What to do with a redundancy payout
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What to do with a redundancy payout

Make sure you plan your next move carefully to make the most of your payout

By Mercedes Maguire
Fri, Dec 23, 2022 9:11amGrey Clock 3 min

 You wouldn’t really call a redundancy a career highlight given you’re losing your job. But you’re being compensated for that loss with a lump sum of money – in some cases up to a year’s salary or more.

Experts agree that a redundancy is not necessarily the career death knell it may at first appear.

For many, a redundancy and the payout that comes with it, can be the opportunity for a new start; perhaps a career overhaul, the chance to start a business, a slide into early retirement or the opportunity to boost your superannuation or pay down your mortgage. It could even be a long-awaited extended overseas holiday.

Read more stories like this in the launch issue of Kanebridge Quarterly magazine. Order your copy here

The opportunity a redundancy brings really depends on where you’re at in life, your age – and the amount of money you receive. 

“It can very much be a re-start,” says Steve Mickenbecker, money expert at finance comparison site, Canstar. “People (who get a redundancy) tend to re-visit life goals, they ask themselves ‘What do I want to do? What do I value?’. The beauty is you’re being paid a sum that gives you some breathing space to work this out.”

What you do with your redundancy payout will depend on whether you need to live on the money while you look for another job. If you’re on the job market, you may need to make the money last an uncertain amount of time.

If this is the case, the first step should be to make a personal budget, which you can do using online tools and calculators, or with the help of a money coach or financial advisor. Beyond that, your options are simple – invest it or spend it – says Noel Whitaker, a finance columnist and author of Retirement Made Simple. However, the best financial roadmap will vary from person to person.

“I would start by talking to an advisor or your accountant at the outset who can explain the tax implications associated with a redundancy payout, which can be complicated,” Whitaker says. “The best thing you can do regardless of which option you take is to stay as flexible as possible. For instance, you can pay down your mortgage, or you can put your money into your mortgage off-set account, if your loan has one, so you can still access it should you need it.”

He says age also plays a factor. If you are older, you may want to put it in your super knowing you won’t be losing access to it for long, an option that is less attractive to someone in their 30s, for instance, who will not be able to access that money for several decades more.

Bryan Ashenden, the head of financial literacy and advocacy at wealth management company, BT, breaks down the figures on investing versus super.

“With an investment, you will get the benefit of not only the dividend or return, but also capital growth depending on how you invest the money,” Ashenden says. “For example, a $20,000 investment may generate a four per cent income return (or $800 per annum) but may also provide a capital growth of five per cent per annum (or $1000). So, after one year, your $20,000 investment is worth $21,000 and your $800 income return could either be re-invested or perhaps used towards repaying some of your home loan principal or interest.

“If invested via super, with the same rates of return, the $800 income return would be worth $680 after tax, but because it is locked in the super system until you access it, it can be reinvested (with the $1000 capital growth), meaning you have $21,680 as a net investment after one year.”

The added benefit of investing via super, he says, is that when you access the funds after the age of 60, the money comes back to you tax free. For some, the temptation to invest in a small business venture could also be alluring. But that could be a high risk option.

“There are a lot of challenges (to small business) in today’s environment,” says Small Business Association of Australia CEO Anne Nalder. “It’s not a booming period, with inflation tipped to go close to eight per cent by the end of the year and interest rates also going up.

“If you are going to invest in a small business, look at the potential growth areas and go into something you’re good at, familiar with and passionate about.”

Ultimately, while taking a holiday is a ‘sunk cost’ it could be just the refresher you need before making your next move.



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A Killer Golf Swing Is a Hot Job Skill Now

Companies are eager to hire strong players who use hybrid work schedules to schmooze clients on the course

By CALLUM BORCHERS
Fri, Jun 14, 2024 5 min

Standout golfers who aren’t quite PGA Tour material now have somewhere else to play professionally: Corporate America.

People who can smash 300-yard drives and sink birdie putts are sought-after hires in finance, consulting, sales and other industries, recruiters say. In the hybrid work era, the business golf outing is back in a big way.

Executive recruiter Shawn Cole says he gets so many requests to find ace golfers that he records candidates’ handicaps, an index based on average number of strokes over par, in the information packets he submits to clients. Golf alone can’t get you a plum job, he says—but not playing could cost you one.

“I know a guy that literally flies around the world in a private jet loaded with French wine, and he golfs and lands hundred-million-dollar deals,” Cole says.

Tee times and networking sessions have long gone hand-in-golf-glove. Despite criticism that doing business on the course undermines diversity, equity and inclusion efforts—and the fact that golf clubs haven’t always been open to women and minorities —people who mix golf and work say the outings are one of the last reprieves from 30-minute calendar blocks

Stars like Tiger Woods and Michelle Wie West helped expand participation in the sport. Still, just 22% of golfers are nonwhite and 26% are women, according to the National Golf Foundation.

To lure more people, clubs have relaxed rules against mobile-phone use on the course, embracing white-collar professionals who want to entertain clients on the links without disconnecting from the office. It’s no longer taboo to check email from your cart or take a quick call at the halfway turn.

With so much other business conducted virtually, shaking hands on the green and schmoozing over clubhouse beers is now seen as making an extra effort, not slacking off.

Americans played a record 531 million rounds last year. Weekday play has nearly doubled since 2019, with much of the action during business hours , according to research by Stanford University economist Nicholas Bloom .

“It would’ve been scandalous in 2019 to be having multiple meetings a week on the golf course,” Bloom says. “In 2024, if you’re producing results, no one’s going to see anything wrong with it.”

A financial adviser at a major Wall Street bank who competes on the amateur circuit told me he completes 90% of his tasks by 10 a.m. because he manages long-term investment plans that change infrequently. The rest of his workday often involves golfing with clients and prospects. He’s a member of a private club with a multiyear waiting list, and people jump at the chance to join him on a course they normally can’t access.

There is an art to bringing in business this way. He never initiates shoptalk, telling his playing partners the round is about having fun and getting to know each other. They can’t resist asking about investment strategies by the back nine, he says.

Work hard, play hard

Matt Parziale golfed professionally on minor-league tours for several years, but when his dream of making the big time ended, he had to get a regular job. He became a firefighter, like his dad.

A few years later he won one of the biggest amateur tournaments in the country, earning spots in the 2018 Masters and U.S. Open, where he tied for first among non-pros.

The brush with celebrity brought introductions to business types that Parziale, 35 years old, says he wouldn’t have met otherwise. One connection led to a job with a large insurance broker. In 2022 he jumped to Deland, Gibson Insurance Associates in Wellesley, Mass., which recognised his golf game as a tool to help win large accounts.

He rescheduled our interview because he was hosting clients at a private club on Cape Cod, and squeezed me in the next morning, before teeing off with a business group in Newport, R.I.

A short time ago, Parziale couldn’t imagine making a living this way. Now he’s the norm in elite amateur golf circles.

“I look around at the guys at the events I play, and they all have these jobs ,” he says.

His boss, Chief Executive Chip Gibson, says Parziale is good at bringing in business because he puts as much effort into building relationships as honing his game. A golf outing is merely an opportunity to build trust that can eventually lead to a deal, and it’s a misconception that people who golf during work hours don’t work hard, he says.

Barry Allison’s single-digit handicap is an asset in his role as a management consultant at Accenture , where he specialises in travel and hospitality. He splits time between Washington, D.C., and The Villages, Fla., a golf mecca that boasts more than 50 courses.

It can be hard to get to know people in distributed work environments, he says. Go golfing and you’ll learn a lot about someone’s temperament—especially after a bad shot.

“If you see a guy snap a club over his knee, you don’t know what he’s going to snap next,” Allison says.

Special access

On a recent afternoon I was a lunch guest at Brae Burn Country Club, a private enclave outside Boston that was the site of U.S. Golf Association championships won by legends like Walter Hagen and Bobby Jones. I parked in the second lot because the first one was full—on a Wednesday.

My host was Cullen Onstott, managing director of the Onstott Group executive search firm and a former collegiate golfer at Fairfield University. He explained one reason companies prize excellent golfers is they can put well-practiced swings on autopilot and devote most of their attention to chitchat.

It’s hard to talk with potential customers about their needs and interests when you’re hunting for errant shots in the woods. It’s also challenging if you show off.

The first hole at Brae Burn is a 318-yard par 4 that slopes down, enabling big hitters like Onstott to reach the putting green in a single stroke. But to stay close to his playing partners and keep the conversation flowing, he sometimes hits a shorter shot.

Having an “in” at an exclusive club can make you a catch. Bo Burch, an executive recruiter in North Carolina, says clubs in his region tend to attract members according to their business sectors. One might be chock-full of real-estate investors while another has potential buyers of industrial manufacturing equipment.

Burch looks for candidates who are members of clubs that align with his clients’ industries, though he stresses that business acumen comes first when filling positions.

Tami McQueen, a former Division I tennis player and current chief marketing officer at Atlanta investment firm BIP Capital, signed up for private golf lessons this year. She had noticed colleagues were wearing polos with course logos and bringing their clubs to work. She wanted in.

McQueen joined business associates on the golf course for the first time in March at the PGA National Resort in Palm Beach Gardens, Fla. She has lowered her handicap to a respectable 26 and says her new skill lends a professional edge.

“To be able to say, ‘I can play with you and we can have those business meetings on the course’ definitely opens a lot more doors,” she says.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

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Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

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