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Archives for March 2018

Stuck On The Money-Go-Round?

Do you get the feeling that you’re just treading water financially? Don’t think you’re alone. A recent study conducted by ME Bank into household financial comfort suggested that over 25% of Australians have less than $1,000 in savings to draw upon in the event of an emergency.

Here are some tips to help you get off the money-go-round and back in control of your money.

Develop a budget

It is important to have awareness of where you are spending your dollars. By creating a budget, as boring as it sounds, it can change things dramatically because you become more aware of where you are spending your money.

There are many good budget tools out there. I suggest the ASIC Money Smart Website Budget Tool.

Get on the same page

It can be difficult maintaining a budget if you have a partner who isn’t on the same ‘money-wise’ page as you. I’ve seen figures indicating that around 60% of couples argue over money, therefore talking to one-another about your financial goals and aspirations in a constructive and respectful manner can really help. We spend so much of our time finding “the one” who will share our values, and financial values are just as important when it comes to maintaining a comfortable and stress-free lifestyle.

Educate to elevate

Education can elevate you to different pay levels, provide career opportunities and/or even allow you to start up your own business. It has long been a catalyst to achieve a better life and millions of people have invested in themselves to create opportunities.

Look for a new job

With unemployment in Australia low at present, there are always plenty of employers looking for good staff. If your current boss is underselling you, there’s a strong chance in today’s employment landscape that someone else will pay a premium for a good employee just like you! Don’t get stuck in a rut and accept the same job conditions; do something about it and change your life at the same time.

Invest in yourself

If you’re still struggling to see the light at the end of the tunnel, then employ the services of a financial planner to help you navigate the big issues. An investment in yourself is the best investment you can ever make because it can pay a lifetime of dividends and give you the best returns. Never underestimate your value and potential.

The money-go-round is not an enjoyable place to be. By taking action and pursuing opportunities you can write your own financial and life story. Don’t just accept the status quo or get caught in a state of inertia; there’s always something you can do to improve your situation and there are plenty of people to help you if you’re struggling to do it alone.

Note that the above recommendations are provided as general advice only. It has not taken into account your personal financial circumstances. If you would like advice tailored to your specific financial position, please contact us. One of our friendly advisers would be delighted to help you.

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Our Business Growth

Last month The Investment Collective participated in a course organised by the Australian Centre for Business Growth (ACBG), which is part of the University of South Australia. The course is designed to help businesses develop soundly structured business plans designed to achieve outstanding growth results. The first module of the course was in February. There are a further two modules in May and October of this year. Attendance at the course is by invitation only and followed a one day course that David attended late last year. Based on that, the ACBG must have thought it was worth spending their time on us!

Over the last few years, our business has been performing well. However, we’ve arrived at a point where further meaningful growth requires some changes in how we go about things. We do want to significantly grow our business, and our attendance at this particular course is not a ‘trial run’. It’s the real thing.

The course was also attended by five other businesses, all as keen as us to learn of and adopt effective means to significantly grow their businesses. Also, attending the course were a number of management consultants. Individuals who’ve been ‘around the block’ in building businesses and who, as a result, had a wealth of experience and insights to share.

On day three of the February module, each of the six participating businesses had to present their broad 3-year growth plan, together with a 90-day action plan.

There was one prize: ‘Most Ambitious Goals at Module 1’, which was, by unanimous vote, awarded to The Investment Collective. That was the easy part. Now we have to deliver!

  

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It Takes Time: Superannuation Contributions

The superannuation system has a long history with both sides of government shaping the compulsory superannuation system we have today. The establishment of this system in Australia was a response to the financial challenges posed by an aging population. The aim was to have individuals saving for retirement over a working life to relieve the pressure on Australia’s government paid age pension.

Throughout your working life, your employers will make compulsory contributions to your superannuation fund (currently 9.5%). You also have the option to make personal contributions to help build your savings at an accelerated rate.

The government has made superannuation savings attractive as it offers a flat tax rate of 15% on employer contributions and investment earnings (10% on longer-term capital gains if held for more than 12 months).

Reaching your retirement savings goal should not be complicated. You should endeavour to start early and make short-term sacrifices for the longer-term gains. Let time and compound interest do the majority of the heavy lifting for you!

An initiative from the federal government to help boost your superannuation is the co-contribution scheme. If you make a personal after-tax contribution to your superannuation, you may qualify for an additional contribution directly from the government (free money!).

The government will match $0.50 (50 cents) for every dollar you contribute to superannuation up to a maximum co-contribution amount of $500.  The maximum super co-contribution is available if your total income is less than $36,813. The maximum co-contribution reduces by 3.33 cents for every dollar earned over $36,813, reducing to zero when your total income is $51,813 (for 2017/2018 financial year).

There are a few basic eligibility criteria to be met in order to qualify:

You must lodge a tax return

At least 10% of your total income comes from employment or carrying on a business

The balance of your super is equal to or less than $1.6 million and

you are less than 71 years of age at the end of the financial year.

Provided you qualify for the co-contributions, and your fund has your tax file number, the government will automatically forward the co-contribution amount to your super fund.

To find out more go to the super co-contribution information page on the ATO website.

This article has not taken into account your objectives, financial situation or needs. You should consider if the advice contained within the articles is suitable for you and your personal circumstances before acting on it. If you would like to discuss the suitability of the advice to your personal situation, please contact us to make an appointment with one of our friendly advisers.

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International Women’s Day 2018

The theme for this year’s International Women’s Day is #PressForProgress.  Now more than ever there is a strong call to motivate and unite friends, colleagues and communities to think, act and be gender inclusive.  Since the last International Women’s Day, we have seen movements like the #MeToo and #TimesUp campaigns which have been fuelled by women’s equality.  We know that gender equality won’t happen overnight, but the more people who can be involved in taking the stand, the sooner it will happen.

As a woman working in the financial services industry, I can clearly say that for many years it has been a man’s world.  However, according to the Australian Government’s Workplace Gender Equality Agency statistics from April 2016, there seems to have been a shift.  They are now recording in the financial and insurance services industry that the majority of part time and full time workers is held by women at 55% (read the fact sheet here).

I’d like to ask, where are all the ladies?  Every time I have been to an external seminar or function, it is obvious who the dominant gender is, and it’s certainly not mine.  However, here at The Investment Collective, out of our total 41 staff members, 27 of those are women, meaning we hold a 66% majority.  If we then drill down to the individual offices, women hold the majority in Rockhampton with a whopping 83%. Go girls! Our Melbourne office is a little under the majority at 41%.

Regardless of where you work, or what community you’re involved in, we can all play our part in gender equality.  For more information on International Women’s Day or to commit to a ‘gender parity mindset’ head to their website: www.internationalwomensday.com and #PressForProgress.

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Purchasing Your First Home

Buying a house can be a daunting, complex and often frustrating experience – and that’s for people who’ve done it before! A first home buyer can often feel completely overwhelmed when faced with their first property purchase.

If you’re about to buy your first home, you may feel like you’re on the brink of taking a great leap into the unknown. The idea of lenders, real estate agents, solicitors and vendors all with mountains of forms, requirements and jargon may have you wondering whether it’s worth all the effort. And on top of all that, you still have to find the right house!

Relax – it’s not that bad.

Save time and money by avoiding these common first home buyer mistakes

1. Underestimating the costs of purchasing property

Some first home buyers make the mistake of thinking that if they’ve got a $50,000 deposit and a $500,000 home loan approval, they will be able to afford a $550,000 property. The truth is that there are many other costs involved, other than the price of the home. Inspection reports, Lenders Mortgage Insurance (LMI), solicitors’ costs, and stamp duty are just a few of the additional costs involved in purchasing your first a home.

2. Over-extending

Buying your first home should be a happy experience, not one that leaves you racked with doubts and resentment. Far too many first home buyers find themselves in difficult situations because they didn’t stick to their budget, or they didn’t create a budget that was realistic for their needs. The best way to avoid overextending is to have a firm grasp on your current income and expenses. If you know exactly where all your money goes each month, before you buy, you will be much better able to plan an affordable repayment strategy. When it comes time to make an offer, never go above your budgeted purchase price. You never know what might happen in the future that will put strain on your finances.

3. Not taking advantage of first home owner concessions

The First Home Owner Grant is a government initiative to assist people in buying their first home in Australia and can save you thousands in duties and fees. Visit the First Home Owner Grant website for details on each state’s grants.

4. Not considering all aspects of a property

It can be hard not to let emotions get involved when inspecting a property. People immediately start thinking about how they’re going to remodel the bathroom or how they might arrange their furniture. The tendency to get too far ahead and caught up with the aesthetics of a property often distracts people from considering other essential points. Think beyond the home. What is the local council like and how do their services measure up? How has the suburb been trending in the past few years? How is the home positioned and what are the neighbours like? Are there many owner-occupiers around you? Is there adequate public transport? Are there infrastructure or building development plans near the property?

5. Failing to get a property inspection

A building inspection is a worthwhile investment for a number of reasons. Aside from their ability to bring potential problems to light, building and pest inspections can also be used to negotiate on the purchase price. We’ve all heard horror stories of buyers discovering structural faults, water or pest damage after spending their whole budget on purchasing the home. If you can get a third party to identify any issues before you purchase, you will have much more bargaining power with the seller.

Good luck with the house hunting and look forward to the memories that you will create in your new home. If you would like to talk to one of our mortgage brokers contact us today.  One of our friendly advisers would be delighted to speak with you about your property investments.

The information provided in this article is general advice only. It is prepared without taking into account your objectives, financial situation or needs. Before acting on the advice in this article, please consider the appropriateness of the advice, whether the advice is appropriate to you, your objectives, financial situation and/or needs, before following this advice.

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