Grow Your Wealth
Education for all style investors by Jason FittlerArticles do not constitute advice to any person. The views expressed here are those of the author and do not necessarily reflect those of ABN AMRO Morgan's Limited. Advisers in this office may own shares in the companies named here. Please read disclaimer page.
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Tuesday
02Dec
December 2, 2008 in Stockbroking, Superannuation, Investment Strategies Gearing
Click here to hear the audio of this article.
Gearing... we all know what this is, but only few truly understand. It’s simple, the higher the gear you use in your car the faster it goes, while the motor is working at the same rate.
The same is true for your investments; by borrowing to invest you get to where you want to go quicker. However, much like a speeding car there are risks involved.
In the 1972 Oil Shock, 1997 Asia Crisis, 2000 Tec Wreck, 2001 911 and now in the 2008 Credit Crisis all investors have become acutely aware of these risks. Today’s Credit Crisis is by far the worst of all of these; this is due to the oversupply of credit coupled with a strong 5 years Bull Market. People took the risk, many being so badly burnt that they will never return to the market.
The fact is that now is the best time to be gearing up as the market is low and interest rates are falling. These two factors have set the stage for a fantastic return over the coming 5 years. But there are some issues to consider; how you gear, your income and safety.
Today I want to discuss Self Funding Installment Warrants.
A warrant is a financial instrument issued by banks and other institutions and traded on ASX. Warrants provide investors an alternative way to gain exposure to a variety of underlying assets, such as shares, to achieve a desired result.
There are different types of warrants which can suit investment purposes. Warrants with an investment purpose, such as instalments, are generally longer-dated, tend to be less frequently traded and have a lower risk/return profile. While warrants with a trading purpose, such as trading warrants are shorter-dated, traded frequently and have a higher risk/return profile.
The main reasons why you would invest in warrants are:
1. Achieve a leveraged exposure to an underlying share, such as BHP Billiton
2. Diversify your exposure to the share market
3. Generate an income stream through dividends and franking credits
4. Protect the value of your share portfolio
5. Limit your downside risk.
6. No margin calls.
7. Interest deductions available.
Each warrant has a set of features that defines its characteristics. These features are non standardised, varying between warrant types, and are tailored to meet the needs of different types of investors. Some of the features offered by warrants are:
1. entitlement to the full dividends and franking credits paid on the underlying share
2. ability to pay a portion of a share's value upfront without the obligation to repay the balance
3. Capital guarantees over the issue price of the warrant.
Self-Funding Instalments are a cross between a regular instalment and an endowment. You pay approximately 50% of the share price and the issuer loans you the remaining amount plus interest and borrowing. They run normally around 10 years at the end of the term you may have a small amount to pay and then you will own the underlying share.
In contrast to ordinary instalments, the dividends from the underlying share are retained by the issuer and used to reduce the loan balance of a self funding instalment. You are still entitled to franking credits, which may reduce your tax liability – this is particularly important for Self Managed Super Funds.
At annual intervals until expiry, the issuer will charge a further twelve months of prepaid interest to the loan, increasing the loan amount (generally on 30 June). The objective is to achieve a positively geared investment where the dividends outstrip the interest charged, paying off the loan as time passes.
Depending upon your circumstances, you may be entitled to a tax deduction for the interest cost. At any point in time before expiry you may sell the instalment on ASX. While the interest is prepaid for 12 months the borrowing fee is prepaid to expiry (usually five years).
The below two web sites provide you with some more information on warrants, both of these web sites are designed for education purposes. Simply click on the links and listen to the presentations on warrants.
http://www.asx.com.au/programs/vignettes/lesson7.html
http://www.asx.com.au/products/warrants/education/podcast_presentation.htm#ubs
Why should you look at these investments?
1. Safe gearing – your down side is limited unlike a margin loan.
2. You still receive the franking credit for tax.
3. They run for 10 years, at the end of this time you will own the underlying share. Much like lay by.
4. You can use these in your Self Managed Super Fund.
5. If you roll your existing shares into Self Funded Warrants, you will receive cash which can be used to pay out your existing margin loan. As such reducing the risk of your portfolio.
For more information contact me on 07 4771 4577.
Until next week.
Sunday
28Sep
September 28, 2008 in Stockbroking, Investment Strategies Short Selling – What Does it Mean?
Everyone is talking about it… No one knows what it is.
Short selling or "shorting" is the practice of selling a financial instrument the seller does not own, in the hope of repurchasing it later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond.
Often the seller will "borrow" or "rent" the items to be sold, and later repurchase identical items for return to the lender. However, the practice is risky in that prices may rise indefinitely, even beyond the net worth of the short seller. The act of repurchasing is known as "closing" a position.
The term "short selling" or "being short" is often also used as a blanket term for strategies that allow an investor to gain from the decline in price of a security. Those strategies include buying options known as “puts”. A put option consists of the right to sell an asset at a given price; thus the owner of the option benefits when the market price of the asset falls. Similarly, a short position in a futures contract means the holder of the position has an obligation to sell the underlying asset at a later date, to close out the position.
The problem in this market with the introduction of leveraged products such as margin loans, options, warrants and contracts for difference, is that investors are now able to enter into highly leveraged short positions. This causes market volatility as investors look to close out these highly leveraged positions and to some extent can distort market movements.
Most investors will never look to short the market, in fact most investors are long the market, that is, they buy stocks and hold them for the long term. Shorting has traditionally been a tool of the professional investor or broker and is a tool they used to insure positions.
Short selling or "shorting" is the practice of selling a financial instrument the seller does not own, in the hope of repurchasing it later at a lower price. This is done in an attempt to profit from an expected decline in price of a security, such as a stock or a bond.
Often the seller will "borrow" or "rent" the items to be sold, and later repurchase identical items for return to the lender. However, the practice is risky in that prices may rise indefinitely, even beyond the net worth of the short seller. The act of repurchasing is known as "closing" a position.
The term "short selling" or "being short" is often also used as a blanket term for strategies that allow an investor to gain from the decline in price of a security. Those strategies include buying options known as “puts”. A put option consists of the right to sell an asset at a given price; thus the owner of the option benefits when the market price of the asset falls. Similarly, a short position in a futures contract means the holder of the position has an obligation to sell the underlying asset at a later date, to close out the position.
The problem in this market with the introduction of leveraged products such as margin loans, options, warrants and contracts for difference, is that investors are now able to enter into highly leveraged short positions. This causes market volatility as investors look to close out these highly leveraged positions and to some extent can distort market movements.
Most investors will never look to short the market, in fact most investors are long the market, that is, they buy stocks and hold them for the long term. Shorting has traditionally been a tool of the professional investor or broker and is a tool they used to insure positions.
Tuesday
23Sep
September 23, 2008 in General, Stockbroking, Investment Strategies Why Many People Think Shares Are High Risk
Many people liken investing in shares to betting on horse racing or going to the casino. Why?
Here is a typical example of a first-time investor:
Without any experience, professional advice, or education, they purchase shares. They then lose all of their money. Based on the experience, they conclude shares are a high-risk investment. Badly burnt once, they never again enter into the share market.
Let's take a closer look at this typical share trading experience.
It normally begins with a hot tip from a friend, family member, media article or a taxi driver. The person who gives the tip has already invested and is going to make a fortune.
The first-time investor does some research. They ask friends and family members their thoughts. These people more than likely have the same advice from the same person. What a great idea, we’ll all be rich. The first-time investor visits the company’s web site to see what they have to say. Surprise, the company’s web site is very positive on the stock.
To save money, the first-time investor goes along to a discount broker and places the trade.
A slightly more educated first-time investor may decide to pay a little extra and call a stockbroker to get their opinion and place the trade. The stockbroker most likely has never heard of the stock and recommends against the buy, explaining that it is high risk. But this is all too late, the investor has it in their head that this is easy money and pushes ahead regardless of the advice given.
The stock fails and the company goes broke. The first-time investor loses all their money. Badly burnt the first-time investor concludes that the share market is a high-risk game. And stockbrokers don’t know anything or add any value.
The Lesson: If you have little or no stock market experience seek out and listen to independent professional advice, before you start betting the farm on a hot tip. If you do you'll find the stock market is no more risky than any other form of investing. But you must understand how it works, you must be educated. Reading through our Grow Your Wealth archive section is a great place to start.
When you need advice, we are always ready to listen and help. Give us a call (07) 4771 4577.
PS. If this story sounds familiar, try investing again, but this time, seek out advice. Avoiding shares due to one bad experience will cost you more money long-term then you lost the first time.
Here is a typical example of a first-time investor:
Without any experience, professional advice, or education, they purchase shares. They then lose all of their money. Based on the experience, they conclude shares are a high-risk investment. Badly burnt once, they never again enter into the share market.
Let's take a closer look at this typical share trading experience.
It normally begins with a hot tip from a friend, family member, media article or a taxi driver. The person who gives the tip has already invested and is going to make a fortune.
The first-time investor does some research. They ask friends and family members their thoughts. These people more than likely have the same advice from the same person. What a great idea, we’ll all be rich. The first-time investor visits the company’s web site to see what they have to say. Surprise, the company’s web site is very positive on the stock.
To save money, the first-time investor goes along to a discount broker and places the trade.
A slightly more educated first-time investor may decide to pay a little extra and call a stockbroker to get their opinion and place the trade. The stockbroker most likely has never heard of the stock and recommends against the buy, explaining that it is high risk. But this is all too late, the investor has it in their head that this is easy money and pushes ahead regardless of the advice given.
The stock fails and the company goes broke. The first-time investor loses all their money. Badly burnt the first-time investor concludes that the share market is a high-risk game. And stockbrokers don’t know anything or add any value.
The Lesson: If you have little or no stock market experience seek out and listen to independent professional advice, before you start betting the farm on a hot tip. If you do you'll find the stock market is no more risky than any other form of investing. But you must understand how it works, you must be educated. Reading through our Grow Your Wealth archive section is a great place to start.
When you need advice, we are always ready to listen and help. Give us a call (07) 4771 4577.
PS. If this story sounds familiar, try investing again, but this time, seek out advice. Avoiding shares due to one bad experience will cost you more money long-term then you lost the first time.
Monday
15Sep
September 15, 2008 in Taxation, Investment Strategies Tax Effective Investments – Like Shooting Fish in a Barrel
“If people spent half the time and energy they do on avoiding tax to make money, this would be the richest country in the world”Tax effective investments such as trees, have never been high on my list of recommendations. Why not? Let's take a close look.
You go to your accountant or financial planner to have your tax done. Because you have worked hard and made money you have a tax bill. The more money you make, the larger the tax bill. Am I the only one who really loves a large tax bill? Think about that for a moment.
So because you are unhappy with your tax bill, your accountant or financial planner suggests a great idea. Trees! You invest $10,000 in a forestry investment (trees), receive a $8000 deduction and save $4000 in tax. In 11 years time when the trees are harvested and pulped into wood chip you should receive back at least the minimum investment of $10,000, perhaps more. However, when you get your $10,000 back it is fully taxable. So now you have to pay the tax you were trying to avoid in the first place.
So, what’s the point? My guess, the big fat commission your accountant or financial planner receives. If it is because of a big fat commission, your adviser is no more than a product flogger. Ouch!
But wait there’s more!
If you were lucky enough to have an accountant who put you into Great Southern Trees between 1998 to 2003, you do not have to wait 11 years, Great Southern will buy these back off you now. So how much will you get? I have been advised by a Great Southern representative that if you owned a year 2000 lot you would receive 2,150 shares in Great Southern. These shares are issued to you at a price of $1.10, making them worth $2,365. But wait it gets better. The stock is currently trading at $0.50, so the real worth is $1,075. Best of all, you’ll be taxed on receiving the $2365.
So how did this investment work out?
Cost $10,000, less tax saving $4000, less the shares you received for the trees of $1075 gives you a total cost of $4925. In short if you had done nothing you would be $4925 better off by paying the tax.
Moral of the story
The only way to save tax, is to structure your investments correctly from the start.
To get the right advice on structuring see us.
Phone (07) 4771 4577 and make an appointment.
Monday
08Sep
September 8, 2008 in Stockbroking, Investment Strategies Why Serious Investors Should Look at Option Strategies
First, what Options are not: Options are not a form of betting. Options are not about trading on a
computer program purchased for $10,000. Options are not about
investing all your capital in each trade. Anyone who approaches options
with this attitude will lose their shirt.
Serious and professional investors use options as a form of insurance, and to provide extra income for their portfolio.
Why should you start to think about options? I believe the market is cheap at present. And I fully expect to see the market move back towards 6300 over the coming 12 months. Second, I believe that the market will trade sideways from 6300 for a number of years after that. Keep in mind that even when the market moves sideways there will still be spikes and dips.
Below I will discuss two simple strategies. The first is an actual strategy I did last week. The second is a strategy you could use right now. Both have very different reasons as to why you would do them.
Sell a Call
You would look to use this strategy if you think that the price of a stock you hold (in this case BHP) has topped and is likely to fall. However, you do not wish to sell due to the capital gains tax issues.
In my example I sold a $42 call, this means that I have given someone the right to buy 1000 of my BHP shares at $42 and for this they have paid me $2,350.00. At the time I sold this call, the price of BHP was $42. As such, if I have to sell my 1000 shares I will receive $42,000 plus the $2350, giving me a total of $44.35 per share. Overall, I would be happy with that price.
One of two things can happen.
1. The price of BHP continues to move up and I end up selling my shares for $44.35 and lose any upside beyond this.
2. The price of BHP moves down, this is in fact what happened. BHP moved back to $37.00 per share. Therefore, my shares that were worth $42,000 are now worth $37,000 a loss of $5000.00. However, I also made $2350 from the sale of the call reducing my loss to $2650.
Overall, a good result. Keep in mind that I have a low cost base on the share and had I sold the shares on market at $42 and then purchased them back at $37 although I would have saved $5000, but it would have cost me more than this in capital gains tax and transaction fees.
Selling a call is used to protect your portfolio from any downside movements in the price of your share and improve the income of your portfolio.
Sell a Put
You would look to use this strategy if you think that the price of a stock is cheap right now and you would be happy to buy at the current price but would like to try to get it a little cheaper.
Let us look at a live example, which you could have done last Friday.
I would look to sell a $10.65 Put over Suncorp. This means that I have given someone the right to sell my 1000 shares in Suncorp at $10.65 per share, and for this they have paid me 0.44c per share. At the time I sold this Put the price of Suncorp was $10.70 per share. If I have to buy the 1000 shares in Suncorp it will cost me $10,650, less the $440 I was paid when I sold the Put. This brings the overall price of the Suncorp shares down to $10.21 per share ($10.65 less 0.44c). Overall, I would be happy to buy 1000 shares at the current price of $10.70 so I would be more than happy buying them at $10.21.
One of two things can happen.
1. The price of Suncorp continues to go down and I end up buying the shares for $10.65. Keep in mind that I have already been paid the 0.44 cents, so my actual cost was $10.21. The risk with this strategy is that Suncorp goes broke and the shares are worthless. This is why we only do this strategy over a stock, which is very unlikely to go broke, such as Suncorp.
2. The price of Suncorp moves up. In this case, we do not buy the shares in Suncorp and as such, we miss any upside in the share price. However, for our troubles we end up with $440 in our pocket.
As you can see in both of these strategies you could miss out on future upside in the shares price, but please keep in mind that we are employing this strategy at a time when the market will be moving sideways. There will be other opportunities to get into the stock later.
Do these strategies interest you?
Give us a call and we can discuss it further. Ph: 07 4771 4577.
PS. Please be aware Options are not for everyone. We do put you through a screening process before we will advise or perform any trades on your behalf.
Serious and professional investors use options as a form of insurance, and to provide extra income for their portfolio.
Why should you start to think about options? I believe the market is cheap at present. And I fully expect to see the market move back towards 6300 over the coming 12 months. Second, I believe that the market will trade sideways from 6300 for a number of years after that. Keep in mind that even when the market moves sideways there will still be spikes and dips.
Below I will discuss two simple strategies. The first is an actual strategy I did last week. The second is a strategy you could use right now. Both have very different reasons as to why you would do them.
Sell a Call
You would look to use this strategy if you think that the price of a stock you hold (in this case BHP) has topped and is likely to fall. However, you do not wish to sell due to the capital gains tax issues.
In my example I sold a $42 call, this means that I have given someone the right to buy 1000 of my BHP shares at $42 and for this they have paid me $2,350.00. At the time I sold this call, the price of BHP was $42. As such, if I have to sell my 1000 shares I will receive $42,000 plus the $2350, giving me a total of $44.35 per share. Overall, I would be happy with that price.
One of two things can happen.
1. The price of BHP continues to move up and I end up selling my shares for $44.35 and lose any upside beyond this.
2. The price of BHP moves down, this is in fact what happened. BHP moved back to $37.00 per share. Therefore, my shares that were worth $42,000 are now worth $37,000 a loss of $5000.00. However, I also made $2350 from the sale of the call reducing my loss to $2650.
Overall, a good result. Keep in mind that I have a low cost base on the share and had I sold the shares on market at $42 and then purchased them back at $37 although I would have saved $5000, but it would have cost me more than this in capital gains tax and transaction fees.
Selling a call is used to protect your portfolio from any downside movements in the price of your share and improve the income of your portfolio.
Sell a Put
You would look to use this strategy if you think that the price of a stock is cheap right now and you would be happy to buy at the current price but would like to try to get it a little cheaper.
Let us look at a live example, which you could have done last Friday.
I would look to sell a $10.65 Put over Suncorp. This means that I have given someone the right to sell my 1000 shares in Suncorp at $10.65 per share, and for this they have paid me 0.44c per share. At the time I sold this Put the price of Suncorp was $10.70 per share. If I have to buy the 1000 shares in Suncorp it will cost me $10,650, less the $440 I was paid when I sold the Put. This brings the overall price of the Suncorp shares down to $10.21 per share ($10.65 less 0.44c). Overall, I would be happy to buy 1000 shares at the current price of $10.70 so I would be more than happy buying them at $10.21.
One of two things can happen.
1. The price of Suncorp continues to go down and I end up buying the shares for $10.65. Keep in mind that I have already been paid the 0.44 cents, so my actual cost was $10.21. The risk with this strategy is that Suncorp goes broke and the shares are worthless. This is why we only do this strategy over a stock, which is very unlikely to go broke, such as Suncorp.
2. The price of Suncorp moves up. In this case, we do not buy the shares in Suncorp and as such, we miss any upside in the share price. However, for our troubles we end up with $440 in our pocket.
As you can see in both of these strategies you could miss out on future upside in the shares price, but please keep in mind that we are employing this strategy at a time when the market will be moving sideways. There will be other opportunities to get into the stock later.
Do these strategies interest you?
Give us a call and we can discuss it further. Ph: 07 4771 4577.
PS. Please be aware Options are not for everyone. We do put you through a screening process before we will advise or perform any trades on your behalf.
Monday
01Sep
September 1, 2008 in Stockbroking, Investment Strategies Ten Traps of the Bear Market
1. Throwing in the Towel – after a prolonged Bear market it gets all too hard for some investors. As such investors simply sell out never to return. This is the worst possible outcome. Keep in mind it will always get hard before the good times, otherwise there would not be good times.2. Portfolio Rage – this is where you blame everyone else for the state of your portfolio. Remember, in a good market anyone can make good calls; it is in a bad market that your adviser earns his money.
3. False hope – when you see a $20 stock fall to $10, common sense will tell you that if it was good value at $20 then it is great value at $10. This is not always the case. The share may no longer be the same beast it was previously. Be careful when buying in a bear market, there is good value out there but not everything will turn to gold.
4. Weed the garden – do not fall into the trap of holding a stock which has fallen, a weed is a weed, pull it out and move on. At the same time do not sell good stocks, hold these as they are more likely to rebound with the market.
5. Suckers rally – the market can move sideways in a Bear, but on its sideways track it can tend to spike and dip. Do not be fooled by any spikes, these are most likely sucker rallies. Bear markets can last as long at 3 years.
6. The slow analysis’s – in a Bull market analysis’s are quick to increase their numbers on the back of good news; however, in a Bear market they are slow to down grade. Be careful of looking only at a companies PE ratio to determine if the company is cheap. A slow moving analysis’s may not have upgraded their numbers, as such the PE could be giving the wrong signal.
7. High dividends – it is common in Bear markets that companies cut dividends, do not look at the historical data. Take a look at the projected dividends before buying that high yielding stock.
8. Media madness – Media sell advertising space not information. The media love a good story and if they can not find one the next best thing is to make it up. Make sure you do your own independent research not just read a paper. Remember the old saying “Pay a dollar and you will get a dollar’s worth of information”.
9. Picking the bottom – nobody rings a bell at the bottom of the market to let you know. Trying to pick the bottom is a mugs game a savvy investor knows this, so they invest with a long term view buying quality stocks which are cheap. This way they do not miss the first 10-20% of the Bull market.
10. Quick recovery – losing money hurts and a Bear market can go for a number of years. Waiting for a quick rally will only leave you with broken dreams. Beware that there will be plenty of thrills and spills in the Bear market keep working through it and you will come out on the other side a better and richer investor.
We are always available to answer your questions.
So make sure you call us, before investing. Phone (07) 4771 4577
Tuesday
19Aug
August 19, 2008 in Managed Funds, Investment Strategies Property, How Cheap Does it Have to Get Before You Buy?
Key Points
1. Property Trust investments have fallen by 50%.
2. Property Trusts are now around 20% undervalued.
3. Listed property trusts pay a far superior yield then any direct property
holdings.
This is a strategy for the longer term balanced investor.
Summary
I believe now is the time to start re-weighting your portfolio to property, property is cheap right now and over the longer term will produce great results.
I expect that this sector will continue to be restructured over the coming 12 months as, such I prefer to play the sector through the use of an index fund as opposed to direct shares for now. This will reduce your overall risk level while at the same time providing you the opportunity to cash in on the expected growth in the sector.
If you are interested in taking advantage of this opportunity please contact your advisor on 07 4771 4577.
Tuesday
12Aug
August 12, 2008 in Retirement, Investment Strategies, Index Funds If Direct Shares Are Not For You! Read On
There is no dispute that the share market over the longer term provides the best return. For those who disagree see the below chart. Red is the Australian Share Index Accumulated and Blue is the Property Accumulated index.
Most people own their own home as such they are already invested in the property market and will enjoy the benefits of any growth in the sector. But this is not enough, you need to spread your investment risk and also be invested in the share market as well.
As you can see from the below chart, Australian shares do provide the best return. However it can be very difficult deciding which shares to buy when to sell etc. For many, would be investors this decision proves to be too much, and they never get started.
This does not need to be the case; there are simpler ways to get started in the share market.
The best and cheapest way is through index funds. An index fund will give you exposure to the whole market. As such you do not need to make any decisions on when to buy or sell, this is all done for you. Add to this that index funds provide the lowest fees and clearly this is a great place to get started for the new investor.
When is the best time to get started?
The general rule is to buy low and sell high, the best time to get into the market is when the market is low. Unfortunately this is normally when people become emotional about investing and are selling.
Right now is a great time to invest in an index fund, the market is looking very cheap and is in fact the cheapest it has been since 1984. Getting into an index fund right now will yield fantastic results over a 3-5 year period.
Next step.
If you agree that you want to have more money in three years than you do today, if you own your own property and if you do not have a lot of experience in the market then now is the time to be buying into an index fund.
For little effort on your behalf you will yield great results.
For more information call us today on 07 4771 4577.
Jason Fittler
Most people own their own home as such they are already invested in the property market and will enjoy the benefits of any growth in the sector. But this is not enough, you need to spread your investment risk and also be invested in the share market as well.
As you can see from the below chart, Australian shares do provide the best return. However it can be very difficult deciding which shares to buy when to sell etc. For many, would be investors this decision proves to be too much, and they never get started.
This does not need to be the case; there are simpler ways to get started in the share market.
The best and cheapest way is through index funds. An index fund will give you exposure to the whole market. As such you do not need to make any decisions on when to buy or sell, this is all done for you. Add to this that index funds provide the lowest fees and clearly this is a great place to get started for the new investor.
When is the best time to get started?
The general rule is to buy low and sell high, the best time to get into the market is when the market is low. Unfortunately this is normally when people become emotional about investing and are selling.
Right now is a great time to invest in an index fund, the market is looking very cheap and is in fact the cheapest it has been since 1984. Getting into an index fund right now will yield fantastic results over a 3-5 year period.
Next step.
If you agree that you want to have more money in three years than you do today, if you own your own property and if you do not have a lot of experience in the market then now is the time to be buying into an index fund.
For little effort on your behalf you will yield great results.
For more information call us today on 07 4771 4577.
Jason Fittler
Tuesday
05Aug
August 5, 2008 in Managed Funds, Investment Strategies, Index Funds The Secret to Achieving Great Results... be a Contrarian
contrarian |kənˈtre(ə)rēən; kän-|
noun; a person who typically acts or thinks in a way contrary to popular or accepted opinion; specif., an investor who seeks to make a profit by acting in opposition to majority opinion, prevailing wisdom, etc., as by buying a company's stock when it is out of favor with the majority of investors
adjective; opposing or rejecting popular opinion; going against current practice :
When
investing whether in Property, Shares, Managed Funds or Index funds,
the small investor has no control over the direction on the market. It
is like being on a mighty river in a small boat; you will simply be
swept along with it.
As such it is important to go
against the trend and invest in times while there is a little
uncertainty if you wish to achieve great results. Take a look at the
below charts.
Would you be comfortable investing in this market.
How about this market?
When we put these two together you have the following
chart. My guess is in hind sight you would have picked the part circled
to buy in. The problem is that we do not invest in hind sight we invest
in real time. As such the truth is that most would not have bought in
until many years later.
The Message:
For the small investors we need to invest against the trend in order to make large profits. We need to take a little more risk as long as that risk is calculated.
“All progress is made by the unreasonable man.”
So if you are ready to make money give us a call so we can discuss your options.
Jason Fittler
Tuesday
29Jul
July 29, 2008 in Taxation Tax Tips
Below are some handy tips for your tax return, whether you have an accountant complete your return or you are a do it yourself person. Keep the below Do’s and Do not’s in mind when completing your return. At the end of the day it is your return and the ATO will hold you accountable.
First the “ Do not’s”
1. Do not make claims for non-work related expenses. Getting back a bit of extra cash in your refund now will quickly be forgotten if you are caught by the ATO. The fees and penalties will be approx twice what you received for the deduction.
2. Do not leave out group certificates, especially ones from centre link, the ATO will know and will catch up with you.
3. Do not forget to declare capital gains on shares or rental properties. In regards to rental properties the ATO will match all properties sold against tax returns received. You will be caught 100% of the time, although it may take a couple of years before you receive the adjustment notice.
4. Do not forget to declare your bank interest again as above the ATO will cross check with the banks.
5. Do not forget details of any HECS debts of supplement loans, again the ATO know this and you will be charged anyway.
6. Do not listen to advice from anyone unless they are an accountant, many people look to their parents or friends for tax advice. Although they may tell you what you want to hear it is most likely incorrect. For the best advice speak to a CPA.
7. Do not think that because you used a tax agent, accountant or because you received your full refund that you have gotten away with not declaring some income or non-work expenses. The ATO has up to 5 years to audit your account and will do so.
Let take a look at the “Do’s”
1. Do claim all your work expenses, make sure that you have the necessary documents in place and consult an accountant should you not be clear if a claim is legitimate. Our tax system has many deductions which are claimable and it is your right to maximise your claims.
2. Make sure you claim all of the rebate to which you are entitled, including zone, spouse zone, children zone, medical expenses, seniors, pensioners, sole parent, Medicare, etc. Rebates are funds to which you are entitled as such you should make sure you receive them.
3. Seek professional advice is you are not 100% sure, generally the advice is worth what you pay for it.
4. Listen to the advice from an Accountant, sometimes it is not what you want to hear but they have your best interest in mind. Even the best accountants have had clients go through audits by the ATO. It is then, when you will be thankful you got the right advice.
5. Make sure you keep copies of your returns and receipts for at least 5 years. If the ATO does audit you then you will need this to prove your claims.
Keep in mind that our system of taxation is a self assessment system which means that the ATO takes no responsibility for making sure that your tax return is correct. So if you have made a mistake or a claim which you were not entitled to then this may not show up for a number of years.
Making a mistake can be costly when doing your own tax return. As a general rule if the mistake means you will receive an extra $100 in your return, when corrected the fine and penalties from the ATO will be approx $200. So be careful and if you are unsure seek out professional advice.
Jason Fittler
First the “ Do not’s”
1. Do not make claims for non-work related expenses. Getting back a bit of extra cash in your refund now will quickly be forgotten if you are caught by the ATO. The fees and penalties will be approx twice what you received for the deduction.
2. Do not leave out group certificates, especially ones from centre link, the ATO will know and will catch up with you.
3. Do not forget to declare capital gains on shares or rental properties. In regards to rental properties the ATO will match all properties sold against tax returns received. You will be caught 100% of the time, although it may take a couple of years before you receive the adjustment notice.
4. Do not forget to declare your bank interest again as above the ATO will cross check with the banks.
5. Do not forget details of any HECS debts of supplement loans, again the ATO know this and you will be charged anyway.
6. Do not listen to advice from anyone unless they are an accountant, many people look to their parents or friends for tax advice. Although they may tell you what you want to hear it is most likely incorrect. For the best advice speak to a CPA.
7. Do not think that because you used a tax agent, accountant or because you received your full refund that you have gotten away with not declaring some income or non-work expenses. The ATO has up to 5 years to audit your account and will do so.
Let take a look at the “Do’s”
1. Do claim all your work expenses, make sure that you have the necessary documents in place and consult an accountant should you not be clear if a claim is legitimate. Our tax system has many deductions which are claimable and it is your right to maximise your claims.
2. Make sure you claim all of the rebate to which you are entitled, including zone, spouse zone, children zone, medical expenses, seniors, pensioners, sole parent, Medicare, etc. Rebates are funds to which you are entitled as such you should make sure you receive them.
3. Seek professional advice is you are not 100% sure, generally the advice is worth what you pay for it.
4. Listen to the advice from an Accountant, sometimes it is not what you want to hear but they have your best interest in mind. Even the best accountants have had clients go through audits by the ATO. It is then, when you will be thankful you got the right advice.
5. Make sure you keep copies of your returns and receipts for at least 5 years. If the ATO does audit you then you will need this to prove your claims.
Keep in mind that our system of taxation is a self assessment system which means that the ATO takes no responsibility for making sure that your tax return is correct. So if you have made a mistake or a claim which you were not entitled to then this may not show up for a number of years.
Making a mistake can be costly when doing your own tax return. As a general rule if the mistake means you will receive an extra $100 in your return, when corrected the fine and penalties from the ATO will be approx $200. So be careful and if you are unsure seek out professional advice.
Jason Fittler
Wednesday
23Jul
July 23, 2008 in Managed Funds, Superannuation, Investment Strategies Fees and Industry Funds
Third, anyone can give you good advice when the market is going up it is only the few that can give good advice in bad times.The government on one hand is telling the public that you the investor are paying advisers too much in fees; and on the other hand they’re over regulating advisers so they need to charge higher fees to cover costs.
In down markets, such as the one we are currently in, the call from industry funds is that, given your portfolio has performed so poorly, why pay fees to advisers?
Both Industry funds and the Government understand that the service which a financial planner or investment adviser provides goes far beyond choosing investments. In fact the choice of investments is only a minor part of what they do.
My question to you is… When was the last time you had advice on structure of investments, tax effect of salary sacrifice, negative gearing, positive gearing, super regulations, transition to retirement, tax free super, capital gains and losses, tax effective strategies, self managed super funds or anything related to your investments from either the government or industry fund?
Below are a few thoughts on fees in relation to investing;
First, paying a small fee for no service is not good value for money. When was the last time your industry fund did anything for you?
Second, bad years are when you need your adviser’s experience and advice. It is what you do during this time will determine your future wealth.
Third, anyone can give you good advice when the market is going up it is only the few that can give good advice in bad times.
So who are you listening too? Now be honest, why are you listening to them?
Tuesday
15Jul
July 15, 2008 in Superannuation, Taxation New Super Rules in Relation to Commission Payments
As of the first of July this year the government made some changes in regards to the 9% compulsory superannuation. Employers now have to pay super on commissions, this will mainly affect people employed in the sales area such as real estate, motor vehicles, advertising. If you receive commissions as part of your income read on.
First, the new rule means that employers now have to pay you 9% of your commissions. For industries that have an employee base mainly paid through commissions this has added a large increase to their ongoing cost. In effect this has increased their expenses by 9%.
Keep in mind that this comes at a time when we are seeing falling sales in areas such as retail, housing and motor vehicles. As such many employers have looked to review how employees earn their commissions instead of wearing these costs.
So for many of you on commissions you may have already experienced this or will be about to.
Change to your commission structure.
Your commissions will now be inclusive of super. The good news is as follows;
1. You will receive more money.
2. Pay less tax.
3. Have more money in retirement.
Bad news
1. You will have less in your take home pay.
Let’s look at an example.
The old:-
You earn $50,000 per year in commissions. After tax your take home pay is $40,150 per annum or $772 per week. Total tax paid $9850. No payment to super.
The new:-
You earn $50,000 per year in commissions. You receive $45, 870 as income and $4130 goes towards your super. After tax your take home pay is $37,436 per annum or $720 per week. In your hand you lose $52 per week. The amount of $4,130 is paid into your super fund. You pay tax on these funds of 15% in super so net to your super fund is $3510. Therefore the total amount you receive after tax is $40,946 which is $796 better per annum or an increase in your pay of $15 per week after tax. Total tax you pay is reducing from $9850 per annum to $9054.
So is your glass half full or half empty? Overall this is a good result.
Tuesday
08Jul
Child Care Tax Rebate
By Jason Fittler
If you have young children who are in child care then like myself you will have received a lot of paper work from centre link recently about what you will receive as far as the child care tax rebate.
Many higher income earners are under the impression that if they no longer qualify for the Child Care benefit then they will not be entitled to the Child Care Tax Rebate. This is not the case see facts below.
1. The child care tax rebate is as of the 01/07/2008, 50% of your child day care fees up to a limit of $7500 per child.
2. You are entitled to this tax rebate if you qualify for the child care benefits scheme.
3. You qualify for the child care benefits scheme if;
On learning this most people would assume that you therefore do not qualify for the child care tax rebate.
Wrong.
If you meet the first three criteria but your income is too high then you are able to apply as if you do qualify for the child care benefit scheme but the payment you receive under the scheme is nil.
Now that you qualify for the child care benefits scheme with a nil payment you are entitled to claim the child care tax benefit which is 50% of your child’s day care fees up to a limit of $7500 per child.
Looks like Jane will have to keep working for now.
If you have young children who are in child care then like myself you will have received a lot of paper work from centre link recently about what you will receive as far as the child care tax rebate.
Many higher income earners are under the impression that if they no longer qualify for the Child Care benefit then they will not be entitled to the Child Care Tax Rebate. This is not the case see facts below.
1. The child care tax rebate is as of the 01/07/2008, 50% of your child day care fees up to a limit of $7500 per child.
2. You are entitled to this tax rebate if you qualify for the child care benefits scheme.
3. You qualify for the child care benefits scheme if;
- your child is immunized
- you meet residency requirements
- your child goes to an approved child care centre
- you meet the income test
On learning this most people would assume that you therefore do not qualify for the child care tax rebate.
Wrong.
If you meet the first three criteria but your income is too high then you are able to apply as if you do qualify for the child care benefit scheme but the payment you receive under the scheme is nil.
Now that you qualify for the child care benefits scheme with a nil payment you are entitled to claim the child care tax benefit which is 50% of your child’s day care fees up to a limit of $7500 per child.
Looks like Jane will have to keep working for now.
Monday
30Jun
June 30, 2008 in Superannuation, Investment Strategies A Quick Guide to Superannuation
By Jason Fittler
Below will give you a quick reference to how the current superannuation laws relate to you. This is not a comprehensive look at the current legislation but merely a quick reference point to get you started. Before doing anything in regards your superannuation please speak with a qualified advisor.
As I move through the age groups I will only include the differences in benefits from the previous age group.
Under 50 years of age.
• Employer contributes 9% of salary into your super fund.
• Most employees now have the right to choose which fund they invest their super money into.
• You can receive a maximum of employer contributions of $50,000 from all sources of employment.
• You can make your own contribution of up to $150,000 per annum.
• You can not access your superannuation until age 55 years.
• You can have your Life and TPD insurance inside your super fund; as such the premiums are paid out of the super fund money.
Between age 50 and 55 years. (Same as above except)
• You can receive a maximum of employer contributions of $100,000 from all sources of employment. This is until 2012.
Between age 55 and 60 years. (Same as above except)
• You can start a transition to retirement pension (TTR pension), which means that you can access your superannuation.
• One strategy is to salary sacrifice your salary into super and draw down a TTR Pension. This will reduce your overall tax bill for the year.
• Once in a TTR Pension the funds your receive from the super fund are taxed at your marginal tax rates but you receive a rebate of 15% for tax paid by the super fund.
Between age 60 and 65 years. (Same as above except)
• Once in a TTR Pension the funds you receive from the super fund are tax free.
• All income earned by the super fund is tax free all capital gains in the fund are tax free.
Over age 65. (Same as above except)
• You must start to draw down on your super fund unless you pass the work test. The work test is that you have to show that you worked a minimum of 40 hours during a one month period.
Now get going on building your super investment and enjoy your retirement.
Below will give you a quick reference to how the current superannuation laws relate to you. This is not a comprehensive look at the current legislation but merely a quick reference point to get you started. Before doing anything in regards your superannuation please speak with a qualified advisor.
As I move through the age groups I will only include the differences in benefits from the previous age group.
Under 50 years of age.
• Employer contributes 9% of salary into your super fund.
• Most employees now have the right to choose which fund they invest their super money into.
• You can receive a maximum of employer contributions of $50,000 from all sources of employment.
• You can make your own contribution of up to $150,000 per annum.
• You can not access your superannuation until age 55 years.
• You can have your Life and TPD insurance inside your super fund; as such the premiums are paid out of the super fund money.
Between age 50 and 55 years. (Same as above except)
• You can receive a maximum of employer contributions of $100,000 from all sources of employment. This is until 2012.
Between age 55 and 60 years. (Same as above except)
• You can start a transition to retirement pension (TTR pension), which means that you can access your superannuation.
• One strategy is to salary sacrifice your salary into super and draw down a TTR Pension. This will reduce your overall tax bill for the year.
• Once in a TTR Pension the funds your receive from the super fund are taxed at your marginal tax rates but you receive a rebate of 15% for tax paid by the super fund.
Between age 60 and 65 years. (Same as above except)
• Once in a TTR Pension the funds you receive from the super fund are tax free.
• All income earned by the super fund is tax free all capital gains in the fund are tax free.
Over age 65. (Same as above except)
• You must start to draw down on your super fund unless you pass the work test. The work test is that you have to show that you worked a minimum of 40 hours during a one month period.
Now get going on building your super investment and enjoy your retirement.
If you need a hand please give us a call (07) 4771 4577.
Monday
23Jun
June 23, 2008 in Superannuation, Investment Strategies Super: Get Into it Any Way You Can
By Jason Fittler
2. Sell non income producing assets such as land, and then do the same as above for investment property.
3. If you have funds in term deposits cash this in to live off and salary sacrifice your income to super.
4. Sell out any shares you have and do the same as above for investment property.
5. Salary sacrifice into super as much as you can, tighten the belt a little now as it will pay of big time when you retire.
6. Direct any surplus cash into the super fund as an undeductible contribution.
Keep in mind that at age 55 you will be able to access your super if needed so you are no longer locking your money away for the long term.
Once over the age of 60 and retired, all income, pension payments and capital gains in the super fund are tax free and it doesn’t get better than that.
If you would like us to take a look at what you can do, give us a call on 4771 4577.
We are fast approaching the year 2012. Why is this important? If you are currently over 50 years old you can put up to $100,000 as a deductible contribution into super. After this date, that will drop back to around $50,000. This will restrict the amount of money you can get into super tax effectively after 2012.
I realise that $100,000 is a lot of money and as such may seem out of reach for a lot of people but here are a couple of ideas of how you could do this.
1. Sell your investment property; the property market is at a top right now, cash in on this. The sale will give you a capital gain, to offset this salary sacrifice most of your income in super and live off the cash from the sale. You could also put any surplus cash into your super fund as an undeductible contribution.
I realise that $100,000 is a lot of money and as such may seem out of reach for a lot of people but here are a couple of ideas of how you could do this.
1. Sell your investment property; the property market is at a top right now, cash in on this. The sale will give you a capital gain, to offset this salary sacrifice most of your income in super and live off the cash from the sale. You could also put any surplus cash into your super fund as an undeductible contribution.
2. Sell non income producing assets such as land, and then do the same as above for investment property.
3. If you have funds in term deposits cash this in to live off and salary sacrifice your income to super.
4. Sell out any shares you have and do the same as above for investment property.
5. Salary sacrifice into super as much as you can, tighten the belt a little now as it will pay of big time when you retire.
6. Direct any surplus cash into the super fund as an undeductible contribution.
Keep in mind that at age 55 you will be able to access your super if needed so you are no longer locking your money away for the long term.
Once over the age of 60 and retired, all income, pension payments and capital gains in the super fund are tax free and it doesn’t get better than that.
If you would like us to take a look at what you can do, give us a call on 4771 4577.
Tuesday
17Jun
June 17, 2008 in Thought of the Week, Investment Strategies The Reluctant Spouse.
by Joe ShlegerisI can argue all day long that share investing will do you good, but this won't get me or you anywhere if you find yourself married to a reluctant spouse.
A reluctant spouse dislikes the entire idea of share investing. This spouse (who can be of either sex) finds share investing all too frightening, and often prefers to invest only in rental properties because you can drive by and see them. This spouse might even prefer to just keep your money in the bank.
Such spouses clutch at every bit of news which might support this reluctance to invest: corporate misbehaviour, reports of the shocking misdeeds investment advisors have visited upon their trusting clients, and scary events around the globe which threaten to bring the world economy to its knees. Sometimes such spouses come from families in which money has been lost to bad investments (whether these had anything to do with the share market or not) or they've just heard stories.
None of this is intended to criticise the reluctant spouse. Such a person probably doesn't want to read a book about share investing, but maybe a short and simple text such as this won't be too much to ask. Alternatively, the more enthusiastic spouse can use the arguments in Easy Investing Abundant Income to help lead the reluctant spouse to enlightenment.
If you're married, it's important that you and your spouse both understand why and how you're investing. Otherwise you run the risk of making big mistakes when one spouse's irrational exuberance or unreasonable fear causes you to make silly choices.
A reluctant spouse dislikes the entire idea of share investing. This spouse (who can be of either sex) finds share investing all too frightening, and often prefers to invest only in rental properties because you can drive by and see them. This spouse might even prefer to just keep your money in the bank.
Such spouses clutch at every bit of news which might support this reluctance to invest: corporate misbehaviour, reports of the shocking misdeeds investment advisors have visited upon their trusting clients, and scary events around the globe which threaten to bring the world economy to its knees. Sometimes such spouses come from families in which money has been lost to bad investments (whether these had anything to do with the share market or not) or they've just heard stories.
None of this is intended to criticise the reluctant spouse. Such a person probably doesn't want to read a book about share investing, but maybe a short and simple text such as this won't be too much to ask. Alternatively, the more enthusiastic spouse can use the arguments in Easy Investing Abundant Income to help lead the reluctant spouse to enlightenment.
If you're married, it's important that you and your spouse both understand why and how you're investing. Otherwise you run the risk of making big mistakes when one spouse's irrational exuberance or unreasonable fear causes you to make silly choices.
PS. If you don't have a copy of "Easy Investing Abundant Income" please call into our offices at 105 Denham Street, Townsville, and we'll give you a copy. (no charge)
Tuesday
03Jun
June 3, 2008 in Budgeting, Investment Strategies, Saving & Budgeting Financial Strategy. Do You Have One?
By Jason Fittler
2. Decide what is the most effective use of the savings, pay down debt, investments or put into super.
3. Look for professional help, you will need a coach or someone to help you set and maintain your goals. Look for an advisor whose income is directly related to your investments growth.
4. Review your strategy regularly to make sure you are still on track or review when there is a change in your circumstances which will affect your surplus. I would recommend at least every 6 months.
5. Know your end goal, write it down and place it somewhere you will see it every day.
Here is the key; there are two types of people who will read this email. The first group will read this and understand the advice but will not actually go and write down their budget or goals. I will guarantee that this group will be no better off next year then they are this year.
The second group will right now set a time to sit down review their budget and write down their strategy and goals. I will guarantee that these people will be better of financially in 12 months. Unfortunately only around 2% of the population falls into this category.
Which group do you fall in?
Give us a call... we can help. Ph (07) 4771 4577
Strategy; everyone knows the meaning of the word but few people have a clear and concise strategy of how they will live their life and achieve their goals. When it comes to financial matters most people’s strategy is as follows:
“Make as much money as possible, buy the best lifestyle possible with the money you have. Retirement is too far off to worry about”.
Creating wealth is not about how much you make but in fact more about how much you spend and what you do with your surplus income. Everyone knows the story of the Hare and the Tortoise, but when asked what the moral of the story was most will say, “Slow and steady wins the race”. This could not be further from the truth, the Hare lost the race because he did not use his time efficiently, he had no strategy.
An effective strategy is what allows you to win and achieve your own personal goals. An effective strategy is one which needs to be reviewed constantly to make sure it is still effective when circumstances change.
When you are looking to Grow your Wealth, you need a strategy. Without this you will be lost. So where do you start? Below are a few ideas to get you going.
1. Budget, spend the time and work out a budget. This does not need to account for every dollar spent but should detail how much surplus money you would like to save each month. Remember a budget is about things you will not buy. For more details on budgeting go to archive articles on the website.
“Make as much money as possible, buy the best lifestyle possible with the money you have. Retirement is too far off to worry about”.
Creating wealth is not about how much you make but in fact more about how much you spend and what you do with your surplus income. Everyone knows the story of the Hare and the Tortoise, but when asked what the moral of the story was most will say, “Slow and steady wins the race”. This could not be further from the truth, the Hare lost the race because he did not use his time efficiently, he had no strategy.
An effective strategy is what allows you to win and achieve your own personal goals. An effective strategy is one which needs to be reviewed constantly to make sure it is still effective when circumstances change.
When you are looking to Grow your Wealth, you need a strategy. Without this you will be lost. So where do you start? Below are a few ideas to get you going.
1. Budget, spend the time and work out a budget. This does not need to account for every dollar spent but should detail how much surplus money you would like to save each month. Remember a budget is about things you will not buy. For more details on budgeting go to archive articles on the website.
2. Decide what is the most effective use of the savings, pay down debt, investments or put into super.
3. Look for professional help, you will need a coach or someone to help you set and maintain your goals. Look for an advisor whose income is directly related to your investments growth.
4. Review your strategy regularly to make sure you are still on track or review when there is a change in your circumstances which will affect your surplus. I would recommend at least every 6 months.
5. Know your end goal, write it down and place it somewhere you will see it every day.
Here is the key; there are two types of people who will read this email. The first group will read this and understand the advice but will not actually go and write down their budget or goals. I will guarantee that this group will be no better off next year then they are this year.
The second group will right now set a time to sit down review their budget and write down their strategy and goals. I will guarantee that these people will be better of financially in 12 months. Unfortunately only around 2% of the population falls into this category.
Which group do you fall in?
Give us a call... we can help. Ph (07) 4771 4577
Tuesday
27May
May 27, 2008 in Estate Planning, Taxation, Investment Strategies 5 Ways to Reduce Your Tax Bill
"Keep in mind all of these must be done prior to the 30/06/2008 so do not wait till the last minute, make a plan to do it this next week."It’s that time of year again when we need to start looking at how our investments have performed, over the year and start looking at ways to reduce our tax bill. Below is a list in order of preference of what you should be doing.
1. Superannuation contributions, if you are self employed and have the cash pay up to your age based limit. If you are an employee hopefully you have been salary sacrificing if not start now or see if your employer can make a lump sum.
2. Sell off any investments which have capital losses to off set any capital gain you have incurred.
3. Prepay interest on your investment loans to get the deduction this year.
4. Protected equity loans - these provide you with a deduction for this year. Be quick it will take a couple of weeks to set these up.
5. Tax effective investments such as tree investments - it is the last resort but can provide a great tax deduction.
Keep in mind all of these must be done prior to the 30/06/2008 so do not wait till the last minute, make a plan to do it this next week.
Give us a call... we can help. Ph (07) 4771 4577
Tuesday
20May
May 20, 2008 in Budgeting, Investment Strategies, Saving & Budgeting Are You Wealthy? Take 5 Minutes to Find Out.
By Jason Fittler
Being wealthy means a lot of different things to a lot of different people. But you can in fact pin point the moment when you officially become wealthy.
You no longer need to work to maintain your lifestyle.
For the average Australian worker this would mean when your passive income is above $70,000 per annum. So let see if you are wealthy!
1. Add up your total assets; include family home, cars, boats, investment properties, share holdings, managed funds, cash, superannuation, value of business and anything else of significant value.
2. Subtract any debts being credit cards, overdrafts, home loan, investment home loan, margin loans and personal loans.
3. Subtract any assets which are not income producing being family home, cars, boats and any items which are for personal pleasure.
4. Multiply the total by 4%.
If your answer is over $70,000 congratulations you are in the wealthy category. If you are way over, you need to start thinking about generational wealth. More on this later.
If your answer is below, then there is still some more planning to be done. So get on to it now, if you need help call us. Phone 07 4771 4577
You no longer need to work to maintain your lifestyle.
For the average Australian worker this would mean when your passive income is above $70,000 per annum. So let see if you are wealthy!
1. Add up your total assets; include family home, cars, boats, investment properties, share holdings, managed funds, cash, superannuation, value of business and anything else of significant value.
2. Subtract any debts being credit cards, overdrafts, home loan, investment home loan, margin loans and personal loans.
3. Subtract any assets which are not income producing being family home, cars, boats and any items which are for personal pleasure.
4. Multiply the total by 4%.
If your answer is over $70,000 congratulations you are in the wealthy category. If you are way over, you need to start thinking about generational wealth. More on this later.
If your answer is below, then there is still some more planning to be done. So get on to it now, if you need help call us. Phone 07 4771 4577
Monday
12May
May 12, 2008 in General Swan Dives Into First Budget
Treasurer Wayne Swan will hand down the first Budget of the new Labor Government on May 13. As the first Budget of a new Government there’s some uncertainty over what measures may, or may not be announced. We will release a detailed review of the Budget and the stock implications, but the purpose of this bulletin is to briefly overview some of the key issues and themes prior to the event.
For more read the attached PDF.
If you can not wait to find out more give us a call on 07 4771 4577 and we will review your position now.
For more read the attached PDF.
If you can not wait to find out more give us a call on 07 4771 4577 and we will review your position now.