My best piece of financial advice was given to me when I finished university and was working over in London.
My first boss was a conservative English banker who had a wealth of experience. He advised me that when you start thinking about wealth creation, ‘cash flow is the most important, followed by the ability to know when your return on assets is enough’.
Well, today I am the Principal of Yellow Brick Road Richmond based in the lively inner suburbs of Melbourne, and I still haven’t forgotten that advice. It’s a simple principle that I still think about today. Financial advice does not need to be overly complex but it does require some thought and planning.
I try to impart this knowledge on my clients and reiterate that you need to work on the cash and income side of things first before you have the ability to build your assets. That often starts with a cash flow budgeting exercise and leads to a plan for asset growth.