According to one of Australia’s most successful financial planning firm directors, Aaron Zamykal, this is a big problem that needs addressing.
“Most people should have a plan to create wealth, yet rarely do they plan to reduce their mortgages,” says Zamykal.
“Having a debt reduction plan will make sure that debt is used effectively and efficiently according to individual needs.”
Zamykal’s company, Ellerfield, has developed online software solution that will help consumers manage debt for themselves from the comfort of their own homes, which will be released later this month.debt-relief
The online software allows the consumer to track their goals, receive automatic emails and reports when goals are due, or have been achieved, monitor their income and expenses, and see a live simulation of their mortgage reduction strategy.
Giving consumers the opportunity to be more in control and take responsibility for their financial outcomes, is key to them being better educated to make decisions that work best says Zamykal.
Out-dated methods of increasing your mortgage repayments to reduce debt have long been put to the wayside. Educating consumers that there is other options that on an individual case by case basis, may be a better fit, is a monumental change.
“People can do this, however, a better result may be achieved through diversifying the debt reduction portfolio and purchasing shares or property-based investments to help accumulate wealth and assist in reducing debt,” he says.
“Whether people choose a do-it-yourself debt reduction plan or seek the advice of a financial planner or their banks, it may mean the difference of having a comfortable retirement or not.”
Media reports on brokers and financial planners encouraging investors to buy investments that don’t fit their financial capabilities has instigated a backlash against the industry.
“Consumers need to really research who they trust with their financial futures, and investigate the costs of services, hidden fees and commissions, so that they can make an informed decision,” confirms Zamykal.
By implementing a plan to reduce the mortgage, it allows the consumer to benchmark their success and spend more money on the areas of their lives that they enjoy.
“We see clients every day who have turned their mortgage around and are paying more than ever before off the principle.
“It’s great to see someone who previously had trouble making the minimum mortgage repayment, to now paying off $20,000 to $30,000 off the loan each year.”
Goal setting doesn’t have to be boring and time consuming. ‘Happiness plans’ are not only popular, but motivating for consumers, who want to see their goals realised. Starting with what makes someone happy is always a good start.
“Recently I was with a client who had followed our mortgage reduction plan and paid off their mortgage in 6 years. We now had to uncover different goals for them because the client was unsure what they could do now that their mortgage was gone. Their new goals now focus on private schooling for the children, a holiday to Disneyland, and a new car.”
“We run a process where we uncover what a client really wants, what makes them happy and what their expectations are.”
By simply tracking goals and having a process to follow to achieve them, the chance of success is greatly improved and financial freedom can become a reality for many.
“The realisation of what people have contributed to paying off their mortgage when they receive their six-monthly statement, can cause people to get depressed,” he said.
By using the right process, together with the most efficient loan structure, people can repay their mortgages faster, but it needs to be tailored to the individuals’ needs and situation.
Zamykal says not all people can manage their increasingly complex financial structures, even average households. “There are so many areas to consider from home mortgages, car leasing, multiple credit cards and education, that families often put it all in the too hard basket. Internet-based financial management solutions are a fast way for consumers to get back on track and understand their commitments and future investment strategy faster.”
Given the shift in internet-based banking, people in Australia are fast to adopt new solutions online.
“People are time poor and have become more technologically savvy, and giving them the tools to reduce their debt online is the next step.”
Ellerfield’s 20-year history has put them in good stead to cope for a ever-changing market. Aaron Zamykal has been handed the reins of the Queensland-headquartered business, from his father Ralph, to breathe a fresh approach to the business and to connect better with the next generation.
The second generation business has experienced rapid growth and Zamykal believes that more people are concerned by Australia’s debt problem than ever before.
“The cost of housing is prohibitive to the average Australians lifestyle plans, because the investment is too high,” he says.
“Giving consumers more tools to give them the confidence that they are able to achieve their goals, if they structure their finances correctly, can be life changing.”
View Aaron's Profile
Source: Saving Money Expert (March 2011), Investor Edge Magazine (April 2011)
| < Prev | Next > |
|---|
