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The cost of owning a pet

All / 16.05.2019

The cost of owning a pet

Australians are a nation of animal lovers. According to the Australian Companion Animal Council, we have one of the highest incidences of pet-ownership in the world!

Dogs and cats are our favourites; around 36% of Australian households own a dog, and 23% own a cat. We’re familiar with the companionship pets bring, and the social interaction they foster, but there are other benefits too, such as:

  • Lowered blood pressure and cholesterol
  • Increased physical activity
  • Strengthened immune system and reduced incidence of allergies
  • Children learn responsibility, empathy and respect.

When considering a pet, you expect costs like, food, bedding and the annual vet visit, but there are other costs you may not have thought about.

Let’s start at the beginning. Those purchasing a pet from breeders, could pay anywhere from $100s to $1,000s. Additionally, there are de-sexing, vaccination, and microchipping costs.

Conversely, there are fewer surprises from rescued cats and dogs. Shelters are overflowing with abandoned pets seeking a second chance and adoptions cost around $200 (puppies/kittens) or anything from $150 (adult dogs/cats). De-sexing, vaccinations and microchipping are included in the adoption fee.

But that’s not the end of it. How much, for example, will your pet grow and can your weekly grocery budget expand to feed another hungry family member? Standard dog food can be around $2 per 700g tin. A large dog may require more than one tin a day in addition to dry food and treats.

In most municipalities, pets must be registered – at a cost, of course. Then you need to think about fencing. Pets must be restricted to your property meaning ensuring your boundaries are securely fenced; cat-owners may need to invest in a cat-safe enclosure.

Regularly exercising your pet and providing toys to keep them mentally stimulated will assist in preventing costly property damage through boredom or escape attempts.

Ongoing health care can be pricey too. According to moneysmart.gov.au, health care estimates start around $3,000, excluding unexpected problems.

Pet insurance policies are widely available and offer cover from $50 per month.

As with any insurance, choose wisely. Carefully read the policy document checking for:

  • Benefits and limits
  • Eligibility/age limits
  • Pre-existing conditions
  • Excess options
  • Waiting periods/discounts

Depending on your pet’s circumstances, you might opt to regularly contribute to a dedicated account instead, ensuring there’s money available when needed.

Reduce costs by keeping your pet healthy and happy through diet, exercise, training and play.

Pet-care while you’re on holiday is an additional cost. Dog boarding kennels charge from about $40 per day (cats about $20). Alternatively, a pet-sitter staying in your home could charge anything from $30 per night.

In recent times household expenses have been attracting more scrutiny than ever from financial institutions. Lenders are increasingly antsy about approving loan applications without seeing a full household budget.

When looking to borrow or renegotiate an existing loan, you must know your position. Your financial adviser will help you work through your income and expenses to determine whether a new family member will fit into your budget.

Pet ownership is a long-term financial obligation, but there’s no denying its rewards. With a pet-ownership of 62%, the majority of Australian households would agree.

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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Frequently Asked Questions About Super

All / 08.05.2019

Frequently Asked Questions About Super

If the ins and outs of superannuation leave you confused, the answers to these frequently asked questions will help you understand the basics.

How much do I need to retire?

According to the Association of Superannuation Funds of Australia (ASFA), a couple requires savings of $640,000 if they wish to enjoy a ‘comfortable’ lifestyle in retirement. For a single, the figure is $545,000.

Due to support from the age pension, a single or a couple can fund a ‘modest’ lifestyle with savings of just $70,000 at retirement.

How is my super taxed?

Broadly, contributions are categorised as either concessional or non-concessional.

Concessional contributions are contributions on which an employer or an individual has claimed a tax deduction.

Non-concessional contributions are made from after-tax income. They include many personal contributions and government co-contributions.

Concessional contributions are taxed at 15% within the superfund, with a tax offset available to low income earners. Non-concessional contributions are not taxed within the fund.

Investment earnings are taxed at 15% in the accumulation phase. Over age 60, earnings in the pension phase, and any payouts from the super fund, are tax-free.

How can I contribute to super?

If you are over 18, employed, and earn more than $450 per month your employer will contribute 9.5% of your ordinary time earnings to super. You can further boost your super by:

• Asking your employer to make concessional salary sacrifice contributions from your pre-tax income.

• Making personal contributions from your after-tax income. Subject to set limits you may be able to claim a tax deduction for these contributions in which case they will become concessional. If no tax deduction is claimed they will be non-concessional.

• Low to middle income earners who make a personal non-concessional contribution may receive up to $500 as a government co-contribution.

• If you contribute on behalf of a spouse who earns less than $37,000 a year, you can claim a tax offset of up to $540.

• A special ‘downsizing’ contribution is available to over-65s who sell a home.

Age limits and work tests may apply to some types of contribution.

When can I access my super?

• When you turn 65, even if still working.

• When you reach preservation age (between 55 and 60 depending on date of birth) and have retired.

• If you start a transition to retirement (TTR) income stream.

• If you face severe financial hardship, specific medical conditions or under the first home super saver scheme.

Who can I leave my super to?

If your super fund allows binding death benefit nominations, you can elect to have your superannuation paid to your legal personal representative. The money will then be distributed as instructed by your Will. Alternatively, you can instruct your fund trustees to pay your death benefit to one or more of your ‘dependents’. Under superannuation law these are:

• Your spouse (includes same-sex and de facto partners).

• Children.

• A financial dependent.

• People you had an interdependency relationship with.

Without a binding nomination, your super fund’s trustees decide which dependents will receive the death benefit. They will be guided, but are not bound by, any non-binding nomination.

How do I make the most of my super?

Superannuation remains, for most people, the best vehicle within which to save for their retirement. However, it can be complicated and there are numerous rules to navigate.

That creates challenges, but it also generates opportunities, many of which can add thousands of dollars per year to your retirement income.

Ready to unearth those opportunities and make the most of your super? Now is the perfect time to 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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Placing your family wealth in trust

All / 10.04.2019

The basic function of a trust is to separate control and ownership. The result of using a trust is that assets are protected and profits are distributed in the most tax-effective way. There is no ‘one-size-fits-all’ type of trust. The trust you use depends on many factors, such as the type of asset or business, financing, income type, marital status, susceptibility to being sued – just to name a few.

Whilst there are many types of trusts the two most commonly used are:

  1. Testamentary trust – set up through a directive left in a will, which takes effect after the will-maker’s death;
  2. Discretionary trust – set up by a ‘trust deed’, which commences during the life of the individual(s) establishing the trust.

Both types allow for income and capital to be flexibly distributed to beneficiaries, while those beneficiaries have no legal entitlement or interest in the trust’s property until the trust deed declares it so.

The trustee is the legal owner of the trust property and is responsible for managing the trust fund on behalf of the beneficiaries. The trustee has a legal duty to obey the terms of the trust deed and to always act in the best interests of the beneficiaries. A trust can operate for up to 80 years in Australia, though it is common to have a clause within the trust deed to allow the trustee the option to wind it up earlier if considered appropriate.

Benefits of using trusts to manage family wealth include:

  • Cost: For a straightforward structure, the costs of establishment are relatively low. Specialist advice should be sought for more complicated family scenarios.
  • Effective family tax management: Income can be directed to members of the family on lower tax rates. It also allows different types of income to be directed to different family members.
  • Simplified regulation: Trusts are less complicated than operating a company structure.
  • Tailoring: Most modern day trust deeds are flexible in their operation and can often cater for a wide variety of beneficiary classes and investments.
  • Geographical flexibility: A trust established under Australian law can operate effectively in every Australian state. Where potential beneficiaries live overseas, specialist advice should be sought to determine the optimal structure.
  • Protection of assets: Under certain conditions, family assets may be protected from creditors in the event of bankruptcy or insolvency.

Due to the taxation flexibility that discretionary trusts provide, the ATO scrutinises these trusts to ensure all transactions are undertaken on a commercial, arms-length basis. It checks that distributions are in accordance with the trust deed, specifically targeting the distribution of different types and amounts of income to individual beneficiaries.

Trusts allow considerable estate planning benefits providing more certainty in how your assets will be dealt with after your death. Many wealthy people in Australia use family trusts to gain some peace of mind that their loved ones will be looked after financially when they no longer can, but you don’t have to be rich to benefit from a well-planned structure.

 

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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Retirement: it’s time to get busy living!

All / 10.04.2019

Many people eagerly anticipate retirement. Others view its approach with trepidation, worried over how they’ll fill their days.

Bob retired from work in his early sixties and, deciding he was way too young to retire from life, downsized his suburban home for a country lakeside retreat. He bought a little boat, adopted a shelter-dog and got busy.

The local volunteer fire service deemed him past firefighting age, so Bob helped by cleaning the station and equipment. During emergencies, he was an important member of the team manning relief centres and distributing food and drink to the firefighters.

At home, he grew vegetables and revisited the hobbies of his youth: re-learning the guitar and painting landscapes. Summer afternoons found Bob and his dog out on the boat. During winter Bob did odd jobs around his cottage.

His children complained that he was never around, but Bob had worked since he was fifteen and had been hanging-out for retirement. He’d planned for it, dreamed about it, and now he was living it.

Australians are living longer; it’s not unreasonable to assume you’ll be retired for 20 or 30 years. Not sure how you’ll fill all those days? We have a few ideas to kick-start your new life.

Learn/Teach something

Do you have skills and talents you can share with others? Are you interested in learning from others in return? The University of the Third Age (U3A) may be your kind of group.

Located all over Australia, U3A groups meet regularly to provide learning and engagement for older people and disabled younger people. Organisers run structured courses with professional leaders or casual knowledge-share sessions conducted by group members or invited guests.

Look up the U3A in your area or visit www.u3a.org.au for information.

Become an Olympic athlete

Return to your favourite sport or learn a new one. Sports like archery and golf are Olympic sports! It’s true, and organisers of the 2020 Tokyo games are considering including bowls as well. Or closer to home, you can begin preparing now to enter the Pan Pacific Masters Games on the Gold Coast in 2020.

Write your memoirs

Everyone has a story to tell – yes, even you! You may think your life is rather ho-hum, but your children and grandchildren might disagree. Many independent publishers will help you produce a beautiful memoir with a short print run, perfect for family and friends.

Community

Feel like giving something back? The Australian Men’s Shed Association is a body that supports the health and wellbeing of men. It’s a terrific organisation for retirees with academic or practical skills to share through events and learning activities. To find a Men’s Shed near you, go to www.mensshed.org for details.

If that’s not your thing, or you’re the wrong gender, consider helping 4-legged friends at your local animal shelter. Love children? What about becoming a “Pyjama Angel”? Full details can be found on the Pyjama Foundation website www.thepyjamafoundation.com. Or check out your community notice board for local opportunities.

If retirement has snuck up and caught you unprepared, think about what you enjoy doing, what your skills and interests are and get busy. You’ve still got a lot of living to do – and finally, it’s all about 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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Financial Advice is not the same for everyone

All / 10.04.2019

Financial planning. That’s for people with lots of money to invest, isn’t it?

Not necessarily.

Sure, investment planning is an important part of financial planning, but underpinning the whole process of creating wealth in the first place is having a good financial strategy.

For many people that strategy is taking each day as it comes and letting the future look after itself; but in a complex and ever-changing world, isn’t a more active approach a good idea?

Each of us has specific needs and desires, of course, but there are a number of common challenges that we need to think about when developing our financial strategies.

Stage of life

Baby boomers (born 1946-1964) are moving into retirement in droves so Gen X (1965-1976) is taking on the mantle of being the great wealth accumulators. For the most part, this generation has their strategies in place: pay down the mortgage, contribute to super, maybe buy an investment property, and wait for the kids to leave home.

Generationally, it’s millennials (1977-1995) who face the greatest challenges in developing a financial strategy. Younger millennials are just embarking on careers and the focus is, understandably, on having a good time. Many feel priced out of the housing market, and while the ‘gig’ economy promises greater work flexibility, this comes with reduced job security and often no employer superannuation contributions. Then there’s the challenge of balancing starting a family with establishing a career. All up there’s a lot to plan for.

Gender

The path to income equality is a slow and frustrating one. In general, over their working lives, women continue to earn significantly less than men. This is largely due to time out of the workforce to look after children.

However, progress is being made, and an increasing number of women are earning more than their partners. Having Dad take time off to look after the kids then becomes a viable financial strategy. On top of that, the gig economy, and technology in general, is opening up more opportunities for stay-at-home parents to earn a decent income.

Relationship breakdown

Sadly, many long-term relationships and marriages end, and the emotional and financial costs can be high.

This isn’t an issue that anyone wants to think about, but is obviously a trigger for developing a new financial strategy. This is particularly important when children are involved, and expert help will likely be needed.

Inheritance

More wealth is being transferred from older to younger generations than ever before, and thanks to superannuation, this trend can only grow.

Receiving an inheritance is often the event that leads many people to seek financial advice. While the focus may be on creating an investment plan, this is an ideal time to look at the broader financial strategy to make the most of any inheritance.

Never too soon to start

The upshot is that pretty much everyone can benefit from having a financial plan. It doesn’t need to be complicated and you can get the ball rolling yourself. A simple savings plan or paying off credit card debt can be good places start.

But to make the most of your situation it’s a good idea to talk to a financial adviser.

A qualified adviser can help you understand our complex financial environment and what you need to know to work out the likely outcomes of different strategies.

Ready to take control of your finances? Give us a call and let’s chat.

 

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 Common Financial Mistakes People Make In Their 30s

All / 10.04.2019

Climbing the career ladder, perhaps buying a home and starting a family – the 30s are an exciting stage of life. However, the decisions made now can make a big difference to future financial wellbeing, and with so much going on it is understandable, even inevitable, that the best decisions won’t always be made. So what are the common financial mistakes that 30-somethings should be alert to?

  1. Buying an expensive car

New cars plummet in value when driven off the showroom floor, and the higher the price tag the greater the fall. Buy with borrowed money and you’re paying interest on an asset of diminishing value.

Settling for what you need in a car, rather than what you want, can add hundreds of thousands of dollars to your future nest egg.

  1. Living on plastic

If you don’t pay off your credit card balance in full each month, you’ll be paying a high rate of interest on the carryover balance. Over time, the growing interest bill makes it increasingly difficult to clear the debt. If not used carefully, buy-now-pay-later schemes can also become something of a debt trap.

It might sound boring, but the antidote is to save up for the things you want to buy, and to avoid going into debt for consumer items.

  1. Forgetting to save

A rule of thumb is to save at least 10% of your income, but saving even a small amount is better than doing nothing. And in your 30s you have time on your side.

For instance, when Nicole turned 30 she started to put away $200 per month at an interest rate of 5% per annum (after tax). By the time she’s 60 her savings will grow to $166,452. If she waits until she is 40 to start her savings plan she will accumulate just $82,207 – less than half!

  1. Focusing only on the money

On the other hand, it’s possible to be too fixated on the money – working too hard, snapping up investment properties like it’s a competition. This may be a hard habit to break, but working on some current lifestyle goals and finding some balance can deliver a different type of reward.

  1. Getting caught up in investment fads

Tulips, alpacas, ostriches, the tech boom, crypto-currencies. Investment fads have come and gone, making fortunes for a few, but big losses for many. It pays to heed tried and true rules such as only investing in things you really understand, and diversifying investments to reduce risk.

  1. Not insuring your most important asset

No, it’s probably not the house. For most 30-somethings your biggest asset is the ability to earn an income. Most health-related absences from work are due to illness or non-work related injuries – things that are not covered by worker’s compensation. Income protection insurance can replace much of the income lost due to accident or illness. However, it’s a complex product so seek expert advice.

  1. Still feeling bullet-proof

Sadly, death and disability can strike at any age. Now is the time to make a Will. Investigate powers of attorney and health directives. If the worst happens, these documents will make it easier for your loved ones to settle your affairs.

  1. Being too hard on yourself

Let’s face it. We’re all human, and we all make mistakes. Unfortunately, if we beat ourselves up about a mistake we have made it may compound the problem. The sour taste of a bad investment, for example, might put us off making a good investment.

That would be a pity because the 30s is a decade of huge potential. Good advice now can help you unlock that potential.

 

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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MLC Federal Budget Highlights (Infographic)

All / 03.04.2019

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What the 2019 Federal Budget means for you

All / 03.04.2019

On Tuesday 2nd April 2019, the Government handed down the 2019-2020 Federal Budget.

The focus of this budget is a plan for a stronger economy and securing a better future. From a financial planning and wealth perspective this is positive news and the changes are minimal compared to prior years, not to mention largely positive in nature.

We have provided a brief budget summary which further explains the budget, discusses the changes and implications.

Please remember that these changes are proposals and may or may not be made into law.

The summary can be found here.

We hope that you find the attached article informative and if you have questions or concerns regarding your personal circumstances please do not hesitate to contact us on 02 6621 8544.

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Federal Budget 2019-20 Summary

All / 03.04.2019

Bryan Ashenden from BT Financial looks at the implications of the 2019 Australian Federal Budget from a financial planning perspective.

If you have questions or concerns regarding your personal circumstances please do not hesitate to contact us at TNR Wealth on 02 6621 8544.

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It’s Easy Being Green

All / 08.03.2019

With more and more people realising the importance of caring for the planet on which we live, it’s not surprising that many are looking for investments that make a positive impact on our environment, our communities, and our children’s future as a whole.

Investor concerns now range from the environmental implications of a company’s activities, to how it treats its workforce and the communities in which it operates, and to how ethically the company is governed.

These concerns are usually wrapped up under the description of Socially Responsible Investing (SRI), or Environmental, Social and Governance (ESG). A number of managers offer specific SRI funds.

Shades of Green

There is a wide range of SRI funds, and they use different methods for weeding out undesirable investments, or identifying desirable ones. For example, some managers use a negative screen to exclude things like alcohol, tobacco, gambling or uranium mining. These funds are sometimes described as ‘light green’. Another form of ‘light green’ fund is those that apply a ‘best of class’ approach. Such a fund might still invest in mining companies, but only the ones with the best environmental record.

Other funds apply positive screens, specifically looking for companies that are trying to make the world a better place as well as generate a return for shareholders. These include renewable energy companies, cosmetics companies that don’t use animal testing, or property companies that specialise in sustainable development. Funds that operate a positive screen are considered ‘dark green’.

Other colours

Green isn’t the only colour when it comes to socially responsible investing. Non-environmental concerns are important to many investors who want to avoid any involvement in companies associated with alcohol, tobacco, gambling or armaments. Corporate governance and social equity issues are also a factor for some investors.

If you are interested in learning more about socially responsible investing, talk to us about the many options available.

Note: past performance is not an indicator of future results.

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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