Make today count: #4 I will protect what I love

Even though your financial strategy should be for the long term, there are things you can do each day to help you achieve your goals sooner. Here’s #4:

Insurance may not be something you think about on a daily basis, especially if you’re young and healthy. But the reality is that we never know when life will throw us a curve ball, so it makes sense to have a financial safety net in place. And even if you have personal insurance already, do you have the right levels of cover to take care of all your family’s needs?

For example, research shows that parents with two dependent children need an average of $680,000 in life insurance – but the typical default cover from a super fund is only worth about $200,0001. So if you’re relying on your fund’s default cover, it might not be enough to maintain your family’s lifestyle if you passed away. Or even if you became sick or injured and couldn’t work for a while, would you and your loved ones struggle to make ends meet?

Working out how much cover you need can be complicated, so be sure to ask your financial adviser to guide you. But you can get started today by thinking about this question: If something happened to you, how much money would your loved ones need to be able to pay off your debts, protect their standard of living and prepare for the future?

Matthew Wood, Senior Wealth Advisor and Director, can help you ensure that you and your family are protected!

Get In Touch

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1 Rice Warner, 2015. Australia’s persistent life underinsurance gap.


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Make today count: #3 I will take control of my investments

Even though your financial strategy should be for the long term, there are things you can do each day to help you achieve your goals sooner. Here’s #3:

A long-term investment strategy is the best way to build wealth for the future. The longer you have to invest, the more time you have to ride out any dips in the market that could otherwise put a dent in your returns. That’s why it’s a good idea to build your investment portfolio as soon as possible – your future self will thank you.

If your investment goal is still quite a way off, you might want to invest in high-growth assets that will potentially give you higher returns over time.

A simple way to take charge of your investments today is to take a look at how your super is currently invested. If you’re using your super fund’s default investment mix, it may not be the best option for you. Instead, you might want to make some adjustments so that your investments are more in line with your stage of life and your future income needs.

If you’re in doubt, ask your financial adviser to create an investment strategy that will allow you to achieve all your lifestyle goals.

Matthew Wood, Senior Wealth Advisor and Director, can assist you with getting back in control of your investments today!

Get In Touch

EMAILCONNECTCALL


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Don’t wait for life to happen – Week 3: Getting a wealth boost

Government super announcements

There are going to be times in your life when some unexpected cash comes your way — like a bonus or maybe an inheritance. You may not know when it will happen, but if it does, you’ll want to be prepared so you can make the most of your windfall and avoid frittering it away.

One way to invest the money wisely is to make a personal contribution to your super, taking into consideration any contribution caps (the Government has proposed (not yet legislated) reducing these caps to $25,000 a year from 1 July 2017). Or, if your newfound wealth is in the form of a pay rise, you might consider putting a bit extra into super each paycheque through salary sacrificing. You can contribute up to $30,000 a year (or $35,000 if you’re 50 or older) from your pre-tax earnings(this cap includes compulsory super guarantee paid by your employer) — plus you could even save on tax, as these types of super contributions are usually taxed at the low rate of 15% rather than at your marginal tax rate.

If you come into money, there are other ways to invest as well, such as shares, managed funds, term deposits, and bonds. Each of these is likely to give you a better long-term return than a savings account, but the most suitable investment options for you will depend on your financial situation and goals. Your financial adviser can steer you in the right direction.


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Don’t wait for life to happen – Week 2: Buying property

Whether you’re hunting for your first home, in the market for an investment unit, or helping your kids out with a place of their own, buying property is always a big financial decision — so plan it carefully before jumping in.

 

And with real estate prices soaring across Australia and the median house now valued at over $700,000 nationally,4 you need to work out exactly how much you can afford to spend, long before you start picking out wallpaper.

The last thing you want is to be faced with is mortgage stress for decades to come. That’s why it’s important to think carefully from the outset about how your mortgage repayment plan will fit into your overall financial strategy.

Next, you’ll need to save for a deposit, as most lenders expect you to pay 20% of a property’s value upfront. If you can’t afford that much, you might have to pay for lenders mortgage insurance as well, which can add thousands of dollars to the cost of your loan.

You’ll also want to consider which type of home loan is best for your financial situation —for example, a fixed or variable interest rate loan. Choosing a fixed interest rate can make it easier to budget your repayments, but it also means you won’t reap the benefits if interest rates drop.

 

4 Domain Group, Domain house pricing report, June 2015


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

Investing for Income

Insight Financial Partners - Investing For Income

A diversified investment portfolio has the potential to generate an income that you could use now or put away for your future. To achieve this desired income, you need to work with your financial adviser to set realistic goals and a clear plan for how you will achieve this desired investment income. In this article we help clarify what expectations you might set in order to achieve this desired investment income.

Regardless of the stage of life you’re in, having an income is essential. While the bulk of your income will most likely be earned through employment and the peak years of your career, this doesn’t mean you should delay your investment plans. While the obvious appeal is that this investment income will support you in retirement, by starting early, you could bring forward your retirement date or explore opportunities that otherwise may not have been available to you. So, how do you invest in a way that could deliver this desired income?

According to an Investment Trends Financial Advice report,1 investing for income is one of the top needs that Australians approach their financial advisers about..


Setting expectations

When investing to generate an income, the way your financial adviser will structure your portfolio is highly dependent on your objective, risk tolerance and capacity. These risk discussions reflect the type of investor you are, and the level of risk you’re comfortable taking in order to achieve your income objective.

Your risk capacity and tolerance help dictate the type of investments you pursue, so it is important you have a clear understanding of what they look like from the outset. Your risk tolerance is the more emotional measure of how comfortable you are with the potential for loss, while your risk capacity is a more financial view of what you can lose or put at risk. If your objective is to rely solely on dividends and interest from your investment, you need to be sure that the expectations you’ve set for your portfolio are realistic and achievable, given your appetite for risk. Your financial adviser can help you measure whether your expectations are achievable, and if not, help you refocus your goals.


Investing in line with your investment objectives, risk tolerance and capacity

If you’re a lower risk investor or perhaps are nearing retirement, you may prefer to keep it simple, such as investing in cash and/ or fixed interest investments (like term deposits or managed funds that invest in bonds). Whereas someone interested in asset classes with a higher degree of volatility and potential return may choose to invest in managed funds with exposures to both global and Australian equities, or direct equities and Exchange Traded Funds (ETFs) through the Australian Stock Exchange (ASX). Your financial adviser can explain the qualities of different asset classes, working with you to build a diverse portfolio that aligns with your financial goals and work with you to determine your appetite for risk. Generally these discussions are centred around your:

  • liquidity requirements
  • investment experience
  • ability to take investment risk
  • comfort with market volatility
  • concerns about inflation
  • concerns about taxation and
  • investment preference

Your collective responses will then guide you and your financial adviser on what investments are appropriate to meet your needs and objectives. There will be discussion around the likelihood that your needs and objectives will be achieved, given your levels of risk tolerance and capacity. Sometimes your needs and objectives cannot be easily met within your acceptable risk tolerance and capacity. In these cases, your financial adviser will work with you to find the best solution, given your constraints.

Achieving a regular investment income isn’t reliant on you investing in highly volatile asset classes. It simply means that you need to be aware of your limitations and map out your wealth plan accordingly.

There’s no cut-off age when it comes to structuring a portfolio that could generate an income. However, where feasible, investors should work with their financial adviser to develop and implement an investment action plan sooner rather than later.

The payoff can be significant, opening up options for you now, and in the future.

CONTACT US FOR FURTHER GUIDANCE

1 Investment Trends Financial Advice Report, August 2015, Investment Trends Pty Ltd


Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

0 comments on “How to make the most of your family home – Week 3”

How to make the most of your family home – Week 3

Family spending time together at home
For the majority of families, their home and superannuation will be the two most valuable investments they will own in their lifetime. Here we discuss how the family home might be used to potentially assist in wealth and lifestyle creation.

For those that have purchased their family home, a great deal of value is often held within its walls. This value comes in many forms including physical, emotional, financial and more. Specific wealth strategies can be created around anything of financial value and, once in place should be fine-tuned throughout various life stages. So what should property owners consider when it comes to utilising, most effectively, the home in which they live?

For those of you who are already enjoying your retirement

Your home now, most likely, is completely mortgage-free. But requests may come from your children, to act as a guarantor over their mortgage. Try to remove any emotion from such a decision and consider it, as you would any other investment, rationally. As with any agreement it brings with it an amount of risk, perhaps this fits your risk profile, perhaps it does not.

If you have not yet put an estate plan in place, it has now become a necessity. The wealth you have created throughout your working life can be looked after and distributed according to your wishes if wills and enduring powers of attorney are in place. This is important for everybody at this life stage, but even more important for those that own all or part of a business, or have children from another marriage. Clarity around your final wishes is vital.

Downsizing is a popular decision during this life stage, and for good reason. There is an emotional side to moving out of the family home, but once that original hurdle has been negotiated, most retirees feel a sense of release and relief. They are no longer responsible for the physical and financial demands of the upkeep of a large home. And a move can bring them closer to friends and family, or to an area offering better infrastructure for the elderly. Perhaps most important at this stage is the bearing of the family home on matters such as aged care and Age Pension, which can be substantial. The issues around this topic are broad and complex. Be aware that expert advice is highly recommended in order to assist with any major decisions regarding your family home.

Key takeaways:

  • Consider guarantor requests very carefully
  • Review your estate plan
  • Consider lifestyle benefits of downsizing
  • Speak with an expert about the family home in relation to benefits etc

Source: Count Financial

Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

2 comments on “How to make the most of your family home – Week 2”

How to make the most of your family home – Week 2

Family spending time together at home
For the majority of families, their home and superannuation will be the two most valuable investments they will own in their lifetime. Here we discuss how the family home might be used to potentially assist in wealth and lifestyle creation.

For those that have purchased their family home, a great deal of value is often held within its walls. This value comes in many forms including physical, emotional, financial and more. Specific wealth strategies can be created around anything of financial value and, once in place should be fine-tuned throughout various life stages. So what should property owners consider when it comes to utilising, most effectively, the home in which they live?

For those of you that are looking forward to your retirement

The children are older and are perhaps even at the stage where they have moved out, or are at least paying their own way. You are working on maximising your retirement savings and your income is reaching, or is at its peak. Then why do you feel cash poor? As a home owner it is important to realise that you are also asset rich. So how do you release some of the value in that asset?

Some decide this is a good time to downsize, which achieves several valuable goals. Firstly, it gives you the freedom and the time to downsize at your own pace and on your own terms, rather than suddenly having to do so when health or other issues force a move. This means you can take your time to plan and choose the lifestyle you desire, rather than having to accept whatever is available in your price range at the time that an urgent move is required.

It also frees up a lot of equity for investment elsewhere, money that was previously locked up in the value of the family home. This allows for diversification and different investment strategies to be put in place, such as a balanced mix of income and growth, instead of growth alone. Additionally, the money that is now available could be used to generate an income. However, as with any investment strategy, you should consider the level of risk you are comfortable with, your goals and the investment timeframe.

A family home containing spare bedrooms can itself be used to generate additional income. Granny flats can be rented out to long-term tenants or short-term visitors. Other areas of the house can be renovated to create spaces that can also be rented. In the age of property-sharing websites such as Airbnb, spare rooms in a house located in a desirable area can provide an impressive income for those that welcome the company of travellers. Such income can continue into the future in order to help fund a retirement.

A third option, if you haven’t done so already and if it fits your risk profile, is to borrow against the equity in your house to boost the value of your investment portfolio in a potentially tax-efficient manner.

Be sure to constantly review your insurances, particularly if you make the choice to take in renters, and to evaluate your home loan arrangements to ensure you are receiving the very best deal. Now is also the time to put in place a solid estate plan, including wills and enduring powers of attorney, to make sure the value in the family home is looked after and is distributed in accordance with your wishes – should anything happen to you.

Key takeaways:

  • Consider downsizing
  • Can you create income from your house?
  • Borrow against equity to invest
  • Review your insurance levels
  • Put an estate plan in place

Source: Count Financial

Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.

0 comments on “How to make the most of your family home – Week 1”

How to make the most of your family home – Week 1

Family spending time together at home
For the majority of families, their home and superannuation will be the two most valuable investments they will own in their lifetime. Here we discuss how the family home might be used to potentially assist in wealth and lifestyle creation.

For those that have purchased their family home, a great deal of value is often held within its walls. This value comes in many forms including physical, emotional, financial and more. Specific wealth strategies can be created around anything of financial value and, once in place should be fine-tuned throughout various life stages. So what should property owners consider when it comes to utilising, most effectively, the home in which they live?

For those of you that are currently accumulating your wealth

Income potential is high in this age group. If you are not already salary sacrificing into superannuation, this is a good period in which to begin. Alternatively, and particularly in order to take advantage of historically low interest rates, increasing mortgage repayments could make a big difference in the time it takes to pay off the house, and the amount the mortgage eventually costs you. Too few people review their home loans, instead allowing the mortgage to take care of itself. A mortgage review may mean you discover a better deal elsewhere. But it might also simply lead to a discussion with a representative from your lender, revealing a better way to manage your account. An offset savings account connected to the mortgage account, for instance, can save a considerable amount of interest over time. And a redraw facility that offers essential funds at mortgage interest rates, rather than personal loan or credit card interest rates, can also make a real difference. Paying down the mortgage on the family home as quickly as possible is important as interest on this loan is typically not tax deductible. At the same time, the more you pay down the debt, the more equity is held in the house itself – assuming the value of the house is not decreasing.

Finally, during this period it is very important to ensure that your investment is protected. Has your home and contents insurance kept up with the current value of the property? Have any improvements you have made along the way, or valuable items within the house, been added to your insurance policy? Don’t let your most valuable asset go unprotected or under-protected. Review insurance on an annual basis.

Key takeaways:

  • Consider salary sacrificing or increasing mortgage repayments
  • Review your home loan
  • Check your insurance levels

Source: Count Financial

Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.

Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.

This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.