Dominium Capital

Navigating the complex decision of whether to release cash flow from your business to build diversified assets or reinvest in business operations is a common challenge for small business entrepreneurs.

On one hand, diversifying assets can provide a safety net and create additional revenue streams. This can protect against market fluctuations and unforeseen circumstances, offering financial stability and growth outside the core business.

On the other hand, reinvesting in business operations can drive innovation, enhance productivity, and increase market competitiveness. By focusing on growth and improvement within the business, entrepreneurs can potentially achieve higher returns and long-term success.

Both strategies have their merits and risks. The key lies in striking a balance that aligns with your business goals, risk tolerance, and market conditions. Seeking advice from financial experts and thoroughly evaluating your business's financial health can help make an informed decision.

How do you approach this decision in your business? Share your thoughts and experiences below.

🌟 Rising personal risk insurance premiums in Australia are a growing concern, but what are the alternatives if we're uninsured when illness or injury strikes?

Without coverage, we might face the harsh reality of:

🏠 Moving back with parents (Yay! Not..)

🏚️ Relying on the Disability Support Pension and risking our independence and homes

🏭 Losing our business

Is this the future we envision? Insurance isn't just an expense—it's a vital shield protecting our wealth and ensuring financial security during life's unpredictable moments.

However, we do need to strike a balance between having "what we need" and "what we can afford".

💬 What are your thoughts on rising premiums and the importance of insurance?

For small business entrepreneurs, this is worth a read.

Some simple tips and immediately actionable… actions which could save your small business a lot of money, time and protect your clients’ information.

Meaning you’ll also better protect your brand and reputation. 👍

Small Business Cyber Security | Cyber.gov.au These resources have been developed to help small businesses improve their cyber security.Keeping your small business secureFor a small business, even a minor cyber security incident can have devastating impacts. In the 2022-23 financial year, the average cost of cybercrime for small business increa...

🔒 Trust and Confidentiality in Financial Advising 🔒

As a Financial Adviser, I understand the critical importance of trust and confidentiality, especially when working with clients who are professionals from various sectors of the financial services industry.

From individuals with backgrounds in risk & compliance, anti-money laundering and fraud, to money management and mortgage brokerage, as well as those from multinational firms requiring transparent reporting and auditing, maintaining the highest standards of trust and confidentiality is paramount.

Let’s face it – in Australia, it’s a pretty small industry because “everyone knows someone else” in the sector!

So, I may take it as given, but it’s important to understand that my clients who entrust me with their personal wealth plans, know that I will manage these plans with professionalism and discretion.

They rely on me to keep their financial strategies on track, ensuring confidentiality every step of the way. But, also, they may need their own potential conflicts of interest managed compliantly and transparently, which is where I also help.

In our space, integrity is key. All good Financial Advisers know this.
So is confidentiality: which is not just a promise, but a fundamental principle that guides every aspect of my practice.

If you're seeking a Financial Adviser who understands your role in our broader financial services industry, and who values trust and confidentiality above all else, let's connect. Feel free to reach out.

This is what you do it for.

Like most parents, you work hard so that your kids can “do better” or “be better” or just have a “better life” than you.

This is my “little mate”, who’s now getting “not so little”, taking over from me on the BBQ…

part of me is proud… part me finds it hard to give up the tongs!! 😂 🍖 🥩

I wrote this post in response to a client asking me this week about "currency risk" in their portfolio and how it is managed. Currency - when investments are held offshore, as is the case for 99.99% of my clients! - adds both risk and the potential for returns within your portfolio. 💲 💵 💸 💰

📈🌏 Hedging Global Investments: How Australian Asset Managers Mitigate Currency Risk

Australian-based asset and fund managers, navigating the complexities of global investments requires strategic foresight, particularly in managing currency risk. When investing offshore, currency fluctuations can significantly impact returns, making hedging a crucial element of our investment strategy.

Hedging is employed to protect the value of international investments against adverse currency movements. Here’s how our managers might approach it:

1. Forward Contracts: These are agreements to buy or sell a foreign currency at a predetermined rate on a specific future date. By locking in exchange rates, our portfolio managers can ensure predictability in returns, irrespective of currency volatility.

2. Currency Swaps: This involves exchanging principal and interest payments in different currencies. By swapping currencies, our portfolio managers can align our liabilities and assets, effectively mitigating the risk of currency mismatches.

3. Options and Futures: Currency options provide the right, but not the obligation, to exchange money at a set rate, offering flexibility and protection against adverse movements. Currency futures, on the other hand, are standardised contracts traded on exchanges to buy or sell a currency at a future date, providing a transparent and regulated means to hedge currency risk.

4. Natural Hedging: This strategy involves structuring the portfolio to balance foreign currency assets and liabilities. For instance, revenues generated in foreign currencies can be used to offset expenses in the same currency, reducing the need for active hedging.

5. Dynamic Hedging: This active management approach adjusts hedging positions based on market conditions and outlook. It allows our portfolio managers to respond to currency trends and economic forecasts, optimising protection and potential returns.
In a global investment landscape, currency risk is an unavoidable factor. By employing some or all of these sophisticated hedging techniques, managers aim to safeguard our clients' investments, ensuring stable and predictable returns despite the fluctuations in exchange rates.

As always, our commitment remains to deliver robust performance through diligent risk management and innovative strategies.
Reach out if you would like to discuss your investment portfolio needs.

SUCCESSION.... try to get it right. Because it can go really wrong!

When we speak to small business entrepreneurial clients about family business transfers, a simple starting point is:

“Who” is to succeed? Define/nominate that person (or people...?)

And check that the successor is able to:

- Manage the business.

- Work with existing owners.

The following is a tale of woe, regarding a succession plan going "very wrong" and certainly not the way the original patriarch envisaged.

Shattered Dynasty Jay Pritzker quietly built a $15 billion empire of more than 200 companies, including Hyatt Hotels Corp., and a network of 1,000 family trusts. But one of the patriarch's final deals before his 1999 death, designed to bind his heirs closer, unleashed a torrent of anger, greed, and betrayal, culminat...

Nice, isn't it 👇

In our fast-paced world, it's easy to get caught up in chasing the next new "thing" to own.

Whether it's the latest gadget, a trendy outfit, or an impressive car, some people often seek gratification through material possessions.

Owning nice things is indeed wonderful, and there's nothing wrong with treating ourselves. However, I've found that true fulfilment often comes from seeking meaning in what we love and what we want to learn. And I have found this to be true with my clients.

I find some new clients come to me feeling unfulfilled – they chase the “forever home”, the “latest luxury car” – only to end up trying to replace these items with the next “forever home” (clearly the last one wasn’t forever…), the “new latest luxury car” (because it supersedes the last, “latest” one…)

It's about finding joy in the journey of personal growth, in nurturing our passions, and in the connections we build with others. When we prioritise these aspects of our lives, we often discover a deeper sense of satisfaction than any expensive purchase can provide.

Then, when we do purchase that new car, or go on that spectacular holiday, we enjoy it for what it is – and so we should!

But we’re not defined by it.

Let's shift our focus from simply acquiring more, to finding more meaning in our everyday experiences. Because while new things can make us happy (for now, at least), a life rich in purpose and passion brings lasting fulfilment.

What are your thoughts on finding balance between material pleasures and meaningful pursuits?

I met a bloke this week who I think is doing amazing work; and it led me to think about how his (type of) work could/should/would intersect with private investors looking to make a real change in our society.

Noah Yang and the We Are Mobilise team (see here: https://wearemobilise.org.au/), working towards solving homelessness issues, by taking direct action and working with what I see as an "entrepreneurial mindset" to solve social issues inspired me.

His approach & mindset led me to write my little post for the week below!

I have also included the notion of "impact" investing in my thoughts, for private investors/entrepreneurs to consider "investing more" in solving social issues.

🌱 The Nature of Philanthropic Giving in Australia: Transforming Lives Through Impact Investing 🌱

Philanthropy in Australia is evolving beyond traditional donations, embracing innovative strategies like impact investing. This approach not only provides financial returns but also generates measurable social and environmental benefits. Here’s why this shift is so significant for both donors and recipients:

🔍 For Donors:
Purpose-Driven Investments: Impact investing allows donors to align their financial goals with their values, creating a legacy of positive change.

Measurable Impact: Unlike conventional giving, impact investments offer concrete metrics to track the social and environmental outcomes of their contributions.

Financial Returns: These investments provide a dual benefit – fostering social good while potentially yielding financial returns, ensuring sustainability and ongoing support for crucial causes.

🌟 For Recipients:
Sustainable Funding: Organisations benefit from a reliable flow of capital, enabling long-term planning and development.

Capacity Building: Beyond financial support, impact investing often involves skill-building and operational support, empowering organisations to scale their impact.

Innovation and Growth: Access to funding geared towards social impact encourages innovation, helping communities to address pressing challenges more effectively.

Philanthropy, through the lens of impact investing, is reshaping the landscape of giving in Australia. It’s about creating partnerships that drive real change, ensuring that every dollar contributes to a brighter, more equitable future for our society.

🌟 Success is not for everyone... 🌟

I won't lie - I'm re-writing a post that I wrote awhile back and - today - felt compelled to re-write it and re-post: but why?

Because of a recent successful client experience which proves the point.

“Success is not for everyone…” maybe those who miss out are generally not prepared to "do the work".

Just like sport, business requires work.

Success: I have recently started work with a client who runs a small business which has struggled post COVID (her industry was heavily negatively impacted by lockdowns), along with dealing with getting divorced during that COVID period.

Her success: she "does the work" - immediate results from seeking advice, workshopping plans & strategies and TAKING ACTION. She implements. She works.

Losers (I use the term deliberately provocatively): people who don't do the work. People who are not coachable.

People who complain about their situation and whine about "wanting improvement", wanting to "get ahead" - indeed, wanting "success".

But they won't "do the work".

Don't get me wrong: your version of success doesn't need to be my version. And vice versa.

But, the truth is, without relentless dedication, discipline, and perseverance, success is difficult to achieve.

In both business and sport, the journey to success is paved with challenges, setbacks, and triumphs. Just like on the field, where talent alone doesn't guarantee victory, in the business world, sheer talent isn't always enough to secure success.

When it comes down to it, hard work is the common denominator in achieving greatness, whether you're aiming for the winning goal or striving to reach your business objectives. Talent may open doors, but it's the relentless dedication, discipline, and perseverance that truly elevate individuals to their fullest potential.

In the game of life, success isn't a privilege reserved for a select few; it's an outcome that anyone can attain if they're willing to put in the effort.

So, again: “success is not for everyone…” maybe those who miss out are generally not prepared to "do the work".

As Advisers, we do a lot of the heavy lifting for our clients within the Advisory landscape we work in – but that doesn’t mean our clients “don’t have to do their own work” to obtain their goals.

"Success" means something different to everyone. Embrace the journey, commit to YOUR goals, and prove that with determination and hard work, success is within reach for all of us. 💼🏆

I do enjoy presenting and discussing Business & Personal Financial Advice ideas with entrepreneurs!

Great ideas and discussions in the room and - I trust - the attendees walked away with some “action items” that they can immediately implement in their businesses.

Thanks Paul Veldman for having me at your awesome MABS 2024 Conference.

What will happen to your money when (military) conflicts arise?

I wrote this brief essay off the back of this client question, which I received this week during one of our regular progress meetings

"How do we protect our portfolio against a conflict? For example, what if the China and Taiwan situation escalated?"

Hedging Investment Portfolios Against Major Military Conflicts - Dominium Capital Introduction

In something of what appears to be a "ho-hum" budget for Private Wealth clients, here are our general outtakes from last night's Federal Budget.

Federal Budget 2024 - Dominium Capital The Federal Government's 2024-25 Budget has prioritised tax cuts, cost-of-living relief, and investments in key sectors, aligning with expectations. Treasurer

“Travel news” from our recent client success story! 🌟

A new client inherited a substantial 6-figure sum and had a dream of traveling, but they were unsure about how to manage their finances while pursuing this goal. They initially wanted to set aside a portion of their inheritance for travel expenses.

After thorough discussions and strategizing about their financial goals, we proposed a different approach. Rather than simply setting money aside, why not grow their capital, while still enjoying their travels?

By investing wisely and aiming for a realistic 3% - 3.5% annual share dividend yield, we showed them how their investment portfolio could not only grow their wealth but also generate income to fund their adventures. 💼✈️

Our client was thrilled to discover this alternative solution and embraced the idea of their portfolio financing their travel dreams.

It's moments like these that remind me why I love being a specialist Business & Personal Financial Adviser – whilst seemingly a simple idea, showing clients different ways to help them achieve their goals and live their best lives is a reward I get to enjoy. Cheers to turning dreams into realities! 🥂

The "Work Hard/Play Hard" mindset doesn't extend to curing a hangover!

Have you been "guilty" of this?

Doctors say this popular hangover cure is bunkum Some people swear that vigorous exercise is the best way to beat a hangover, but is there any science to prove it?

🚨 Navigating the Harsh Realities: The Uphill Battle to Retire Securely at Age 55 in Australia 🚨

The dream of retiring comfortably at 55 in Australia is increasingly morphing into a daunting challenge, painted with stark realities that demand attention.

"Retiring early", these days, is more about having the option to retire if you want to. Many small business entrepreneurs don't see themselves as "retiring"- but they want the financial freedom to choose whether they can or not, when they want.

More and more, I meet new clients saying that their goal is to “retire early”.

But there are harsh realities which need facing.

Rising living costs coupled with uncertain economic landscapes cast a shadow over retirement aspirations, making financial security sometimes seem like an elusive mirage. As the sands of time shift, the notion of early retirement becomes a distant fantasy for many, overshadowed by the harsh truths of financial instability.

With life expectancy on the rise, the pressure to amass substantial retirement savings intensifies, leaving little room for error in our financial strategies. The fear of outliving our savings also looms ominously, casting a pall over our hopes for a comfortable retirement.

In the face of these grim circumstances, it's imperative to confront the harsh realities head-on. For the average person, strategies such as tightening budgets to making sacrifices are often the road to retirement security: which is, after taking these harsh steps, still fraught with challenges that demand unwavering determination and resilience.

High-earning executives and small business entrepreneurs also face challenges: however, “smart” strategies, implemented early, can lead to optimal results whilst sidestepping – or at least softening – the need to take harsh measures later on.

Embark on the journey with eyes wide open, acknowledging that brutal financial realities that might lie ahead. By confronting these challenges head-on and early, we can set a path to financial freedom and an early retirement. 💼💔

🌱 Navigating the Entrepreneurial Dilemma: Reinvesting for Growth vs. Paying Yourself

As entrepreneurs, we often find ourselves at a crossroads: reinvesting profits into our business for growth or paying ourselves to diversify assets. It's a delicate balance that requires careful consideration.

On one hand, reinvesting income back into the business can fuel expansion, innovation, and long-term sustainability. It allows us to enhance products/services, reach new markets, and strengthen operations, laying a robust foundation for future success.

On the other hand, paying ourselves provides financial stability and the opportunity to diversify investments beyond the business. It enables us to build personal assets, secure our financial future, and mitigate risks associated with relying solely on the business's performance.

Finding the right balance between these two strategies is crucial.

It involves assessing the stage of your business, growth opportunities, personal financial goals, and risk tolerance. While reinvesting for growth can accelerate business development, paying yourself ensures a well-rounded financial portfolio and personal security.

Ultimately, there's no one-size-fits-all approach.

Each entrepreneur must weigh the options carefully, seeking the right advice from their trusted advisers, mentors, and even their peers.

By striking the right balance between reinvestment and personal compensation, we can steer our businesses towards sustainable growth while safeguarding our financial well-being.

They are less likely to drink, have s*x, be in a relationship – indeed, to do anything exciting.

Gen Z

And, apparently, they're richer than maybe they like to think they are...

Stop complaining, Zoomers – you’re rich People born between 1997 and 2012 should appreciate that Millennials and Baby Boomers were poorer at this stage in their lives.

Feeling cash-rich but asset-poor?

High-earning executives can find that it's not uncommon to find themselves in this situation.

Here's a couple of reasons why this might happen:

💰 Cash Dominated Compensation: Many executives, especially in industries like finance or technology, receive a large portion of their compensation in cash, bonuses, or share (stock) options. While cash provides liquidity, it doesn't necessarily contribute to long-term wealth if it's not wisely invested.

🕒 Limited Time for Asset Building: With demanding jobs and high stress levels, we often have limited time to actively manage investments or acquire assets beyond our primary income source.

💸 High Living Costs: High incomes may lead to living in expensive suburbs/areas and/or maintaining luxurious lifestyles, quickly depleting cash reserves and leaving us feeling asset-poor. Add in private school education and income gets spent – fast.

📉 Lack of Diversification: Concentrated investments, such as company stock, can leave us exposed to specific risks. Diversification is crucial for building a resilient investment portfolio.

🌅 Deferred Compensation and Retirement: While some have deferred compensation or salary-sacrifice arrangements for retirement, they may not provide immediate financial security, leaving us feeling cash-rich but asset-poor in the present.

To navigate these challenges, engaging in comprehensive financial planning, including investment diversification and retirement planning, is crucial.

Working with qualified, licensed Financial Advisers can help make informed decisions about our finances and investments.

Be sure to think about building a strong financial foundation for the future! 💼💰

This is a great reminder - it's directed at students, but many professionals, business owners and entrepreneurs could do with the reminder sometimes!!

Don't use Jargon!

Jim Donovan, vice chairman of global client coverage at Goldman Sachs, discusses how to provide optimal service to clients. (University of Virginia School of Law, Oct. 20, 2022)

✂️ Don't use Jargon! 59 seconds · Clipped by Sean Dunne · Original video ""Secrets to Optimal Client Service," With Jim Donovan" by University of Virginia School of Law

Is Private Banking dead?

I have my own views, but I'd be keen to hear yours in the comments below.

My view: at best, it's become irrelevant. It offers little, if any, real advantages, for the cost (especially in the Australian market), unless you simply like having your ego stroked.... and I'd suggest there's less expensive and innovative ways to have your ego stroked.

Boutiques offer more for less - and this article seems to suggest this is a global trend (for a number of reasons)

Thoughts?

Council Post: Is Private Banking Dead? What use is a private bank in 2023?

Many small business entrepreneurs get "hijacked" by the wrong advice.

Has this ever happened to you? What would you advise "yesterday you" to do differently? Drop a note in the comments. 👇

🔍 The Pitfalls of Following the Wrong Advice: A Lesson in Financial Planning

It would be funny if it weren’t so serious.

The client had a substantial goal: to build $3M in liquid assets for a comfortable retirement. Yet, without the right tools or advice, achieving this seemed like an insurmountable challenge to the client – and rightly so: they had a 7-figure shortfall.

But the problem? They consulted with their accountant, who reassured them that they were "going OK" and didn't require additional financial advice. Personal or Business...

To illustrate the point, here's just some of the issues that needed addressing in the near term and why I would say they were not “going OK”:

📊 Business Financial Advice:
- Exit Strategy Required (none in place)
- Business Continuity Planning required (none in place)
- Key Person Dependency Review & Risk Protection completed (nothing in place)
- Legal Structure/Entities Review and Advice (some assets were held in the wrong/inefficient legal entity)

💼 Personal Finance Considerations:
- Superannuation Fund Portfolio Review (investment strategy unknown/uncertain at best)
- Superannuation Contributions Strategy for Building Wealth and Increasing Tax Efficiency (no strategy in place)
- Personal Risk Insurance Review (none in place)
- Current Australian Share Portfolio Strategy and Review (no strategy in place)
- Estate Planning Guidance and Recommendations for seeking legal advice (No Will or any other estate planning completed – this business owner is married with a dependent child)
- Future Capital Projections for Self-Funding Retirement (not done)

It's a sobering reminder of the consequences of listening to ill-informed advice. Without a comprehensive financial plan tailored to their specific goals and circumstances, individuals risk falling short of their aspirations.

At every turn, it's crucial to seek guidance from experts who can provide holistic advice and empower you to make informed decisions about your financial future. Let's ensure that missteps like these serve as valuable lessons about the importance of sound financial planning and don't let misguided advice derail your dreams.






As always seek professional advice before making any decision to invest or borrow.

"Should you cut costs when your business is struggling financially?"

I met with a business owner entrepreneur today, who told me they’ve been cutting costs at a rate of knots because they’re struggling, and I mentioned that maybe it’s not always the best strategy to simply “keep cutting” – like pruning a plant, cutting too much might kill the plant!

What do you think? I’d love for you to share your insights below.

Here are some ideas I like to explore:

1. Invest in Innovation: Instead of cutting costs, consider doubling down on innovation. Allocate resources towards research and development to create new products or services (programs) that can drive revenue growth and differentiate your business from competitors. Innovation can sometimes be the key to unlocking new markets or revitalising existing ones.

2. Strategic Spending Increases: While it may seem counterintuitive, strategically increasing spending in certain areas such as marketing or customer experience could yield significant returns. By investing in targeted marketing campaigns or enhancing the customer experience, you may be able to attract new customers, retain existing ones, and ultimately boost revenue.

3. Focus on Employee Development: Rather than implementing across-the-board cost-cutting measures, consider investing in your employees' skills and professional development. Providing training opportunities or offering incentives for innovation and productivity can lead to a more engaged workforce, which in turn can drive efficiency and revenue growth.

4. Explore Strategic Partnerships: Instead of solely relying on cost-cutting to improve your financial situation, consider forming strategic partnerships or collaborations with other businesses. By pooling resources or leveraging complementary strengths, you may be able to access new markets, reduce costs through economies of scale, or enhance your product offerings.

5. Revisit Pricing Strategies: Instead of immediately cutting costs, reassess your pricing strategies. Analyse your pricing structure and consider whether adjustments could be made to better reflect the value you provide to customers. This approach may allow you to maintain or even increase revenue without sacrificing quality or profitability.

6. Diversify Revenue Streams: Rather than focusing solely on reducing expenses, explore opportunities to diversify your revenue streams. This might involve expanding into new geographic markets, offering additional products or services, or targeting new customer segments. Diversification can help mitigate risk and provide a more stable foundation for your business.

Clearly, these alternative approaches may present different challenges and considerations – especially in small business, when resources might seem “tight”. But they may offer potential avenues for navigating financial difficulties while maintaining a focus on growth and sustainability.