End of Year Financial Planning

Thu, 12 Apr 2012 13:18:53 +0100

To discuss your end of financial year planning with us, contact us on 02 9417 6011 today.

Here's a great checklist for your end of year financial plans. Deadline: 30 June 2012!

Superannuation

Firstly, check how much you've contributed to super so far this financial year. Don't get stung with excess contributions tax by putting in more than the caps.
Concessional Contributions
If you're under age 50, you can contribute up to $25,000 and if you're over age 50, you can contribute up to $50,000 in pre-tax (concessional/deductible) contributions.
For the self employed, get your concessional (tax deductible) super contributions in before 30 June.
For employees, you can still arrange (or increase) salary sacrifice (concessional/pre-tax) contributions with your employer for May and June.
Are you expecting a bonus this year? You may want to use this to top up your super fund - make sure you have your salary sacrifice arrangement in place before you get your bonus.
Non-concessional Contributions
You can also contribute up to $150,000 this year as a non-concessional (after-tax) contribution.
If you earn under $61,920, making a non-concessional (personal) contribution of up to $1,000 to super may grant you access to the Government Co-Contribution.
For your spouse (under 65, or 70 if working), you can add personal contributions to their fund and if your spouse is on a low income, you may be able to claim an income tax offset of up to $540 for contributions you make on their behalf.
Ensure that any existing death benefit nominations remain valid. It's a great time also to review any potential changes to your total estate plan, including Wills and Powers of Attorney.

Transition to Retirement

For those already in a Transition to Retirement strategy, you may benefit from topping up your super and making an extra withdrawal from your pension account.
If you're running a Transition to Retirement strategy, discuss your needs for next financial year and determine whether a refresh of your strategy will be of benefit to you.

Account Based Pensions

Work out or discuss with your adviser your income needs for 2012/13 and prepare for adjustments to your pension payments.

Extras for SMSFs

It is important to remember that you cannot prepay interest on a limited recourse borrowing within a SMSF, as the pre-payment rules only allow apportionment over the period to which the interest relates (i.e. only deductible in the relevant year).
Obtain valuations for assets such as property, artwork, collectibles and other fund assets that should be valued to their market value at 30 June. This is not only best-practice for SMSFs, but is important for matters including the in-house asset rules.
Ensure the you have sufficiently minuted the fund’s activities in the past year and have reviewed the fund’s investment strategy.

Income

Defer non-essential income until the new financial year

Investments

Review your investment portfolio to determine whether investments should be sold to offset any capital gains or losses made throughout the year.
Get your Capital Gains Tax concessions by holding onto assets for more than 12 months.
Earned more than you anticipated? Need a big tax deduction straight away? Consider managed investment schemes or borrowing to invest and pre-paying the interest. Careful! Be sure the benefits outweigh the risks with these types of investments. Remember that over time a good investment will be much more valuable than a tax break this year.
Review the income distributions in your family trust and any necessary elections are made so you maintain franking credits.

Eligible Deductions

Receipts in a shoe box? Get your ducks in a row for your accountant. It'll save you time and money on accounting fees and you'll ensure you maximise your eligible deductions!

Insurance

Establish your Income Protection cover before 30 June and make an annual premium payment to receive the full tax deduction in this financial year.
For existing Income Protection policies (outside super), remember to put the details in your tax return to claim the deduction.

This list is extensive, but not exhaustive. There may be things to consider particular to your specific needs, so ensure you've got your bases covered and talk to your financial adviser today. Don't leave it until the last minute!

Redundancy - an end to tax savings

Tue, 21 Feb 2012 11:15:19 +0100

Have you been offered a voluntary redundancy? Are you in a position to negotiate termination with your employer?
If so, consider that the transitional rules for employer termination payments (ETPs) are set to end on 30 June 2012. This will have a marked impact on how much tax you will pay on benefits after 1 July and you will no longer be able to direct part of the ETP into super.
If you are in a position to take bona fide redundancy or early retirement, contact us today to discuss the implications of these rule changes.

Are you Rebalanced?

Tue, 31 Jan 2012 00:49:17 +0100

What do you do when you feel out of whack? When you’re stressed out and feeling as though you’re out of balance? Many people find meditation, exercise or yoga activities that help them to rebalance and centre themselves. Or you take a visit to your masseuse, chiropractor or physiotherapist for a regular adjustment.

Just like your health, your finances can also get out of alignment. Your portfolio, whether ordinary investment or superannuation, can easily shift from your strategic (or target) allocation (that is, the percentage of assets you hold in each type of asset class) when markets move.

For example, you may start with your portfolio as having 50% in shares and 50% in fixed interest and cash, but after 12 months with share markets moving downwards and fixed interest yields improving, your allocation may have shifted to 30% in shares and 70% in fixed interest and cash.

Your portfolio’s asset allocation is the major determinant of the risk and return characteristics of the portfolio. The primary goal of rebalancing is to minimise risk relative to your target allocation (as opposed to maximising returns).

To recapture your portfolio’s original risk and return characteristics, you should rebalance your portfolio on a regular basis. “Regular”, is usually semi-annually, annually or whenever the percentage allocated to an asset class is more than 5 per cent off your target.

Rebalancing is easier said than done because it means you need to sell winners and buy into underperforming asset classes. It takes discipline and an objective, pragmatic approach.

When was the last time you checked your portfolio’s asset allocation and compared it to where it should be to keep your risks minimised?
If it’s been more than 6 months, give us a call today to discuss rebalancing your portfolio.

The Savvy Traveller's Guide to Money

Fri, 27 Jan 2012 09:08:40 +0100

I’m heading off overseas to Vietnam shortly for a 2 week vacation and a few days at Conference. Fabulous, I know!

I’ve done quite a bit of travelling in my past and I’ve had some incidents with wallets and money being stolen. When it comes to currency and money, a lot has changed since the mid 90s in the way you can access your funds, but what hasn’t changed is that there are still people out there who will steal your stuff.

Here are my thoughts for savvy travelling with money.

Foreign Exchange

Stock up on a little foreign currency of the country you’re travelling to before you head off from Australia, particularly for more exotic locations (if possible). This ensures that as soon as you land you can buy refreshments or pay for a taxi from the airport. Banks generally offer the best rates with the lowest fees, but shop around as other Forex providers can be more competitive.

Having said that, when we landed in Madagascar in Dec 2010, we went to the foreign exchange bureau at the airport and purchased Malagasy currency by exchanging travellers cheques in US dollars. Reasonable rates as well as an easy and quick process. But this isn’t always the case, often airport exchanges are the most expensive!

Pre-paid travel cards

These are great if you want to lock in exchange rates today if you need that kind of comfort. They work just like a debit card, but in the foreign currency. Beware the upfront fees, ATM costs and hidden charges – it can end up costing you a lot more than you expected. Also, the range of currencies available is limited.

Travellers Cheques

Who uses these nowadays? I still recommend this option, particularly if you’re going to out of the way places (like Madagascar) as you can purchase in a foreign currency such as US Dollars (still considered THE global currency) and have the security they provide in the event of loss.

Credit/Debit cards

If you have Visa/Mastercard these can travel with you most anywhere and you can shop just like you do at home. You’ll be charged exorbitant fees for cash advances (not recommended), but for payment on purchases there is usually just a reasonable exchange rate conversion fee. It depends on your institution, so read the fine print!

You can now obtain a credit/debit card specific for overseas travelling and these generally remove those horrible overseas fees.

For me, it’s not a case of either/or. Having a combination of options is always best – it provides you with certainty, security and flexibility. So while that pickpocket is taking your wallet, you’ve still got those traveller’s cheques stashed elsewhere as you ring the police and your financial institution back home to cancel and reissue cards!

Where's Your Patience?

Tue, 31 Jan 2012 00:54:03 +0100

Bill Gates once said, “Most people overestimate what they can do in one year and underestimate what they can do in ten years.”

10 years can disappear in a blink of an eye. I was chatting with friends over dinner last week discussing the real estate opportunities we had missed in the early 2000s, all for a variety of reasons and all of those reasons being other than financial.

It is easy to lament the things we didn’t do if we look back on the past with some regret. This point of view comes because we are at today, looking back. We know where we’ve been, we know the history. It is easy to be intelligent, with hindsight.

And it is just as easy to start today. Take up the exercise, learn a new skill, change jobs, obtain sensible investment advice from a qualified financial planner. What’s hard is that there is no crystal ball and you’ve no idea how it will turn out in the future.

What’s hard is taking that very first step and then little steps after that. Successful investing relies on three things:

Patience.

One of my favourite Warren Buffett quotes (which you’ll find on our Facebook Welcome Page) is - “someone's sitting in the shade today because someone planted a tree a long time ago”. If you don’t have the patience to ride the waves of market cycles and stay focused on your long term goals, it is unlikely that you’ll get to where you want to go. Your investment strategy and asset allocation needs to match both your tolerance to risk and your time frame.

Discipline.

Sure, you can invest a lump sum, reinvest the income and wait 30 years. But to get to where you need to go sooner takes a disciplined investment and savings approach. It is the regular contributions to your investments that will make the biggest difference in the long run.

Strength.

Every day I read the financial markets news. Every day the markets are turning bullish (going up) or bearish (going down). Do you have the strength to cut through the noise of the mass media and the short term fluctuations to stay true to your plans?

One minute there’s panic, then next euphoria. Russell Investments has compared the market of cycle emotions to the All Ordinaries Index revealing that at the point of maximum financial risk, that is, when you buy stocks at their most expensive, investors are in a state of euphoria. Yet, at the point of maximum financial opportunity, that is, when you buy stocks at their cheapest, investors struggle with despondency. It is from these emotional states that many people make financial decisions, and they usually turn out poorly!

For your investments to generate returns that’d make you think you’d won the lottery, you need patience, discipline and strength. Before you know it, ten years has flown by. Building a good financial plan and staying focused and disciplined on your goals, will create the wealth you desire.

For investment advice that makes sense, start today with a phone call – 02 9417 6011.

Source: www.russell.com/au

What do you fight for?

Tue, 31 Jan 2012 00:56:32 +0100

Since end of September last year, I’ve been going to the gym. Not just any gym, but Fight Gym.

As a young child, I was sporty and active. My major sport was softball and in my early teens was considered adept enough to make regional teams (until I broke my right arm in a bicycle accident!). At school on the playground and during sports time, I played everything from handball to football!

From around 17, life started to impinge on sport. Suddenly I was too busy with study, part time work and socialising to play sport and for several years I hardly exercised. I hated the idea of going to a gym.

At University, around age 19, a friend suggested we play baseball. Sport was back in my life and for a few seasons, it was incredibly fun and not too energetic! There was some indoor cricket in there too!

It was short lived however as I left Australia to travel overseas for a while. Upon my return I moved up to Newcastle and found myself playing indoor soccer with friends. Great!

At 26 I had a short season of slow pitch softball, (not what you’d call sport, as there was beer and cigarettes involved during innings) and after that, not much.

In 2007 I faced the gym or swimming pool every day for 6 months getting fit enough to ride in the Sydney Spring Cycle. Goal accomplished. Now what!?

As I edge closer to 40, I realise I need to get fit and active. A short burst with an awesome personal trainer early last year introduced me to boxing training. Her wonderful words of encouragement and her surprise at my skill filled me with joy and hope. It left me feeling that finally, here was something I could do regularly that I might just stick to for longer than a season.

It’s been three months, three times a week boxing. It is fantastic. I get up early, cycle to the gym, train for an hour and ride my bike back home again.

Now here’s the point: it’s hard work. It’s hard to wake up early after a late night. It’s hard to get out of bed sore, aching and tired. It’s hard to wrestle with myself every morning and push myself to do this. But push I do. The argument in my head goes like this:

“Oh, so early. I could sleep longer. Do I really need to go to the gym?”

“Yes, it’s Tuesday. Come on, get out of bed.”

“Nooooo. Just a few more minutes.”

“Fine. But when that clock hits 20 minutes to the hour, you’re going to the gym.”

“Surely it’s OK to just miss today. I’ll go again on Saturday, I promise.”

“No, it’s not OK. You’ll love it once you’re there. Come on, out of bed.”

(Whinging noise) “I’ll just wait for the alarm to ring again.”

“Wake up. Get up. Go to the gym. You love it. You can do it. You can do it. You can do it. Yes, yes, yes.”

Every gym day morning, it’s the same story. Can’t I just skip straight to the end line? Yes, some days I’m feeling awake, refreshed and bouncing out of bed ready to box. But most days, it’s a personal challenge.

I know this conversation will get easier. The exercise is getting easier – I can plank for over one minute now, 3 months ago I was lucky to hold myself up for 15 seconds!!

I persist because the only person stopping me from being the fittest, healthiest and best person I can be is me. And I know the fight will be worth it.

Of course, this isn’t just about exercise. Applying this strategy to all the things I want to achieve in life will make them possible – health, happiness, love and wealth.

In his latest book, “Find Your Success Code”, Zig Ziglar says, “Desire produces the energy to get out of bed when you don’t feel like it. Desire gives you the power to run the last one hundred yards of a marathon when you think even one more step is impossible! Desire gives you the will to do the tough things your competition may not be willing to do. Desire is the mother of motivation, because it is where motivation is born. Desire will pull you across the finish line and give you victory!”

What do you desire that’s worth fighting for?

What’s one thing you desire financially that will get you taking action towards that goal? Once you know it, take your next step and talk to us today and get practical, professional advice.

What you see is NOT what you get

Fri, 18 Nov 2011 04:20:04 +0100

Last month, a letter came into our office from an organisation that had the look and feel of a government department. They were offering “term investments” with the benefits of competitive fixed investment rates, flexible investment terms, monthly income payments and no entry or exit fees.

You’d be excused for thinking that the offer was for secure term deposits with a government guarantee.

However, the company offering the product has nothing to do with a government body and the investment has nothing to do with term deposits.

In fact, the fine print says: “this is not a bank deposit or common fund. An investment may achieve lower than expected returns. There is a risk that withdrawal proceeds may not be paid within a reasonable period after the end of a fixed term. Investors risk losing some or all of their principal investment.”

So where is your money being invested? As they say, “in cash and mortgaged investments.”

This investment reminds me of what ACR (Australian Capital Reserve) was doing some years ago pre-GFC. You may recall that this company went bust, lost their investors money and no longer exists.

I don’t have an issue with this company offering an investment of this type. They have a place in the investment universe and there are investors who want this type of asset within their portfolios.

What I am bothered by is the way which this is marketed to the public. While they are not breaking any rules per se in the eyes of ASIC, they are skating pretty close to the line. Many inexperienced and unwary people would be easily duped by the way this company is portraying itself.

The lesson for investors here is to read the fine print and if you don’t have time for that, get financial advice from your trusted adviser.

A Clever Strategy for getting back into the market

Fri, 18 Nov 2011 04:17:46 +0100

There is plenty of concern over where markets are headed with such news stories as the “European crisis” scaring us with doom and gloom commentary.

It’s at this time that Dollar Cost Averaging can help you. This is when you “drip feed” into the market by buying bit by bit, rather than all in one go. A simple way to do this is to set up a monthly Regular Savings Plan for your managed investment or an automated purchase order for your shares.

This approach means you don’t have to try and pick the bottom of the market or worry about when you should be investing.

There are two ways to achieve Dollar Cost Averaging:

Sit on a sum of money you want to invest and put in a portion of it month by month; or
Make regular monthly investments year on year through a savings plan

The effect of either approach is designed to smooth out returns over time. If you put everything in today, you face volatility from day one. But if you enter the market bit by bit, the way the market moves will impact on the capital gains and the dividends you receive. Because you’re buying at different prices along the way, there may be better value in the future. This strategy works best in volatile markets.

The built-in discipline of a regular savings plan is a simple and effective way for you to achieve financial independence. One of my clients a little over 12 months ago had no savings or investments at all. We started her on a regular savings plan and she now has over $7,000 invested that would otherwise have been frittered away.

The real value of dollar cost averaging is that the structure of a disciplined investment program like dollar cost averaging helps overcome that behavioural bias that wants to turn us into market timers.

How it Works – A hypothetical example
Let’s assume you make a total of ten $500 investments, as shown below.

As you can see, when the unit price falls, your $500 buys more units. So, during a falling market, this approach ensures you buy cheaply. In this example, your $5,000 investment will result in your acquiring 891.6 units over the period, which at the end of period will be worth $8,916. Which means your $5,000 investment has grown significantly* (most of it during a falling market), with a rising market in front of you. Compare that profit to the zero result you would have achieved if you had invested all of your money at the start of the falling market.

Take Advantage of the power of a savings plan by talking to us today.
Phone 02 9417 6011 | Email info@tudorinvest.com.au

Source: Zurich Investments; afrsmartinvestor.com

Tudor Times.

Fri, 18 Nov 2011 04:10:32 +0100

It’s been an interesting and enjoyable year for us at Tudor.

The beginning of 2011 started with stressed clients worried about their investments and losing money on the share market and in their superannuation funds. This sentiment has continued throughout the year and we have worked hard to ensure our clients stayed focused on their personal strategies and avoided panicking.

We’ve run three successful workshops with the dynamic and entertaining Leonard Whittaker from Millennium3 Financial Services delivering his engaging and interactive seminar on Financial Life Planning. We’re excited to be able to work with him and others in 2012 and we’ll be bringing new content into the workshops for those looking for more. We expect our first workshop to be held towards the end of February/beginning of March. You can register your interest here: http://www.tudorinvest.com.au/workshop.

We have grieved the loss of some of our clients and while it is always sad to see death and the impact of illness, it is a fact of life. Our role of facilitating the claims process for our clients and their families has ensured that they have received money when they most needed it. This year, our insurers paid our clients over $1.5 million in life insurance and $320,000 in Income Protection claims.

The highlight for me this year was attending the Risk Store Conference on Hamilton Island in August where I was a co-presenter with Marc Fabris, National Manager, Sales Strategies and Research Life Risk at Zurich. We delivered a presentation on using Social Media in an advice practice. This led to being interviewed in October for an article in Zurich’s online Risk Pulse newsletter that is distributed to their financial adviser network across Australia. You can read it here: http://www.zurich.com.au/zportal/cs/ContentServer?pagename=GroupSite/Page/ThreeColumnLeadImage&cid=1305872482614&p=1288910737076

Even though I finished my Master degree in Applied Finance in November 2010, it wasn’t until October this year that I actually graduated. It was an exciting moment for me as it reinforced all the hard work I had undertaken to achieve the accolade. You can see the moment here: http://youtu.be/08v_8ZA6FuY

I was also nominated for two awards – the inaugural “Female Excellence in Advice” and “Excellence in Education” – through the Association of Financial Advisers (AFA). It was an honour to be nominated for these awards and a privilege to be in the esteemed company of the other worthy nominees. It’s always nice to know that others appreciate my hard work too!

Our planning for 2012 is underway and we’re excited about the year ahead. We are looking forward to making some changes to our business that will ensure we continue to deliver and improve upon the value you receive from our services. As always, we welcome your feedback. To let us know your thoughts on how we can improve, please send us an email to info@tudorinvest.com.au.

12 Ideas for a Fantastic 2012

Thu, 17 Nov 2011 23:58:25 +0100

Here are 12 great ideas you can implement before Christmas to set yourself up for a fantastic 2012.

Book into a workshop. You’re bombarded with invitations every other day. You ignore most of them, but some do pique your interest and you think, “yeah, I really should go to that.” But you find you can make plenty of excuses not to go. Find a short course, seminar or workshop that resonates with you and sign up. You’ll have plenty of time to work around the excuses to make sure you get to it. You’re welcome to come along to our next (free) workshop – visit http://www.tudorinvest.com.au/workshop.php and register your interest. We’ll let you know early in the new year when it’s on.

Build a Budget. Having control of your spending will help you reduce stress and help you get what you want. The MoneySmart team have got an easy to use, downloadable excel version here: http://www.moneysmart.gov.au/tools-and-resources/calculators-and-tools/budget-planner

Conserve for Christmas. No, not this year! It’s all too late now!! You’ll just have to pay off the credit cards quick smart in January! Why not set up a regular savings plan so you have your Christmas Fund ready to roll this time next year? You won’t have to rely on credit cards to get you through and you’ll be surprised how much you’ve saved. Perhaps you’ll have enough left over for a holiday! Talk to us today to start your Christmas 2012 savings plan!

Rev up some resolutions. Did you know that only 8% of people are always successful in achieving their resolutions?¹ Get in early and set some 2012 resolutions now! For 6 ways to make resolutions that work, read this article: http://www.steveshapiro.com/2008/08/18/resolutions-that-work/

Check your beneficiaries. Give yourself some peace of mind by making sure your beneficiary nominations are valid and up to date. Estate Planning is all about making sure the right people get the right money at the right time. For assistance with implementing the right structures and strategies to ensure you and your family are fully prepared in the event of your death, call us today on 02 9417 6011.

Create a reading list. Are there books out there that you’ve always wanted to read but haven’t got around to it yet? For me, it’s novels like Great Expectations or Lord of the Rings. Design a reading list for next year that gives you an even complement of trashy, inspiring, educational and relaxing so you’ve got a book to hand for any type of mood. I’m always looking for a good book, so feel free to share your current literature with us on Facebook at www.facebook.com/Tudor.Invest

There’s an App for that. I upgraded to an iPhone recently and I am loving it! Whatever your smartphone, there’s an App for that. My favourites to keep me organised, focused and connected are: Errands; Card Munch; and LinkedIn, Twitter and Facebook Apps. I love my grocery App from IGA for a simple shopping list and to stay calm and relaxed I meditate with Glenn Harrold and play Words or Hanging with Friends!

Travel safely. If you’re planning a holiday whether in Australia or overseas, make sure you take out travel insurance. But, did you know? A good quality Income Protection policy operates worldwide and provides in-built benefits that will reimburse accommodation and travel costs for a family member to stay with you if you’re more than 100km from home or pay for your airfare to return to Australia if you suffer a sickness or injury. Don’t have Income Protection or need an insurance health check? Call us today on 02 9417 6011.

Recipe A Day. If you’re like me, you don’t always find time to plan out the week’s meals and before you know it, you’re stuck for ideas and heading for the unhealthy fast food or snacks. There are plenty of fantastic people out there wanting to send recipes to you whether via a phone App (like AllRecipe’s dinner spinner) or emailed daily to your inbox - I enjoy Martha Stewart’s Dinner Tonight ideas (http://www.marthastewart.com/276948/dinner-tonight).

Find lost money. I see that many of my new clients have several super funds out there that they’ve lost track of over the years. Take a stand and make the commitment to finding your lost super. Then, make an appointment with your financial planner to help you understand how best to consolidate your funds and plan for your retirement. (It’s closer than you think). Did you know? You can also search for ordinary money with ASIC’s unclaimed money online search here: https://www.edge.asic.gov.au/unclaimed/simplequery.html

Connect with your Community. Get more involved with your neighbourhood by volunteering at a local organization or finding a creative way to give back. In 2010 38% of the adult population (6.4 million people) volunteered. Reasons volunteers cite for their decision is firstly “knowing my contribution makes a difference” followed by a personal belief in a particular cause.²
As a Toastmaster for 6 years now, I enjoy leading our Speechcraft programmes and seeing the development of the participants as they improve their public speaking and communications skills. It gives me a great sense of fulfilment to be able to share my knowledge and experience with others.
Visit http://www.govolunteer.com.au to find your next volunteering opportunity.

Clear the Closet. While it’s a great place to start, this can be an exercise for more than just your wardrobe. The pantry, fridge and linen closet will likely also benefit from a clear out. But more than this, what about your mind? What unhealthy and limiting beliefs are you holding onto, stopping you from achieving your goals? As you clear out your wardrobe, de-clutter your mind with some meditation and journal some of your beliefs, ready for working on in the coming year.