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Three steps to your kids’ financial success

All / 10.09.2020

Three steps to your kids’ financial success

For many of us, our first experience of banking and savings was the school Savings Account Program.

But in 2019 the Australian Securities and Investments Commission (ASIC) raised concerns that these accounts had little lasting impact on children’s savings behaviour.

All parents want their children to be better-off than they were – more secure and financially independent, but the big question remains: where do you start?

Ushering your children toward financial security can be a simple three-step process.

Step 1: Create good habits

Start early; learning to save is one of life’s great lessons. In an increasingly cash-less society, it can be difficult for children to understand the value of money and how to save.

Help them by:

  • Providing a piggy bank for very young children, or a glass jar through which they can see their savings mounting up.
  • Teaching the difference between needs and wants. Lead by example with your own savings habits.
  • Involving them in the household budget; compare prices at the supermarket and demonstrate bill-paying.
  • Paying pocket money for age-appropriate chores and helping them to create a mini-budget, apportioning money to:
    • spending on anything they want.
    • donating to charity to instil a sense of community and empathy,
    • saving for a goal; helpful in teaching kids restraint and how to avoid impulse buys.

Step 2: Inform

Nothing is free; water in the tap, electricity and even the internet don’t just happen by magic. One of the best ways to teach kids about responsible money handling is to explain debt and the consequences for not meeting financial obligations, which segues neatly into a discussion about personal credit scores.

People with better credit scores find seeking finance approval easier and often qualifies them for more advantageous lending deals and better interest rates.

Helping kids understand the concept of a credit score can be a little daunting, so try these tips:

  • Brush up on your knowledge first.
  • Don’t focus on numbers, explain that it’s about financial behaviour over time.
  • Avoid complexity and keep the information age-relevant.
  • Use examples. Discuss mistakes you’ve made in the past, explain how you rectified them.

Step 3: Consider where you’re saving

Record-low interest rates have taken the fun out of savings, but don’t let that stop your kids from calculating how much they can earn from the right type of account. The Moneysmart website has savings calculators that kids can play with and learn from.

The banking and finance industry offers a plethora of accounts specifically designed to encourage kids to save. Help them research the account that will suit them; consider fees and interest.
Additionally, searching online will reveal a range of websites, blogs and apps dedicated to engaging and educating kids about money and savings.

Introduce your kids to good habits while they’re young, and you’ll be setting them up for success.

Finding the most child-appropriate plans and accounts that specifically suit your child’s needs can be a minefield. Your financial adviser will be happy to work with you as you guide your children into a financially secure future.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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Economic and Investment Update Webinar – Recording

All / 07.09.2020

Economic and Investment Update Webinar – Recording

Forecasting in the time of coronavirus

The global COVID-19 pandemic has wreaked havoc across the global economy in terms of human cost, curtailed economic activity, and disrupted financial markets. Even as some countries succeed in controlling the outbreak, the case count continues to grow globally, casting a shadow on the global economic outlook in 2020 and beyond.

TNRWealth hosted a webinar on Thursday 3 September at 5.45pm, featuring Vanguard Asia Pacific Economist, Beatrice Yeo as she outlined the bumpy road to recovery for the Australian and Global economy, as well as forecasts for the financial markets.

Topics discussed included:

  • Global economic outlook
  • The road to recovery post coronavirus pandemic
  • Financial market returns

To watch a recording of this webinar please click on the following link:

 

 

 

To view Vanguard’s Client Friendly Quarterly economic & market update report

 

 

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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 pearls of wisdom

All / 03.09.2020

Financial pearls of wisdom

As we approach retirement some people start to panic a little wondering if they are truly looking forward to the time of their life when they no longer have to work. All of a sudden something they have been pining for is becoming real!

Instead of worrying, have a read of the following tips and if necessary, act now. After all, it’s your future – and it could be here sooner than you think.

1: What do you want and how will you get it?

What are your goals and objectives for your retirement? Write out a plan that sees you enjoying the fruits of your labours. Then make sure your finances can achieve your goals. If not, do something about it now while you still have time. Be realistic and set achievable timeframes.

2: It’s not just about returns; remember the risks

Every investment has some degree of risk. Cash is considered the safest as there’s a good chance your money will still be in the bank when you need it. The downside is that it pays the lowest return; it isn’t tax effective; and doesn’t tend to keep pace with inflation. To achieve higher returns and make your money work harder, you need to take appropriate risk. Understand the differences between the various investment assets available and make your decisions wisely.

3: Share it around

To help reduce risk, share your investments across several asset classes – and within those asset classes as well. The right balance will depend on your financial objectives, the amount of time you have available to invest, and your risk tolerance.

4: Don’t forget super…

Superannuation will be your bank account when you are no longer working so you should be considering ways to boost your superannuation balance prior to retirement. But be aware the tax benefits are not always equal so make sure you have a balance of inside-super and outside-super investments.

5: …or tax

Tax is the trickiest area of all. Always make sure you get good advice on investing tax-effectively. A simple restructure of an underlying asset, investment vehicle or ownership structure can help you to minimise the amount of tax you pay and maximise your after-tax return.

6: Retirement can last another lifetime

With medical technology and improved lifestyles we are living much longer than previous generations. The older you get, the longer you’re likely to live. Being prepared for a longer retirement means that your money must last longer, so don’t be too conservative with your investments.

7: Stay cool

You are in this for the long term so when markets fluctuate and investments unexpectedly fall in value, don’t panic and sell. Sit down with your adviser, review your portfolio and stay focused on your long-term goals and objectives.

8: Keep learning

You are never too old to learn. Financial advisers have an important role in giving you tailored guidance, but you still need to make your own informed decisions about your financial plan. Make sure you understand everything and if not, ask us questions or do some research.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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Invite to an Economic and Investment Update Webinar

All / 01.09.2020

Invite to an Economic and Investment Update Webinar

On behalf of TNR Wealth Management and Vanguard invites you to an exclusive webcast on the economic situation today.

Forecasting in the time of coronavirus

The global COVID-19 pandemic has wreaked havoc across the global economy in terms of human cost, curtailed economic activity, and disrupted financial markets. Even as some countries succeed in controlling the outbreak, the case count continues to grow globally, casting a shadow on the global economic outlook in 2020 and beyond.

Join us for a special webinar on Thursday 3 September at 5.45pm, featuring Vanguard Asia Pacific Economist, Beatrice Yeo as she outlines the bumpy road to recovery for the Australian and Global economy, as well as forecasts for the financial markets.

Topics they’ll discuss include:

  • Global economic outlook
  • The road to recovery post coronavirus pandemic
  • Financial market returns

To register your attendance, click on the following link:

 

 

To view Vanguard’s Client Friendly Quarterly economic & market update report

 

 

Click on the below box to sign into the Webinar. Passcode is 139159.

 

 

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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It’s to your credit to read the fine print

All / 27.08.2020

It’s to your credit to read the fine print

When using credit cards for quick personal loans beware of the fine print!

Card loans may offer reduced interest rates, but missed payments can result in interest rates reverting to the card’s higher rate. Credit card balances can quickly blow out and take years to pay off.

Let’s do the maths:

  • Card balance: $5,000
  • Interest rate: 18%
  • No fees or further purchases

By paying the minimum monthly amount ($102 then decreasing), it would take 33 years to pay off at a total cost of $17,181 (including $12,181 interest)!

You’re right in thinking that’s an extreme – but interest can easily get out of hand. Stay in control and read the fine print!

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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What you perceive you believe

All / 20.08.2020

What you perceive you believe

When it comes to choosing to invest in property and shares, many issues are the same:

  1. do the research before you buy,
  2. be aware of your investment timeframe,
  3. monitor performance, and
  4. know when to sell.

But there is one big difference and it’s all about perception of risk.

Shares are valued daily so you can see the volatility in prices every time you read a newspaper or visit a stockmarket website. To some investors these price movements are very distracting and they perceive that shares are more risky.

Property, on the other hand, is not subject to continuous public evaluation. You only really know the value when a similar property sells, or you ask someone to put a price on it. This means investors are more likely to see property as a long-term investment and perceive it to be less risky.

Investments in growth assets – property and shares – should be seen as long-term investments. The real risk to investors is that they become disturbed by price volatility and sell quality investments at the worst time. History has shown that changing asset allocation too frequently can ruin sound long-term investment strategies.

Seek the guidance of a professional financial adviser to learn more about how your perceptions may be affecting your investing.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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We are now a COVID-19 safe registered workplace!

All / 13.08.2020

We are now a COVID-19 safe registered workplace!

Since March we have implemented strict cleaning regimes and work practices to ensure the safety of our staff, clients and the community. We are pleased to let you know that our practice has now been recognised through the accreditation process and we are proud to offer you a COVID safe space for all your financial planning, insurance and wealth management needs.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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Preparing for retirement in uncertain times

All / 13.08.2020

Preparing for retirement in uncertain times

As most long-term investors know, investment markets have their ups and downs. The downs are usually associated with periods of uncertainty, perhaps due to political or economic factors, or even natural disasters. Uncertainty leads to volatility – more extreme movements in asset prices – which can have a big impact on portfolio values. This can be of particular concern if you are close to retirement and preparing for your last payday. So what can you do about it?

If you are building wealth in preparation for retirement in wobbly times, there are some options:

  1. Save more. The 9.5% Super Guarantee will not be enough. Savings of at least 15% of salary over your working life are required to produce a sufficiently large retirement investment.
  2. Spend less now and in retirement. Review your budget and review your plans about how you will live in retirement.
  3. Work longer. Put off retirement until later; maybe consider working part-time in the first few years of “retirement”.
  4. Seek higher investment returns.
  5. Implement a gearing strategy to accelerate returns.

This last solution will involve taking on more risk. Investors have always accepted that the higher the return, the higher the risk. It is often easier to see the good investment opportunities after the event but the challenge is to identify where consistent higher returns can be found.

Don’t abandon shares

Over the long term, shares have produced higher returns than fixed interest though with greater volatility. The difference in returns between shares and fixed interest is called the “equity risk premium” – the reward for taking on the extra risk. In the past, the difference has been 5-7%.

When investment volatility is high, shares tend to be the hardest hit. But while it is tempting to sell shares in a falling market, this robs investors of the opportunity to ride the upswing when markets recover.

It is possible that better returns may be found amongst the ‘boutique’ managers who are not constrained by huge fund size and/or manage their funds on an ‘absolute return’ basis rather than simply trying to beat the investment sector benchmark. This requires smart investing, not just following the pack.

Allocate more to riskier assets

Fund managers have traditionally held a significant proportion of investments in blue chip company shares. Whilst they tend to pay consistent dividends, there may be other opportunities for faster growth. These include smaller companies (or small caps), unlisted shares (private companies) and overseas shares in less developed countries (emerging markets).
Apart from shares, higher yielding debt instruments offer the potential for even higher returns but at higher risk.
The key to investing in these areas is good research – identifying sound opportunities and eliminating those with unacceptable levels of risk. Of course, the supply of “good quality, relatively safe” investment opportunities may appear to be limited when things are uncertain. Some fund managers offer products specialising in a wide variety of assets.

Active asset management

Good investment management requires talented people and sophisticated systems and strategies. Organisations with these attributes have a better chance of identifying under- and over-priced securities and markets. By moving money between countries, currencies, sectors, and asset classes, these managers aim to produce higher returns. Funds managed according to an “absolute return” philosophy is an example of where managers aim to produce above average returns in rising and falling markets.

When selecting a fund manager always pay attention to the fees charged as these can impact on the overall return on your investment. Sometimes they may even offset the larger returns made on the investment itself.

Implement a gearing strategy

Borrowing (or gearing) gives you a larger sum of money to invest. This magnifies any growth you achieve on your investments especially over the long term. Careful thought should be given regarding the method of gearing as some strategies may be more suitable to your particular circumstances than others. You should always bear in mind that gearing may not only increase your gains, it can also magnify any losses.

If none of these latter strategies appeal to you, then you may have to revisit options 1, 2 and 3 above, but before you make any rash decisions, talk to your financial adviser first to develop a plan specifically to suit your needs.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6626 3000.

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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You CAN save one million dollars!

All / 06.08.2020

One of the most common questions I’m asked as a financial adviser is “will I have enough to retire?” It truly is the sixty-four thousand dollar question and if $64,000 was the answer, we’d all be on easy street!

With so many variables involved, there is no set answer, but these days with many of us expecting to live longer, at least one million dollars is the minimum required to fund a comfortable retirement.

This might come as a shock to many and a lot of people might think that figure is only achievable by winning the lottery, but I can assure you that it is achievable. All it takes is some planning and commitment… and a little bit of magic called compounding.

Below I have outlined some key tips that I would talk to you about if you were sitting in front of me:

Start with your focus. For this example, it’s one million bucks.

Frequency – Regular deposits are recommended straight from your pay. What you don’t see you don’t miss.

Amount – Minimum 10% of monthly net income is recommended.

Rate – Choose investments that provide at least a 6-8%pa rate of return.

Type – High interest savings account to get started, then perhaps managed funds once you have saved enough for the minimum investment. As your balance grows, we will look at other assets to spread your investment. If you’re taking advantage of the low tax applied to super, in addition to the superannuation guarantee, you may want to salary sacrifice to your super fund – as long as you don’t exceed the concessional contributions cap.

Risk – Remember: high returns generally mean high risk. On the other hand, being too careful can slow progress. Everyone has a different risk tolerance which depends on age, personality and circumstances.

Age – Obviously it’s best to begin as early as possible, but you can still save a substantial amount even if you start in your mid-late thirties.

Emergencies – Emergencies mean just that. If you withdraw money for a new car or big holiday, you’re only undermining yourself. (That doesn’t mean you miss out on these enjoyable lifestyle events. Fun is an important part of your savings plan.)

Goal – The figures I’ve quoted here are based upon a $1 million target, however, depending on your lifestyle and expectations, you can revise that amount to suit your circumstances.

How many years to save $1 million

Let’s start with a savings balance of $5,000. This is how long it will take to reach the million dollar mark at different contribution amounts and earnings rates:

Monthly
Contribution
Years @ 4%pa interestYears @ 6%pa interestYears @ 8%pa interest
$400554336
$500504033
$800413328
$1,000363026

Obviously, the earlier you start saving, the smaller the contribution is needed. You can accelerate your contribution rate as your income increases. Savvy savers who pay a mortgage off early can accelerate their program considerably by directing the amount formerly devoted to the mortgage payment into savings.

And what about money you receive along the way? If you receive an inheritance of say, $100,000 (assuming an annual return of 6%), the $1 million mark can be reached in just 30 years contributing only $400 per month.

Regular investing is likened to building a “saving muscle.” You grow accustomed to putting away this money over the years and are able to increase the amount as you would increase an exercise regimen. Eventually, it becomes habit, you don’t notice the pain anymore, and the payoff can be enormous at the end. Like achieving a fit and healthy body, building your saving muscle results in a healthy financial outlook.

Being a millionaire may seem like an unattainable dream, but with the right amount of planning and diligence you can join the Millionaires’ Club sooner than you think.

Notes: taxation and inflation have not been taken into account in these calculations. Calculation based on achieving $1 million in today’s dollars.

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 financial tips from an older generation

All / 30.07.2020

Five financial tips from an older generation

Back in my day…


If I had a dollar for every time I’ve heard that over the years! More interesting, I caught myself saying those words only last week as though channelling my father!

The younger generation is so tech-savvy these days that I can’t keep up although we had technology too! Our ‘information revolution’ produced gems like floppy-disks, dial-up internet and entire families sharing a single land-line telephone. Quickly superseded and gone forever, thankfully!

When it comes to money, some things stay relevant regardless of your generation.

So here, although you didn’t ask, are my five tips for getting, and keeping, control of your finances – for life!

  1. Living within your means seems obvious, but surprisingly, many people don’t. It’s why credit like store/bank cards and shop-now-pay-later facilities are so popular. Unmanageable debt has the power to keep you awake at night – and not in a good way. But you really can survive without the latest device or _______ (insert item here). In short, don’t be a slave to possessions; why lock yourself into debt more durable than the item?
  2. Save. The world is full of opportunities: travel and socialising, etc., but don’t underestimate the security of a stash of cash. With a small, regular commitment, you can have a life and save too.
    Consider this example: An initial $500, plus $50 per week over five years, could accumulate almost $15,000! (Assuming no withdrawals and 2.5% interest over the period). Additionally, developing a savings habit will help create a good credit score for, say, a future home loan.
  3. Buy quality, pre-loved items like clothing or furniture. Pieces in good condition will generally last longer, and with care, can become classics you won’t need to replace..
  4. Learn to cook. Stay with me! Nothing beats a home-cooked meal for cost-savings and old-fashioned job-satisfaction. Find a recipe, make a list, shop and cook. Not sure what you’re doing? YouTube is your best friend. For $30, you could cook yourself and a friend a similar meal costing around $80 in a restaurant. (There’s the week’s $50 for your savings account!)
  5. Make a budget and stick to it. Record income, then expenses beginning with non-negotiable ones like rent/mortgage, loan payments, insurance, transport, groceries, etc.

If you can’t account for some of your money, a budget will help you identify areas of overspending so you can reallocate funds to savings and discretionary expenses.

The government’s MoneySmart website provides a budget planner to get you started, or create your own using a spreadsheet.

Every generation believes there’s nothing to learn from the other, but the truth is we’re all learning, all the time.

In fact, I was recently introduced to online video chatting. Now my grandchildren will benefit from even more of my advice!

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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