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Get the biggest bang from your renovation buck

All / 20.11.2019

Get the biggest bang from your renovation buck

Whether it’s doing up the bathroom or kitchen, or adding an entire new wing to the house, some focused planning will help your home renovation project run smoothly.

Here are some tips to help you get the biggest ‘bang’ for your renovation buck.

1. Budgeting and saving

Renovating is a major expense so unless you’ve already saved up the necessary funds you will either need to prepare for increased loan repayments or get cracking on a savings plan.
First up, prepare a couple of budgets – one for the renovations, and another for regular living costs. Then, with your current spending and future savings needs laid bare, it’s time to play the penny-pinching game. Can you take lunch from home rather than buying it every day? Does avoiding the toll road add that much time to your daily commute? Are you paying for bottled water? And can you still enjoy life with less eating out or ordering in?

2. Avoid hidden surprises

Make sure that the fabric of the existing house is sound. Depending on its age, have the house inspected for asbestos. Its removal can add time and many dollars to your renovation. Termites and rot are other unwelcome surprises.

3. Find the right contractors

Shop around, get multiple quotes and check references and reviews. Also ask to see contractors’ licenses. Don’t just go with the lowest quote; make sure you have confidence in the tradie’s ability to do the job.

4. Release your inner handyperson

How much can you save by doing some of the work yourself? Most people can do a great job painting a room. How about laying your own tiles? The Internet abounds with ‘How to’ videos for all sorts of renovation skills.

5. Call in a favour

How many chippies, sparkies and plumbers in your family or friendship group? Of course, you won’t want to stretch a friendship or impose on them, so maybe you can swap one of your skills for some of theirs.

6. Shop smart

Extend your budget by buying seconds or second hand. Check out Gumtree and eBay, or get to know your local auction rooms – bidding at auction can be both fun and rewarding. Can you deal directly with any suppliers, and who can offer you mate’s rates?

7. Select your materials with your budget in mind

Hand basins, shower screens, kitchen sinks, taps, flooring, light fittings, ovens… Everything comes in a wide range of styles and prices to suit every budget. However, appearances can be deceiving. A cheaper bench top or bath can provide all the visual appeal of more expensive alternatives. Still, sometimes you may have to compromise and opt for ‘good’ rather than ‘best’. And if you’re renovating with a future sale in mind, it’s also important that you don’t over-capitalise on your renovations.

Undertaking major renovations can be a daunting prospect, but some thought and planning can deliver not just a more valuable home, but also one that provides you with years of satisfaction.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

 

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8 ways to help kids with their money

All / 14.11.2019

8 ways to help kids with their money

Each new generation will treat money differently to the last, but children of the 21st Century certainly have many more uses for money than those of the last century. Not all that long ago a bike or a doll was a 5-year-old’s dream gift; now it’s an iPad!

Attitudes and activities are changing much earlier than in previous generations, so, for the sake of their future well-being, it’s important to introduce your children to the intricacies of money management from an early age.

Keep it simple – explain where your money comes from and how it is spent. Remember, children learn best from experience so they will probably follow your own example.

Some helpful hints include:

Starting out:

  1. Set up a bank account in the child’s name and explain that if they want to buy something they must first have the money.
  2. Encourage them to do jobs to earn their pocket money. This also teaches them responsibility (which is handy when they start talking about their rights!).
  3. Help them understand that the money that comes “out of the wall” was first put in there through your work.
  4. Inspire your child to save a fixed amount, say 10%, from their pocket money for more expensive items (like their first iPad).

As they get a bit older:

  1. Explain how unnecessary spending as a result of peer pressure will impact on their future.
  2. Explain how credit cards work and teach them what happens when the full balance isn’t paid off every month. This is a great lesson in how debt quickly gets out of control.
  3. When you buy their mobile phone let them pay for the plan or any excess calls over the monthly prepaid limit from their own money.
  4. Allow kids to make their own spending decisions so they learn from their mistakes.

Teaching the basic money facts to your children when they are young will go a long way to setting them on the right path to financial success in later life.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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Financial Advice, Royal Commission and You

All / 07.11.2019

Financial Advice, Royal Commission and You

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry delivered its final report in February 2019, capping off a process that revealed the unethical and, in some cases, illegal practices of some of Australia’s largest banks, insurance and other financial services companies.

Many of the Royal Commission’s recommendations are aimed squarely at financial services companies, and they should lead to changes in corporate attitudes and practices that will deliver indirect, and hopefully positive changes to many consumers. The Royal Commission also made a number of recommendations that will have a more direct impact on investors. Unfortunately, these may not always be for the better.

Even though the Royal Commission unearthed a wide range of bad behaviours, it’s important to acknowledge the large number of financial advisers who have always adhered to high ethical standards while delivering great outcomes to their clients. Clients of these advisers may see little change in the relationship with their adviser and how their money is managed. So what changes are likely to affect consumers?

A ban on conflicted remuneration

Conflicted remuneration arises when an adviser has an incentive, such as a sales bonus, to recommend an investment product.

Conflicted remuneration was banned some time ago, but existing arrangements were ‘grandfathered’. These grandfathered arrangements will now cease.

An end to trailing commissions

Investment and superannuation products may pay the recommending adviser an ongoing annual or ‘trailing’ commission. The expectation is that the adviser will continue to provide ongoing review of the suitability of the product, and recommend changes when warranted.

Unfortunately, the Royal Commission revealed numerous cases where fees were charged and no advice given. This extended to fees being charged to dead peoples’ accounts. All investment and superannuation trailing commissions will cease from 2021. While this should lead to higher investment returns, many consumers will miss out on proactive follow up from advisers unless they ‘opt-in’ and agree to pay for advice. As the cost of such advice may be uneconomic for investors with smaller portfolios, the end of trailing commissions may deliver mixed outcomes. One prediction is that it may spark an increase in so called ‘robo advice’, where automated systems deliver lower cost, albeit more generic advice.

Increased educational requirements for advisers

New advisers must now hold a relevant, degree level qualification. Existing advisers without such qualifications will need to undertake further study.

While qualifications are important, they overlook the value of the real-world knowledge of experienced advisers. Many older advisers may retire rather than undertake additional study, which may lead to a shortage of advisers.

Incidental outcomes

Another indirect outcome of the Royal Commission is that many of the larger banks and insurance companies have decided to sell off their financial advice businesses. This also has the potential to reduce the number of active advisers, but may see a rise in the number of smaller, independent advisory firms.

The Royal Commission has delivered a major and necessary shake-up of the financial services industry. To find out what the direct, personal impacts may be for you, talk to your financial adviser.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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Traps to avoid in retirement – Carrying debt into retirement

All / 31.10.2019

Traps to avoid in retirement – Carrying debt into retirement

Increased housing costs and low wage growth are seeing more Australians carry higher levels of debt into retirement. Repaying this debt can place a major drag on retirement cash flows and hinder the achievement of retirement goals. These may include maintaining an adequate quality of life through retirement, and leaving a benefit to the next generation that is unencumbered by outstanding debt.

Fortunately, there are a number of ways by which retirement debt can be avoided or managed.

  • If you’re still working, increase your debt repayments. It may also be worth considering delaying retirement. However, bear in mind that with increasing age comes the increasing likelihood of being forced into retirement by ill health.
  • Tackle high interest debt first. If you’re paying interest on credit card balances or personal loans and have the ability to redraw on a mortgage, pay off the higher interest debts from your mortgage account.
  • Already retired? Look at using your superannuation to pay off outstanding debt.
  • Down size your home. This may allow you to pay off debts and still have enough to purchase a smaller home. If this strategy frees up more money than you need to repay your debt, investigate the superannuation incentives available to ‘down-sizers’. Also be aware any surplus cash you pocket may reduce age pension payments.

As always, it’s important to take your personal situation into account. For example, if your mortgage interest rate is low, you have significant investments earning a good return, and you have a long life expectancy, carrying some debt into retirement may be worth considering.

For help in managing your debt in retirement talk to your financial adviser.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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Using equity to build wealth

All / 24.10.2019

Using equity to build wealth

The equity you have in your home is simply the difference between the current market value of your home and the amount you still owe on your home loan. For example, if your home is worth $800,000 and your outstanding loan balance is $200,000, your equity is $600,000.

Your equity increases as home loan repayments reduce your loan balance or whenever your property increases in value. While you can’t control the property market, the more that you can pay off your home loan the quicker you build equity.

Many people are content to sit on this growing equity. However, it’s possible to utilise even modest amounts of equity to boost the rate at which you can build additional wealth. And you don’t need to pay off your entire mortgage to do so.

Putting equity to work

Putting your equity to work involves borrowing against your increased share of the value of your home and investing the proceeds. This could be by:

  • Buying an investment property.
  • Investing in shares or other growth assets.
  • Renovating your home, provided the increase in home value exceeds the cost of renovations.

The key requirement for boosting wealth by using equity is that the long-term returns from your selected investments (capital growth, rent, dividends or distributions) need to exceed the long-term costs (interest payments, insurance, repairs and maintenance, taxes and management costs).

The emphasis here is on ‘long-term’. In the short term property and share prices can fluctuate. If your investments fall in value, so does your equity. Taking on too much debt, even to fund productive assets, can lead to real financial stress. Interest rate rises may increase your loan servicing costs. It’s therefore important to introduce buffers such as not borrowing too much and factoring in possible interest rate rises to ensure that your strategy can survive the ups and downs of the various markets.

Also bear in mind that the out of pocket costs of funding an investment may be higher in the early years. Over time, however, increasing rent or dividend income help to cover costs.

It may be tempting to use some of your equity in your home to fund lifestyle, such as a holiday or new car. And if it adds to your enjoyment of life, why not? Just be aware that funding living expenses with debt tends to erode wealth rather than build it.

Be informed

Using the equity in your home to help you build your wealth is just one form of borrowing to invest. Done well it can provide a real boost to wealth. However, as this is quite a technical area of financial planning it’s important to understand how building wealth with debt works and to appreciate the risks involved.

Your financial planner will be able to look at your specific situation and help you design a strategy that will allow you to take advantage of your equity.

And when it comes to putting that strategy into practice, a mortgage broker can help you find the loan that’s right for you.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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Traps to avoid in retirement – Ignoring estate planning

All / 17.10.2019

Traps to avoid in retirement – Ignoring estate planning

 

Don’t have a Will? You’re in good company. Less than half of Australian adults do. Even then, many Wills are out of date or invalid. The upshot is that hard earned wealth may be fought over by family or distributed by government formula, and not end up with the preferred beneficiaries.

It’s also important to remember that Wills are just one component of estate planning, so here’s a quick checklist to help you get your estate planning on the right track.

  • If you don’t have a Will, make one. Consult a specialist estate planning lawyer.
  • If you do have a Will, ensure it is up to date and reflects your current wishes. Is your executor willing to take on the role and likely to outlive you?
  • Have enduring and medical powers of attorney drawn up so someone you trust can act on your behalf and make decisions if you are no longer able to do so.
  • Review your superannuation death benefit nomination. Super death benefits can be directed to your estate and distributed under your Will, or they can be paid directly to nominated beneficiaries.
  • Look into pre-paid funerals or funeral bonds. Aside from relieving your family of one burden at a time of great stress, you may see an increase in your age pension payments.

Depending on business and financial structures, family dynamics, pension rules and legal requirements, estate planning can be complex. Your financial adviser can help you identify the estate planning issues you need to address, and the professionals you may need to consult, to ensure your assets are distributed according to your wishes and to provide the best outcome for your beneficiaries.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

 

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Five reasons to refinance your home loan

All / 10.10.2019

Five reasons to refinance your home loan

Many people treat their home loan as a set-and-forget, riding out whatever the original loan terms and prevailing interest rates dish up. They may be doing themselves a disservice, as there are several ways in which borrowers can benefit from refinancing their mortgage.

  1. Find a lower interest rate.
    Whether interest rates are rising or falling, in a competitive mortgage market you may be able to refinance your mortgage at a lower interest rate. The benefits are that you can then…
  2. Reduce your home loan repayments.
    For a given loan term the lower the interest rate the lower your repayments. This then frees up some of your income for other purpose. Or you can…
  3. Shorten the term of your loan.
    If you maintain your current repayments with a lower interest rate loan, you’ll pay it off sooner and save heaps on interest.
  4. Switch from a fixed to a variable rate mortgage (or vice versa).
    A fixed rate home loan can help you lock in an interest rate for several years into the future. This can provide some protection against rising interest rates. Conversely, when interest rates are falling, a variable rate loan is the better way to go. Be aware, however, that even the experts often get it wrong when it comes to predicting the direction of future interest rates.
  5. Consolidate debt or access equity.
    If your home has increased in value then refinancing may allow you to access some of the greater equity you have in your home. This may allow you to pay off higher interest debt, such as credit cards, take a holiday, or pay for renovations.

Take care

While refinancing a home loan can be a winning strategy that’s not automatically the case. There will likely be costs involved in both paying off the existing loan and in establishing the new loan. If the difference in interest rates between the old and new loans is small, it may be hard to gain a benefit.

And take care when refinancing for debt consolidation or to free up equity. If you promptly max-out the credit card you’ve just paid off, you could be digging a deeper debt hole for yourself.

To find out if you’re getting the best deal from your mortgage, talk to a qualified professional.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

 

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Which is more precious..?

All / 03.10.2019

Which is more precious..?

It’s the middle of the night and you’re jolted awake by extreme pain in your chest. You feel like the life is being crushed out of you and immediately realise you’re having a heart attack. Your partner frantically calls 000 and as you lay clutching your chest waiting for the ambulance to arrive all you can think about is how your family will be supported if you die.

The pain intensifies.

Hopefully this will never happen to you, but what if it did? Take a moment to think about how your family’s living expenses would be met if your income stopped tomorrow.

The average Australian household spends up to one-third of its gross income on mortgage repayments. Most of us would rely on our regular income continuing indefinitely in order to meet such an expense. And at this point we haven’t even put food on the table.

Income protection (or “salary continuance”) insurance usually provides up to 75% of your salary or business income in the event that you cannot work due to illness or injury. Of course, you might have sick leave, other compensation arrangements, or perhaps a cash reserve to rely on for a while, but what will happen when these run out?

Transfer the risk

Just like any other insurance, protecting your income is about transferring risk to someone else. By paying a monthly premium, you have the security of knowing that should anything happen – your car is stolen, your home damaged by fire, or you suffer a serious illness or accident – your financial loss will be minimised.

Ask yourself…

If you have your car fully insured but don’t have adequate (or any) personal risk cover, ask yourself this question – why is my car more precious than my life and health?
If your answer puts this into better perspective, do something about it now. Once you have appropriate insurance in place, you can get on with enjoying life, and if you do get sick or badly injured, money will be one less thing for you and your family to worry about.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

 

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4 Good places to stash your cash

All / 25.09.2019

4 Good places to stash your cash

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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The benefits of consolidating your super

All / 19.09.2019

The benefits of consolidating your super

What makes us change? Why do we resist making improvements in our lives? Often you know you should take some action but … but … there is always a reason not to.


Let’s take an example

You’ve had a few jobs over the years and been paid superannuation during each one. You have a number of super funds and you forget all about them until the annual statements arrive by mail or pop up in your inbox. Now you feel worried and confused. What does it all mean? Have I got them all? Is my money still safe? Am I paying for multiple insurance policies? What should I do with all this paperwork? And the worst one – am I paying too much in fees?

The usual option is to simply put them into your “too hard folder” and forget about it until next year… and then you go through all that confusion again!

But there is a better way and if you act now you can sort it all out and potentially save a lot of money!

Here is a five-step process to help you on your way:

Step 1 – collect all the superannuation statements you can find from your “bottom drawer” or print the latest from each of your online accounts.

Step 2 – make a time to meet with your financial adviser to go through the paperwork.

Step 3 – seek advice and select one superannuation fund that suits your needs.

Step 4 – sign transfer forms so your adviser can get the accounts rolled over to your chosen fund.

Step 5 – relax knowing that your super is all in one place.

Seriously, superannuation is too important to ignore. Getting your super under control can save you money in fees, cut down on paperwork, allow you to get an investment strategy in place, and help you keep track of your money.

The Australian Securities and Investment Commission reports that there are billions of dollars sitting in unclaimed or “lost” superannuation accounts with thousands more accounts added to the list each month. Inactive accounts with balances of less than $6,000 are transferred into the federal government’s consolidated revenue fund, so if you think you might have some old superannuation accounts that you haven’t touched in three years, don’t hand it over to the government, claim it!

Visit the ATO website at www.gov.au for more information or check your MyGov account at www.my.gov.au.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer
Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.
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