Ep 032 – Business and Personal Insurance

Suburban Folk 0:00
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Unknown Speaker 0:41
a month into my child’s 529 from the month that they start kindergarten, I should be able to pay for 80% of my child’s college. I don’t trust that most people will eat their

Unknown Speaker 0:52
vegetables. So our kind

Unknown Speaker 0:54
of standard is three servings of vegetables per meal. You take something

Unknown Speaker 0:58
like a two by sixes You cut it

Unknown Speaker 1:00
with a circular saw. That’s like a superpower. Those middle school years are not

Suburban Folk 1:04
as fun but at that age, they’re still willing to talk to you. Welcome to the Suburban Folk podcast. I’m your host, Greg. Today’s episode we focus on insurance from business insurance and risk mitigation to personal insurance and how it fits into your overall financial profile. While it may not be something that we think about day to day in today’s environment, it is certainly important to make sure that you have your affairs in order. Our guest is Linden Holland of CBD risk management and insurance. Linden was born in Wollongong, New South Wales, Australia, and he started out as a spot welder for his first job. And then after an injury, he had to look for new options. He’s faced many challenges including separation and long term hospitalization after a motorcar accident on the app and highway. Lyndon has now been in the financial services industry for almost four decades. He specializes in helping small businesses and the self employed manage all risks they face, both known and unknown. Lending can save you With a few simple steps from any loss you can sustain, including regulatory and financial. Thanks for taking some time to join us on the show today. How are you?

Unknown Speaker 2:15
I’m Excellent. Thank you. Thank you for inviting me. This is a

Suburban Folk 2:18
timely topic that we’re going to talk about with your background. Unfortunately, given everything that’s going on in the world today, people are obviously concerned about their health, obviously concerned about finances, and by extension insurance in particular, I would think small and medium businesses is really going to be a consideration the pitfalls that they would have in getting their company started and making sure that they are profitable, etc, etc. while managing risk. Just got a whole lot more interesting. I’m using that word very lightly. So you want to go ahead and kick us off with your background in the industry. And how you Got into the insurance business.

Unknown Speaker 3:02
Sure. I started in the industry and in 1980 as 14 and a half year old, I started off in a motor vehicle dealership in the insurance department. And from there, I thought there has got to be a lot more than just insuring cars. So by I looked around and joined the financial planning industry, which at the time was known as the life insurance industry and general insurance. So that’s where I kicked off. And I did that because I’ve just felt there were needs for that. I’ve had a couple of experiences myself that required insurance, and they didn’t respond and I just didn’t think it was good enough

Suburban Folk 3:47
going from car insurance to life insurance. How does that ultimately expand into the book of business that you are doing today because I think that the general population Doesn’t necessarily think of all the different types of risk mitigation that could come with certain types of business insurance. So what are some of those examples? People, like you said, understand car insurance, understand life insurance, probably for their own personal use. But how does that then extend into business insurance?

Unknown Speaker 4:19
A good question, Greg. Business Insurance is complex. And I don’t know why the industry has made it complex. I see insurance as I transfer my risks to somebody else in the event that I should suffer a loss, I should be put back into a position I was before I suffered that loss. So I look at and that’s how I look at all of my insurance. So some people kind of sort of look at me a little bit strange, but that’s the basics and the idea of insurance when insurance actually started in the United Kingdom. Marine insurance is What kicked it off. So cargo was put on to ships. And people would wager whether it would actually get there or not. And then what they did is they It was like betting on horses and those sorts of things. So the government stepped in and actually made it legislation that you actually had to have a financial interest in that cargo. So that’s the beginning of how insurance started in this world. Today. Small Business Insurance, for self employed in small businesses is really important to understand it because of the complexity in the policy wording, and the exclusions, etc. Some people just find it very daunting. With business insurance. There’s so many different types. There’s business interruption, there’s loss of contents, there’s loss of business, there’s management liability. There’s directors and officers insurance, there’s buy sell insurance, there’s litigation insurance. There’s business partner litigation, insurance, there’s insurance for virtually everything. And I mean, in the United States, that increases to lots of other personal insurances and business insurances as well.

Suburban Folk 6:23
Where should somebody start? Especially if, like you said, let’s say it’s a individual person, that’s a small business, they’re doing some sort of just consulting on their own. What kinds of things should they be looking for now? I’m assuming it depends what kind of industry they’re in. But is there a standard place to start before they get too far into the process of establishing a business?

Unknown Speaker 6:44
No, Craig, it’s it’s a great question. What we should do first is ask ourselves the question, what could go wrong? And in this industry, what has gone wrong so write myself as a risk, register and identity defy the risks, and then build a likelihood and consequence on those risks so that you can identify what the problems are one of the biggest problems I find, and I find this across small business right up to the big corporates throughout the world, they don’t identify the risk by likelihood or consequence. They identify the cause, but they don’t offend identify the risk. And you can go into in Australia in the top 100 companies and find that probably 90% of them haven’t got that right. So if you can identify what can go wrong, you can then build something and effective controls around that to make sure that you mitigate the loss or you actually avoid it. So you start with a risk register with what can go wrong and how can I mitigate it?

Suburban Folk 7:58
Is that something that you Walk your clients through or would you be expecting them to have that well sorted out before you would start to interact with them?

Unknown Speaker 8:08
Greg, most people don’t know how to do it. And as I said, big corporate worlds don’t know how to do it. Australia has just taken its banking system through a royal commission, which is a government investigation into its conduct. And they couldn’t even get it right. They’ve got billions of dollars to spend on risk management and governance and compliance. So it’s something that I guide them and we discussed together we sit down and I say to them, explain to me what you do as a consultant, for example. So I’m a life coach is a good one. Do I give people advice? Do they act on my advice, and if they do, could that lead to something that could go wrong, and if that does, we need to make sure that we can cover that loss or we transfer that to an insurance company, and step by step. And there’s really only, you know, probably 20 or 30 risks we can identify or should identify on the risk register. And then the rest of them will become causes because there’s what’s what’s happens today has normally happened before. And if I can give you an example of that, California was hit with some bushfires last year and they were terrible and devastating. And the whole world poured out and it was great to see what the world did in its response. However, not not only a few months later, Australia also went through exactly the same issue. And we had back bushfires that were devastating. They took people’s lives, animals lives, their homes, their businesses, what we didn’t learn from that risk is how we should have documented what has happened in California, address that and make sure that we’ve got effective controls to make sure it doesn’t happen again.

Suburban Folk 10:08
That’s seems worrisome, given all the trends that we’ve had going on. And actually, as you’re giving the example, I was gonna say, yeah, how did the fires that were, obviously global news in Australia affect businesses and then just people personally, so sounds like, obviously significant disruption. And then what do you mean, when you say that maybe the lessons learned haven’t happened and the risk mitigation didn’t happen? What kind of examples?

Unknown Speaker 10:36
Yeah, look, it was devastating. In Australia, we’ve seen businesses and families destroyed. We’ve seen people’s lives lost and I mean, I get very emotional, I got goosebumps and tears in my eyes. Now when I think about people losing their lives, because we can stop it. We can prevent it or we can slow it down. We just don’t have the effective controls in place that we we enforce the Have a look at what’s currently happening today. Now in Australia, we’ve gone through the fires, we had floods, and then we had hail storms and now we’ve got COVID-19. So all of this in a period of 12 months, it has cost our economy several hundred billion dollars and will cost several hundred billion more and we will not recover from the coal void until probably October or November this year. And it’s it the devastation is terrible. We’re seeing people going into hiding and hibernation and they scared about their future and what they’re going to do and where they’re going. Anyway, back to my point I got off the the question what we as governments and What we as people in corporations ought to be doing is identify our risks, identify all the risks that we’ve encountered before, wherever that be in the world, such as the fires, storms, wars, whatever that be. And I say sighs and I say that lightly given what’s going on now. The Australian government released a paper back in 2019, from the Department of Health in September, and it was on the response to a virus coming out of Asia. And the response in this paper said, in the event that we had a virus come out of Asia, Australia would close its borders immediately. And if we had if somebody had done their job and put that in front of the Prime Minister, and said, Look, this is our response to that. Then we probably could have prevented months and months of pain. It’s happened before, anything that’s happened before is likely to happen again. And this is what we put in the risk register. We put down the risk, we identify the pain that we could suffer from it, and then we put in effective controls. The last thing about that is to make sure that somebody does the job in responding when that happens.

Suburban Folk 13:27
It’s a little bit scary to me that the perspective you’re describing sounds very similar to the conversations that are going on here in the States as well as far as what could have been put in place for other similar situations. Granted, it’s unprecedent what we’re going through right now, but certainly there have been other lessons learned h1 n one. That one was a big one that started to come around swine flu, I think was another one that didn’t end up being nearly like what we’re seeing with COVID-19 but Yeah, some of what those lessons weren’t were, for example, as far as the equipment that’s available has been an ongoing discussion from that standpoint. So, point well taken on what we’re seeing, again on the global stage for what people can be learning so they understand what kind of risks they have. Now, I’m also curious, what kind of inquiries are you getting? Given all the things that are going on? And like you said, for Australia, it’s been for the last year that these major events have happened. Are you seeing an increase in inquiries due to this? And are they the same kinds of questions or is it changed much just given everything that’s going on?

Unknown Speaker 14:39
Interesting question, Greg date, yes, there are inquiries, there is inquiries into the Royal Commission banking fiasco we had over the last couple of years. There’s queries into the bushfires and how that happened and how that could be prevented. And there are lots of people now getting into involved with social media. They’re posting on Facebook or Instagram or LinkedIn on a regular basis. What if we did this? Why didn’t we do this? Why didn’t we address that? And unfortunately, they’re not being listened to. and governments don’t listen to people. They employ purported experts who really aren’t experts. And to give you an example. There are companies running around saying, Yeah, we are governance, compliance and risk its boots, we can identify your risk x, your risks, and we can build a risk register, but they don’t know how to identify risks, and they don’t do it by likelihood and consequence, and about what went wrong. The problems I have with all of it, Greg is is we had deaths here in a theme park a couple of years ago. And the only thing that went wrong is somebody just didn’t do their job. And because somebody didn’t Do that safety check, several more ruling people died. And it’s just a matter of people doing their job. So if I’ve got those controls in place, I’ve got to make sure they’re effective and we respond.

Suburban Folk 16:13
This is maybe a stupid question. But then for those kind of controls being in place, how does that interact with a particular type of insurance policy? Thinking of the theme park example you just gave? Would that be something where you would expect the theme park to have something in place that’s also LinkedIn with some sort of insurance that ensures they are following the proper safety protocols? Or would that be coming from the government or general public or something like that?

Unknown Speaker 16:43
Interesting question. I mean, the insurance company will certainly have some clauses or some conditions saying that you must meet safety measurements you must meet the ISI, which is the Australian safety regulator here. So we do have those measures in place, the insurance company ought to respond to those sorts of issues. However, as we all know, sometimes insurance companies have clauses or conditions in their policies that say, unless this is followed, unless this procedure is done, then we can void your policy. So it’s really important to make sure that everybody does their job and we have effective controls. What we’re seeing now with insurance companies is our businesses in Australia covered for business interruption insurance, when you’ve gone into not quite locked down in Australia, but we’ve certainly been encouraged to stay at home. We’ve been told that we can only mingle up to groups of 10. The Prime Minister has recommended that we only mingle in groups of two and How that’s managed is managed by each state. So it’s important for us to make sure that we get everything right that we do important for us to make sure every day we do our job, most of these things that we encounter, or we experienced these because somebody hasn’t done their job, or I haven’t identified my risks properly,

Suburban Folk 18:24
does what we’re seeing now fall into a category of unprecedented no amount of risk mitigation could have prepared people on a personal level and businesses for I guess, like business continuity, to be prepared or do. Do you feel like it’s just a bigger version of something that could be identified as part of a risk strategy?

Unknown Speaker 18:48
Look, I think that it’s something that we got complacent with when we had the the bird flu or a couple of the other viruses that have been out brakes, insurance companies responded in putting some of those clauses in their insurance policies as exclusions. So for example, some of the exclusions we are seeing is that you are excluded from an outbreak of a virus. Now, if you use a broker and you use a qualified broker, they would identify the exclusions as being a risk. And they would go back to the insurance company and ask the insurance company to write that back in to the policy, not excluding it. Now, today, sorry before today, if we wind back six months, that would have been a possibility. In Australia. What we’re seeing today is the insurance companies backing off and actually withdrawing from offering anybody any insurance so I would be surprised if you can double surance today In most occupations, if you’re a landlord or a property owner, and you lease or rent that property out, you’re unlikely to get loss of rent today, due to the current virus, it will certainly come back sooner or later when it settles down how the insurance companies will respond. I don’t know, in Australia, they’ve talked about whether we should just exclude it across the board, or what we should do, in my opinion, the entire country, whether that be the United States of America or Australia or China and China needs to step up to the plate and support the industry and support its people. So in my opinion, the claims should be paid by the insurance companies, and that would be funded by the Federal Reserve or the Australian Government. And because the industry needs to be sustainable, it needs to start If we need to have insurance, and we need to stay in a job, we need to put food on the table. And we need to continue on. So it’s really important that the world responds properly, and not irresponsibly. And I’m, in my opinion, it’s irresponsible for insurance companies to consider. Let’s not offer insurance because it’s stopping people buying homes and businesses, and it’s stopping the economy today. I can’t go out in Australia and buy a new property tomorrow if I wanted to, because I can’t get insurance, if that’s an investment property, and I want to cover loss of rent today, if you don’t have it, and a lot of people in Australia are trying to now secure landlord insurance or property insurance because they didn’t have loss of rent. It was too late. You’ve missed the boat. It’s like saying I contracted cancer yesterday. Can I get life insurance? The answer is obviously no.

Suburban Folk 21:59
Obviously people agree that the right thing to do is to stay away from large crowds stay at home as much as you possibly can. And that’s not their fault that this has occurred, it is again, the right thing to do. So I think the majority of people are in agreement that because that is the case, and citizens are following what the governing body is advising to do in order to tamp this down and, you know, ultimately save lives, then there should be some kind of financial protection for people so that once we get past it, and we’re trying to get the economy back to what we’re used to, they’ve got to have some kind of safety net. So I like to think that most folks see that in a similar way that you’re describing.

Unknown Speaker 22:45
Yeah, look, I think so. It’s it’s we’re in unknown territory, Greg and we’ve we’ve not been here for ever we’ve not seen it on the scale and as time goes on, and as we progress in time in globalized And into mixing of races and cultures and foods and, and other bits and pieces. We’re going to see these things change the way we go about things. And we’re going to see a lot more of this. It’s really important to stand up globally or nationally, and support everybody. It’s important now to support the vulnerable, the aged and the homeless, and those that are already sick, those homeless out on the streets, it gets amongst to them and it could spread and go further virally, and have a bigger impact. So we need to respond to everybody and not leave everybody out. It’s really important that we come together as a community, no matter what color will no matter what race no matter what we are, and we’re all human beings, and we just need to do it together.

Suburban Folk 23:56
I’m also curious, drilling down maybe even from industry. Industry based on your experience, and before the current situations that have gone on and then as well as to now, are there certain industries that inherently take on more risk just because of the business that they happen to be in? And then of course, means they need to be more aware of the different types of policies that they should have. And then the second question is, are there technology things is one thing that comes to example in my mind, for example, here, if people were able to work from home and remotely, they’ve been able to fare a little bit better than a restaurant, let’s say where you have to have people come out and congregate, and you just don’t have any other options. So any advice in general for what types of industries are going to have a lot more risk and what may be a safer bet and then also what else that could be doing to mitigate the risk even outside of just making sure they have the right kind of coverage, financial

Unknown Speaker 25:00
Yes, it’s interesting. As far as where we’re going, as far as the world is concerned, a lot of us in Australia have moved our operations to home. So we’re working remotely. So for insurance companies and big corporates, they’re moving all their employees to their homes, and they’re working from home. So the risks for them are going to be more cyber than anything else, more hacking than anything else. And I’ve seen an increase in hacking activity over the last three or four weeks, because people are going to try and take advantage of the situation when I’m working from home. is my home network secure, it’s probably not as secure as my network at the office. So therefore, am I vulnerable? And the hackers know about this. So we need to be very aware of our home systems, which are certainly nothing like systems in corporations. When we talk about risks, Those sorts of things. I’m still seeing retail stores today. Open in Australia, we’re starting to see them continue to trade. The risk is with that if employees start to get the virus or guests or shoppers start to get the virus and they can point and prove to where it came from, then they risk litigation. And sometimes I just really think we’re not taking it seriously enough across the world with all the deaths and all the cases there are. Let’s not make a mistake, this virus does cool. And it’s not gender, age, or or anything else discriminate. It’s taken lives of young people, of teenagers and young adults and the older so it’s not a children or older people’s virus. It’s now in Australia actually changing and they’re now saying in Australia, there’s a couple of different strains, or it’s changing its nature, which is quite scary. We’re about to come into winter. So it’s going to probably get worse before it gets better. And I think in Australia, we’re not taking it seriously enough. So we’re going to suffer some of those consequences

Suburban Folk 27:24
in America, kind of the opposite, sort of rooting for the warmer weather. Not that there’s anything proven that says that it might limit the spread, but there’s a chance, at least based on the way flu season goes and things like that. So yeah, going the other way. I would imagine, you don’t want winter to come very quickly, because it could make things worse.

Unknown Speaker 27:48
Yeah, absolutely. So we’re certainly all praying to God and we’re praying to God for all of our friends around the world that this just goes away and we can get back to normality but I don’t think we’ll ever see the world again. The way we want to do it,

Suburban Folk 28:01
I think that is certainly true, at least the way things are trending right now. So, going back to even some of the different insurance considerations, so we talked about life insurance, when you were giving some of your background and there also could be like disability or workers comp. How do you deal with those kinds of policies and advising people? And when you do, are we talking about individual coverage? So I’m Greg, I get my life insurance policy are we talking about? I’m Greg and I have company XYZ and I’m buying life insurance policy that’ll be for me and also for all my employees.

Unknown Speaker 28:45
Greg, it’s a great question. When it comes to risk mitigation and insurance. What you need to do is you need to be considering everything, what could go wrong, so when I speak to an expert or Professional like you I sit down and I say, Okay, what are your assets? What are your liabilities? What is your family tree? What does that look like? And where do you want to be in three 510 20 in 50 years time. And what happens is is that I identify the risks. So if Greg couldn’t produce an income, what would be the outcome for his family? What would be the outcome for his children’s education? What would be the the pressure or the added pressure, for example that he might put on the rest of his family? So if I was to for terminally ill tomorrow, and I was was terminally ill for three or four years, what is the impact that I’m leaving behind? And for a few dollars a week I can protect my family’s financial interest to take away that financial burden. One thing I do know Greg is I helped a guy last year After four or five years fighting with the insurance companies secure $12 million from his insurance policies that took him from a bad health situation, to taking his mind off of his financial insecurity, to being able to then concentrate on his health. And it’s made a massive difference. The doctors said he was unlikely to survive 24 months, were coming into 18 months now. And we’re seeing an improvement in his health because he doesn’t have that financial insecurity. So it’s important to address every little step along the way, as we continue to mature or something stops us and we start again. So what we do is we look at what interrupts the business and what can go wrong in the business. What interrupts the person personally, the husband, the wife, the partner, whatever that looks like. What happens if that’s interrupted? And how can we reduce and mitigate the financial stress there? What does the family look like moving forward? And how can it impact? or How can I reduce? or How can I stop? So we look at life insurance and business, buy sell agreements, and income protection, insurance, disability, long term disability, trauma insurance, we look at all of it, because they’re all risks that we face. And if we don’t identify all of them, it’s the unknown and the one we forgot about, that’s gonna hit us.

Suburban Folk 31:37
And that probably includes protection for employees as well, right? Because that could be a certain risk consideration for the owner of a business. If something happens their employee and they aren’t covering that person a because it’s presumably the right thing to do and B, they don’t want to be that person that didn’t provide the right coverage for their workers who are taking on risk that then it could become a court case and ultimately cost a lot more money. Right.

Unknown Speaker 32:06
Interesting. You say that in Australia, we’ve just actually changed legislation which I’m appalled by. We have most of our employees automatically get life insurance, short term and long term disability insurance included with their superannuation through their employer. The government has just legislated that if you leave your employer and you don’t contact your in your superannuation fund within a certain period of time, they will automatically cancel your insurance. And we’re starting to see the risks now where people have an accident and maybe they’re in hospital for six or 12 months and they can’t respond. They come out and they want to put in a claim on their insurance, and there’s no insurance. It’s really an irresponsible thing. We’ve not looked at what the risks and the consequences are of what we’re doing. And I’m very vocal about this. So I applaud the US government, in what it does with its employers and how it puts together employer insurance programs, because it’s really important. And if that person is a key person to your business, you need to support them financially. So insurance does that. And it takes away the financial burden from you, allows you to keep them employed, put somebody else in the position, who might not be as good but certainly carry on for a while until they can come back to good health and back to work. So really important that came in insurance and employee insurance for key people is in place and that it works for everybody. And I think something else that

Suburban Folk 33:52
you hit on that’s important for people to hear with just the overall considerations. For risk and the coverages that are available is stress. I think sometimes people don’t necessarily think of how these different situations could equal finance it. But certainly when people think of finance, they realize how stressful it can be. If there’s unknown and you don’t know where the next dollar is coming from, or something like that if you’re really strapped, but I would think that is an emphasis for any type of policy that you’re looking at or working with an insurance company on or again, like the example you gave where, unfortunately, there does have to be litigation because a company’s not paying. It’s all really stress related. And indeed, I think anybody that’s been in a situation like that would be able to relate that. Yeah, it can affect your health. It can affect everything that’s going on. Right.

Unknown Speaker 34:51
Okay, great. And look, it really does if you’ve got somebody who’s sick and you put in a claim to the insurance company and they deny your claim because they don’t like it. It puts them under further stress, it puts them under financial stress. And ultimately, I’ve seen that lead to death. And it wants insurance companies wake up and realize that, you know, we’re not looking at what is the right thing to do. We’re looking for the to improve our bottom line or our return to the investor. Once they realize that that’s not what the world or business is about, then we’ll have a better outcome. It’s about doing what’s right. And I’m passionate about this insurance is to replace my financial loss in the event that I actually suffer a financial loss. I don’t care if your policy says Elvis, Elvis Presley and Michael Jackson need to be standing on 52nd and third, just for the policy to respond. That’s just ridiculous. So you know that stress, stress is one of the biggest killers in the world. And this is what insurance company need to address if I stopped you financially living or putting food on the table or paying your mortgage or your electricity, I’m adding to your stress, which is increasing the power of whatever it is that’s got ahold of you the cancer, the mental illness, the whatever it is, I’m actually contributing to that more than probably the disease or problem itself. So my my suggestion to the corporate world is stop putting the mighty dollar first and start doing the right thing.

Suburban Folk 36:33
And actually why that’s top of mind for me. I have an episode forthcoming with a cardiologist and gang going back to what is going on now. He pointed out that still in the US, at least, cardiovascular Heart disease is still the number one killer of Americans and he said, you know, it’s come down, but the alarming thing is that younger folks, 30s and 40s age people are actually increasing in their instances. And I asked about stress being a factor. And he said absolutely, that it was a definite factor from saw the news and all the things that come and bombard you to job issues that can then lead, of course, bad eating, and so on. So it is a factor. And again, I think when people think of finances, maybe they link it a little bit easier, just because that’s something they deal with day to day, but it’s not a hard leap to also then go over to the types of coverages that we’re talking about other types of situations to see that it’s something else that would add a lot of issues and again, not being able to work, that loss of income stream coming in, that’s already a stressful situation in and of itself to then have to fight to get what you thought your policy was covering to begin with. Just exponentially I would think would compound the just negativity of the situation. It’s

Unknown Speaker 38:00
It is so true, I mean, and financial stress leads to lots of things, it leads to divorce, it leads to alcoholism, it leads to domestic violence. It leads to so many different things, heart attack, stroke, obesity, eating, comfort, eating, insomnia, it’s got so many things linked to it diabetes even. So it really is something that we need to be responsible and act responsibly with. And as a person who’s starting off a business or a person who has a family or a mortgage or commitments, it’s your responsibility to ensure that you are protected in the right places with your insurance. And it goes through from the 22 year old entrepreneur who’s who’s out there, doing everything they can do to the 5560 year old person who’s looking at retirement in the next five or 10 years. The relationship between overall finances to certain insurance coverages a little bit further. What is the relationship between the two should the consideration of what types of coverage and with the risk considerations that we’ve been talking about? Does it live inside of that financial plan? Are they separate from each other, but commingle in some way? How should somebody think about what kind of insurance and coverage that they have with their overall financial plan? And look, it’s important, it’s important to be able to address all of these, and it’s really, really important to be able to afford it. I mean, sometimes insurance is not affordable, and we walk away. Sometimes some insurance is better than none. And there would be difference of an opinion out there about whether that’s the right thing to say or not the covers of insurance I and going back to is what can go wrong. And what is going to be the outcome? If that happens? What can I manage myself? And what risk Do I need to transfer to insurance companies and other things. So that goes personally, that goes in business that goes in partnerships. And that goes in financial planning so that I’ve got a plan to go from age, whatever it is, I am today, to retirement and beyond. I’ve just started my master’s degree in Applied Finance. And whilst I’ve been doing this for nearly 14 years, it’s really interesting the other things you learn to do when you start to seeing what other people look at and how they look at how to do these things properly. So you need something from the beginning today, that takes you all the way through the end. And it’s a life plan. It’s a financial life plan, such as a business plan. It’s not any different to that. It’s just recording of what your life looks like. Now. Tomorrow, what you want it to look like and how it looks when it’s time to retire.

Suburban Folk 41:05
And for folks that are either running their own business or thinking about creating their own business, should their personal finances be separate from the business finances? Or do they have to be looked at all as one package?

Unknown Speaker 41:23
And I certainly use separate personal and business. I mean, I’m not sure what the IRS is like there. But certainly here in Australia, we have two separate business and personal finance. And when you’re starting off in a business, Greg, brand new, that’s really hard to do, because you’re the person that’s taking the money out of your personal pocket and putting it in the business to run. And so therefore, you will look at it and say, well, it’s mine anyway. But authorities and governments and that sort of look at it in a different way. So it’s important to keep them separate. important to document them separately. And for the reason that they were actually developed or the reason I actually purchased them or what purpose they have.

Suburban Folk 42:10
One maybe clear example to me that helps illustrate those differences would be probably real estate, you tend to think of your residential purchase, which is you as an individual, but if you’re purchasing a property for an investment, then you likely should have a business entity ready to go. Because if you rent that out, and the person that’s living in your rental property hurts themselves or something else goes on and you’re liable for something, you don’t want to be personally liable. You want your business entity to be liable. So maybe that’s one way to think of the differences between the two.

Unknown Speaker 42:49
Yeah, I think that’s a great example. I mean, as you know, corporations are separate from the personal persons. So it’s it’s important to do that. It certainly says to the IRS So in Australia, the A to, you’re running them as separate entities, and that is the purpose of it. So therefore, personally, I don’t get caught up or hopefully don’t get caught up in that litigation and made personally responsible. So yeah, that’s a great a great one with the property example. I’m going to use that one From now on, thanks for that.

Suburban Folk 43:19
Well, and I just think of that from the standpoint of like, well, they could come after the business, so better the business to go bankrupt and like the worst case scenario, right then for you to personally go bankrupt because you didn’t do the due diligence to separate the two entities. And I think that began with real estate that can definitely be one that that people might blur those lines a little bit and definitely should not if they could help it one more time going back to the current environment, from the just overall financial aspects separate from the things that we’ve talked about so far with risk and so on. Is there anything else that you are finding or recommending to people with The economic downturn that we have, and I won’t put you on the spot to ask what you think’s going to happen in the next few months as far as if we’re going to see any kind of recovery or anything, but just general rules of thumb that you are recommending for people with their overall finances. I’m trying to encourage people that this is not Armageddon. This is just a stop gap in where we were going. So what happened yesterday is not going to reflect on what happens

Unknown Speaker 44:30
tomorrow. We are changing to a digital world, people should embrace that. And I encourage people to start looking at how can I do what I do from my home or what can I do to change my career now, and how can I move on so there’s a book that I love to death and it’s from Hal Elrod, and it’s called Miracle Morning. And I encourage it’s it’s free at the moment on audio books. I encourage people to listen to it because it encourages you, and talks about adversity and accidents and near death experiences, and how people around the world have overcome them. How generals around the world have put those principles into place. And it’s taken Marines and armies and, and places around the world into those new dimensions and taking them into a new place. So I encourage you, if you’re going to start a new business today, I encourage you to start the new business and look at what that looks like and start again. When are we going to get back together to normality I reckon in Australia, October, November. I’m hoping the United States can certainly recover quicker than that. But unless we take our social distancing serious and unless we know and I would have thought we should have shut down all the borders and all everything else is safe for essential services a few weeks ago. I believe it would have been over now but Who are there’s nothing we can do about that. But what we can do is look to the future positively, and grow positively. And make sure that if an event like this ever happens again, God forbid, that we’re prepared for it, that we have the risk management programs in place, so that I can sit back and say,

Suburban Folk 46:21
I’m prepared a great outlook for people to remind themselves of when there doesn’t seem to be an end sight for what’s going on. Like you said, we will get through it, we will see the other side. And it’s important to have some lessons learned from things that have already come and gone as well as this once it has come and gone. And Lyndon that is actually the main set of questions that I had. Is there anything that comes to mind from your perspective that we didn’t cover? Look,

Unknown Speaker 46:52
Greg, we could do this probably once a month and there would be so much to cover. I think it’s really important that If you’re going into business or you have risks that you need to protect against, you should engage a broker and a proper qualified financial planner and have a look at all of your risks in one place or bring them together so that you understand the entire picture. A lot of people use insurance companies direct or they use investments direct or do other bits and pieces and today, they’re seeing the consequences of that to save a few dollars from using a broker as opposed to dealing direct or buying shares direct as opposed to using a broker who gives me advice. we’re now seeing the value in using a qualified broker, a qualified financial planner, a qualified certified financial advisor, and I encourage anybody around the world that if you want to sit down your financial future Don’t do it by yourself, get out and get educated and work with these people who know what the risks are and can guide you and help you. It’s not worth saving yourself a few dollars, because you end up with so many issues that you can’t fix when it comes time to climb. So I encourage everybody to stay safe to to look up, chin up, we will get through this on positive about that. It’s an opportunity to look at new opportunities, and I encourage you all to look at it. And if you need to reach out to somebody for encouragement, I’m available Linden Holland on Facebook or on LinkedIn. Or, you know, I can leave my link here on email and somebody can get back to me but I’m, I’m here for you if you need me.

Suburban Folk 48:47
That’s perfect. Yeah, I’ll definitely make sure to put all of your information into the show notes so that if people are looking to reach out and connect, they will be able to easily do that, Linda, and I really appreciate you coming On the show, I had a good time and really enjoyed getting to hear some of the perspective of what’s going on in Australia and the things that you’re saying sounds like we’re all in it together indeed. And we will certainly see ourselves on the other side. So stay safe. And again, I appreciate it.

Unknown Speaker 49:17
Thank you, Greg, I appreciate you very, very much. Speak to you soon. Cheers.

Suburban Folk 49:23
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