; and secondly, it may well cut your costs by shedding multiple fees.
Another area where multiple accounts can take their toll is super. Consider consolidating your accounts into one.
Not only can this make it easier to keep track of, but it will save money on duplicate fees and insurance. If you think you may have long forgotten super accounts, search for it on the Australian Tax Office’s lost super website. Since July 2019, super providers must transfer inactive accounts to the tax office.
Once you have reviewed your superannuation, the next step is to check that your investments match your risk profile and your retirement plans. If they aren’t aligned, then it’s likely they will not spark much joy in the future when you start drawing down your retirement savings.
If you have many years before retirement and can tolerate some risk, you may consider being reasonably aggressive in your investment choice as you will have sufficient time to ride investment cycles. You can gradually reduce risk in the years leading up to and following retirement.
Sort through your insurances
Another area to check is insurance. While insurance, whether in or out of super, may not spark much joy, you will be over the moon should you ever need to make a claim and have the right cover in place.
When it comes to insurance, make sure your cover reflects your life stage. For instance, if you have recently bought a home or had a child, you may need to increase your life insurance cover to protect your family. Or if your mortgage is paid off and the kids have left home, you might decide to reduce your cover.
Prune your investments
If you also have investments outside your super, they too might benefit from some decluttering. As the end of the year approaches, now is a good time to look at your portfolio, sell underperforming assets and generally rebalance your investments.
Many people who have applied Marie Kondo’s decluttering rules to their possessions talk about the feeling of freedom and release. It may well be that applying the same logic to your finances gets you one step closer to financial freedom.
If you would like to review or make changes to your finances, why not call us to discuss.
Current as at Dec 2023
Don’t set resolutions, set goals
If breaking New Year’s resolutions is as much a tradition as the act of making them, you’re not alone – nearly 45% of New Year’s resolutions don’t even make it past the first month.1
So why not try something different this year?
The main reason resolutions fail is because they’re often formed without a strategy. A strategy has clear directions, timelines and consideration of resources needed, which is why they are much more likely to be acted upon.
Now is a great time to think about what you want to achieve over the coming months and develop a road map.
Reflect on your goals
What is it you want to achieve this year? Knowing this, not only strengthens your vision, but your chance at success becomes much more likely.
Many of us share similar goals. According to the website Envision Experience, the most common self-improvement goals people strive for are to improve their health and fitness, find their life purpose, acquire more skills for success, strengthen relationships, challenge themselves and improve their self-esteem and positivity.2
While these goals may resonate for you, you need to set goals that are meaningful to you, not simply reflect what others want to change in their lives. Simply writing down “earn more money” or “lose weight” will make your goals more like resolutions, grandiose statements that have little direction and no intent.
Have a clear goal. Instead of saying “earn more money” why not try “financial goals for 2024”, make a list then define each one.
Think of the ‘why’
Before creating your plan, think about why you want to achieve these goals. Your why will be the reason you get up early in the morning for the gym or cut back on takeaway three nights a week. It is the core motivation that will you to keep focused while working towards your goals.
Creating your strategy
Once you have clear idea of what you’d like to achieve and more importantly why, it’s time to develop your strategy to succeeding. Start by transforming your new year’s goals into SMART goals – Specific, Measurable, Assignable, Realistic and Time-related. SMART goals were introduced in 1981 via a paper by George T. Doran in the Management Review journal and has been a popular feature for goal setting be it small or life changing.3
The SMART criteria will help you define and strengthen your goals and form a framework for your strategy, recognising the resources you need and any potential challenges.
Say for instance you want to go on a holiday. By thinking ‘Specifically’, you narrow down the focus to committing to saving money. To make the goal ‘Measurable’, you decide you want to save $5k by mid-year. The person ‘Assignable’ is you. By being ‘Realistic’, you plan for what results can be realistically achieved – how much money can you set aside each week to achieve $5k in savings by June. The ‘Time’-related aspect of the goal is the date you have set yourself to achieve this (in this example, mid-year).
Once you’re off and running, review your progress regularly and reassess your initial strategy, so that you continue working towards success.
Managing multiple goals
As with resolutions, we can overextend ourselves with our goals. This doesn’t mean you have to pick just one goal but be realistic about how many you can manage. Someone who knows all about goals is Warren Buffett, who recommends writing a list of goals and narrowing it down to five.4 His theory is that all other goals are in fact distractions that will prevent you from achieving what matters to you most.
If you’re striving towards more than one goal, it’s a good idea to stagger them. You don’t want to plan to train for a marathon, take on that big project at work and agree to volunteer for an event only to create competing pressures on your resources and time required to achieve them. Consider how your goals fit together or if they take time away from the other, and plan accordingly.
All strategies benefit from having a mentor or a coach to keep you focussed and accountable to the goals you have set for yourself. We can work with you to help you achieve your version of success this year with a clear financial plan for your future.
Current as at Jan 2024
Planet Wealth
Planet Wealth Pty Ltd (ACN 137 467 362) as Trustee of the Planet Insurance and Financial Planning Unit Trust ABN 15 757 194 605 is an Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited ABN 89 051 208 327 Australian Financial Services Licence 232706 and Australian Credit Licence 232706.
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