Total Wealth Management > Archived
financial advisor

What can a financial adviser do for me?

/1 Comment/in /by

You might be saying to yourself;
• I don’t have enough money or assets to get financial advice, or
• I don’t have enough time to see a financial adviser, or
• Is it worth getting financial advice, or
• What exactly does a financial adviser do?
These are all reasonable objections an adviser would experience from roughly 60% of those Australians who don’t already have a financial adviser. Even those people who have had a financial adviser for many years might only have sought advice on one subject such as life insurance and may not know the extent of the services that their financial adviser can provide them.

Why is this the case?

Let’s look at a couple of the objections why people don’t seek financial advice.

“I don’t have enough money to see a Financial Adviser”

A common reason most Australians don’t seek financial advice is because they believe they don’t have enough money or assets in order to justify seeking financial advice.

While its true that a financial adviser helps some people who would be considered wealthy become even wealthier. The bigger truth is that the majority of clients the average adviser has (that’s me) is made up of everyday Australian’s with ordinary jobs earning average incomes… sound like you?

What I am trying to say here is that you don’t need to already be wealthy to seek financial advice.  In fact there is a good chance that you will derive a greater benefit from financial advice if you are not already rich.

You are more likely to become wealthy, and more importantly stay wealthy with help from a financial adviser, rather than going it alone.

One of the best attributes of a good financial adviser is they “stop clients making silly mistakes” i.e. stopping clients towards the end of the GFC from moving their money out of their current investment option into a more conservative option. When asked why, most responses were because they didn’t want to lose anymore super…if you don’t know why this could have been a costly mistake then you certainly needed to seek the advice of a financial adviser.

“I don’t have the time to see a Financial Adviser”

A second reason for not seeking financial advice is the “I don’t have time” excuse.
We will always find time for something we think is important, so the real reason for many people not seeking advice is not lack of time, it’s that they don’t think planning for their future is important enough.
Let’s face it what’s more important?
• finding enough time to catch up with a mate for a beer or a best friend for coffee or
• Spending the same amount of time discussing your financial future?

Be like myself and the majority of my clients find time to do both as they are both important.
Or even better, make an appointment to discuss your financial future with me and I’ll have that coffee with you!

TWM Golf day to raise funds for The Leukemia Foundation

/0 Comments/in , /by

Total Wealth Management $10,000 hole in one Golf Day for

Team J and J  raising funds for the Leukaemia Foundation.

       WIN $10,000

…FOR A HOLE IN ONE on the par 3  — 10th

 

     The major prize is a round for 4 at Brookwater Golf Club.

Plus   golf prizes -nearest to the pin and longest drive, also raffle tickets sold on the day for prizes including  vouchers,  dinner and  accommodation…

       ….so why not join us for a game?

Where : Ipswich Country Club,  1 Samford Rd LeichhardtICCPic

When : Saturday April 30th

 Time: Normal members from 7 am or

             TWM Teams from 12 pm

Competition : 2 person Ambrose

 Cost : $20 each

  Carts : $25 extra (book with pro Phone: 3812 0488)

 

Book now by calling Chris Howard on 3281 1226 or by email – chris@totalwealth.com.au

In our 2015 round of grants, the Leukaemia Foundation is investing almost $4 million of donated funds in an  additional 14 promising blood cancer research projects, taking the total number of research projects currently being funded, to 49. A diagnosis of leukaemia, lymphoma, myeloma or a related disorder can have a   dramatic impact on a person’s life. At times it can be difficult to cope with the emotional stress involved. The Leukaemia Foundation’s support services team can provide you and your family with much needed support during this time. We cherish any support you can provide to us on behalf of the people and the families affected.

 

 

www.moritz-heffes.com.au

Financing your asset purchases

/0 Comments/in , , /by

For most businesses, the decision for financing your asset purchases is very clear cut as it boils down to a choice between a lease or a chattel mortgage. There are, however many businesses who may find a short term rental contract the best option available. For businesses that may not qualify for traditional bank lending or have specific needs, short term rental finance can offer many benefits, please consider the following list:-

asset purchases

  • Start up equipment finance when banks don’t want to know you
  • No capital outlay, keep your cash for more important things
  • 100% tax deductible monthly payments
  • Fast approval – 24 – 48 hrs / easy application
  • No financials under $50,000*
  • Maxed out capital expenditure budget
  • Choices available at the end of the 1 year term

Once the rental term is over, the business has 4 choices:-

  1. Hand the equipment back as it has served its purpose
  2. Continue to rent
  3. Buy the equipment outright and get a 75% rebate on all the rental repayments made
  4. Switch to a ‘rent-to-own’ plan for another 3 years where the equipment is owned at the end of the term

CostVSFlexThe flexibility of these options along with the net cost to the business is something that should not be over looked. Lease and chattel mortgages can tie businesses down for long term periods and reduce flexibility. On the other hand, equipment hire is very expensive and may leave you open to availability and weather issues. Consider the adjoining chart.

The rental option is a pathway to ownership while at the same time presenting you with a very economic alternative to bank finance, particularly if your business fits into one of the categories highlighted above.

For example, a $30,000 service van for your business would rent for $355 per week, after 12 months the buy back price on this asset would be $20,036. Lets consider each of the end of term options mentioned above:-

  1. Hand the equipment back as it has served its purpose – The total rent paid would be $18,495 and the tax deduction claimed on these rental payments for a company would be approximately $5,550 (30% tax rate). The net payments would total $12,946, therefore by adding the end of year 1 purchase price to the net payments the rental cost of ownership would be $2,157 or $41.50 per week against having purchased the van outright. The revenue and profit generated by the asset should be well above this cost.
  2. Continue to rent – If your contract ran for a few more months, you could still exercise the above option at the completion and each rental payment would continue to add to your rebate total if you decided to purchase the asset.
  3. Buy the equipment outright and get a 75% rebate (net of tax) on all the rental repayments made – Net of tax requires the deduction of 10% input tax credits claimed from the 12 month rental figure before multiplying the total by 75%. This is then subtracted from the purchase price and tax is added back on for sale back to your business at a price of $20,036.
  4. Switch to a ‘rent-to-own’ plan for another 3 years where the equipment is owned at the end of the term – rental payments are reduced by approximately 30 % during this period.

*Each application is assessed on its own merits

For more information on financing your asset purchases, please contact Chris at TWM Finance on 07 3281 1226.

health insurance

Health Insurance in a Word: OUCH!

/0 Comments/in /by

Health insurance premiums will go up – again – on April 1st, between five and six percent according to estimates. OUCH! That’s a big hit to budgets and inevitably leads many people to ask: what am I paying for, have I got the right cover, and can I find a cheaper or better policy?

Health Insurance

healththenandnow.com

All perfectly sensible questions but trying to find answers yourself is like trying to solve a Rubik’s Cube – it’s complex and most of us give up before we find the solution. So what to do?

Total Wealth Management are delighted to say we can help our clients review their health insurance to make sure you have the right policy at the right price for your needs.

We’ve established a referral arrangement with ItsMy Health*, a company that specialises in reviewing and comparing health insurance polices. There’s no cost and no obligation and it will help you answer the questions that probably nag you every time you make a claim.

To review your health insurance and go into a draw for a BOSE Speaker# – simply click here, provide a few details and a representative from ItsMy Health will call you on our behalf. Easy as that!

If there’s a better policy or a cheaper policy that meets your needs, they’ll recommend it to you and handle the paperwork if you decide to swap. If you’ve already got the best policy at the best price, they’ll tell you. You can’t ask more than that.

There’s a good chance it’ll ease the squeeze on your budget and get you a better health insurance policy to boot.

For more information call our office NOW on 32811226!

Renting VS Buying

Renting VS Buying, it’s quite simple really!

/0 Comments/in , , /by

To help answer the renting VS buying question, I will never forget the feeling of handing over 7 x $50 notes each week to our real estate agent/landlord back in 1987 when I rented in Gosford. For my partner and I, this was enough to motivate us to get a deposit together to purchase our first home. If you feel the same way then read on!

These days you don’t get the same feeling of ‘giving your money away’ as we did back then as we didn’t have ‘the internet’, now digital banking creates a false impression so that the amount you are paying does not feel like it is that much. Take my word for it, pay your rent with cash and see how much it hurts.

rent vs buy image

albaconsol.com

Renting VS buying largely comes down to convenience and cost. In order to live close to the city or even the suburbs, you have a much greater demand due to the close proximity of everything; therefore the property prices are going to be much higher. The only option that may be left open to you is to move further out. You might think that this is not an option, so I guess you first need to weigh up the costs associated such as fuel/public transport and time. That block 20 kilometers out of town is likely to be half the price of the one in town; that $100K – $200K is a lot of fuel and time, especially considering that your first place is a stepping stone to your ultimate ‘dream home’.

Other then the monthly mortgage, which is often a similar amount to what you are currently paying in rent, there are also many costs associated with acquiring your first place including; Stamp duty, inspection reports, rates and maintenance. If you are considering making the switch, it is essential that you have a plan to ensure you have considered all of the costs involved.

If you stop and truly consider the pros and cons of moving further out, you might be surprised at the benefits of ownership living out of the city and leaving behind the renting VS buying dilemma. I once had a 2 hour commute each way to work! Not much fun at the time but we did see some nice growth in the property we purchased at the time.

These points, of course are the down side of getting your own place, on the other hand the upside is quite appealing. Consider the following points:-

  • A place to call your ‘own’, your own block of dirt & the pride that goes with it
  • An investment that will hopefully grow in value over time
  • A more permanent residence with out leases and continual moving
  • No increases in weekly rent (currently interest rates are low or falling)

Lets face it, the longer you put it off the dearer it will get. History has shown that property values are likely to climb steadily higher, so if you look ahead 5 years, would you rather be renting still or settled into your own place? For me, renting VS buying is an easy decision!

If you would like to compare the options available to you give me a call at TWM Finance for help.

By Chris Howard, Mortgage broker at TWM Finance

mozo.com.au

GEN-Y – Redefining the Australian Dream

/0 Comments/in , /by

GEN-Y are redefining the Australian Dream because the Australian dream was simple when our parents were young.

Austdream

deakin.edu.au

They’d get jobs in a handful of sectors, buy a humble brick home in the suburbs for less than $100,000 and have a couple of kids. Four television channels and board games provided entertainment. On weekends friends were invited around for barbeques. To communicate with people outside the home people used telephones that were connected to the wall. Our parents certainly couldn’t have predicted that their millennial children – born between the early 1980s and mid 1990s – would grow up to be digital natives whose own aspirations would be entirely different. After spending super chilled summers running around under the sprinkler in the backyard, we must come to terms with the fact that a bit of lawn and enough room for a Hills Hoist may no longer be a given when we have families of our own.

According to Prof. Sgro, we’re better educated than our parents, so although we may appear frivolous at times, he’s sure we’ll wind up with more than Instagram snaps of our travels when we get old. ‘Culturally and socially we’ve been sold on the idea of having a house and security,’ Prof. Sgro says, but adds that the next generation of investors will think beyond the picket fence and put their income into profitable activities, commercial properties or shares. He suggests that bright digital natives are more entrepreneurial. We’ll use our skills for start-ups and invest in business ventures. ‘Gen Y is mobile. They have better things to do with their money than have it sitting in a house,’ he says.

Economist Brian Haratsis suggests that millennials shouldn’t rule out owning a home entirely, in the process of GEN-Y – Redefining the Australian Dream they may find it may take longer to get into the market than it has in the past. ‘The big issue now is your deposit,’ he points out. ‘If you look at what the future repayments are, it’s not that bad compared with the past. It’s thinking creatively about how you get your deposit so that you can enter the market.’ He says if you need $60,000 for a deposit and can’t save it then you should get into the share market. Safer bets like BHP, Coles and Woolworths will enable people to accumulate wealth over time. ‘As you move through your financial life those shares may form part or all of a deposit for an investment,’ he explains.

It seems that uncertainty is the only certainty for GEN-Y’s redefining the Australian Dream, but if any generation is equipped to handle it, it’s this one.

 

 

Total Wealth Management Office Relocation

/0 Comments/in /by

After 7 years at the Ipswich Corporate Centre, Rod has finally decided to relocate our office to 11 Lawrence St North Ipswich. We are all looking forward to the new air conditioning, no stairs or lift and plenty of car parks. We will be shifting during week commencing December 14th and will spend time over the Christmas break to set everything up correctly.

With all the changes happening we will continue to keep you posted via our newsletters along with this web page. We hope to see you in our new office soon.

 

What stage of the Investment Cycle are we in?

/0 Comments/in , /by

A major concern for many involved in investing is our location in the investment cycle. There are those who are starting to predict the worst and worry those around them. After doing a bit of research we feel these fears are unfounded. We are six years out from the Global Financial Crisis, since then global shares have increased by 159% while Australian shares are up 91%. All in all things are looking good. Let’s have a look at the cycles and our current position within them.

investment cycleCurrent Market Cycles

Some believe that the current bull market has run its course and we are overdue for the next bear however there is no set rule for the length a bull or bear can run. While the current bull has been running longer than the average it is by no means the longest. Depending on one’s definition of a bear market it could be seen that there was a bear market in America in 2011 which would make the current bull well below average.

Australia and the global market definitely had a bear market in 2011 and so these markets are currently running below average for a bull. With the definition so widely open to interpretation it’s easy to see why some investors are starting to panic. Many, however, feel that the current bull is nowhere near its peak and the threat of a bear market is a distant concern.

The Phases Of A Bull Market Within An Investment Cycle

It is generally agreed that a bull market has 3 phases. Let’s investigate these phases of the investment cycle.

Phase 1: Economic conditions are weak. Investors are lacking confidence. Interest rates are low, as are bond yields. The experienced investor sees a great opportunity.

Phase 2: Economic growth is improving in this part of the investment cycle. Profits are strengthening. All investors are starting to become optimistic.

Phase 3: Investors are beside themselves! With strong profit conditions shares become overvalued. Inflation becomes a problem. The banks react by using their tight monetary policy which pushes bond yields higher. This combination of over-valuation, loaded share investors and tight monetary policy exhausts the bull and starts a new bear market.

It typically takes 3-5 years to complete the bull market phases, but as we mentioned before the market is unpredictable and the bull or bear can last any amount of time. A bull will run until it gets tired!

Is There A Bear In The Woods?

To see if we have a bear creeping up on us we need to look at current market statistics. The current share market valuations are good, shares look expensive but once the earning yields are considered shares are still cheap, as are bond yields.

The global economy is growing well. It does appear to be doing so slower than usual but the slower it goes the longer the recovery period. This slow pace keeps us away from a bear market.

As it currently stands global monetary conditions appear positive and inflation is not yet an issue. Investors are feeling good, but that crazy amount of excitement seems to be a long way off. Australian investors are currently avoiding the share market and are opting for bank deposits.

Put simply the signs of an impeding bear threat are not there. Everything is riding along slowly but surely and the threat of a bear suddenly creeping up does not exist.

Investing Now in the Investment Cycle?

Currently US shares are expensive while most other markets are cheap. If you’re looking at investing at home, Australian shares should do okay, there are better opportunities abroad.

Growl?

In closing, it looks like we won’t be hearing the growl of  bear for quite some time. There is no need to worry about the investment cycle as none of the signs that indicate and impending bear attack are present! Happy Investing!

home prices

The Home Prices And Interest Rates Of Australia

/1 Comment/in , /by

It comes as no shock to hear that Australian properties are overvalued. The Reserve Bank has cut its interest rates with further cuts expected. This is as a result of numerous things including the Australian dollar remaining high, commodity prices falling lower than expected and the outlook for business investing falling. There is concern that further rate cuts will push house prices higher which may result in a collapse. Is this concern legitimate?

Helpful Construction

An economic uprising in Australia almost always involves housing. The lower interest rates drive housing demand and boost consumer home building. Plus more approvals are being given than ever before.

Hot Property

Are low rates just adding fuel to the already overheated property market? House prices are 14% above trend and the reason for this is highly debated. Low interest rates play a role but constrained supply is also a factor. There is a low vacancy rate and a short coming in supply of houses to the tune of 200,000 since 2001. Sydney is the main focus for property statistics, the rest of Australia is not as high.

Investing

Housing as an investment is a good idea and any serious investor will have housing under their belt as well as shares. Since 1920 housing has returned 11.1% per annum. This is not far behind shares returns, having both options is a positive move and also offers diversification.

In the short term we see low interest rates bringing gains in home prices, however this depends on location. The long term outlook is messy at best, housing is so expensive and has very low yields.

In the end there is no single reason that house prices are being pushed so high however it is clear the RBA is watching their actions carefully. One can only hope the prices become reasonable in time and must invest wisely.

Recent downturn in the stock market

/0 Comments/in , /by

While investors have been busy arguing about whether or not we are due for a bear market or not the stock market has taken a downturn. Could this be because some investors are worried we could be headed for recession? Who knows? Let’s take a look at what’s been going on.

During May we saw both the share market and the Australian dollar drop. This was a result of the Australian Bureau of Statistics releasing a report that showed weak business figures. Capital expenditure fell by 4.4%  from January to March which came as a shock to many as it was expected to rise by at least 2%.

The outlook for business investment for the next financial year is not good as business are expected to invest 25% less than in the current financial year.

 

While the current outlook may not be positive the statistics could be wrong, an upturn was expected early in 2015 and it didn’t happen. Who knows if business investment will drop for sure? Either way, this is what is going on in the stock market right now. Happy investing!