Beeliar Financial Advisers

Financial Planning in Beeliar, Perth, Western Australia

For financial success, try to avoid these traps

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Many aspects of financial success are about putting good habits in place early and avoiding traps that can damage your dollar value. Here are our top five traps to avoid.

1. Make minimum repayments

Whether we’re talking about high-interest debt such as credit cards or longer-term investment debt such as mortgages, making the minimum repayment is good, but not always great. On credit card debt you can end up paying interest of 20% or more, potentially adding thousands of dollars annually to your repayments. Even small increases in your regular mortgage repayments can cut years off the loan and save tens of thousands of dollars in interest along the way.

2. Leak money to businesses

Many businesses are now moving to a subscription or regular repayment model, whether it is for software, TV services or holiday packages, because it seems cheaper and causes less financial pain in the short term. Those businesses become wealthy over time and you do not. Being aware of these regular outgoings, living a leaner lifestyle and plugging these financial leaks can be the equivalent of adding several percentage points to your investment interest.

3. Spend your redraw/equity

Paying extra into your mortgage is an exceptionally good habit. Constantly redrawing the available funds, or borrowing on the equity for non-investment purposes, is not. Keeping all of your savings within your mortgage, or in an offset account, will likely save a considerable amount of interest over time. But be sure to set yourself a budget or savings goal to reap the full benefit of your discipline.

4. Lack familiarity with your finances

We are all guilty at some stage of being less familiar than we should be with the investment mix of our super fund, or the interest rate on our mortgage. But checking in with your finances on a regular basis – monthly, bi-annually or yearly – is a simple way to check things are moving in the right direction and to take action if they are not. This process should always involve all stakeholders, particularly both members of a couple.

5. Prioritise spending rather than investing

All great plans begin with a goal. Wealth planning usually begins with a retirement lifestyle goal. A strategy is then set to achieve that goal – perhaps the diversified investment of $100 every week for the next 20 years – and that becomes the absolute priority. Households often prioritise and plan for holidays, new cars, furniture updates and wide-screen TVs. The fact that a plan is in place means they will likely have those things. But such purchases should only be allowed after the real priority has been taken care of.

 

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

IMPORTANT INFORMATION

This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non‑guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138).

Information in this document 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 Financial Wisdom, 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. Taxation considerations are general and based on present taxation laws and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information

Winning the money mind games

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Success in generating long-term wealth has a lot to do with awareness of the tricks money can play on your mind. How many of these do you recognise?

Money and emotion are strongly connected. Purchases often mean something to us personally. They broadcast our identity. They make us feel special. They reward us for hard work. But in the background, behind our most basic reasons for spending or saving, our mind plays further tricks. If you become aware of these tricks then the added clarity will benefit your wealth generation.

1. Bigger is better

Consider the purchase of a new car. You have just spent $35,000, so when the salesperson offers you a special deal – a $700 upgrade pack including a towbar, carpet mats and alloy wheels – it seems like a bargain. But would you happily go out today and spend $700 elsewhere? How many grocery trips does that represent? And many of us will grab the opportunity to buy a $100 item that has had its price slashed to $50. But if a $5000 item is discounted to $4950, then the $50 saving is not nearly as attractive. Remember that a dollar is always worth a dollar, no matter how much or how little the related purchase happens to be.

2. Discounted = good value

It is increasingly rare to see a price ticket that is not marked down. But is the $130 jacket, marked down from $210, actually better value or better quality than the $100 jacket in the shop next door? Ignore the higher price (known as an ‘anchor’, intended to make the discounted price seem cheap) and consider the actual value. This works in several other situations. For instance, many restaurant menus offer a high-priced entrée and main to make the other options seem cheap. And in your local electronics store, the fancy $500 toaster is only really there to make the $140 toaster seem like a bargain.

3. Gifted money is not worth investing

You receive money as a gift so instead of adding it to savings, investment or retirement funds, you put it straight into the spending budget. Your mind is de-valuing the money, because it was a gift. In other words, you didn’t have to work for it, so it is somehow of less value or not worthy of investment. But if you regularly invest a specific percentage of your income, then consider investing the same percentage (or more) of gifted money.

 

 

 

4. Small change is of little value

How much small change do we leave lying around, or in a container, or in the glove box, then happily spend it on little things without a second thought? But consider that a small money box for children can easily hold $400 in gold coins, and suddenly that small change becomes a very real driver of financial change. The same goes for small pay rises, which may not seem to make any difference right now but can make a very real difference over the long term.

5. Money buys happiness now

Buying something today produces a very measurable result. Saving for the future and putting money into superannuation or investments is difficult to quantify in terms of lifestyle. So make it quantifiable. Figure out your average monthly expenditure and buy future months of happiness with your savings and investments.

6. Reduced mortgage repayments represent a saving

In an environment of low interest rates, many home owners have been offered a drop in mortgage repayments. That is great for our household budgets, right? But consider that if you drop your repayments, you will spend more on the mortgage in the long run and will lose more money in interest, as you take longer paying off the mortgage compared to keeping your repayments at the same level.

Changing your money mindset

If you want to know more about how to separate money from emotion, your financial adviser should be the first person you speak to. They will help you change your money mindset so you can recognise traps and win the money mind games.

 

 

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886

Making the aged care journey smoother

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When you’re exploring aged care options for a loved one, the process can seem overwhelming. Here’s how to make it a bit easier.

Choosing when to place an elderly relative into a retirement home may be one of the toughest decisions you have to make. And while you want your loved one to be as comfortable as possible in their final years, it’s also important to be financially prepared.

With so many choices available and so many decisions to make, it helps to break down the process into a series of steps. And remember, when the time comes to begin your own aged care journey, you’ll want to be ready – so the sooner you start planning, the better.

Step 1. Finding the right place

The first step is to have your loved one’s needs assessed to determine the right level of care – from semi-independent living to round-the-clock nursing. Free assessments are conducted by community- or hospital-based Aged Care Assessment Teams. You should also consider any additional services your relative might need in the future, so they won’t have to move again if their health declines.

If you can, visit different retirement facilities together to find an environment your loved one feels comfortable in. Be sure to investigate the social activities and meal options on offer, to ensure they’ll enjoy a happy and enriched life there.

Step 2. Calculating the costs

Although the federal government subsidises aged care costs, there are still various expenses that need be covered. For residential aged care, these include:

  • Accommodation fees. Prices are set by the facility but may also depend on your relative’s income and assets. Fees can be paid either as a lump sum or in regular instalments.
  • Basic daily care fee. This covers daily living costs and is fixed at 85% of the maximum single Age Pension – currently $50.66 per day.
  • Means-tested fee. This may be charged on top of your relative’s daily care fees, and is based on their assets and income. It’s currently capped at $27,232.33 a year.
  • Extra service fees. Additional fees may be charged for a more comfortable standard of accommodation, or special services like hairdressing or pay TV.

A financial adviser can help you calculate all these costs so you know exactly what to expect.

Step 3. Managing the paperwork

Because the fee amounts vary, you’ll need to lodge a Request for a combined assets and income assessment form with the Department of Human Services. This helps determine how much of a government subsidy your relative will receive towards the aged care costs.

Next, you can start applying directly to aged care facilities to find a suitable placement for your relative. A facility will contact you as soon as a slot becomes available, and they may also require you to enter into a Resident Agreement and Accommodation Agreement.

Step 4. What to do with the family home

Moving into aged care accommodation isn’t cheap, and many people who go into care need to sell their family home to cover the costs. This process can take many months, so you might also have to sort out a loan to manage the initial expenses while the property is on the market.

An alternative may be to rent out the property and use the rental income to help cover your aged care fees.

Your relative’s choice of whether to sell, or keep and rent out their former family home can have significant consequences for the aged care fees they pay, as well as any social security entitlements they receive, so speak to a financial adviser about the best option before taking any action.

Step 5. Making the move

Packing up an entire house or flat and moving into a single room of a retirement home requires a lot of work. As space will be limited, you’ll need to prioritise the most important or valuable items (including those with sentimental value) for your relative to take with them, and then sell or give away the rest.

There will also be other practicalities to deal with, such as changing their postal address and advising Centrelink about the move. Finally, make sure you include your loved one in as much of the decision-making as possible, to help make the transition as painless for them as you can.

 

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

How much will your child’s education cost?

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Your child’s education is an important investment in their future. But getting it right takes careful planning, which means you need a true understanding of the costs involved.

As every parent knows, a quality education is one of the most important foundations you can provide for your child. But the costs of schooling can really add up over the years – and it’s not just fees; there are plenty of other extras you’ll need to cover as well. And of course, if you have more than one child, then all the expenses will be multiplied.

So how much can you expect to shell out for each child’s education – and are there ways to plan ahead so you can reduce the strain on your household finances?

What to expect

The cost of a child’s schooling in Australia varies widely between metropolitan and regional areas, and depends on whether you opt for a private or public education. But even if you send your child to a government school, there are still plenty of expenses that you’ll need to be ready for – like uniforms, books, supplies and after-school activities.

In a major capital like Melbourne or Sydney, the cost to educate a child born in 2018 from preschool to Year 12 could cost anywhere from around $72,000 to almost $550,000.[1] That means a family with two children attending private school could end up spending well above $1 million for their kids’ primary and secondary education.

And while cites like Adelaide and Perth are substantially cheaper, the projected costs still range from around $55,000 up to more than $400,000.1

How to prepare

As with any investment, you should plan carefully for your child’s education. Everyone’s circumstances and choices are different, so take the time to research and calculate how much you’re likely to be pay over the course of your child’s school years. That way you can start budgeting as soon as possible.

If you’re lucky, you might have parents who are willing to chip in for their grandchildren’s education – but if not, don’t worry. Here are three things you can do now to cover your family’s education costs without sacrificing your lifestyle.

  1. Create a savings plan

By putting aside a little bit of money on a regular basis, you can grow your savings so you’ll have money to put towards your child’s schooling. A simple way to do this is to set up an automatic transfer from your everyday account into a high-interest savings account. Once you get started, you’ll notice the interest compounding over time. As you get into the habit of saving, you’ll find it becomes easier to manage your short term expenses like school fees and uniforms.

  1. Invest your savings

While a savings plan is great, it’s important to know that education costs may rise faster than inflation. This means your cash savings might not grow enough over time to meet your child’s future education costs, and you might want to consider non-cash investments as well. By investing part of your savings in an investment bond or managed fund, you may find it easier to cover education costs over the longer term, based on the anticipated growth and earnings from these investments. So it’s worth speaking to your financial adviser about the best investment vehicle for your situation.

  1. Pay down your mortgage

It can be tough keeping up with school fees and other costs when you still have a major financial burden hanging over you. That’s why it’s a good idea to prioritise paying off as much as your home loan as possible before you child starts school, so you’re in a better financial position to manage their ongoing education costs when the time comes. Even if your child is already in school, it’s never too late for your financial adviser to help you get your finances on track and plan for the remainder of their education.

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

[1] Australian Scholarships Group, ASG Planning for Education Index, 2018.

Your end of financial year checklist

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Who doesn’t love the end of the financial year? Okay, so maybe sorting through a shoe box full of receipts isn’t your idea of fun, but don’t worry. With our handy checklist, you can take some of the headache out of tax time. You might even find ways to give your finances a boost.

The end of financial year has a way of creeping up and catching us unprepared. But this time you can be ready, with a to-do list of tasks that you can tick off as you go.

For instance, now may be the perfect time to put a bit extra into your super before 1 July to make the most of the annual contribution caps. And if you’re a business owner, we’ve also got some useful tips to help you manage your financial obligations and plan for the year ahead.

So as the countdown to 30 June begins, here’s our checklist to start you on your way.

Getting ready for the tax man

  • Confirm if you need to lodge a tax return

If you received an income through employment or investments during the financial year, chances are you may need to lodge a tax return after 30 June. If you’re not sure whether you need to do one, you can find out by using the Australian Tax Office’s online tool – ‘Do I need to lodge a tax return?’, or speak to your accountant or tax agent.

  • Organise your documents

Your tax return needs to show everything you earned between 1 July 2017 and 30 June 2018. As the first step, gather your payment summaries from your employer, invoices for any self-employed work you’ve done, and bank statements that verify your income.

  • Identify your investment earnings

Your tax return must also indicate any income you’ve earned from non-work activities during the financial year. This includes (but not limited to) dividends from shares and rental income from investment properties, as well as capital gains from the sale of investment assets. Make sure you have a clear record of all your investment earnings for the year, with documentary evidence to back it up.

  • Collect receipts for donations or gifts

You may be able to claim a tax deduction for donations or gifts you’ve made during the financial year to charitable organisations or other eligible ‘deductible gift recipients’. You’ll need to find all your receipts for these – monetary gifts must be over $2 to be tax-deductible, and different rules apply for gifts of money or contributions, so ask your accountant which ones you can claim.

  • Work out your deductions

Depending on your employment situation, you may be able to claim a tax deduction for money you’ve spent on things like your car or other transport, work uniform, tools, home office equipment or education and training expenses. You may also be able to claim deductions on costs you incur in earning investment income (such as interest payments) and super contributions. Your accountant can advise you on what you may be eligible for.

  • Calculate child support payments

If you’re making child support payments or providing any related benefits, calculate the total you have paid during this financial year. Depending on your circumstances, these costs may be used to reduce your adjusted taxable income. Your adjusted taxable income is used to calculate your entitlement to a range of Government concessions. Speak to your accountant or tax agent or contact Centrelink for more information.

Sorting out your super

  • Make an after-tax contribution

The annual cap for after-tax or ‘non-concessional’ super contributions is $100,000 (or $300,000 in any three-year period, if you are eligible for and apply the ‘bring-forward’ rule). But if your total super balance is $1.6 million or more, your annual cap reduces to nil, while your bring-forward cap is reduced once your total superannuation balance is $1.4 million or more. So if you’re thinking of giving your super a boost, ask your financial adviser how you can make the most of the caps.

  • Start salary sacrificing or making personal tax-deductible contributions

The annual cap for pre-tax or ‘concessional’ contributions is $25,000. One way to take advantage of the cap is by salary sacrificing part of your income into super. But even if you don’t reach your cap before 30 June, salary sacrificing might be a strategy worth considering for next financial year, so talk to your financial adviser, tax agent or accountant.

Another way to make use of the concessional cap is to speak with your employer about making personal tax-deductible contributions. Since 1 July 2017, most employees have become eligible to make these contributions whereas previously employees were generally ineligible.

  • Don’t exceed your caps

If there’s a possibility you’ve already gone above your concessional or non-concessional contribution cap, work out how much you’ve put into super so far this financial year. If you’ve contributed too much, speak to your financial adviser.

  • Find other ways to contribute

If you’re a low income earner, you might be eligible for other types of contributions or government payments – for instance, a split contribution from your spouse, a government co-contribution or the Low Income Super Tax Offset (LISTO). Your spouse may also qualify for a tax offset when making a contribution on your behalf. If you’re not sure what you’re entitled to, ask your financial adviser now so you don’t miss out before 30 June.

Taking care of business

  • Organise your paperwork

If you’re a business owner, the type of tax return you need to lodge will depend on the structure of your business. Your accountant will probably want to see your profit and loss statement for the financial year, plus your balance sheet, general ledger report and bank reconciliation report, so it’s best to get these ready in advance.

  • Reconcile your payroll

If you employ staff, you’ll need to give them each a payment summary by 14 July so they can lodge their own tax returns. You can also use this opportunity to check that your employees’ salaries are in line with award rates and you’ve paid them the required amount of super.

  • Update your financial records

As with each monthly or quarterly Business Activity Statement (BAS) you lodge, make sure you have all the financial documents ready that you’ll need. The Australian Taxation Office website has a full list – yours may include bank statements, a PAYG payment summary, receipts and invoices, plus records of fuel tax and GST.

  • Check your depreciating assets

Until 30 June 2018, businesses with a turnover below $10 million per year can now deduct the full cost of any depreciating assets under $20,000 (that were purchased and installed ready for use between 7.30pm AEST on 12 May 2015 and 30 June 2018) and a portion of the cost of assets worth over $20,000. If you’ve made a purchase for your business in the past year, ask your accountant if you can claim a deduction.

  • Work out your deductions

Tax time is also when you should review your stock to see if you can claim deductions on anything your business makes, buys or sells. You may even be able to claim a deduction for things like interest on business loans and overdrafts.

  • Plan your spending

As many of your business expenses may qualify for a tax deduction, it’s worth thinking strategically about when to pay them. There may be costs you want to pay now so you may claim a deduction for this financial year – and on the other hand, you may want to put off some payments so you can save the deduction for next financial year.

When it comes to taking care of your business commitments at tax time, it’s best to contact your accountant or tax agent. They can help you organise your paperwork, review your deductions and assets and help get other financial records in order for the end of financial year.

 

Start the next financial year off on the right foot.

Need help getting your finances in shape for the year ahead? Speak to your financial adviser. They can make sure you have the right arrangements in place for your personal circumstances and lifestyle goals.

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

Insurance for every life stage

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It’s a good idea to regularly revisit your personal insurance to make sure it’s giving you the level and type of cover you need at your specific stage of life. Here are some things worth considering to make sure you and your family are protected.

Recent research shows that Australians are largely underinsured, with the median level of life cover meeting only 61% of basic needs.[1] Part of the problem may be that we tend to ‘set and forget’ our insurance – even as our circumstances and responsibilities evolve throughout our lives.

That’s why it’s so important to regularly review your cover to make sure it’s working to protect your lifestyle, loved ones and financial goals. Here’s what to consider as you move through different life stages.

Young and single

While you may not be thinking about life insurance when you’re young and healthy, there are still the risks of injury and illness. What’s more, an extended period without an income can do serious damage to your finances. So, if you’re away from the office for longer than your sick leave allows, you’re going to need a safety net.

Which insurance is for you?

  • income protection
  • trauma insurance
  • TPD (Total and Permanent Disablement) insurance

Young couple

Consider how your lifestyle would change if you were left without an income – for example, you might not be able to save for a house deposit or keep up with your mortgage. And if you were off work for some months, you’d still need to keep up with regular living expenses and loan repayments, ideally without eating into your savings.

Which insurance is for you?

  • income protection
  • trauma insurance
  • TPD
  • death or accidental death insurance

Family with kids

Once you have kids relying on you, your financial responsibilities increase. Your income is a vital asset: you need it to manage debt, stay on top of bills, pay your children’s school fees and keep up with other necessary expenses. That’s why it’s worth taking the time to get your insurance sorted – so you can make sure your family’s lifestyle is protected.

Which insurance is for you?

  • death or accidental death insurance
  • trauma insurance
  • income protection
  • TPD

Mature and independent

If you’re single and enjoying life, your income is key to the lifestyle you cherish – so it makes sense to protect it with a financial buffer. That way you’ll be covered against accidents or illnesses that could take you out of the workforce for a while. Or, if you’re raising children, you’ll also want a financial safety net that ensures they’ll be taken care of, even if something happens to you.

Which insurance is for you?

  • death or accidental death insurance
  • trauma insurance
  • income protection
  • TPD

Retired

With your children grown up and independent, your financial responsibilities have started to ease – but that doesn’t mean you should forget about insurance. Because you’ve spent so many years building up a nest egg for your retirement, it’s important to protect it. A serious medical event could still impact your finances, so get the right cover in place to ensure your ongoing financial wellbeing.

Which insurance is for you?

  • death or accidental death insurance
  • trauma insurance

Need more guidance?

Remember, your financial adviser can help you make sure you have the right level of insurance cover. They’ll work with you to understand your situation and recommend insurance solutions to better protect your financial future.

General information only: The information in this message is of a general nature only and has been prepared without taking into account your particular financial needs, circumstances and objectives. It should not be construed as financial, taxation or legal advice. Before acting on the basis of this information, you should consider its appropriateness to your own objectives, financial situation and needs. Individual advice can be provided by contacting our office at admin@completefinsol.com or by phone (08) 9330 8886.

 

[1] Rice Warner: Australia’s relentless underinsurance gap, September 2016.

What Is … ? Investment Terms Explained

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Want to learn more about investing but you’re not sure where to begin? Here are a few key terms every investor should know.

If you’re looking to build wealth for the future, buying a lottery ticket probably isn’t the way to go. A far more reliable option is to invest – but, unlike hitting the jackpot, investing takes time, patience and knowhow. For many of us though, trying to understand investment-speak is like learning another language. But don’t worry – once you get your head around a few basic concepts, you’ll be on your way towards becoming an educated investor. Here are a few common investment terms to get you started.

Portfolio
Your portfolio is the collection of assets you’ve invested in, which might include cash, bonds, shares and property. You may hold different amounts of each asset and they’re all likely to have different values. As an investor, you can manage your own portfolio and choose which assets to buy and sell at which time, or else you can hire a professional to manage it for you.

Cash
Cash refers to money you have that isn’t tied up in other assets. It’s often easily accessible when you need it, and it has a clear, specific value. As well as the hard cash you have on hand, it may also include other forms of money that can readily be converted into cash if you need it, such as the balance of your savings account.

Bonds
Investing in a bond essentially means lending money to the government or a company for a period of time, at either a fixed or variable interest rate. Then, when the bond expires, you get your money back with interest. Bonds are generally considered to be a more secure investment than shares because you know exactly how much you’ll earn and when – but the main risk is if the issuer cannot pay you back.

Shares
A share or stock is a portion of a company that’s available for investors to purchase. The amount of a company each investor owns is relative to the total number of shares available; for example, if a company has 100 shares and you buy one, then you become a shareholder who owns 1% of the company. If the company returns a profit and pays income to its shareholders, your dividend is based on the portion you own. Because shares are subject to stock market movements, their value is likely to go up and down in value over the short term – but they also have the potential to earn higher returns than cash or bonds in the long run. This means they may carry higher risk than these other assets.

Property
The most direct way to invest in property is to buy residential or commercial real estate and rent it out to a tenant. Your investment can then pay off in two ways: firstly, through the rental income, and secondly via an increased asset value if you sell it for a profit. You can also invest in property indirectly through an Australian Real Estate Investment Trust (A-REIT). These enable investors to pool their money together in a shared portfolio of commercial and industrial real estate.

Managed funds
When you invest in a managed fund, your money is pooled together with the money of other investors. A fund manager is responsible for all the fund’s investment decisions regarding buying and selling assets. The fund can pay a regular income, but the amount can increase or decrease depending on how the assets perform. The value of your managed fund investment (eg, units) can also fluctuate over time. Although investing in a managed fund gives you less control than direct shares, it may also give you access to a wider range of investment opportunities than you’d have as a sole investor.

Investment risk
When deciding which investments are right for you, it’s important to understand the trade-off between risk and return, and know how to manage investment risk. All investments carry some risk due to factors such as inflation, an economic downturn or a drop in a particular market – even if you choose an investment that’s traditionally considered ‘safe’, such as high-quality bonds. Every investment carries the risk of not returning your investment, and assets with greater changes in their capital value and pricing will move around a lot more, especially in the short term. It’s therefore essential to know and understand the risks of every investment you make.

Asset allocation
Asset allocation refers to the mix and value of the various assets and asset classes in your portfolio. The key to getting the right mix is to weigh up your goals, your appetite for risk and the length of time you’re planning to invest – which is different for everyone. Each asset class carries its own level of risk and return: generally speaking, ‘conservative’ assets like cash or bonds offer a safer but lower return than the potential returns on ‘growth’ assets like shares or property.

Diversification
Diversification is a strategy for reducing risk in your portfolio by investing in a range of assets, with some likely to perform better than others at different times. That way, when one type of investment is underperforming, your other investments will likely still be earning returns. For example, let’s say you’re only invested in shares. If there’s a downturn in the stockmarket, your entire portfolio will be negatively impacted. But if half of your portfolio is invested in other assets, then that half may not be affected.

Return on investment
Your return on investment (ROI) is the amount you earn from an investment relative to how much it cost you. By applying this simple formula, you can compare the profitability of different investments:

ROI = (Gain from Investment – Cost of Investment) divided by Cost of Investment

For instance, if you buy a house for $500,000, earn $25,000 in rental income, and then sell the property for $600,000 – after accounting for $60,000 in total costs (stamp duties, loan interest, legal and agents fees, rates and maintenance etc.) your ROI would be $65,000 divided by the $560,000 spent, which equals an ROI just shy of 12%.

Capital gain/loss
A capital gain is the profit you make when you sell an asset – or the increase in value between what you originally paid and how much the asset sells for. If you sell an asset for less than you bought it, this is called a capital loss. Because your net capital gain forms part of your taxable income, you generally need to report any net capital gain or loss in your tax return for that year. This is the difference between the total capital gain for the year and the total capital loss (including unused loss from previous years), less any relevant CGT discount or concessions.

Yield
The yield is the amount of income you receive from an investment, for example, interest, dividends, or rent. They’re usually calculated as an annual percentage based on the cost or value of the asset, and can vary depending on how the market and asset is performing or is expected to perform. But remember, a yield isn’t a guarantee of specific returns. It’s simply an indicator of how a particular investment is currently performing or is likely to perform in the near future.

Need more guidance?
While it’s good to understand the basics, it’s important to realise just how complex investment concepts really are. So if you’re new to investing – or even if you’re a seasoned investor – be sure to talk to your financial adviser to make sure your investments are in line with your lifestyle needs and goals.

 

IMPORTANT INFORMATION

This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138). Information in this document 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 Financial Wisdom, 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. Taxation considerations are general and based on present taxation laws and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision. This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Financial Wisdom Advisers are authorised representatives of Financial Wisdom. Information in this document is based on current regulatory requirements and laws, as at 10 January 2018, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document.

Colonial First State Market Summary January 2019

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Taken from the CBA Global Markets Research report, ‘January Month in Review’; first published on 1 February 2019

Summary: Financial Markets in January

  • Money markets showed elevated yields that have only contracted marginally in January.
  • Bonds have rallied (yields lower) in Australia as markets increased the chance rate cuts.
  • Global credit spreads retraced a good portion of the late 2018 widening, while A$ credit spreads remain on the sidelines and range bound.
  • Equities rose strongly in January after a battering in December. Materials and miners performed well as commodities rose.
  • The AUD was supported by higher commodity prices.

Money Markets (Cash)
The Australian data has been mixed over the past few months. And dwelling prices continue to fall. The bright spot is the labour market, where jobs growth remains strong and the unemployment rate is inching lower. The Australian OIS rates have moved to price in an even greater chance of a rate cut in the coming year. However, these expectations remain more of a late 2019 or early 2020 story.

Australian and Global Fixed Interest
Across the developed market rates world, yields have finished near their lows in January. Markets have pushed back on the bounce in equity markets and have been firmly forward looking on a view that the rate hike cycle in the US has come to an end. As January closed, the more dovish Fed meeting justified the market pricing. The expected inversion of US rate curves has stalled for now. Carry trades may well move back in vogue given the Fed position.

This is also important for other markets. Global macro type trades have favoured a paid US rates vs received other markets. Cross market traded might start to lose favour given this new backdrop.

The US 2Y yield closed the month at 2.46% which was a rally (yields higher) of 2bp, though the range was a high of 2.616% and a low of 2.38% The US 10Y closed the month at 2.63% which was a rally (yields higher) of 5.5bp. The US curve finished the month modestly flatter, much of the move was undone in the last day as the curve steepened post FOMC. Front curves, which have been watched closely stayed in negative territory.

USD swap spreads, which have largely been benign in recent months, narrowed in the 10Y sector, flattening the spread curve. In the Australian market, OIS pricing continued to lean against RBA views that the next move in policy rates will be higher. Further out of cycle rate hikes by the banks as funding cost increases were passed on as well as soft housing data are trumping the RBA’s optimism. Both labour force and CPI data did not provide a reason to consolidate pricing and indeed CPI reduced market pricing for cuts, albeit until the FOMC delivered its coup de grace.

Australian rates have also rallied (yields higher) and flattened once again. The 3Y physical bond has rallied (yields higher) 15bp to 1.7325%, while the 10Y physical has rallied 7.75bp to 2.2425%.

Global Credit Markets (Cash)
January was dominated by the continued impasse on the funding of Trump’s wall between the US and Mexico and consequently all bar the last couple of days, the US government was shut for the month. A problem that may resurface given the temporary nature of the re-opening. Brexit and trade headlines continued to occupy the narrative, but the tactical impact on A$ credit appeared negligible. At month’s end the Fed released its latest statement, which carried with it a noticeably more dovish tone than previous statements.

January saw 44% of the S&P 500 reported Q4 results, with aggregate sales of +6.2% on the pcp and aggregate earnings of +13% on the pcp. Optically reporting season so far has seen solid growth numbers, however there has been pockets of stress surface, mainly on the back of bell-weather names disappointing, which gave markets moments for pause. Despite the persistent headlines and lack of tangible progress in the prevailing risk points, markets (risk) continued to rally nonetheless. The S&P 500 and DOW closing the month up around +7.9%, the strongest monthly gain in three years.

After a horrendous month or two of spread widening, January saw offshore credit spreads partially retrace lost ground. USD credit spreads outperformed EUR credit spreads by a factor of 4:1. USD Non-Financials ended the month -28 bps tighter compared to -6 bps tighter in EUR Non-Financials. It was a similar story in Financials, -24 bps vs -6 bps across USD and EUR respectively. A$ spreads also lagged, but A$ materially outperformed on the way out. While USD Non-Financial spreads were +50 – 70 bps wider over Q4’18, A$ Non-Financials were just +10 bps wider. On the January retracement, we’re seeing USD Non-Financials half way back to their prior inflection point, around the beginning of October 18. EUR Non Financials have retraced perhaps a third of their widening.

Equity Markets
After slumping in December, global sharemarkets began recoveries from their lows in early January with gains extending over the month. Investors continued to be fixated on developments in the US-China trade dispute as well as UK Brexit, US bank earnings reports and the US Government shutdown. Higher oil prices provided support for companies in the energy sectors.

In the first week of January, global markets were mixed in volatile trade. The US Dow Jones slumped 660 points on January 3 after Apple’s first sales warning in 12 years. But the Dow rebounded 747 points on January 4 in response to data showing a 312,000 lift in US non-farm payrolls for December. US markets rose 0.5-1.6 per cent in the first week of January, and Europe also lifted (German Dax up 2 per cent) but the Australian ASX 200 fell 0.5 per cent.

In the second week, global sharemarkets posted healthy gains on optimism about US-China trade negotiations. And on January 10, US Federal Reserve chief Jerome Powell reiterated that the Fed can be patient on future rate hikes. The Dow rose on four of the five days, lifting 2.4 per cent while the ASX 200 was up by 2.8 per cent.

In the third week of the month, global markets posted more gains, generally between 1.5-2.0 per cent. The Dow Jones again rose in four of the five days, lifting 3 per cent, while the ASX 200 rose 1.8 per cent and the German Dax lifted 2.9 per cent. On January 15, the UK Parliament rejected the Brexit deal but Australian and US markets rose. Over the week shares in US global investment banks were generally higher in response to earnings results.

In the fourth week of January global sharemarkets were generally flat, except the UK FTSE, down 2.3 per cent on uncertainty about Brexit. US shares fell by between 1-2 per cent on January 22 as investors digested a downgrade in IMF economic growth forecasts and weaker Chinese economic data. But US shares rebounded the next day on good earnings data.

In the final four days of the month, (January 28- 31) global sharemarkets were mixed. But on January 30, US sharemarkets posted solid gains in response to positive earnings results from Apple and Boeing and the rates decision from the Federal Reserve. The Fed left rates unchanged but pledged to be patient in deciding the next move in rates. The Dow rose 435 points or 1.8 per cent.

Over January, all major sharemarkets were higher. The US Dow Jones rose 7.2 per cent with the S&P 500 up 7.9 per cent and Nasdaq up 9.7 per cent. In Europe, the German Dax rose by 5.8 per cent and UK FTSE rose 3.6 per cent. And in Asia, Japan rose 3.8 per cent while the ASX 200 lifted 3.9 per cent – the best January gain in five years.

In January, all of Australia’s 22 sub-industry sectors posted gains except Banks (down 0.6 per cent). The Energy sector rose the most (up 11.5 per cent) from Software & services (up 9.3 per cent) and Consumer services (up 8.3 per cent). The Small Ordinaries out-performed, up 5.6 per cent, with big companies (ASX50) up 3.5 per cent and mid-cap stocks up 4.5 per cent.

Australian dollar

After the CAD, AUD was the strongest performing G10 currency in January seeing its tradeweighted index rise by 1.5%. Rising Australia commodity prices helped initiate the January move and would remain a consistent theme throughout. However the more important catalyst was a 4 January speech by the Fed Chairman Jerome Powell which appear to emphasise downside risks to US inflation.

AUD buying reached a peak on 11 January on growing optimism regarding US-China trade talks as US Treasury Secretary Mnuchin announced an official trade meeting for end-January. The AUD was also helped by a surprise improvement in December retail sales, and further comments from the Fed’s Clarida emphasising a more ‘patient’ policy approach.

AUD outperformance was not a one-way trade however. While played-down by the RBA monetary policy statement 8 January, investor concerns regarding the Australian property market were beginning to impact the policy rate outlook. Such concerns were confirmed by weaker investment and owner occupied house lending on 12 January undermining AUD. Tumbling consumer confidence, US-China trade tensions, and weaker China data all added to the more AUD gloomy tone seeing AUD/USD reach a 3 week low on 24 January.

Thereafter however, iron ore’s rally, and growing fears of a more dovish Fed seeming to outweigh RBA policy concerns. Indeed AUD/USD ignored soft Q4 inflation, preferring instead focus on still stronger Iron prices and confirmation at the 31 January FOMC meeting that US rates were effectively ‘on-hold’ for now.

Commodities
The CBA commodity price index decreased ~6.0% in January on the back of higher iron ore and oil prices.

CBA’s Terms of Trade (ToT) tracker indicates a ~3% increase in Australia’s ToT in QI, if spot AUD and commodity prices are maintained until the end of March. Given the tracker is using only one month of actual data, there are still notable risks associated with our forecast. Our tracker is pointing to a ~1-1.5% q/q lift in Australia’s ToT in QIV.

Commodity prices finished mostly higher in January, led by iron ore and oil. Easing US-China trade tensions helped commodity prices generally, but commodity specific factors were particularly positive for iron ore and oil prices. Iron ore prices rose sharply towards the end of last month following a tailings dam collapse at Vale’s Feijao mine in Brazil. While the mine only accounts for ~0.5% of the seaborne iron ore market, the ramifications could be larger. The company has already outlined plans to decommission 10 of its upstream tailings dams over three years, sidelining ~2.5% of the seaborne iron ore market in the process. However, Vale believes it has enough spare capacity to partially offset any lost output. Despite Vale’s guidance, markets are justifiably concerned that Vale’s iron ore production could remain lower for longer. Those concerns stem from the imminent response of Brazil’s regulators, who will take into consideration that the dam collapse at Feijao is the second such disaster Vale has been involved in since late 2015.

Oil prices outperformed other major commodities for most of January. Prices rose on demand hopes as US-China trade talks showed positive signs. However, oil prices also gained on evidence of ongoing compliance with the OPECled supply deal to sideline ~1.2% of global oil supply in 1H19. The most recent bullish data print was US oil imports from Saudi Arabia, which fell to the second lowest level since 2010 last week.

Coking coal was a notable underperformer last month. Subdued steel margins in China combined with weak buying and restocking demand before the Chinese New Year holiday (4-10 February) were the major drivers.

Gold also saw a late rise in January. Prices gained sharply following the FOMC removed its policy guidance of “some further gradual increases” and replaced it with a statement that they will be “patient” in assessing its next change to the Funds rate. The dovish tone increases the appeal of gold relative to US-interest bearing securities.

Australian house prices
The CoreLogic data showed that dwelling prices continued to fall in January, with a 1.2% fall across the eight capital cities. Prices fell in seven out of the eight capital cities in the month, with Canberra the only capital city where prices rose (see Table below). It’s worth noting that sales volumes are seasonally low in January, so the prices data is little less reliable than normal.

Sydney and Melbourne experienced the largest price falls in January. The rate of decline in Sydney and Melbourne dwelling prices have picked up over the past three months.

Dwelling prices in Sydney are now off 12.3% from their peak in mid-2017, taking prices back to mid 2016 levels. The current Sydney downturn is now one of the largest experienced, with the size of the price fall only larger for the 1982 downturn. In Melbourne, prices are off 8.7% from the peak, taking values back to early- 2017 levels.

The leading indicators of dwelling prices are pointing to further falls. Auction clearance rates are very low, the flow of credit has slowed to both owner-occupiers and investors, and foreign buyers have stepped back from the market. We expect further dwelling price falls this year, with prices in Sydney and Melbourne expected to drop by the most. We also expect small decline in Brisbane, Perth and Darwin in 2019.

Dwelling sales volumes are low which has implications for the broader economy. Firstly, low sales volumes and lower sales prices are reducing stamp duty revenues for the state governments. Secondly, lower sales volumes tend to reduce the amount that people spend on new furnishings, fittings and white goods. Growth in sales volumes has declined for these items and there is also heavy discounting in these goods as retailers try to keep their market share.

When we last heard from the RBA back in December they seemed fairly relaxed about how the dwelling price downturn was playing out, with the broader economy looking in good shape. Since then we have seen the labour market continue to improve but we are expecting only a modest rise in consumer spending in Q4 after a soft outcome the previous quarter. Our analysis here shows some tentative evidence of a negative wealth effect.

Next week’s RBA communication with provide an important update on their thinking related to the housing market. In particular, Wednesday’s speech by Governor Lowe and the Statement on Monetary on Friday will give the RBA chance to outline their views.

This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State). The information, opinions, and commentary contained in this document have been sourced from Global Markets Research, a division of Commonwealth Bank of Australia ABN 48 123 123 124 AFSL 234945. Global Markets Research has given Colonial First State its permission to reproduce its information, opinions, and commentary contained in this document. This information was first made available to CBA clients on 1 February 2019 in a CBA Global Markets Research report publication titled, ‘January Month in Review’. Colonial First State is a wholly owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124, AFS Licence 234945 (the Bank). Colonial First State is the issuer of super, pension and investment products. The Bank and its subsidiaries do not guarantee the performance of Colonial First State’s products or the repayment of capital from any investments. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum extent permitted by law, no person including Colonial First State, Global Markets Research, or any member of the Bank group of companies, accepts responsibility for any loss suffered by any person arising from reliance on this information. This document provides information for the adviser only and is not to be handed on to any investor. This document has been prepared for general information purposes only and is intended to provide a summary of the subject matter covered. It does not purport to be comprehensive or to give advice. The views expressed are the views of Global Markets Research at the time of writing and may change over time. This document does not constitute an offer, invitation, investment recommendation or inducement to distribute or purchase securities, shares, units, other interests, or to enter into an investment agreement. Past performance is no indication of future performance. Stocks mentioned are for illustrative purposes only and are not recommendations to you to buy sell or hold these stocks. This document cannot be used or copied in whole or part without Colonial First State’s express written consent. Copyright © Commonwealth Bank of Australia 2019. Want more information? Please speak with your financial adviser Mark Giles Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138). Alternatively visit our website at completefinsol.com.au or contact Colonial First State Investments Limited at colonialfirststate.com.au or phone 13 13 36. © Colonial First State Investments Limited ABN 98 002 348 352 AFS Licence 232468. This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) based on its understanding of current regulatory requirements and laws as at 6 October 2016. This document is not advice and provides information only. It does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement available from the product issuer carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision.

Teaching Kids the Secrets of Financial Success

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In an increasingly digital world, the value of money can be a difficult concept for children to grasp. Here are some tips for helping your kids and grandkids become wealthy and wise.

When you were young, do you remember standing next to mum or dad at the corner shop and watching them count out notes and coins to pay for the bread and milk? This was a valuable lesson about the purpose and value of money.

Fast forward to today – few corner shops exist and the days of counting change are almost over. When our children see us pay for something at the shopping centre, it’s likely to be with a piece of plastic – or even by mobile phone.

That’s why it’s now more crucial than ever to consciously teach your children and grandchildren about money: how to spend it and how to save it. Here are five ways to do it.

1 Help them budget and save
Many children believe parents have an endless supply of money – which is why it’s so important to talk to kids about money from an early age. You can start by discussing your own household budget and explaining how you manage costs like weekly grocery shopping and phone bills. If there’s something your child wants, like a new soccer ball or item of clothing, work out a budget so they can save up and buy it. Then reward them by taking them shopping.

2 Give them pocket money
Pocket money is one of the simplest and most powerful ways to teach children the value of cash – which is why it should be earned rather than given freely. Whether it’s payment for completing chores or a reward for behaving well, children will understand very quickly that money has value. You can also separate their pocket money into portions for spending and saving, so they’ll learn how to put money aside for the future.

3 Set up a bank account
By setting up a bank account for your child, you can teach them the basics of everyday banking. It’s worth discussing the statements with them when they arrive – not only so you can explain what each part means, but also so you can check their progress towards their savings goals and praise them as they reach each milestone. You might even open a separate savings account to help making saving fun and easy.

4 Make money fun
Learning about money doesn’t have to be another chore: there are plenty of games you can use to teach kids financial literacy. From a young age, you can play-act spending situations with your kids, like pretending to ‘shop’ with their toys or using food items in the kitchen. As your children get older, these games can become more advanced. In fact, one of the best ways may be through playing Monopoly – which you can use to teach more complex concepts like rent and taxes.

5 Surf the net
The internet is a treasure trove of information on all things financial. Here are some of our favourites:

  • MoneySmart – packed with online resources and activities for children of different ages
  • CommBank Youth App – teaches real-life money skills to under 14s
  • Kidspot – a popular online parenting magazine with games and ideas for finance education
  • Bankaroo – a fun virtual bank for kids to learn about saving, spending and budgeting.

Talk to us
To explore the financial strategies available to help your children or grandchildren, speak with your financial adviser.

 

IMPORTANT INFORMATION
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision. This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Financial Wisdom Advisers are authorised representatives of Financial Wisdom. Information in this document is based on current regulatory requirements and laws, as at 30 November 2017, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document. This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138). Information in this document 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 Financial Wisdom, 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. Taxation considerations are general and based on present taxation laws and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

12 Months And Counting

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So, you’re one year out from retirement – congratulations! Here are five steps you can take now to ensure you’re ready.

The last year before retirement can be filled with excitement and expectation, and often a few nerves. While leaving the workforce for good may be a dream come true, it can also feel a little daunting.

According to Professor Lynne Parkinson, gerontologist and Editor-in-Chief of the Australasian Journal on Ageing, “Days are very long when you don’t work, so you don’t want to have nothing to do,” Parkinson says. “A successful retirement usually means you’re busier than ever.”

To start retirement confidently, it’s a good idea to use the final 12 months of work to make a detailed plan of what you might do in retirement – to ensure you stay mentally, physically and socially active on a daily basis.

“If a retiree has interests that can fill their day, that is what matters,” Lynne said. “A happy retirement means staying connected and active by having a plan.” Here’s how to do it in 5 simple steps.

1. Set your retirement goals
While one retiree wants to expand their social circle, another might want to nurture current friendships. Some might want to head overseas while others will be keen to stay as close as possible to their grandchildren.

“Success is about discovering what you want to do as an individual,” Lynne said. “For example, if you’re shy you can focus on an interest close to home such as gardening.”

The bottom line is – don’t make a plan around what others expect, but instead make it absolutely unique to you.

2. Expand your hobbies
What’s the one thing you’ve never had enough time to do but you’ve always been passionate about? It might be a hobby like golf, fishing or cooking – or maybe you want to discover more about your family tree.

Or perhaps, you wish to give back to the community through volunteer work or advocating for an environmental or social cause.

“There is plentiful evidence that if you’re an active, healthy person, then volunteering is very good for you,” Lynne said.

3. Make travel plans
Retirement is a wonderful opportunity to get out and explore the world. By planning ahead, you can look forward to new adventures.

“A lot of people travel once they retire – it’s the Australian dream,” Lynne said.

And the best part is, it doesn’t need to be expensive. There are plenty of options to suit your retirement budget.

“You can buy a little van and take a trip around Australia, if that’s what makes you happy,” Lynne commented.

4. Learn something new
“As you get older you tend to sleep less, so there are more hours to fill,” Lynne observed.

After leaving work, you may find yourself with endless time up your sleeve. So why not make the most of it by gaining new skills and knowledge?

Whether it’s an informal language course or a part-time series leading to a new qualification, there are plenty of choices available at local community colleges or with a private teacher.

5. Make a strong financial plan
Your financial adviser can help prepare you financially for your move to retirement – from understanding your superannuation options to making the most of your Centrelink benefits.

They can also help you work out a retirement budget that enables you to reach your lifestyle goals and enjoy the retirement you deserve. And, with the 12-month countdown to retirement ticking, now is the perfect time to start planning.

 

IMPORTANT INFORMATION
This document contains general advice. It does not take account of your objectives, financial situation or needs. You should consider talking to a Financial Adviser before making a financial decision. This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, nonguaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Financial Wisdom Advisers are authorised representatives of Financial Wisdom. Information in this document is based on current regulatory requirements and laws, as at 10 December 2017, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Financial Wisdom, its related entities, agents and employees for any loss arising from reliance on this document.

This document has been prepared by Financial Wisdom Limited ABN 70 006 646 108, AFSL 231138, (Financial Wisdom) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124. Mark Giles of Complete Financial Solutions (WA) – Financial Planning (ABN26 050 157 938) is an authorised representative of Financial Wisdom Limited (ABN) 70 006 646 108 AFSL 231138). Information in this document 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 Financial Wisdom, 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. Taxation considerations are general and based on present taxation laws and their interpretation and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

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