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Is your personal balance sheet built for purpose?

written by Staff reporter | February 17, 2021

Sponsored by MGD Wealth

In MGD Wealth’s experience, senior aviation professionals and executives who are building wealth towards a retirement goal generally don’t spend enough time thinking about employment and lifestyle transition.

A combination of work and family focus, lack of clarity about longer-term goals and their timing, and the sheer range of strategies and investments available can make it difficult to ensure you are financially on course.

Above and beyond specific needs and wants, MGD believes most people have two strategic financial goals:

1. Achieving financial freedom: the ability to live and retire without onerous financial constraint; and
2. Achieving financial resilience: the state in which you and your asset base can withstand financial shock(s).

MGD thinks the achievement of the above is based on having a strong, well-structured Personal Balance Sheet.

In the transition to retirement, you will likely go from being focused solely on accumulating capital to a new phase where you are drawing down on that capital to meet planned expenses. One of the key challenges is that the personal balance sheet built while you are working will often need to go through a significant restructure to make sure it is optimised for this new retirement phase.

That restructure needs to take place in light of changing employment, lifestyle, and taxation, as well as the need for cash flow and lump sum capital that is necessary and desired.

The retirement structure also needs to take account of the state of financial markets at the time – the likely forward return on capital from different asset classes – because poor structure and investments at the start of retirement can lead to permanent loss of capital if that coincides with a major investment market downturn. Hence, for most people, the transition to retirement is the most critical financial project to get right.

To help those wanting to plan for a successful financial future, MGD has written an article, Building a Personal Balance Sheet with Purpose: Key Factors to Achieving Financial Freedom and Financial Resilience. In this paper, they:

• Explain what a personal balance sheet is and what makes it strong;
• Discuss the purpose of a strong personal balance sheet to achieve financial freedom and financial resilience; and
• Explain a methodology to build financial capacity to meet life goals and cope with the inevitable ups and downs of life.

Given the current elevated state of most financial markets, the team at MGD think it is an ideal time for people to understand the importance of a strong, well-structured personal balance sheet that is designed with a clear purpose. We hope you find their article valuable.

MGD can work with you to build a strong and resilient personal balance sheet that is structured to meet your life goals and aspirations. For further information, or to discuss your options, please connect with the team at MGD by emailing [email protected]. Initial discussions are complimentary when you reference “Australian Aviation” in your enquiry.

Any advice included in this communication is general and has been prepared without taking into account your objectives, financial situation or needs. As such, you should consider its appropriateness having regard to these factors before acting on it.

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