Benefits of Advice

Lee Nickelson is an Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee

In the wake of the Royal Commission into Misconduct in the Banking, Superannuating and Financial Services Industry, it is important that we continue to focus on the benefits of receiving expert Financial Advice.

SunSuper commissioned CoreData to investigate the benefits of advice in their 2017 Value of Advice report which produced some interesting results. Overwhelmingly, those surveyed who receive financial advice are more ”well” in life.  They are better equipped to deal with unexpected expenses, more prepared for retirement and have more confidence in making financial decisions (1).

80% of those currently advised believe advice has given them more confidence in making financial decisions

Financial literacy is an important benefit and outcome of an advice relationship. Whilst we don’t expect clients to follow the movements of the NASDAQ, having an understanding of investment characteristics such as income versus capital values, the importance of asset allocation and investing for the long term gives clients greater confidence when making financial decisions.  This in turn brings a greater sense of financial security and less worrying about money.  After all, our definition of wealth is an absence of financial worry.

79% of those currently advised believe advice has given them more control over their financial position

Planning for the future is so important as it gives you confidence you can achieve your immediate and future financial goals.  Whether it is setting aside funds for a rainy day, increasing your savings, or contributing to a retirement plan, having an advice relationship allows you to map out your own path to financial freedom.

77% of those currently advised believe advice has helped them feel prepared for retirement

Many of us think that retirement is so far away that it doesn’t warrant planning now – this couldn’t be further from the truth.  Einstein’s 8th wonder of the world is compounding returns, earning interest on your interest, so paying attention to your retirement nest egg early, no matter how small, is well worth while.

67% of those currently advised feel advice has made them more equipped to handle sudden, one off costs

Through accountability, information and support, receiving financial advice can help people establish contingency plans, insurance and debt management strategies to deal with unexpected events and life’s twists and turns.

80% of those currently advised believe advice has given them more peace of mind.

Financial security is important for everyone, to know we are on the right track and not borrowing from our future to live the life we are currently.  A staggering statistic from the report is 39% of those unadvised felt they had enough money to pay for recreational activities compared to 79% who were advised.

Financial stress affects people’s lives in quantifiable ways.  It can affect your health, relationships at home, and both your productivity and attendance at work.  This is why we continue to believe in the value of financial advice; knowing that it improves lifestyle outcomes and overall wellbeing.

If you are interested in your own financial health check, please don’t hesitate to contact an Financial Adviser at Income Solutions.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.
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Is your money personality set in stone?

Our upbringings hugely influence the attitudes we have towards money. Did you observe your parents working hard to put food on the table? Was money a cause of conflict in your household? Was it spent freely, or were budgets obeyed?

The money attitudes you were exposed to as a child aren’t necessary the ones you’ve taken on though. Some people exhibit money habits very different to the ones they grew up seeing, perhaps in a reaction to those circumstances or as a reflection of their personality. Take a look at a family of siblings and you might notice very different money personalities.

Here are four of the most common money personalities:

Avoider

As the name suggests, an avoider doesn’t want much to do with money. They don’t want to spend time thinking about it, which is why bills go unpaid and little attention is spent on investing and saving. There are many reasons why someone could be a money avoider, but two common ones are either feeling overwhelmed or confused around financial matters, or believing that money represents greed so it’s bad to focus on it.

Hoarder

This money personality type excels with saving but struggles to spend. This can lead to Scrooge-like tendencies, as the hoarder finds it difficult to part with their money. They’re anxious that money could be taken away from them and they must have substantial savings at all times. The hoarder doesn’t have fun with their money – the greatest enjoyment they get is knowing it’s untouched.

Spender

The opposite to the hoarder, the spender enjoys buying things for themselves and loved ones, making them very generous but sometimes irresponsible if they spend more than they earn. They risk falling into debt and struggle to save enough money for substantial purchases such as a house deposit. Delayed gratification is foreign to the spender, who’d rather buy on impulse.

Status seeker

Unlike the other money personality types, whose habits might go unnoticed at first, there’s no mistaking the status seeker. They’re the ones with the newest gadgets, flashiest cars, most fashionable clothes. The status seeker uses money to exalt their image. They have high standards and are deeply invested in how others see them. Like the spender, the status seeker risks going into debt if they can’t afford their lifestyle.

Perhaps you identify strongly with one of these types, or can see yourself in several. None are inherently bad, but they all represent unbalanced attitudes to money.

While many of these beliefs can be quite entrenched, it is possible to change your thinking and foster a more positive money mindset.

Here are some tips to bring these beliefs into equilibrium:

Understand the emotions that drive your decisions

The money hoarder tends to be driven by anxiety, while for the status seeker it’s insecurity. Identify your emotions – this observation will make you more aware of how you view and use money.

Create and maintain good money habits

A budget provides a clear picture of where money is going. They’re useful for everyone to have, but are especially helpful for the spender and avoider.

Stop comparing yourself to others

The status seeker is the worst offender, but many of us also buy things to impress others. Focus on what you want and don’t worry about keeping up with the Joneses.

Communicate with your partner about money matters

It’s possible you and your partner are different money personality types. Ensure you’re on the same page about shared spending, saving and long term goals.

Practice gratitude

Appreciating what you already have will cut down on any unnecessary spending and anxiety around your finances.

Get assistance

Whatever your attitude to money, it’s always worthwhile having someone in your corner to assist you to make the most of your financial situation. We are here to help.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.
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Raising Financially Educated Kids

Lee Nickelson is an Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee

Why do many of us have such a bad relationship with money? The recent UBS white paper¹ revealed some disturbing statistics – 56% of married women leave financial decisions to their spouse and 85% of those women do so as they feel the man ‘knows more’. The scariest statistic when taking this into account is that 8 out of 10 women will at some point in their lives be left managing their money themselves. Having had a family friend recently pass away; his widow knows all too well the difficulty taking a back step with money management has caused.

Our relationship with money starts early in our lives. Now, in the digital age of money, how do we best equip our kids to grasp the value of money?

The Financial Planning Association have released their report Share the Dream – Research into raising the Invisible Money Generation² which shows up to 68% of people are reluctant to talk to their children about money, often as they are stressed about their own situation or are concerned the discussion will make their children worry about money. Is this then perpetuating the education gap?

Interestingly, parents with a Financial Planner are much more likely to discuss money with their children. It also starts with simple conversations. Parents who report talking to their children start with pragmatic topics such as how to spend and how to save, how do we earn money, the household budget and how much people earn when they work. More complicated topics such as in app purchases, crypto currency or Afterpay type credit purchases are less likely to be discussed, though this doesn’t make them less important.

Now in the Invisible-Money generation, how do we start teaching children about money when the majority of transactions are tap and go / online based? Pocket money is a great first step for children to practice with money. I know with my 4-year-old daughter, it is about learning simple addition and subtraction, what the numbers, colours and size of the notes and coins represent and the difference of how many ice-creams she will need to forgo to buy a teddy bear. There is a tipping point between the ages of 14-18 where buying shifts from tangible products to online purchases such as apps, games and experiences, so prior education is paramount here.

The research is clear, in order for us to prepare our kids and give them the best chance to have a great relationship with money, we need to talk to them about it early and frequently. If you would like more how to hints and tips, please speak with one of our Financial Advisers.

 

¹ https://www.ubs.com/global/en/ubs-news/r-news-display-ndp/en-20180514-ubs-reveals-top-reason.html
² https://resources.moneyandlife.com.au/hubfs/FPA%20Share%20the%20Dream%20Report%20-%20August%202018.pdf 
Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.
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Have oil prices peaked?

Australian motorists are not the only ones hoping that global oil prices have peaked after reaching four-year highs in 2018. Not only do high oil prices flow through to the price of petrol at your local service station, but they also increase the cost of doing business for everyone from farmers to airlines and push up the cost of living for households.

On June 22 the Organisation of Petroleum Exporting Countries (OPEC) plus Russia agreed to increase output by one million barrels a day, or about 1 per cent of world supplies, to relieve global shortages and lower oil prices. Even so, the price of Brent Crude rose to US$75.60 a barrel immediately after the announcement amid concerns the target may not be met. As at June 29, the oil price had surged 64 per cent in 12 months, but if OPEC and Russia succeed in lifting supply prices should begin to fall.

There are several international oil prices quoted in the media, but the price of Brent Crude is considered the major global benchmark.

What’s going on?

OPEC’s latest turnaround follows four years of determined efforts to limit oil production and boost prices. The price of Brent Crude crashed from US$115 to US$30 a barrel in 2014 as cash-strapped producers including Russia and Venezuela increased supply. At the same time, the US expanded production from fracking.

Then early this year the freezing northern hemisphere winter pushed up the price of oil as demand spiralled. Brent Crude was trading at a sustained high of around US$80 a barrel until May, when US President Donald Trump withdrew from the Iran nuclear deal.

Under the 2015 deal, nations including the US, France, Britain, Russia, Germany and China agreed to lift international sanctions on Iran’s oil exports in return for OPEC’s third largest producer winding back its nuclear capability.

The first sign that oil prices may have peaked came on news that Saudi Arabia and Russia were discussing a possible increase in oil production. In late May the price of Brent crude eased back to levels around US$76 a barrel before settling at US$77 after the June 22 meeting sealed the deal.

Who’s affected?

Holidaymakers may feel the pinch after Qantas chief executive, Alan Joyce warned airfares could rise in response to this year’s oil price hikes. Jet fuel costs have climbed 50 per cent in the past 12 months which will eat into airline profits, depending on how much of the cost they are prepared to absorb before lifting fares.¹

Rising oil prices also erode profits of transport companies and businesses that rely on the movement of goods or the use of heavy machinery. Australian farmers face the double-whammy of rising fuel costs on top of the effects of drought.

Consumers ultimately pay for higher oil prices as they flow through to the cost of food and other goods.

There are some winners from constrained oil exports though. Australian gas producers stand to gain from increasing demand and high prices as they ramp up production and exports.

Relief ahead for motorists

Rising oil prices have inevitably been passed on to local motorists, although there is relief in sight. The national average price of unleaded petrol rose by 14.7 per cent in the three months to June to a four-year high of 153.3c a litre. Prices edged lower towards the end of June in response to the downward trend in crude oil prices.²

Rising oil prices have been exacerbated by the weaker Aussie dollar which has fallen from US81c earlier this year to recent levels below US74c.

Petrol prices vary enormously between regions, cities and even within suburbs. Australian Competition and Consumer Commission chairman, Rod Sims has urged motorists to use fuel price websites and apps to shop around (you could try MotorMouth or Compare the Market.)³

 

¹ IATA, http://www.iata.org/publications/economics/fuel-monitor/Pages/index.aspx

² Australian Institute of Petroleum as at June 24, 2018, https://aip.com.au/pricing/pump-prices

³ ‘Petrol prices stable to March but now hitting four year highs’, ACCC, 5 June 2018, href=”https://www.accc.gov.au/media-release/petrol-prices-stable-to-march-but-now-hitting-four-year-highs

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way
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Ignore the Hype

Gareth Daniels is an Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee

As I have mentioned before (and no doubt mention again) when reading articles in the papers, watching news on TV or even listening to the radio to and from work, it is always vital to objectively consider the information we are being given.

As a history student, I was taught to always consider who has produced the source of the information, who their intended audience is and why it may have been produced. That foundation can serve us well when considering decisions that relate to our long term financial security.

At the heart of this is accepting that popular media constantly misuses the word ‘investor.’ Many of you may have heard Peter Thornhill speak or even read his book Motivated Money. He correctly spends time focusing on the difference between speculation and investing; the first being the “buying or selling of commodities or stocks… in the hope of an unexpected rise in the price“¹ and the second being “use of money productively so that an income is obtained.

Peter goes on to note that “speculation is described as investment simply to legitimise activity that has nothing to do with investing.

I read with interest the article This asset manager thinks Australian property ‘calamity’ is coming, so he sold all the firms shares². Consider this article in conjunction with the process of analysing a source:

Who has produced it: A national media organisation that knows doom and gloom predictions sell papers

Who is the intended audience: The misconception that all investors are speculators and all speculators are investors means they are attempting to reach as many people as possible. Regarding the interviewee, I would suggest he is trying to reach future potential customers (pitching for business as he apparently knows better than the market) and those clients to whom they have just returned their money (justification for selling the fund).

Why has it been produced: Again, for the publication it is the desire to get eyeballs on their paper and website and for the interviewee, future potential customers by an apparent display or foresight whilst pacifying those clients to who they have just had their money returned by way of defense of their actions.

Philip Parker may be a top fund manager as the article notes, but by what bench mark? The ASX top 200 is cited in the article, all well and good but it is the capital value of this bench mark that is the apparent measure? I would prefer to measure against corporate profits shared out as income via dividend. I would also not like to get sucked into the yield trap, jumping in and out of different assets and significantly increasing the likely effects of market timing risk.

If values are over inflated then surely it is speculators that are at risk with their hopes of gains at considerable risk that should be worried. Investors who own quality assets for the long term to be in receipt of income, should not even dedicate a second of their time to read an article clearly aimed at speculators. It can become stressful to build wealth via a fund manager who believes that over the long term, through active management³ they can beat the market rather than simply owning the best that the market has to offer. The latter allows you to confidently ignore the short term fluctuations in perceived value and and enjoying the true value of a repeating, tax-effective and increasing income stream over time.

What is intriguing is the (potentially) strategic move by this fund manager. Despite the litany of unfulfilled doomsday predictions that regularly crop up, the article even sites a few, these are readily forgotten, whilst the ones that do appear to come true elevate those that predicated them to genius status. So, this firm and it’s investment team either get lauded as the special few that were able to read the tea leaves correctly, or they simply “enjoy their time off” before returning to the fold to make further predictions; attempting to reach those that believe in speculation rather than investing. All this whilst the rest of us carry on with our investment strategy, focusing on what is important to us and critically analysing the overload of information that we are unnecessarily bombarded with.

 

1. Thornhill, P. (2015) Motivated Money; Sound Financial Advice for the post GFC World, 5th Revision. Australia: Motivated Money, pg 12

2. Patrick Commins, B. (2017) This asset manager thinks Australian property ‘calamity’ is coming, so he sold all the firm’s shares. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/this-asset-manager-thinks-an-australian-property-calamity-is-coming-so-he-sold-all-the-firms-shares-2017-5 [Accessed 7 Jul. 2017]

3. The belief that a manager knows better than most can pre-empt economic cycles, property bubbles, threats of war and crisis around the world and a whole host of other fads. They are effectively trying to speculate their way to wealth via capital appreciation.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product.
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Generations of Wealth

Alison Adams from Income Solutions

Authorised Representative, GWM Adviser Services Limited, Australian Financial Services Licensee 

 

Sometimes financial advice is not about dollars and cents but instead becomes more about goals and objectives.   As Financial Advisors, in the business of building wealth for our clients, we felt it was important to define “wealth” What is wealth   The concept sounds simple enough, and in many ways it is simple. We like to quote John C Bogle, the author of The little book of Common Sense Investing, “simple but not easy”.  Often, the “not easy” part involves the goal of leaving a meaningful legacy to those whom you love.  We find this is a common theme amongst our clients. It is one thing to invest for your own future but once you have successfully taken that journey, commonly thoughts turn to making sure your hard work benefits your children and grandchildren. So, what is needed?  Successful estate planning takes an investment of time, careful consideration of your desired outcomes and the assistance of a quality Financial Advisor and specialist Estate Planning Lawyer. Did you know that your superannuation account balance and jointly held assets are not administered by your Will?   For estate planning purposes, these types of financial assets are called “non estate assets”. For the majority of people, their superannuation account is likely to be one of their biggest assets. Another contender for biggest asset may be the family home, commonly jointly owned.  In summary, the two assets often representing the bulk of an individual’s wealth may not be dealt with by their Will.  What about if the bulk of your financial assets are deemed “estate assets” and in the event of your death, these assets will be distributed to your loved ones in accordance with your Will. That should set them up for a financially sound future, right?  One of the biggest destroyers of wealth is the transfer of wealth from generation to generation. Consider your own family circumstances. Even if your family has so far been lucky enough to have escaped the statistics around relationship breakdowns, gambling or drug addiction, how do you know what the future holds for your children or even for your grandchildren?  There are ways that a quality Will can provide a regular income stream to your loved ones and at the same time, protect their inheritance.  David Ramsay, founder and Principal Financial Advisor at Income Solutions likes to say “you love your children and grandchildren; at best, you hope to like their partners”. Here’s some food for thought, consider these scenarios:

  1. Sadly your father passes away and in accordance with his Will, you and your brother inherit the family home. The home sits in prime real estate, with upcoming re-zoning changes making you and your brother think it’s a good idea to rent the house out for a couple of years and sell when all of the changes have passed, holding out for a bigger profit. It’s currently worth $1m, however you believe your strategy could triple that value. Your father had a very simple Will and the home passes to you and your brother, held jointly at 50% each (currently a $500,00 inheritance to each brother). Both you and your brother are married, with young children.  3 months later, you unfortunately pass away in a car accident. Your Will makes provisions for your wife and young family.  Your wife meets with the lawyer and lists all of your assets, including the $500,000 share of the inherited family house. Her Lawyer tells her that unfortunately a jointly held asset is not governed by the Will, and by law, the surviving brother is now the sole owner of the inherited family home. Your wife and children have no legal claim over your share of the house.
  1. 6 years ago you met your second wife, married and now have 3 beautiful girls together. You believe that your family is complete; you have your 3 girls and also 2 sons from your first marriage.  Your ex-wife lives nearby and, although you’ve had rough patches in the past, your 2 sons come and stay every other weekend and because you live nearby you are able to attend their various sporting and school events and enjoy a good relationship with them. The boys have a good relationship with their step sisters, however as they are entering their late teens, lately the relationship between your second wife and the boys is often strained.  Your motto is that things will improve once they get through their teenage years. Unfortunately you have an industrial accident at work and pass away.  You have a current Will which makes provisions for your current wife to inherit the majority of your assets, with smaller amounts distributed to all of your children.  You’ve had discussions with your second wife about how you would like her look after all of your children, and upon her passing, distribute your assets evenly. These wishes were reflected in her Will, drafted at the same time you drafted your Will. Your second wife is advised that, following your death, her existing Will is invalid and she makes arrangements with her Lawyer to draft a new Will immediately. After all, she’s the only parent left for her girls.  The new Will is drawn, making provisions for your 3 daughters but excluding any provisions for your 2 sons.
  1. You have worked hard and sacrificed through the years to build a sizeable investment portfolio. The portfolio derives enough income to support your lifestyle and consists of growth assets that should continue to support both your children and grandchildren when you pass.  You have never been in the business of spending money “for the sake of it” and when you hear about DIY Will kits that you can purchase for $69.95 at the local newsagents, you go for it. After all, it’s pretty simple – you want your kids to inherit it, don’t touch it and live off the income, just as you have. When they pass, you want their Will to provide the same directions to their children. You’ve even sat all of your kids down and told them as much and they all agreed.  You pass away a contented man, proud of your life’s achievements and the way you’ve provided for your family’s future. Only problem is:
  • Daughter number 1 has a marriage breakdown 2 years after you pass away.  She directly inherited your assets in her own name, meaning they formed part of the divorce settlement. Half of your inheritance has now been distributed to her ex-husband, who, truth be known, you never really liked anyway.
  • Son number 2 has never been good at managing his money. Before you passed, you asked your other children to keep an eye on him, but they’re so busy with their own lives that they can’t keep track of him as well.  A few ill advised investment decisions later and he’s lost at least 3/4 of his inheritance.
  • Son number 3 is self employed and just prior to your passing, he ran one of the biggest engineering businesses in town (a great source of pride for you). Unfortunately the majority of his business involved supplying and servicing the machinery at 2 local car manufacturers. Since those manufacturers have closed down, he’s put on a brave face but in truth, new business has proved too hard to find and he’s just about to declare bankruptcy.  The only thing that can save him is your inheritance but due to a quirk of bad timing, he is forced to use the inheritance to pay his debts and close his business. He’s not in debt, however he has no business and no inheritance.

These 3 scenarios are fictitious, however similar scenarios are happening each and every day.  Sadly, they are preventable. Advice from a good quality Financial Advisor and specialist Estate Planning Lawyer would ensure sound investment strategies could accompany estate planning protections. The outcome being that the transfer of wealth through generations can successfully be achieved.

 

Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way.  Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Before making a decision to acquire a financial product, you should obtain and read the Product Disclosure Statement (PDS) relating to that product.

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Save small. Win big.

Do you try to save more for your future but find life keeps getting in the way?

With almost half of Australians reportedly living pay-cheque to pay-cheque^, it seems many of us will struggle to put our saving plans into practice.

Building wealth doesn’t have to be complicated or mean making big sacrifices. Adding just $10 extra per week to your super could significantly boost your savings for the future. The more you can contribute, the more this effect is multiplied by compound interest as your savings grow.

Just look at the difference regular contributions could make to your super balance.

Could you spare $10 per week?

By contributing $10 per week (after tax), you could save*:
Period of investment (years) 10 20 30
Amount saved $6,102 $14,664 $26,680

How about $20?

By contributing $20 per week (after tax), you could save*:
Period of investment (years) 10 20 30
Amount saved $12,203 $29,328 $53,360

$50?

By contributing $50 per week (after tax), you could save*:
Period of investment (years) 10 20 30
Amount saved $30,508 $73,320 $133,401

$100?

By contributing $100 per week (after tax), you could save*:
Period of investment (years) 10 20 30
Amount saved $61,015 $146,641 $266,802

Whatever you can spare out of your weekly budget, it’s important to start saving sooner rather than later. Your future self will thank you.

Please contact us on (03) 5229 577 if you would like to discuss, or visit www.incomesolutions.com.au/events to find out more about our free information session, First Steps to Financial Success.

Important information

Information is current as at 14/09/2016 and may change. Forecasts are not guaranteed to occur.

Source: MLC 14th September, 2016

^ MLC & IPSOS, Australia today report, Feb 2016.

*Assumptions:

  • The weekly contribution is made as a single annual contribution (eg $10pw is made as a $520 contribution 1x pa).
  • The individual is eligible to contribute to super for each year of the entire period.
  • Individual makes after tax contributions (i.e. Non Concessional Contributions). [As such the amount contributed is the amount invested].
  • Investment returns are growth 4% pa, income 3% pa, franking credits nil.
  • Investments are still held at the end of the period.
  • Investment income is taxed at 15%.
  • Result is in today’s dollars.
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From Frivolous to Finance – Getting Your Money in Order.

Savings.

Growing up I’ve been lucky enough to live a really good Aussie life.

Mum, Dad, two little brothers, a Dalmatian dog named Stripes (I wish that was a joke) and a white picket fence. I received an above average education, studied overseas, taken many family holidays and have never gone without.

I’ve had it really good.

So you can imagine my shock and embarrassment when after thirteen years of schooling, four years of tertiary education and my abundance of worldly experiences, I was ill-equipped to handle my finances.

I can tell you about Pythagoras’ Thoerum, go into detail analyzing Euripedes Medea, and Peut parler un minimum français! (I took a little French in school, if I’m being honest it was just to go on the Year 10 trip to Paris.)

But up until recently, I couldn’t tell you how my bank accounts worked.

I couldn’t tell you what the interest rate was on my Credit Card, and I definitely couldn’t tell you ​​why I thought it was OK to go into the bank and take out a loan to travel Europe for 4 months.

But don’t worry guys, I know how to solve for x using  x + 9 = 18 + -2x …phew!

So when I returned from gulping my way through the beer halls in Germany and skiing the slopes in Switzerland, it was time to return home and face the music.

But how?

I was so ashamed to admit that after all the education my parents had provided me with and the privileges life had thrown in my direction, that I was in this position.

By a stroke a fate, I had applied for a job in admin support here at Income Solutions, and got it. I couldn’t help but laugh at the irony! Me, who can’t get her account out of the red working at this financial firm?

What has struck me over the last six months is how the key skills you need are so simple. They are based on common sense. Why is this not being taught to us at high school?

But it’s ok, I know HBr is Hydrogen Bromide… I’ll use that one day!

No matter your history or your circumstance, it’s important to make a decision to want to help yourself and do something about it.

Once you’ve made that decision, it’s about education and discipline.

Education isn’t just for the young, you need to keep educating yourself throughout life. Education in knowing where your money is going, where you’re being taxed or getting charged interest and what options are available to you.

Discipline in sticking to your plan, being able to say ‘not yet’ to those shoes you want, living within your means and not relying on credit.

If you would like to take the first step towards improving your financial situation, go to www.incomeoslutions.com.au/events and register for our First Steps to Financial Success seminar. Topics that are covered include Setting Goals, Managing your Cash Flow, Debt Management, and strategies for building and protecting wealth.

It’s free, no obligation and the purpose is to provide tips and education to people who want it.

What have you got to lose?

Celeste Smith – Marketing Coordinator

Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

153 Mercer Street, Geelong

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WOMEN – Professional Self-Taught Jugglers

Spotlight on Women - WEbsite SizeWhether you are single or in a relationship, one thing we all have in common is that we are juggling many roles all at once. I learnt quickly that once you begin to add little munchkins to your clan, the number of balls that you are juggling dramatically increases. When I thought I had achieved some rhythm to my new found skill of juggling, it was time to return to work. I had no idea what I was in for in regards to the level of organisation it would require trying to fit in my own personal time, setting goals for now and later, while continuing to run a house!

Returning to work is a big decision. For some it is financial and for others it is to assist with self-fulfilment. Whatever the reason, finding the right work life balance is crucial. There is no right or wrong level of work life balance. The solution that works for your family is individual.

Following returning to work, I began to experience guilt. Guilt for not being able to spend more time with my little ones, that I wasn’t completing as much at work as I had (in comparison to my old, full time employed, child free self), that the house wasn’t as tidy as it used to be and the list goes on! I had to find a way to put a positive spin on what I was doing and the reasons as to why I had returned to work. I realised it was to achieve my goals! Our goals often take second place to day to day activities, however even without realising it, it is another one of those balls we are juggling. Understanding and knowing why I was back at work and the benefits my employment brings to myself and my family was very important, empowering and motivating. Without goals, it is easy to question why. It helps you stay on track towards reaching those goals which are important to you. Also, it is hard to know if you are on the right track, if you don’t know where you are heading.

Goal setting doesn’t just end with the things you want to do in the next 12 months. Goal setting should include what you and your family want to do in 5 years – family holidays, education for your children, a new car, when it is that you and your partner would like to stop work or wind back into retirement. As far away as these milestones may seem, without having an active plan in place, time will continue to fly by. Without a solid plan our goals rarely materialise.

Planning your exciting goals and aspirations doesn’t have to be a weighted time consuming ball that you have to learn to juggle along with everything else. It is easier than you think if you work with someone who can help you plan and keep you motivated. It is very rewarding when you realise you are actually living and experiencing the achievement of the goals you wrote down.

We use systems all the time without realising. Just like we put systems (well try to!) in at home to make our home life easier, it is vitally important to establish systems that ensure your money is working for you, and your family.   Something as simple as structuring your banking correctly can have a big impact on how hard your money works for you.

Now that you are back at work and earning additional money to put towards your household, it is important to ensure that all the sacrifices that have been made to earn this money have not gone to waste. You need to ensure that your hard earned money is working for you.

I have written about my own personal experience, as a Mum working part time. In my professional life I am a Financial Planner with Income Solutions.   I regularly hear stories just like mine, which provided me with the motivation to create a tailored presentation for women which provides some examples of the impact receiving financial advice can make to your day to day lifestyle as well as your long term goals. For more information, book a one-on-one meeting or a workplace Income Solutions for Women session.

Invest in yourself – it could be the best investment you’ll ever make!  

Jess Hall, Financial Planner

 

Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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Myth #5: Now I have a plan, I am set

Blog - Linked In Size (1)For the final instalment of the Financial Planning Myth Series, I wanted to touch on a Myth that even some people who already engage a Financial Planner believe; that is “Now that I have a Plan in place, I am all set and can execute the plan myself.

A Financial Plan is not unlike a Personal Training or eating plan; you get much better results when you have a coach who holds you accountable to enact the plan and to stick to it! Like weight loss or muscle gain goals, achieving financial goals requires hard work and dedication. Getting successful outcomes is always easier when you have someone challenging you along the way.

Whilst our industry is full of people who recommend change for change sake (mostly when it is not actually required), occasionally there are changes to your circumstances that you might not realise cause ripple effects right throughout your Financial Plan. For example, consider the impact of a large home renovation, whilst this might not seem like a huge deal, have you considered things like:

  • Does your Will need changing to reflect your wishes and to equalise your estate?
  • Do you require higher sums of Life and Total & Permanent Disability Insurance?
  • Does your Home Loan need reviewing and could you get a better rate now you have more debt (hence more bargaining power with the Bank)? Perhaps you should contact your Mortgage broker or lending specialist.
  • Are there strategies you could use like Debt Recycling to reduce your Mortgage more quickly?

A good Financial Planner can give you the tools and create a Plan to get you on the right path, but even the best laid plans will require tweaking and adjustments over time. The value added through a long-term partnership with your Planner can be invaluable.

To quote Will Rogers: ‘Even if you’re on the right track, you’ll get run over if you just sit there.

Steven Nickelson, Financial Planner

 

Please note: The advice in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

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