EOFY – You Snooze, You Lose

We’re heading towards the 30th June again and Wealthwise adviser Joseph Hoe argues that, like our Mums, our finances are something we should be thinking about all the time, not just one day a year.

EOFY – You Snooze, You Lose?

Let’s face it, most of us are lazy and, when it comes to dealing with our finances, it’s usually an impending deadline that spurs us into action. Sometime before the end of June you’ll probably remember to top up your SG contributions, or look at reviewing your income protection to try and get a bigger tax deduction. The thing is, while doing both of these could be financially beneficial, they should be among several areas of your finances that you review regularly and not treat as a last-minute End of The Financial Year knee-jerk reaction.

Below is a checklist of things you could consider talking to your financial adviser about. It is by no means comprehensive.

  1. We mentioned tax deductible income protection premiums, but also insurance companies are constantly updating and improving their products so it might pay to move your existing cover to a newer policy.
  2. Everybody is raving about Self-Managed Super Funds, but they are a bit like a puppy at Christmas – they are not for everyone, they are a big responsibility, and they need a lot of looking after.
  3. If you already have an SMSF, have you thought about contribution levels and the investments you want to hold there? Have you also looked into the pros and cons (and limitations!) of having life cover inside the fund?
  4. Keeping your estate planning up to date. Have you recently had a new child, got divorced or married, or want to change a beneficiary? These are matters that should be dealt with promptly as we could end up seeing our assets distributed (or redistributed!) in a way that is not according to our wishes.
  5. Millions of Australian have more than one super fund and by leaving their funds fragmented they are often missing out on the opportunity that one well-managed consolidated fund can provide. Time to look for that lost super?
  6. It might seem a silly question, but is your employer paying you the correct amount of super contributions? Until you know what your entitlements are, it’s a question that you can’t really answer.
  7. Related to the last point is salary packaging (aka salary sacrificing). Can you talk to your employer about restructuring your salary so you can pay for certain items with pre-tax dollars? However, be aware that unless you work for specified not-for-profit organisations, what you are eligible for is limited, though still financially beneficial.
  8. Finally, if you are nearing retirement age, have you looked at a Transition To Retirement strategy? The laws in Australia relating to TTR are among the world’s most generous so, if you are looking forward to that dream retirement, this could be one of the major building blocks in your strategy.

If you want to discuss anything in this article, or any other matter relating to your finances, please call your Wealthwise adviser on 9380 6333.

The Best Investment In The World

From our newsletter archives.

Wealthwise sends out a weekly email newsletter to our clients with financial news, current affairs and a sports roundup. Just a part of our service offer. Here’s one of our recent articles:

There is a famous story, a parable even, about a young man who sold his house and travelled the world seeking his fortune. When he returned to his home town, penniless, many years later he was surprised to see a fine mansion standing where his old house used to be.

“Who lives there?” he asked a passing stranger, to which the stranger replied, “The luckiest people in the world. 20 years ago they bought an old farmhouse. One year later they found diamonds all over the property. They’re now the richest family in the country.”

Like the traveller in our story, as we search high and low for profitable investments, we often overlook the one investment right under our noses that is not at the mercy the markets, isn’t liable to depreciation or lose big chunks to the taxman. The one investment that gives us a return every day for the rest of our lives.

No, it’s not fully franked BHP Billiton shares and it’s not a secret. The best investment in the world is . . . ourselves.

When we invest in ourselves it pays dividends far into the future. It makes us happier and more fulfilled. It gives us marketable skills that help us make a better living. Countries that become rich and stay rich are those that invest in education, research & development and their people. Think of yourself and your family as a country. You need to consider what skills, courses and equipment you should invest in to keep your “country” prospering.

This concept is especially important nowadays as we enter what is being called the “Age of Disruption”. Until recently, major social change took decades, even centuries. Now, we are living through rapid social upheaval and all the old certainties are out of the window.

At a recent primary school teachers’ conference, a speaker asked the audience two disturbing questions – “Are we teaching the right things to our children? How relevant will our current curriculum be to the next generation of adults in the year 2030?” And by implication he was also asking how relevant are the current skills and knowledge bases of those of us already in the workplace.

If you are working in an office you might be struggling to master Windows 8 just in time for it to be replaced by Windows 10 (Windows 9 apparently disappeared down a cyber rabbit hole somewhere). If you are a parent, you might be finding it impossible to keep up with your child’s education without a smartphone, a printer/scanner and a Dropbox account. If you are a bank customer, as most of us are, you might find the reduction of face to face service in favour a “better customer experience” via long telephone queues and complicated websites a big challenge.

And you’re probably thinking, “Help, I need to go back to school”. 
Well, yes and no. 

Back to school, but not school as you and I knew it, for with this 21st Century disruption has come a new learning paradigm, an opportunity for everybody to be lifelong learners. 

From practical computer skills to ancient Greek philosophy, via the internet we now all have access to learning that previous generations could only have dreamed about. 

Tired of typing with two fingers on your computer? Head over to www.typingclub.com. 

Don’t want to feel dumb when people talk about HTML and Javascript? Check out the basics by playing games at www.code.org. 

How about free access to fine arts courses taught by Ivy League professors? Welcome to www.coursera.org. 

Need to become an expert in Excel or PowerPoint? You can buy a monthly subscription at www.lynda.com 

You literally have the world at your fingertips, so what are you waiting for?

Stop reading this article right now, find some great online education and apply it to the best investment in the world: YOU!

Important Changes To Preservation Age From July 1st, 2015

Please note these important changes to the preservation age effective from the 1st July, 2015. At present it is age 55, but like the government’s recent changes to Age Pension there will now be a ‘stepped’ system based on when you were born. The following table outlines preservation ages 

Date of birth
Preservation age
Before 1 July 1960 55
1 July 1960 – 30 June 1961 56
1 July 1961 – 30 June 1962 57
1 July 1962 – 30 June 1963 58
1 July 1963 – 30 June 1964 59
From 1 July 1964 60

So, those of you who were born in the second half of 1960, will start to turn 55 in the second half of 2015 and your preservation age will be 56. 
Individuals turning 55 after July 2015 cannot access the TTR condition of release (commence a pre-retirement pension) until they have reached their preservation age which will be their 56th birthday.

For more information on how this will affect you please call your Wealthwise adviser on 089 380 6333.

Let’s All Move To Norway

From our newsletter archives.

Wealthwise sends out a weekly email newsletter to our clients with financial news, current affairs and a sports roundup. Just a part of our service offer. Here’s one of our recent articles:

You’ve probably heard the old saying, “There are lies, damned lies, and statistics”. Perhaps we should add a fourth untruth to the list – “news headlines”.

As the internet eats into the ‘old’ media’s revenues and the battle for advertisers becomes ever more desperate, is the search for eye-catching headlines and stories that prey on the fears of Australians starting to distort reality? Of course, there is a lot of truth in the adage, “bad news sells”, but if you look at the general trend of news stories over the last couple of years you’d be forgiven for thinking that Australia was only a budget away from becoming an impoverished third world country.

Recently, two seemingly contrasting reports within a week highlighted how the media confuses and scares people by cherry-picking the most extreme statistics to create sensationalist headlines.

The report by the Organisation for Economic Cooperation and Development (OECD) ranked Australia as the best place in the world to live, with 5 Australian cities, including Perth, in the Top 10 (apparently, Canberra is the world’s best city – you see how dodgy statistics are?).

However, another report, by the Global Age Watch Index, ranks Australia 13th in the list of the top countries to grow old in, a fair ways behind global favourite Norway. Apparently, one of the key factors hurting the Lucky Country’s position was its 61st place for ‘income security’. We were so low we even came behind Afghanistan. So, if you live in a wretchedly poor country torn apart by civil war and with no effective government your income is more secure than in Australia?

One thing we stress here at Wealthwise is the importance of wealth AND health. The news can be particularly bad for your health, especially if you react to it in a knee-jerk fashion. The best and most successful financial investors have two things in common: they look to the long term, and they are never panicked into buying or selling (or moving to Afghanistan to protect their pension). Yes, things change and yesterday’s darlings can become today’s pariahs – remember gold and term deposits? This is why we recommend regular reviews of your financial situation to ensure you are making best use of your adviser’s knowledge of what’s going in the financial world. And, even if you just want a quick chat about a news story that you feel could impact your life, please give your adviser a ring – 08 9380 6333.

 

Christmas Holiday 2014

Christmas Greeting 2014

 

 

 

 

 

 

 

Please note that our office will close at 3pm Friday December 19th and re-open at 8.30am Monday 5th January 2015

 

Important Reminder – Change To Retirement Rules in 2015

If you are of retirement age or very close, there is a significant Centrelink rule change which will come into force on 1st January 2015. Depending on your personal situation, it could be advantageous to retire before this date. Please talk to us on (08) 9380-6333 at your earliest opportunity if you are even remotely considering retiring, so we can fully consider all of your options and the best course of action to take. Act now!

2014-15 Federal Budget – 7 Things Working Families Need to Know

Budget Changes For Working Families

Budget Changes For Working Families

 

You’ve won some, you’ve lost some. The biggie here is the rise in the retirement age, which the government has been telegraphing for a while. Working an extra 3 to 5 years (depending on when you were born) is going to have a big impact on most people’s long term financial planning.

1. There will be a new Paid Parental Leave Scheme.

2. Some child benefits will be discontinued when a child reaches the age of 6 as opposed to the current age of 16.

3. Family assistance thresholds will be reduced.

4. Doctor visits will no longer be free – a fee of $7 will be charged.

5. The Energy Supplement will stay in place and the government estimates the average family will benefit to the tune of $550 due to the abolition of the Carbon Tax.

6. The cost of running a car will rise – the gasoline tax that has been frozen since 2001 will now be indexed to inflation twice a year.

7. If you were born after 1965 your retirement age will be raised to 70.

If you want to find out more about how the 2014/15 Budget will affect your financial future, phone Wealthwise on 08 9380 6333 to speak to one of our advisers or use our Contact Form.

 For Federal Treasurer Joe Hockey’s full statement check out the government’s budget website.

2014-15 Federal Budget – 4 Things Pensioners Need to Know

Retirement at 70

Retire At 70?

Pensioners are not being hit as hard as some other segments of society but they will see some changes. The 4 most important ones are:

1. Asset and associated income test thresholds will be indexed between now and 2017, but then remain at fixed levels for three years.

2. From 2017, pension increases will be linked to inflation instead of wages. As wages generally increase faster than inflation this saving for the government will mean a loss to pensioners.

3. The Annual Seniors Supplement will be abolished.

4. Untaxed superannuation will be included in the income test for new recipients of the Commonwealth Seniors Health Card.

If you want to find out more about how the 2014/15 Budget will affect your financial future, phone Wealthwise on 08 9380 6333 to speak to one of our advisers or use our Contact Form.

For Federal Treasurer Joe Hockey’s full statement check out the government’s budget website.

 

2014/15 Federal Budget – 5 Things Businesses Need to Know

2014-15 Federal Budget

2014-15 Budget Crunch

Business organisations have generally welcomed the budget because they feel it introduces some fiscal discipline to a growing debt burden. High earners will be the big losers.

 

The 5 highlights as far as businesses are concerned are as follows:

1. The Carbon Tax and Mining Tax will be abolished.

2. 800,000 small businesses will have their company tax cut by 1.50%

3. The government will pay up to $10,000 to businesses that employ a person who has been on unemployment benefits or the Disability Support Pension for six months.

4. Expanding overseas markets with new free trade agreements with Korea and Japan.

5. Top marginal tax rate to increase by 2.00% for those earning over $180,000. This Temporary Budget Repair Levy will last for 3 years.

If you want to find out more about how the 2014/15 Budget will affect your financial future, phone Wealthwise on 08 9380 6333 to speak to one of our advisers or use our Contact Form.

For Federal Treasurer Joe Hockey’s full statement check out the government’s budget website.

 

2014-15 Federal Budget – 4 Things Students and Young People Need to Know

Vocational Training Is A Winner

Vocational Training Is A Winner

 

The Treasurer has placed quite an emphasis on young people and education this year. Vocational training is the big winner.

1. The government will start viewing vocational training in a similar light to higher education. They will provide apprentices doing a four year training with Trade Support Loans of up to $20,000. Those studying for diplomas and sub-bachelor degree courses will also be eligible for government support.

2. From 2016, universities will be allowed to set their own tuition fees. However, if you are already studying, you are ‘grandfathered in’ until 2020.

3. Fees only become repayable when students are in the workforce and earning over $50,000 per year.

4. Newstart for those unemployed under the age of 25 will become Youth Allowance, while those jobless under the age of 30 face a six-month wait before they can claim benefits.

 

If you want to find out more about how the 2014/15 Budget will affect your financial future, phone Wealthwise on 08 9380 6333 to speak to one of our advisers or use our Contact Form.

For Federal Treasurer Joe Hockey’s full statement check out the government’s budget website.