by Dr. Tom Buckley

Why will two similar people start with a specific goal and on average only one achieves it? Why can two athletes of equal ability who train together every day doing the same training sessions but in competition one consistently beats the other?

In my experience there are two types of people where it comes to goal achievement: those who are interested and then those who are committed. The interested athlete will train, maybe even consistently, but most probably do not pay attention to nutrition or sleep, and is always cramming in training. The committed athlete makes time for training, looks at very aspect of their training and performance, and pays particular attention to rest and recovery.

So what has this to do with life in general? Ask yourself, why does one worker get promoted above another? Is one more alert to the potential opportunity while the other frequently suffers from sleepless, junk fueled days thus missing opportunities? Is one consistent with their performance while the other just has great days or moments?

Going on a fab diet for three weeks is someone interested in loosing weight, adopting a long term lifestyle change that is sustainable is commitment. Being home for ten minutes before sleep time is being interested; being home for bath and bed time stories, no matter what, is commitment.

Being interested usually results in great excitement at first where as being committed is less exciting. Being interested is all about excuses, being committed involves no excuses.

If you’re reading this, chances are your interested, but ask yourself: “are you committed?” Recharging requires commitment.

Tom Buckley a University lecturer and researcher in the field or Health Sciences whose doctoral studies focused on physiological responses to stress. Author of several peer reviewed publications and supporting author of Flip the Switch, his current research interests are in human factors related to performance and wellbeing

by Fiona Cosgrove

Life coaches, Performance coaches, Wellness coaches, Executive coaches. These are becoming everyday terms. With the increased pressure on us to reach for the stars, achieve our goals, fulfill our potential comes the dilemma of how to structure our lives to allow this success. The demands of daily life have never been greater and in this information age when the choice of services, products, guidelines is enormous, how do we come up with a plan to “be our best”? There is a big difference between consultants, mentors and coaches. The former two roles are more of a “telling” or expert role. They are bringing their often superior knowledge to the relationship and we learn from them. They tend to take responsibility for the learning and teaching process. A coach is quite different.

What a coach will do is:

• Act as a support person and “cheerleader”
• Help you find your own solutions
• Facilitate your path to change
• Let you take the lead
• Be a mirror to reflect your insights and awareness
• Affirm your strengths
• Show empathy and acceptance
• Hold you accountable

A coach is someone who will help you get there. A coach will not:

• Tell you what to do,
• Take on the responsibility
• Constantly offer advice
• Design your plan

Get the picture? If you find the right match for you, a coach can help you climb any mountain. But how do we find a great coach when there are so many people out there claiming to be just that?

A good check list might look something like this:

A great coach will:

• Be passionate and energetic in their commitment to help you be your best
• Be astute enough to recognize what is important to you, not them.
• Walk the talk
• Only offer expert advice at pivotal moments
• Have clear focus and positive and confident outlook
• Believe in you
• Be trained in coach psychology and the area that they are working in

It is a good idea to meet with a potential coach first to find out if you are comfortable with each other and you can connect with that person. Your coach will foster self acceptance and self respect and not hold themselves out to have all the answer. They will have a knack for honing in on our strengths, desires and values. Coaches are great listeners and enjoy our stories. Ask them about how they structure their sessions. A good coach will have a model they follow (but not their own agenda), which will become a vehicle for you to help you move towards your goals. They usually offer a program rather than a one-off session, understanding that change takes time and a methodical approach.

A coach needs to be able to take risks and confront us when necessary, yet at the same time be playful when appropriate and make the sessions fun - not just hard work. A good coach will not rescue us when we hit a difficult place but let us work through the dilemma. They will understand the importance of our journey and help us celebrate each successful step. They will eventually leave us with greater self knowledge, confidence and belief in our own abilities and if all goes according to plan – the ability to live a more fulfilling life.

Fiona Cosgrove has over 20 years experience in the wellness & fitness industry - owning and managing clubs in Australia and Asia, including No 1 Martin Place, NSW Fitness Centre of the Year, 2006. Fiona is the author of Coach Yourself to Wellness and she regularly runs corporate seminars and workshops in the areas of healthy lifestyle, motivation and wellness.

By Tim Sharp

As regular readers would well be aware, I spend much of my time talking about happiness and as part of this, I spend much of my time busting common myths and misconceptions about happiness. If we don’t properly understand what happiness is (as well as what it isn’t) then we’re always going struggle to achieve it.

Now I’ve heard some pretty bizarre and outlandish claims made about happiness in my time and so as a result, I’ve developed a new presentation titled “Hard facts, half-truths and absolute nonsense”. Today I’m pleased to bring you a brief summary of some of the more common half-truths and some of the absurd claims made about happiness with a view to helping you avoid falling into these traps and accordingly, being distracted from what will really help you create a happy life.

Myth 1: Happiness comes from having more money and more things

The truth: more money will lead to more happiness but only to a point. There’s no doubt that for someone living below the poverty line, struggling to eat or secure shelter, then money will definitely help. But once we get beyond a certain point, which for the sake of simplicity we’ll consider an average wage, then the return we get from increasing our wealth diminishes rapidly. That is, if happiness is our goal we’ll receive a much better return on our investment from pursuing other goals such as developing and fostering our relationships – which makes happiness the most valuable asset!

Myth 2: Happiness involves seeking pleasure and avoiding pain

The truth: as with the first point this is partially true, but only partially. Most people like pleasure and most don’t like pain; but happiness is much more than hedonism. In fact, the research suggests that although important, pleasure may be less important for our happiness than meaning and purpose.

Myth 3: Happiness is synonymous with being frivolous and irresponsible

The truth: Happy people are not silly but rather, tend to be very responsible and productive employees and citizens. In short, happy people typically outperform unhappy people on every measure so rather than being frivolous, happy people are healthier, more productive, better parents and better friends.

Myth 4: Life’s too serious for happiness

The truth: Life’s so serious we can’t afford not to be happy. I’m not naive enough to think life’s all wonderful but the fact that there are problems in the world means it’s even more important for as many of us as possible to be happy; because, when we experience positive emotions we’re more resilient and we’re more able to generate effective solutions to the difficulties we face.

Myth 5: There’s a secret to happiness out there somewhere

The truth: there is no secret. I’m sorry to disappoint some of you but the reality is quite simple…there is no one secret to happiness. And even if there were one thing that was very important for me it wouldn’t be the same for all of you because we’re all different. Happiness means different things to different people and accordingly, the creation of happiness will require different approaches for different people. But at the risk of contradicting my earlier statement, if here was a secret to happiness it would probably be discipline – having the discipline to determine and clarify your own happiness plan, and then stick to it!

So if you want to create a happier life beware of these and other myths. I urge you to believe happiness is possible but I also urge you to see the creation of happiness as something that requires work and time.

Dr. Sharp is one of Australia’s leaders in the exciting new science of positive psychology and happiness. In short, he is one of this country’s leading Executive Coaches, a highly qualified consultant on matters relating to human behaviour and psychology (particularly the application of positive psychology principles within organisations and teams) and a sought after public/corporate speaker. For more information please email info@thehappinessinstitute or visit The Happiness Institute

by Diana Ennen

Many of you are already established in business with your website in place, your business cards tucked away securely awaiting the next networking opportunity, and your promotional materials printed and filed away. You are set — Or are you?

Think back, when was the last time you revisited this area? When was the last time you recreated your promotional materials and added a new image? Have you actually read your website lately from the prospective of a potential client? If so, did it portray you in the best light and did it convince you to utilize your services? Did it have all your latest PR successes and latest services? If not, it’s time to jumpstart your marketing. The results, more clients and a new and improved you.

Here are just a few ideas:

Your Web Site

When doing your website or reviewing your website, take your time. This isn’t a race to the finish. Take it a page at a time and give it your all. Ask yourself:

Would it hold their interest? You need to make sure they aren’t bored with long paragraphs or unnecessary long wordy descriptions. They want to find what they came for quickly.

Is it personalized? When people come to your site, do they get to know you and your business or do they hear the same ole’ same ole’ that’s on all the websites in your Industry. It’s important to have you in there.

Get to the point. Go back and cut out unnecessary words, paragraphs, graphics, anything that just isn’t essential to the bottom line of providing the benefits of what you provide.

Is it understandable? Sounds simple, right? Go back over your site and make sure that you’ve clearly spelled out what you do. You know you’re the best, but have you adequately described this to your potential clients?

Can you add a few new graphics or colors or something to jazz it up? A change of your website’s theme colors can make a big difference in adding to a fresh new look.

Press Releases & Articles

How often do you write a press release and submit it out? Or better yet, when was the last time you did send one out? Ouch-that long. If you want to fine tune and bump up your marketing, then you absolutely need to write a good press release and get it out there. The main point in that sentence is — write a good one. How do you do that? Easy, make it something that informs and inspires. Make it newsworthy. Tie it into what is happening in today’s times and then connect your business to how you can make a difference. Did you remember the “call to action” paragraph, where you are telling them what you want them to do? And finally, just having a release isn’t enough. You need to actively submit it out and post it on your website, blogs, social networking sites, etc.

Social Networking

You need to do this. Actually you will want to do this. Once you get started you’ll love it too. So go ahead and do it. Most businesses will tell you that doing this makes a considerable difference in their business. Don’t have time to, hire a virtual assistant to do it for you.

Now, find the sites that interest you and get active and involved. Remember to succeed you need to be committed. You can’t just show up once every few months and expect it to work.

Your Promotional Materials

Just think how impressed your clients or even more important, those potential new clients, will be when they receive a letter on your new letterhead, with your new business card, a matching brochure, and maybe even a matching magnet with your business information on it. It’s time to jazz it up a bit and recreate a new image. You have so many more years experience in your business, let it show with your new promotions.

You’ll see how great you’ll feel with your new marketing image. Make it a goal to do this often. You and your pocketbook will be glad you did.

Diana Ennen specializes in publicity and marketing and helping businesses get the most out of their publicity efforts. She’s the President of Virtual Word Publishing, http://www.virtualwordpublishing.com and author of numerous books including Virtual Assistant the Series: Become a Highly Successful, Sought After VA. Stop by for free information on starting a virtual assistant business and our free PR Informational package.

by Matt O’Neill

You want to build a better diet for you and your clients. But will the latest nutrition trends help, or just add to the confusion? Dietician Matt O’Neill separates the positives from the pitfalls.

The obesity crisis is putting the pinch on fast foods and the food industry is scrambling to meet the demands of busy consumers who are demanding quick, healthy options. There is a boom in convenience foods at supermarkets, takeaways and service stations. But convenience and other trends could come at a price.

1. low-carb becomes slow-carb

Market researchers have predicted a peak in the low-carbohydrate craze and a downward trend in sales of low-carb foods. The new trend is “slow-carbs”, based on the concept of the Glycaemic Index (GI). Hungry, frustrated low-carbers are turning to less processed, wholegrain cereals for food, which are filling but not fattening.

• positives

Atkins and the low-carb diet gurus have spawned a whole new range of lower carbohydrate and lean, high-protein foods. If you know what you’re doing, you’ve now got more options to create the diet you want. Carb-reduced pasta, prepackaged “98% fat-free” deli meats and high-protein shakes offer simple ways to cut calories and still eat well. Low GI foods such as porridge, oat bran cereals, yoghurt and others can help you feel full before you eat too much.

• pitfalls

The attraction of low-carb diets won’t dwindle overnight, so there’s still lots of confusion to combat. For example, it’s hard to exercise without enough carbohydrates to keep your glycogen stores fuelled. But you also can’t over-eat or over-drink low GI products just because they have a low GI logo endorsement on the package. Helping clients better manage their hunger and appetite is the key here.

2. fast food becomes low-fat

Morgan Spurlock’s Academy Award nominated “Supersize Me” documentary about the fast food industry was a wake-up call for the multinational burger business. Now major players like McDonalds have introduced lower-fat burgers and salads in response to media pressure and demand for healthier choices.

• positives

Making the change from a regular burger to a lower-fat version will reduce the saturated fat that raises blood cholesterol. Ready-to-eat salads offer a genuine calorie saving and can represent one of the best on-the-go lunch-time options around.

• pitfalls

Some new “less than 10% fat” menu items aren’t necessarily lower in calories. Flatbread wraps, in particular, contain significantly more carbohydrates than burgers with light, fluffy buns and this can cancel out the calorie savings made when cutting the fat. Check the nutrition information to see if you’ve got a good deal for your waist line as well as your heart.

3. bars become a meal

Breakfast and snack bars are the big growth area in convenience foods. They offer fast nutrition for time-poor consumers, even on the way to and from the gym.

• positives

There are a wide range of low-fat, fruit-based snack bars which are much better choices than the three Cs: cookies, cakes and chocolate.

• pitfalls

Although many bars are low in fat, they often contain large amounts of sugar. Some are one-third to half sugar, and this means you won’t save too many calories. And a warning to fitness enthusiasts: swapping processed energy and protein bars for fresh fruit means you’ll miss out on a bundle of health-promoting antioxidants.

4. meals become drinks

If you haven’t got time to eat, why not drink your nutrition? Juice and smoothie bars are capitalising on our busy lives, providing liquid meals in a flash. Cafés and coffeebars have an added hook by providing a caffeine fix alternative for ex- and would-be smokers.

• positives

Vegetable juices offer a relatively low-calorie nutrient boost, packed with vitamins and antioxidants. Adding a banana and strawberries to a skimmed milk smoothie can top up your daily fruit serves.

• pitfalls

Fruit juice and dairy drinks can pack a lot of calories that slide down too easily. They enjoy a healthy image, but are not so healthy for our waist lines. Serve sizes, some as large as 800 millilitres can provide more calories than the meal you would’ve eaten. Go easy on these.

5. kids’ food becomes healthy

With up to 25% of children carrying excessive body fat, food companies are offering calorie-conscious kids’ foods at supermarkets and school canteens.

• positives

There’s an increasing range of healthier foods, marketed in interesting and fun ways for our kids. Fat-reduced, tasty savoury snacks, fruit packs and calcium-rich low-fat dairy desserts are good options. Even for adults, these are worth checking out.

• pitfalls

Some food companies continue to promote the idea that simply cutting fat makes food healthy for kids. Promoting a sweet treat as “99% fat free” ignores the high sugar content.

6. food becomes medicine

Health-conscious, or perhaps disease-phobic, consumers are looking for dietary alternatives to medicines to enhance wellbeing. The line between food and drugs has blurred with innovative food products known as “pharmafoods”, “neutrafoods” and just plain “phood” (food and medicine).

• positives

So-called functional foods can offer real benefits, especially for people with specific needs. Products with enhanced levels of omega-3 fats, soluble fibre and a range of phytochemicals (beneficial plant chemicals) offer simple ways to boost the intake of the good nutrients that are often lacking in our diet.

• pitfalls

Without getting the basics of good nutrition right first, navigating through a supermarket that looks more like a drug store could be very confusing. Individual foods won’t offer a quick fix for a poor lifestyle. You can also expect to pay a premium for these food products as food companies try to recoup the costs of developing and marketing new “phoods”.

final thought

Our fast-paced lifestyle is reshaping the way we eat at an alarming rate. To make healthy informed choices, we’ll need to slow down enough to read nutrition information and ask if it’s not available. Helping your clients understand and read food labels will help equip them to eat well into the future.

Matt O’Neill is a top Australian nutritionist and regular on Channel 7’s Sunrise program. You can subscribe to Matt’s free email newsletter, download useful tools or enrol in a course at his website at www.SmartShape.com.au

by Kate James

‘Integrity is telling myself the truth. And honesty is telling the truth to other people.’ Spencer Johnson

I have an inherent believe that most people are good…and that most people are honest. But some people choose to hide that honesty, keeping their true feelings close rather than speaking out openly.

The quote above suggests that living life by the principles of integrity and honesty is simple. But it’s complex and the real complexity lies in the shades of grey that colour the area between truth and dishonesty. This is further complicated by the fact that sometimes we don’t open up and say things as they really are because we don’t have that clarity ourselves.

Most of us set out to live honest lives. And on the surface, we do. We hand in a wallet we find on the street, we pay our taxes, we do the right thing by our employers and for the most part, we tell the truth to friends and family.

The ambiguity lies in the subtleties of life. In a small conversation with a friend, you find yourself agreeing with something when really you don’t. In a discussion with your partner you skirt around the real issue. With your children, your parents, your boss, you say yes when you really want to say no. Sometimes you’re not even aware of your true feelings at the time. For those of us who seem ‘hard wired’ to please others, there’s a natural tendency to simply go along.

These subtle untruths eventually have an impact…fine layer upon fine layer, gradually building a tangible film between the ‘authentic you’ and the ‘public you’. Sometimes the layers build for years before you become aware that you feel that your true self has been watered down and as a result, you find that your energy levels are depleted.

Mostly, we avoid the truth because we want to make other people happy. For many of us it’s habitual. We say what we think others want to hear but in doing so, we create a barrier that keeps us from really connecting.

Once you become aware that you’re not speaking openly, there’s that sense of having ‘an elephant in the room’. Something that isn’t spoken about that impedes an open and honest connection. A barrier that stands in the way of the lightness that comes with open, authentic conversation.

Whilst initiating and engaging in a heartfelt conversation can be daunting and sometimes difficult, the energy in a relationship (and in you) is miraculously restored when you lift the barriers to honest communication.

This is not to say that every single communication you ever have in your life must be completely open at all times. There’s a balance to be found and the simplest measure is to ask yourself whether withholding or sharing something will ultimately enrich the relationship.

Even if the short term impact is negative, creating openness and honesty is one of the best ways to breathe life into your relationships.

Tackling a tough conversation:

• Take some time to prepare - really think about what you need to say.
• Remove any accusations from the conversation. Getting your point across is easier if you can avoid making the other person wrong.
• Deal with just one issue at a time.
• Choose a time and place that is most conducive to a good conversation. Some people find it less confronting to talk openly when walking side by side rather than sitting face to face.
• Know when to let it go. If the conversation becomes heated and you or the other person feels overly emotional, agree to return to the discussion at a later date

Kate James is a work life balance coach, writer and speaker. She works with professional people who want to enhance their quality of life by making the right career and life choices. You can find Kate at www.totalbalance.com.au.

by Glenn Capelli

Cecil John Rhodes died in 1902 and amongst other things was the founder of the diamond company De Beers. After his death his Rhodes Trust establish The Rhodes Scholarship an international award for study at Oxford University.

Since then there have been a bucket load of famous Rhodes Scholars including the 1945 Nobel Prize winner Australian Howard Florey (the penicillin man), former PM Bob Hawke (Scholar 1953) and a 1975 Scholar in former Carlton Premiership Captain (and ex Head Boy of my old High School Churchlands) Mike Fitzpatrick.

However, my favourite Rhodes Scholar is not a politician, scientist, merchant banker or even footballer. My favourite Rhodes Scholar is the man who wrote the song Me and Bobby McGee – Kris Kristofferson.

I love Kris because he cannot only perform academically, he can also perform with:

• A guitar
• A mop - he was a janitor at one stage of his life
• A gearstick - he once drove trucks for a living and
• A stamina in that he has lasted in the music industry for decades

Kris Kristofferson is not only a Rhodes Scholar he is a Road Scholar too.

My figuring is that in today’s world the Rhodes/Roads mix is a good blend. Way back in 1995 the Enterprising Nation Karpin Report into Australian Leadership and Management Skills talked about the need for the T Skilled worker. This worker not only has deep specific, technical skills (the perpendicular part of the letter T) but also great broad skills (the horizontal part of T).

Broad skills include:

• Communication skills
• Empathy
• A breadth of learning
• Creative Thinking Skills

Broad skills are the stuff of Road Scholars; people who can get by in any given situation, people who can connect with others, people who are versatilists. A versatilist being a ‘person who can be a specialist in a particular discipline while at the same time be able to change to another role with the same ease’. In short, part Rhodes Scholar and part Road Scholar.

So master your Road Scholarship – learn something wide of your usual field, connect with folk who think differently than you, be curious beyond your own discipline and if ever you are busted flat in Baton Rouge – or anywhere else – have the Emotional Smarts and breadth to bounce back.

Glenn Capelli is the author of Thinking Caps book and radio pieces as well as being a top Keynote Speaker. www.glenncapelli.com. You can contact Glenn at glenn@glenncapelli.com

by Rosemary Marchese

Picturing yourself on a sandy beach or relaxing by the pool this summer? Aren’t we all? The end of year often brings hope of that well-deserved break. But has history would have it have you worked so hard that you feel too pooped to even think about exercising on holidays?

Don’t make it a chore…think of it as an opportunity!

Your holiday break is an opportunity to reinvigorate your body with some well-deserved opportunities to exercise. It doesn’t have to mean that you hit the resort gym sweating it out for two hours while your better half is poolside with a daiquiri! But time away from work is an ideal time to get more physically active, especially if you have found limited time to do so during the year. Here are just a few ideas to inspire you…

1. Going somewhere with a pool? Try some pre-brekkie laps (you could swim or walk them), water volleyball, and water polo or get in there with the aqua aerobics class! So many holiday facilities have a range of pool activities available you often just have to find out when they are on! Otherwise just get in there with family and friends to start your own game of volleyball.

2. Get in touch with nature and try a bushwalk or two. Walking is cheap and can be done at a time that suits you on your holiday.

3. Go on a half day shopping tour – you are bound to burn more kilojoules here than sitting by the pool the entire day. You could always follow it up with an aqua class and the rest of the day by the pool.

4. Lead by example and take the stairs not the lift. So often we think of it as a chore to climb stairs and opt for the lift. I like to appreciate the fact that I have the capability to walk and so many people would love to be able to do that. It’s gives me a better appreciation of my life and of course is good for stimulating that heart rate a little more than pressing that lift button!

5. Explore the city you are in on foot. Of course this will depend on where you are but so many of the best features of a town can be seen on foot.

6. Try a new sport. Pick up a tennis racket and start playing. Kick a soccer ball or play hide and seek with the kids.

7. Try a nightclub or two and start dancing!

The list could be endless but as you can see it doesn’t have to be a structured exercise program all the time. Just a little more exercise can help with recharging your body, soul and mind to help top off a break. Happy holidays!

Rosemary is a registered physiotherapist who has combined her expertise in health with fitness. She has over 15 years of experience teaching and consulting in the fitness industry, including personal training, PUMP and Pilates instructing. She is the co-author of the best-selling book ‘The Essential Guide to Fitness: For the Fitness Instructor’, which was specifically written for those people wanting to start a career in the fitness industry. She is also a former Editor for a fitness magazine and is now writing her second fitness book. Rosemary is a fit and healthy mother of two young children dedicated to helping busy mums achieve their health and fitness goals.

by Rob Wilkins

I am struck sometimes by the ability of individuals to trust process and intellect and not listen to that which they have always known to serve them best, their instinct. Instinct is not something that “occurs” but rather is something that, I would say, gifted individuals recognise and embrace.

It is the combination of intellect with instinct that creates that state of being mindful and alert to the possibilities of all situations.

Carl Rogers, the psychologist whose notoriety was derived by his now famous “Humanist” approach to psychology, once stated, ” I have learned that my total organismic sensing of a situation is more trustworthy than my intellect.”

Sense making is a term that is gaining amazing credence in Knowledge Management circles and my reflection of this is centered around this combination of intellect and instinct or “being mindful”.

My question is, “Is this a learned state or can it only be practiced by a gifted few?” (metaphorically speaking).

Jerry Braza PH.D, in his book “Moment by Moment” states “mindfulness is a natural state of living moment by moment”. The reason why this statement resonates so strongly with me is because of what I observe on a day-to-day basis as a Learning and Development Professional. I observe so many people caught up in the plans of the day, week, month or year and not giving their attention to the moment at hand.

Children provide a wonderful illustration of how the adult mind lets go of this natural skill of being mindful. I am reminded of a story of a family who are on their way to a party and come to a railway crossing that begins to indicate a train is coming. The father, who is driving and already anxious about arriving on time, thinks to himself “Great! Now we will definitely be late”. That is until his 4 year old daughter pipes up and says, “Daddy, Daddy, now we get to see the train go by! This is exciting!” The father appreciates the complete diversity of what his daughter is thinking and for a brief moment, appreciates being mindful and in the moment.

There is a lot to learn from mindfulness and what it means for recharging yourself and your day-to-day performance and I hope to talk about his in more detail in the future.

In the meantime, find yourself a railway crossing and enjoy the moment (metaphorically speaking of course).

Rob Wilkins is a Learning and Development professional with over 20 years experience in Corporate Learning and Development, Management and Executive Development, Learning Technologies and Organisational Performance Improvement. Currently completing his Masters in Knowledge Management and Business Information, Rob is considered a specialist in eLearning and Personal Learning Environments with a strong Knowledge Management influence guiding his research and professional development. Email: dawilkos@tpg.com.au : or more of his insights on a daily basis: Blog: http://roalp.blogspot.com

by Justin Hooper

You’d have to be on Mars not to know that we’re experiencing some of the most volatile markets in history. Let’s not kid ourselves…..this is not fun!

Having said that, what are we really concerned about? Why is there so much “panic” and fear around?

I’m not an expert when it comes to emotions but it seems to me that behind the concern that seems to be pervading the stock markets is a fear of losing lifestyle. Most people would be totally relaxed if they could maintain their lifestyle no matter what happened in the market.

Let’s take a look at a real life example of a client who requires $54,000 pa to fund their desired lifestyle:

Pension Account Value as at 10/10/07: $1,142,000
Drawdown over the past 12 months: $ 54,000
Pension Value as at 10/10/08: $ 858,000

In projecting how long the money might last in a meeting 12 months ago, a simple assessment ensued as follows:

Assumptions:

1. Conservative investment return ongoing of 7% pa
2. Cost of living at $54,000 pa indexed at 3% CPI

The projected balance of funds remaining after:

5 Years $1,250,000
10 Years $1,346,000
15 Years $1,415,000

Today (10th October 2008) one year later, the average return required to get that client back to $1,346,000 (“nine” years from now) is 11.67% pa. To get back to $1,415,000 (“fourteen” years from now) is 10.35% pa.

Is this achievable? History says yes. The average return of a model balanced portfolio (25% defensive and 75% growth assets) from 1985 to 30 September 2008 should have been around 11.39% pa. During the 5 years to 31 December 2007, this portfolio should have a return of 13.10% pa.

That’s not to say we shouldn’t do whatever we can to manage our situation. My view is control the “controllables” and don’t worry about the “uncontrollables”.

So what can you control?

1. Diversify

A year ago, International assets, particularly shares didn’t look too good. Fixed Interest funds were also significantly underperforming. In the past 3 moths in particular, they’ve certainly helped overall performance with the unit prices of the global equities funds (in our portfolios) increasing by in excess of 9%. (This is due to the decline in the Australian dollar).

The drop in interest rates has also helped improve the value of the fixed interest assets in the portfolios. Short-term Australian Fixed Interest funds have had a return of 7.80% and the International Fixed Interest has a return of 5.95% for the last 12 months up to 30 September 2008.

Diversification is the one ‘free lunch’ that you get when investing.

2. Eliminate Unnecessary Spending – there’s no harm in “tightening the belt” where it doesn’t affect your lifestyle.

3. Stay in touch with your adviser – you need a framework for making decisions and then an ability to keep your emotions from corroding that framework.

Justin Hooper,CEO, Sentinel Wealth Management, www.sentinelwealth.com.au