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The Wealthmaker |
A budget is one of the best and most practical tools to help you manage your finances and unburden your life so that you can achieve things that are really important to you!
Anyone with...
Today! Reviewing your budget regularly, at least annually, will help to keep your spending and savings on track, as well as keep you focused on your goals and dreams.
Budgets are particularly useful when you are looking forward to milestones in life:
Regular investing is a particularly effective and convenient way to help you reach your financial goals. Even a little money invested regularly can grow into a tidy sum over time.
The easiest way to save is through a regular investment plan. By investing an amount each month, you will be well on your way to developing substantial savings, and this introduces you to the world of investing.
They are the cost of living independently and they need to be managed. Particularly, we must manage and control our spending patterns on credit cards!
The costs of interest, late fees and the vicious cycle of paying for yesterday’s purchase keeps those burdened with debt from realising tomorrow’s opportunities.
Do you know how much it really costs to keep a car running every year? From negotiating to buy the car, to payment of registration and insurance costs, there are a host of new and ongoing costs associated with owning your car. So before you dig deep to buy, take on a pricey lease or commit yourself to a loan, prepare yourself.
Costs to consider before you purchase a car and even before you decide how much you want to spend on your car!
The cost of higher education has been increasing at a startling rate, while at the same time our rapidly changing world requires higher levels of education to compete in the job market.
Typically, the total cost of a tertiary education courses can range from about $20,000 upwards toward $80,000 and beyond. The result too often is a huge stress on a family’s finances, and a debt trap.
Planning ahead is the best solution for tackling education expenses.
Wealth creation – some people jump to the concept, yet for others the thought alone can start your head spinning, or worse, your stomach. Rest assured, no matter what your tolerance is for risk or your aptitude for financial matters, there is a solution for you.
The earlier you start saving and investing the better. This is because of the impact that time and compounding have on your money. Interest accumulated over time through shares and managed funds will be earned on the original money you invested, plus all the interest previously accumulated. Also, the sooner you begin to save, the more experienced and attuned you will become to the activity.
Regular investing is a particularly effective and convenient way to help you reach your financial goals. Even a little money invested regularly can grow into a tidy sum over time.
Always maximise the return on the money you do have by opening higher interest earning savings, cash management account, or term deposit accounts or invest it wisely.
Savings plans, superannuation, property, direct shares and managed funds are all tools that help create wealth and achieve financial goals, especially for retirement.
It is very important that you protect your wealth and your family both now and in the future. This is normally achieved through the use of various life insurance products. Your adviser will assist you with the most appropriate type and level of protection you require.
Insurance becomes an issue for all of us once we have “things”, such as an investment portfolio, debt, mortgage, children or anyone else who is financial dependent upon you, financial obligations and living costs that can only be met by your income, and therefore your ability to work.
Who needs insurance advice (also known as “risk advice”)? And when?
Income protection, also known as disability insurance, will replace up to 75% of your income for either a specified period of time or until you reach the age of 65, depending on the policy you choose.
If you become seriously ill of have an accident that prevents you from working for an extended period of time your income protection will help your to live and meet some, if no all, of your financial commitments.
It will also help you to avoid using savings and investments for daily living if you have a policy that allows you to do this.
List insurance provides a safety net for your dependents if you were to die.
Life insurance not only helps supplement income and cover debt if a main breadwinner were to die, it helps provide a buffer during the grieving period as well as burial costs.
If kids, especially young children are involved, additional money may be needed for care, after school care, or help around the house.
Life insurance is invaluable for sole parents and people who have children with more than one partner.
It will give you and your loved ones comfort to know that they will be looked after if you were to die.
Also, called simple TPD, this policy may often be taken out as an extra on your life insurance.
The most unusual purpose of TPD is to provide a lump sum payment if one is to suffer from some type of accident or illness that leaves them unable to continue in their usual occupation, or permanently disabled for purposes of working in that occupation.
Trauma insurance offers financial protection in the event of a serious illness of disability, and depending on the policy, a full or partial payment may be made upon death.
Generally, they are used to ensure that living expenses, as well as recovery care, is provided for in the event of a major illness of disability.
These policies have become increasingly popular as medical advances have become so successful in saving people who suffer major illnesses and accidents.
Trauma insurance is often bundled with a life insurance policy but may be taken as stand-alone cover.
Some companies also offer protection for children.
Business insurance, incorporated through life, trauma, and income protection insurance, is a vital safety net for anyone operating his or her own business, or in partnership in a business.
It should be a strategy that protects the business, your income and your personal assets from being lost while the main income producer of the business is away due to injury of illness.
It is important that the structure, including ownership and beneficiaries, of the policies be organised correctly in consideration of the operational issues of the business.
Everyone can benefit form a budget. And reviewing your budget regularly, at least annually, will help to keep your spending and savings on track, as well as keep you focused on your goals and dreams.
Budgets are particularly useful when you are looking forward to milestones in life:
Regular investing is a particularly effective and convenient way to help you reach your financial goals. Even a little money invested regularly can grow into a tidy sum over time.
The easiest way to save is through a regular investment plan. By investing an amount each month, you will be well on your way to developing substantial savings, and this introduces you to the world of investing.
Estate planning is a way of ensuring that there are sufficient assets on your death:
It involves more than just having a Will. It involves all the assets you own or control.
There are four key issues that need to be considered during the estate planning process. They are as follows.
1. The availability of assets on your death
Your assets must be managed and preserved to ensure that there are sufficient assets available on your death to carry out your wishes.
2. People
Your assets should be distributed to the right people. It may not be wise to leave all your assets to a 15 year-old child (without any conditions) or to an adult child with an imminent marriage breakdown.
3. Timing
Your assets should be distributed at the most appropriate time. The timing of an asset transfer can have significant tax effects, reducing the net amount of any distribution.
4. Control
Sometimes events happen that mean we lose the amount of control we previously had. These can include being overseas and unable to attend to your financial affairs or losing the ability to manage your own affairs as a result of an accident of illness.
As part of the estate planning process there are a number of arrangements that can be put in place to enable another person to make these decisions on your behalf.
Such arrangements include enduring powers of attorney, advance health directives and funeral plans.
Negative gearing is the process where a person borrows money to invest and the costs of the investment are greater than the income received.
Effectively, at least on paper, the investment makes a loss for a period of time.
Frequently the investor may need to contribute money to the investment as the income received from the investment may not be adequate to cover the costs.
The most common investments that are negatively geared are real estate, shares and unit trusts.
By gearing into an investment the return is magnified if the total return including capital growth is greater than the interest and other ownership costs. Equally, losses are magnified if the total return is less than interest and ownership costs.
To maximise the benefits of gearing investors should have a high taxable income so they may write off their losses. Negatively geared investments are more suitable for investors on a high marginal income tax rate with surplus disposable income.
The term risk profile is used to define a person’s comfort level and suitability with fluctuations, including potential losses, of their investment and savings dollars.
An individual’s risk profile takes into account factors such as:
For example, savings accounts and term deposits will keep your money secure, however, the money you deposit into these accounts will not earn much. While an investment in fixed interest securities (bonds) may earn a bit more interest, as the risk of the security rises so does the yield. Other investment options such as property and shares have historically produced the greatest returns over longer time frames but both have inherent risks of capital losses and volatility over the short term. Volatility is the unpredictable upward and downward shifts of investment values over a period of time. The greater the volatility the more frequent the shifts.
The answer, quite simply is, it depends!
Some of the factors that need to be taken into account when determining if a person will have enough money to retire include:
Who can get it?
You may get Age Pension if you:
You may receive:
How much Age Pension you get will depend on your family circumstances and your income and assets. Centrelink follows four steps to work out how much pension you’ll get.
Step 1
They work out the maximum amount that could be paid to you and your partner (if you have one). The amount can include other benefits like Rent Assistance and Telephone Allowance.
Step 2
They work out the maximum amount that could be paid to you and your partner (if you have one). The amount can include other benefits like Rent Assistance and Telephone Allowance.
Step 3
They calculate your total assets. If you have a partner, your own and your partner’s assets are combined.
Step 4
The amounts of pension payable under the income test and the assets test are compared. You will be paid the lower of the two rates.
Do you see yourself dining out at a top quality restaurant once a week, or will lunch at a local coffee shop satisfy your dining out experience?
Will your holidays consist of hitching up the caravan and travelling up of down the coast to your favourite beachside location, or is a week or two feasting on wine and cheese in Tuscany more your style?
You see, the amount of retirement income you need is influenced by the lifestyle you would like to have, whilst the level of income you will receive will be determined by:
In order to plan for your retirement income, the earlier you start the better.
The options you have are very much determined by the rules relating to the fund that holds your superannuation benefits.
For example, some funds pay benefits in the form of an income stream of pension, others pay the benefit as a lump sum, whilst others will allow you to take either a lump sum of a pension.
When superannuation benefit passes from the pre-retirement phase (the accumulation phase) to the pension paying phase (the income phase) there is generally no tax payable (except when coming out of some public sector funds) but there maybe fees and charges levied on the transfer depending on the fund or funds being used.
Even though you current superannuation fund may only allow benefits to be taken as a lump sum, it is generally possible to transfer your superannuation from one fund to another that may provide more suitable payment options such as an income stream. Transferring benefits from one superannuation fund to another is referred to as “rolling over” a benefit.
Once we reach age 55 and beyond we still need to consider any dependents, and how much longer they may be financially dependent on us. Although some 55+ year olds have achieved the great Australian dream of paying off the mortgage, and other debt, for others it may still remain a dream.
Insurance can play an important part of a financial plan for those 55 and over. In fact, protection after age 55 is particularly important because this is also the time we are planning or beginning our retirement and any unforseen illness of accident could thwart those plans with devastating affect.
Who needs insurance advice (also known as “risk advice”)? And when?
Life can be a risky business but you don’t have to take unnecessary changes.
A budget is one of the best and most practical tools to help you manage your finances and unburden your life so that you can achieve things that are really important to you!
Anyone with...
Everyone can benefit form a budget. And reviewing your budget regularly, at least annually, will help to keep your spending and savings on track, as well as keep you focused on your goals and dreams.
Budgets are particularly useful when you are looking forward to milestones in life:
Many parents wish to ensure that there is sufficient value in their estate to pass on to their children and give them a helping hand for their future.
However, as we are living longer and healthier lives, we need to support ourselves in retirement for a longer period than perhaps our parents and grandparents needed to.
Many people find this a difficult situation and often deprive themselves of income in retirement in order to preserve their capital for their children.
There is a much quoted expression that sums up this dilemma:
“if you don’t fly first class... Your children will”
Parents and their children need to work through this issue together to ensure that a workable compromise is reached. A financial planner can be very helpful in this situation as they project the capital required to produce the required level of income and, at the same time, manage the capital to ensure that it does not diminish prematurely.
The term risk profile is used to define a person’s comfort level and suitability with fluctuations, including potential losses, of their investment and savings dollars.
An individual’s risk profile takes into account factors such as:
For example, savings accounts and term deposits will keep your money secure, however, the money you deposit into these accounts will not earn much. While an investment in fixed interest securities (bonds) may earn a bit more interest, as the risk of the security rises so does the yield. Other investment options such as property and shares have historically produced the greatest returns over longer time frames but both have inherent risks of capital losses and volatility over the short term. Volatility is the unpredictable upward and downward shifts of investment values over a period of time. The greater the volatility the more frequent the shifts.
The intention of superannuation is to provide benefits for retirement.
In order to prevent people form accessing their superannuation benefits and dissipate the funds prior to retirement, the Government introduced a system known as preservation.
In general terms, preserved benefits can only be accessed in the following circumstances:
Preservation becomes an unexpected issue for people who plan to retire early and perhaps continue to work on a part-time basis. In such circumstances people may not be able to get access to their superannuation benefits.
Prior to making any plans to cease working it is important that you have a clear understanding of your ability to access your superannuation benefits.
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