Posted by Adam Grossmann, January 2013.

My objective is to inform and inspire, so you can view your finances with clarity and achieve positive outcomes in your lives.

As a finance professional, my sole objective is to provide the best financial outcomes for my clients. What I did not comprehend when I started in 2006, was achieving this had little to do with the products and processes we use. This blog aims to clear some confusion and advance financial performance.

Posted by Adam Grossmann, February 2013

My first day in the finance industry was with one of the top mortgage originators in Australia. I had the privilege to spend a few hours with the owner and the chance to pick the brains of an industry expert, someone who has done it all and made a fortune.

My enthusiasm was brimming, I had so many questions. How did they reduce debt, free up cash, make money? What information did they share and what value did they provide for their customers. After all, this was a very successful business; surely it was because they help their customers? Right? What I was about to learn left me questioning what I was doing in this industry.

I had built a report with the owner during the interview process; I think he liked me and responded to my enthusiasm. I asked, “How do you do it, what makes you successful?” He looked me in the eye, lent forward and softened his voice, as if to be sharing a secret. “When you write a loan free up as much equity as possible, people don’t know how much they spend, if you free up equity they tend to spend it, it’s great for trails.” (Trail income is paid as a percentage of outstanding debt. The more debt your customers have, the more you get paid)…

Freeing up equity without cash flow support, opens a customer for disaster. This strategy is about profits for lenders; what is means for you is higher cost of finance and more years in debt.

This was the tip of the ice burg of a multitude of products, systems and policies that all work against consumers for industry profit. I was rocked, my core objective is to provide the best possible financial outcomes for my customers; was this in tatters? If I wanted to be successful, did I have to rethink my values? Not likely, I left this business within a month and started my own...

Posted by Adam Grossmann, February 2013

The finance industry doesn’t pay for time, they pay for executed contracts, which leads to a huge problem for consumers… You hear why you should sign a contract, when often the most relevant information is why you should not. Now don’t get me wrong I am not saying advisors are bad, there are some genuine people in the industry trying to do their best for their customers. But regardless of who you are dealing with, all advisors are limited on what they can say and do, by Bank product and process.

Banks teach brokers and planners the features of their products, process and legal requirements to protect the institution. But advisors are not shown how policy and structures can inflate the cost of finance; how credit cards undermine future income; how they move goalposts after the fact and why they sell negative income to start with. Banks run their own objectives; not yours.

You might take advice from a trustworthy broker or planner, but make that part of your research, not all of your research. Enter below and I will show you how to save money, without signing a contract...

Posted by Adam Grossmann, February 2013

I could write endlessly about this topic, but for the purpose of everyone’s sanity, lets make this simple…

Fortnightly repayments, offset accounts, lines of credit and sweeping credit card facilities, have all been promoted under the umbrella of “Debt Reduction”. Although there is some technical truth to the story, there is a critical flaw. If you are being shown a loan type that will help you reduce debt, ask your advisor the following question… What happens if I spend more than I earn? If the answer is, it won’t affect the loan, run a mile. In fact just run a mile, it’s mostly smoke screens and mirrors to sell contracts.

Fundamental debt reduction is about one thing, cash flow management. Allocating your income to cover all expenses, and executing that plan, is the only way to control debt. Financiers build liquidity (available funds) through the refinance process, i.e. a new credit card, redraw. They do this because liquidity is a great way to grow debt (Day one the first scam). It’s all about increasing profits, and you are the potential victim. But there is a silver lining…

The good news… The repayment schedule set with a new home loan considerably inflates your cost of finance. If you haven't done so already, enter below to eliminate this waste from your existing loans, right now.

Posted by Adam Grossmann, February 2016

One perception to adjust for the benefit of our investment well being, is “Good Debt”. In my view, its a term used to help people past any anxiety of long term banking contracts. Leveraging is fundamental to many strategies, however an investment mindset of “Good Debt”, can be costly. Investments win or lose, debt will leverage either way!

Investors generally have sound strategies, but given investments are talked up, forget to plan the inevitable "leveraged loss". When pushing LVR boundaries a negative adjustment can have a major impact on your portfolio. Good Debt wiped out trillions of market wealth during the GFC and with it, millions of retirement plans and investment portfolios. Don't be fooled, all debt must be treated with extreme care.

Our advice... Invest wisely, plan for contingencies and balance your portfolio for sustainable growth. Debt Reduction strategies, fundamental for non-investment debt, can add significantly to an investment mix. Liquid strategy, solid ROI, builds net worth and reduces risk.

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Posted by Adam Grossmann, May 2016

Consumer Warning! Consolidation can result in the loss of cash flow, plus additional cost and term of finance.

If you have been driven to consolidation, this could be crucial. Why consolidate? Payments getting difficult to manage? Juggling funds around? Need to simplify into a single repayment? Want to save money? All legitimate reasons to take action, but here is the harsh reality. Your finances are not lacking, cash flow management is.

Your income is the most valuable asset you have; it is also a limited resource (you earn one amount of income during your professional life). Without cash flow management, funds released through consolidation is likely to be lost to the same financial inefficiencies driving your debts now.

Adding to this devastation, when you consolidate to a reduced interest rate and a reduced repayment, what is the new term of finance? Consolidate longer than today's remaining term, even at a lower rate, can increase your total cost of finance.

Here’s the good news. If you improve your cash flow management, you can control performance and strip cost regardless. Cashflow.coach automates this for you. We strip your finance cost and secure the money for your futures.

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Posted by Adam Grossmann, January 2017

Spend on your credit card, while having your money reducing daily home loan interest? Sound about right? As with most finance sales pitches, you may hear a technical truth, but not the fundamental flaw.

Think about your lives outgoings. Various bills, cost cycles, investments, food, fun, transport, education, maintenance, medical, family, unplanned expenses and after all of this, the need for a holiday. From a single account with a single balance, how well do you keep all spending within budget?

Now consider a $450,000 loan @ 4% IR over 30 years. In the first year you pay $3.25 to reduce every $1 principal debt. Even after 10 years, you are still paying $2.27 for every $1. With sweeping credit cards, every dollar miss spent adds to principal debt, costing several times more future income to recover ground. It's a penalty you don't see, but can weigh you down heavily.

Financiers make money not only through direct interest, but by creating future liability through liquid structures. Without changing your accounts or the way you use them; Cashflow.coach manages money, avoids pitfalls, strips your cost of finance and tracks progress.

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Posted by Adam Grossmann February 2019

As a mortgage broker in 2006, my sole objective was to deliver the best possible financial outcomes for my clients. In addition to a mortgage broking service, we provided education and strategy and have never varied from our sole purpose. For example we did not justify refinancing small margins when the client would benefit more from budgeting and strategy. We established long term relationships and would finance when the time was right regardless.

This led to servicing some clients without commission and I had an initiative which would benefit the client, help me get remunerated and create advantages for the industry. According to the major lenders they were struggling with customer retention and increasing cost driven by some financiers refinance away from lenders when there was little benefit. The activity known as churning, was not always in the customers interest and was increasing lender processing.

My idea was allow customers to authorise after sales trail commissions to be allocated to a broker of their choice, lenders would stop paying cowboy operators and create an industry fighting to provide the best after sales support. It was feasible because financial planning was structured in a similar way. I presented to managers from all major Banks in Australia, and demonstrated how they could reduce cost and secure happier, longer term customers.

The idea mostly fell on deaf ears, not because there wasn’t potential worth exploring, but they just didn't seem open to initiative. One lender did see potential and the idea was presented at a national board meeting, as a point of discussion. The feedback was, "We like the idea but your competitors who we also supply, wouldn’t".

As I drove away from that meeting, I realised that if we were going to make positive change in people’s lives, we had to build our own systems. That was nearly a decade ago and we have been developing in this space since. Current functionality will continue to simplify and we have some exciting features set for release. Everything we do eliminates burden, so you have more time and money in life.

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