Look for help to get into the housing market

Governments across the country are offering incentives for first-home buyers. You just have to know where to look.

Buying your own home is the largest purchase most people will make in their lives.

However, a long run of low interest rates has fuelled spectacular dwelling price growth, record housing debt and phenomenal asset values, particularly in Sydney and Melbourne. According to the Reserve Bank of Australia, housing prices nationally have increased 7.25 per cent a year, on average, over the past 30 years.

In its Perceptions of Housing Affordability Report 2017, financial analysis and advisory firm CoreLogic says it now takes 1.5 years of household income to save for a 20 per cent deposit on a dwelling compared with 0.8 years 15 years ago.

Nevertheless, there are government incentives to help prospective first-home buyers. Last year’s Federal Budget proposed allowing individuals to make voluntary contributions to their superannuation to save for a deposit.

Super contributions and earnings are taxed at 15%, rather than higher marginal rates. Contributions are limited to $30,000 per person in total and $15,000 per year and both members of a couple could take advantage of the scheme.

Currently, the NSW and Victorian governments are offer first-home buyers:

  • no stamp duty on all homes worth up to $650,000 in NSW and $600,000 in Victoria
  • stamp duty relief for homes worth up to $800,000 in NSW and $750,000 in Victoria
  • a $10,000 grant for builders of new homes worth up to $750,000 and purchasers of new homes worth up to $600,000 in NSW
  • no duty on lenders mortgage insurance in NSW

Most states have first-home buyer grants, and some are making it harder for foreign investors by increasing duties and land taxes and introducing other measures to reduce competition for first-home buyers.

SEEK ADVICE

There are many investment options that can help you build a deposit, but you don’t have to make financial decisions by yourself.

Chat with your Adviser today… or I’m more than happy to help!

Money hacks for teens

Help your teens and young adults manage how they spend and save.

So your teenagers and young adults know how to spend, but do they know how to budget for the things they really want? Learning good money management should be an essential life skill.

A reason to save

For many teenagers and young adults with part-time jobs, spending their entire pay each week is easy if they don’t have pressing financial obligations. This is why it’s important to discuss a long-term goal and find a reason to save.

Perhaps this goal will be a car, a holiday with friends, higher education – or even a rental bond if they want to move out. Just make sure you emphasise that they will still need money after the purchase, either for running costs or to enjoy their social lives, so they shouldn’t blow the lot.

Budget benefits

The envelope method is a great way to learn about budgeting. Label real envelopes – or use tags in an app – with categories such as clothes, nights out, transport, phone, food, and university or school supplies. These should cover all their current expenses. Then allocate money to each envelope every pay day.

They can also use MoneySmart’s Budget Planner and apps such as TrackMySPEND to help them work out their goals and how much to allocate to each envelope.

A handy budgeting formula is the simple 50/30/20 rule. Urge them to dedicate 50 per cent of their pay to bills (if they don’t have many, they could reduce this amount), 30 per cent to fun activities and purchases, and 20 per cent to savings. This will get them into the habit of planning their spending and eliminate the habit of living from pay day to pay day.

Learning budgeting and savings skills early will help them build a solid nest egg for their future.

Get advice

Young adults face many big decisions, but helping them get serious about money management early can make life easier as they get older.

A visit to your financial adviser with your child may also help them develop good money management skills from an early age and avoid some of the mistakes we made along the way.

Where to turn for advice?

Time and again, we hear and see headlines on the latest scams and the heart-breaking journeys of those ripped off.  From a dodgy tradie to those cashing in on the bitcoin boom, scams can come in all shapes and sizes and are getting harder to recognise.  Sometimes, it’s easy to sit back and judge when it’s not us involved and it seems ‘glaringly obvious.’  But for those who got ‘done over’ it’s very real and very painful.

The Australian Competition and Consumer Commission (ACCC) report that over $5 million per annum is lost to scams, but seeing that many are too ashamed or embarrassed to admit their error, the number is quite likely much higher than that!

So, where to turn?

When we have serious health problems, we head to the doctor or specialist.  A serious legal issue means we call in the lawyers.  We want someone with training, experience and qualifications to assist…, but Aussies, in particular, seem pretty happy to take financial advice from family and friends… or even the hot tip from the cabbie!

Professional advisers, however, are likely to have years of experience and training and can help size up investments in ways that our loved ones, just cant.  We don’t want to get left behind with the latest buzz, but we also don’t want to be caught in the latest get-rich-quick scam iether.

Devoting years to study and having inside knowledge of investments and markets plus hours of ongoing education and professional development, can mean a bonus for you.  A good adviser is a steady hand at the tiller and the calm voice during the storm that can help you stay on track and naviagate the good and bad times.

Planners develop investment strategies based around your personal timesframs and financial goals and help you assess the risk and the return.  They’re the ones who help guarantee a good night’s sleep instead of staring at the ceiling and worrying.

Advisers now are on an ASIC register so you can check them out: Financial Advisers Register.  You can find who they’re licenced through, what they can advise on , their qualifications and training and if any disciplinary actions have been taken against them.

To find out what others think of your adviser or leave feedback yourself, you can now also head to Adviser Ratings to see feedback from both clients and colleagues.  There’s lots of research you can do before getting advice so ensure you interview a few to find the best fit for you.

Your finances will be glad you did!

 

How to cope financially with illness or injury

Bills still need to be paid even if illness or injury keep you out of work. But help is available if you need it.

Dealing with a serious illness or injury is stressful enough without having to consider how to cope financially.

However, making sure you get everything you are entitled to and offsetting bill payments can help relieve some of the stress of an already traumatic circumstance.

Advocates

When you are injured or ill, it’s easy to miss important information, so it’s essential to have someone by your side who can listen, question and ensure your needs are met.

Choose someone you can trust, such as a close relative or friend, who can be your advocate, and help understand instructions from medical professionals as well as organise any medical payments.

Services

The available government services include the Department of Human Services or Centrelink.

In very limited circumstances, you may get early access to your superannuation on compassionate grounds if the illness or injury is catastrophic. You can apply through the Department of Human Services.

You might also like to contact Financial Counselling Australia to talk to someone who can provide free, unbiased information to help with your financial difficulties.

Employment

Ask your employer how much paid sick leave you have, whether you can take unpaid leave, and how long you can have off work. The Fair Work Ombudsman’s sick and carers’ leave information covers your rights at work.

Insurance

Check your insurance policies, including any linked to your superannuation, to see if they provide income support or bill payment help.

Types of insurance include:

  • income protection, which provides an income if you are unable to work
  • health insurance, which can help with medical costs
  • total and permanent disability insurance, which can be included in your superannuation and covers the costs of rehabilitation, bill payments and living costs
  • trauma cover, which covers specified illnesses or injuries.

Reach out

Open up about your circumstances to your debtors and ask for a hardship variation to your bills or a repayment plan that offers paying in instalments.

From setting up these repayment plans to choosing appropriate insurance, a financial adviser may help you take care of your finances while you’re injured or ill, which means you can focus on recovering.

If you’re unsure even where to start, give us a call and we can review your paperwork to see if you’re eligible for any claims.

Tips to help you start your own business

Starting a new business is exciting but there’s a lot to think about and organise.

Before you even begin, you should consider how prepared you are to make difficult decisions, work long hours, face financial constraints, lose sleep, and confront failure.

Most jump in thinking about all the freedom they’ll have ‘running their own show’ but if you ask any entrepreneur, usually the opposite is true!

Research

If none of these scare you, and you have the drive to make a success of your business idea, start by talking with others who have gone down the same path and can help you figure out your next steps.

Be under no illusions, this is a complex process with many moving parts, but having a checklist will make things easier.

The Department of Industry, Innovation and Science offers a lot of help through its business.gov.au website, including a start your own business preliminary checklist.

It says you should follow these steps:

  • choose your business structure and type
  • apply for an Australian Business Number (ABN)
  • register your business name and trademark
  • protect your intellectual property
  • understand the appropriate standards and codes of practice
  • set up record- and account-keeping processes
  • register a website name
  • work out what taxes you need to register for
  • find out the registration processes and licences you need
  • consider your insurance needs
  • buy or lease business premises.

Business plan

One essential ingredient of any new business venture is to draw up a business plan, which you will need to secure any financing. It will also provide direction and help keep you on track.

Financing your idea and keeping track of where the money is going is crucial to your success, so a good accountant is essential.

Employment

If you intend to hire people, you will also need to be familiar with the relevant labour laws, superannuation rules, work health and safety obligations and tax laws. Information about pay and conditions is available from the Fair Work Ombudsman website. You will also need workers’ compensation and public liability insurance.

Here to help

With so much to think about, it’s clear that starting a business is challenging. A financial adviser may help you understand your new financial obligations and develop a financial plan tailored to you, so you may get your new business off to the right start.   We’re always happy to help, so don’t hesitate to give us a call on 07 5593 0855.

Simple lifestyle changes for a healthier you

Treat your body well and it may help you dodge cancer. Here’s some tips on how to create a healthier lifestyle.

“Cancer isn’t always a matter of genetics or bad luck,” says Professor David Whiteman of Brisbane’s QIMR Berghofer Medical Research Institute.[1] A recent study from the institute found risky habits and behaviour are to blame for more than 16,000 Australians being diagnosed with cancer each year.1 The good news is that changing these behaviours may help prevent certain cancers forming.

The most common types of cancers that are directly related to lifestyle choices include skin melanomas, and lung, bowel, liver and stomach cancers.1 The key culprits causing these types of cancers include:

  • tobacco smoking
  • high intake of red and processed meat
  • low intake of fruits and vegetables
  • excessive exposure to UV light
  • excessive alcohol consumption
  • being physically inactive
  • being overweight.1

In other words, what we put in our bodies and how often we move them.

So, what changes can you make for a healthier lifestyle?

  • Since the biggest cause of preventable cancer is smoking tobacco, your first mission is to “hang tough, don’t puff!”1
  • Eat more fruit and vegetables and reduce your intake of red and processed meat –going vegetarian just two days per week may help you create a more balanced diet.
  • Decrease your alcohol consumption – limit your drinks to special occasions or set yourself the challenging of nursing one drink per party.
  • Exercise regularly – exercise may help reduce the risk of various physical and mental health problems.[2] If you have a sedentary lifestyle, even committing to 15 minutes of walking a day could be a great start.
  • Moderate your exposure to UV light – get your sunlight early in the morning or late in the afternoon and use a combination of protective clothing, shade and sunscreen.

 

[1] ABC News, (2017), ‘Changes to risk factors could have prevented 40 per cent of cancer deaths, study finds’. Available at: http://www.abc.net.au/news/2017-12-12/cancer-study-finds-40pc-deaths-preventable-with-lifestyle-change/9247876

[2] Australian Government, Department of Health, ‘Physical Activity’. Available at: http://www.health.gov.au/internet/main/publishing.nsf/content/phy-activity

What is Bitcoin all about?

Chances are by now you’ve heard all about Bitcoin… but you may not know too much about what it really is.

Bitcoin is a type of digital currency known as a cryptocurrency. It operates on a decentralised peer-to-peer networked program on your computer, meaning that transactions can be conducted between a buyer and seller without the need for any third party oversight such as a regulator or bank. The underlying technology that makes all cryptocurrencies possible is the blockchain.

Bitcoin’s ‘wild run’

Bitcoin’s value has oscillated wildly. It peaked at US$20,000 in mid-December 2017, lost 40 per cent of its value within a week, then bounced back and hasn’t stopped bouncing since.

What are the risks?

Bitcoin certainly has all of the hallmarks of a ‘speculative bubble’ and history is littered with plenty of examples of speculative fevers that ultimately collapsed. Another risk is regulation. Some cryptocurrencies are becoming the preferred medium of exchange for criminals due to anonymity, if governments can find a way to crack down they surely will.

Want to know more?

There’s lots of information now available.  Have a chat to your financial adviser who can help you work out if Bitcoin or cryptocurrency, merits further investigation or is worth leaving behind.