Are your investment choices working out?
Investing is a major decision and going at it alone could have lasting effects on your future
Trust your investments with proven experience
Accumulation by definition doesn’t happen overnight, it is a gradual and continual increase over time.
We believe one of the most important ingredients for accumulating wealth is planning. Planning to accumulate wealth enables you to work effectively toward your goals. Without planning you risk investing considerable time, effort and resources with sub-optimal results.
From your younger years of trying to save for your first car, a backpacking holiday or a deposit of some form, through to eliminating the home mortgage and providing for your retirement, things can seem daunting in this fast moving and complex world.
Coping with all these responsibilities can become difficult however, by following some simple and yet important ‘tips and traps’ you should be able to put in place a long to short term wealth accumulation program.
You could be surprised at what you can achieve with simple and consistent strategies. We can help you understand the concepts of wealth accumulation through appropriate diversified financial strategies whilst considering your current situation and objectives.
At Total Wealth Management, we assess which strategy or combination of strategies best suit your personal situation in order to achieve your investment goals and objectives.
In addition to the usual considerations; investment risk, asset structure and ownership, debt management, superannuation contributions, insurance, investment selection and diversification, and estate planning, some of the wealth creation strategies we may consider for you include:
- Regular Savings Programs
- Borrowing to invest (or gearing)
- Internally geared funds
Gearing is a strategy which simply means that you borrow money to invest. Gearing can enable you to build your wealth faster than if you relied exclusively on your own capital. You can potentially:
- Multiply your investment profits
- Achieve your wealth goals sooner
- To be successful in the long term, the investment you acquire with borrowed money must generate a total return (income and capital growth) that exceeds the after-tax costs of financing the investment (including interest on the loan).
There are a number of ways you can establish a gearing strategy:
- You can borrow against the equity in your home
- You can take out a margin loan
- You could invest in an internally geared share fund
Tax is inevitable and something we all have to pay, but the big question is… are you paying too much?
Like or hate it, and let’s face it most of us hate it, tax is something we all have to pay during our working lives, and for some during our non-working lives. However, there are numerous strategies to reduce the amount of tax we pay throughout our lives and upon our death.
These can range from simple to complex strategies.
At Total Wealth Management, we work together with your chosen taxation and estate planning professionals to ensure you have the right strategies in place in order to reduce the amount of tax you pay during life and at death.
Some tax minimisation strategies we may consider for you:
- Structuring the ownership of your assets tax effectively
- Tax effective investing for children
- Borrowing to invest
- Salary sacrifice and/or salary packaging
- Tax deductible contributions to superannuation
- Managing super contributions within the caps
- Super contribution splitting strategies
- Transition to retirement strategies
- Managing tax on redundancy payments
- Structuring or transferring ownership of insurance to make premiums more tax effective
- Maximising the CGT small business concessions
- Maximising your estate by reducing tax paid by beneficiaries
- Claiming tax back from your super fund upon death – anti-detriment payments
- Assisting with tax planning before, during and after you become an Australian non-resident for tax purposes
Superannuation is the one account that’s with you when you’re:
- working to save for retirement
- moving towards retirement and wanting to continue to grow your super, and
- looking to protect your retirement savings.
Choose the right investment option
According to the government’s review of Stronger Super, 80% of Australians with super simply use their employer’s default fund. But for many of us, the default choice is unlikely to be the right one.
Over time, your investment profile including your appetite for risk may change. So it’s essential to ensure that your super is appropriate to your current needs. A financial adviser can help you determine the best strategy for your current stage and make a plan for what lies ahead so you can feel confident that your super is set up to come home strong.
If you’re younger with plenty of time before you retire, you might prefer a high growth option that is likely to deliver better returns over the long term. As you near retirement, you’re likely to prefer a more conservative option that focuses on keeping your hard-earned savings safe.
Review your long term strategy
If you’ve been cruising along with the pack in recent years, reviewing your super can help you break away and get your super working harder for you. Frequent changes to super regulations can mean that there are new opportunities to maximise your super, or could mean your current strategy may no longer be appropriate.
Spreading my super across a couple of different investment options is a good thing – like not having all my eggs in the one basket