Financial adviser ipswich

Understanding the Value of Advice- Why Get a Financial Adviser?

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For those who have never engaged the services of a financial adviser it can be difficult to understand how an adviser can deliver valuable advice, year in, year out.
Simply, financial advice is much more than picking a managed fund or recommending a superannuation investment. Financial advice is about delivering overall value to the client – both in terms of financial and non-financial return.

To understand how an adviser can add value, it is helpful to understand a few things financial advisers can do for their clients.

Knowledge and Experience
One of the biggest advantages of using a financial adviser is the knowledge and experience you can draw upon to make financial decisions. Financial advisers are specialists in a wide variety of financial matters, including investments, superannuation, insurances and estate planning.

But just as important, they are experienced in guiding clients through complex decisions, hard times and periods of uncertainty.

For example, they ensure their clients don’t make silly decisions, like panicking and moving all their super to cash, every time the share markets crash. They do this by helping their clients understand themselves better and make the right decisions for themselves. A great financial adviser educates as well as advises.

Choosing the right investments
A financial adviser can help you in picking the right investment. But, what is the right investment?

The right investment is one that suits your risk tolerance, your timeframe, your previous investing history and your end goal.

Because investing can be both an exciting and scary venture it helps to have a professional guide you through the process. An adviser can be invaluable when they guide you through market corrections or periods of uncertainty. They can educate you on the different asset classes and how these perform through different economic cycles. They make sure you are not taking unnecessary risks to achieve your goals.

They can give you confidence to invest in assets you may not have considered before, because you lacked knowledge (and confidence) in picking the right investment.

Understanding Superannuation
Superannuation can be a very complicated area and without a solid understanding of how super works, it can be both an extremely time consuming and administrative process. Financial advisers help you through this process by keeping up to date with changes in legislation and providing a team who can assist in all of your superannuation matters.

A great advice team can remove the confusion from super and explain it to you in a simple manner. Even better, they can manage all of your paperwork and save the amount of time you spend chasing up super funds.

Finding the right insurance policy for you
Like super, insurances can be quite complicated and the paperwork involved in implementing a quality insurance plan can run into many, many hours. Financial advisers spend a lot of time researching and reading insurance Product Disclosure Statements – the long document that outlines what the policy will and will not payout for – so they can provide advice that is relevant and appropriate for you.

Now, you might be thinking “I don’t need help finding the right policy as they are all the same. So just give me the cheapest policy, and I’ll be fine.”

Unfortunately, you would be wrong!

There can be many differences between the benefits and features provided by each insurance company and this makes it vital that you get the policy that best matches your needs.

For example, if you are single with no dependants then life insurance probably isn’t essential for you, but a disability insurance policy is probably going to be appropriate.

Perhaps you have a family history of cancer -if so you would want to get the policy that has the Best cancer definitions.

Probably more importantly though, financial advisers have firsthand experience dealing with the insurance companies they recommend. This includes the claim – which can be both a confusing and stressful process for those who are not accustomed to dealing with insurance companies on a regular basis.

financial adviser ipswichRetirement Planning
Retirement planning varies from client to client. No two people have the same idea of what makes a great retirement, when the best time to retire is and how to manage their finances once they stop working.

This is where a financial adviser’s experience is highly beneficial.

While a good financial adviser can get the right superannuation structure in place and maximise Centrelink benefits etc., a Great financial adviser works with their client to transition into retirement and then guides them through the retirement years, ultimately assisting them in the transition into aged care .

People all react differently to retirement – after all retirement is effectively the cessation of full-time gainful employment and this leaves a substantial amount of spare time in one’s week.
Because of an adviser’s experience in helping clients make the financial adjustment to retirement, it is not uncommon for them to discuss the non-financial aspects of retirement as well.

Considerations such as what a client plans to actually do in retirement, the type of lifestyle they wish to live in retirement and what they want to happen to their estate on their passing are all common conversations that are had with a financial adviser.

Planning for Beyond Retirement
An often-missed consideration of how an adviser can add value is the advice they deliver in relation to estate planning. Being a sensitive matter, estate planning can often fall by the wayside. However, as part of the advice a financial adviser delivers, estate planning is a subject matter that is often brought to the attention of the client.

An experienced adviser is able to raise potentially difficult issues and help the client determine what they would like to happen to their estate, such as who is the most appropriate person/s to appoint as executor. They can also help you in talking through your wishes with other family members/beneficiaries.

Why seek advice from a Financial Adviser?
Financial advice is more than picking the right shares or recommending an insurer. It is about finding the right financial path for clients and delivering that through a financial plan.

A great adviser shares their knowledge and experience with their clients, so that they don’t have to learn by making mistakes themselves. A great adviser provides more than a financial return, they also add a non-financial return by being a sounding board to the client and allowing the client to make educated decisions for themselves.

This is the value of advice from a financial adviser.

income protection insurance

What is Income Protection?

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As part of delivering advice to clients we are frequently asked about the various insurance covers we recommend. We have put together a list of our 7 most common questions about income protection, to help you understand it a little better.

Is Income Protection Tax Deductible?
The premiums you pay for your income protection policy are generally tax deductible, if they are paid by you personally. However, if the premium was paid for from a business account or from a superannuation fund, then the premium would not be tax deductible to you personally.
Importantly, because the premium is tax deductible the income you generate from any policy claim is considered as taxable income.

income protection insuranceWhy do I need income protection – I have sick leave (and what about the Disability Pension?)
Sick leave should always be considered as part of an income protection policy. For example, if you have built up a lot of sick leave (and annual leave/long service leave) this can be taken into consideration when the policy is recommended to you.
However, while you may have sick leave/annual leave for the short term, not many people have sick leave that pays them until they reach age 65. This is where Income Protection is beneficial – as it can pay out for many years after you cease working as a result of illness or accident.

As for the disability support pension – this amount is very minimal and it is unlikely this will be anywhere near what you received previously if you have been working full time for a number of years. As at October 2016, the maximum disability pension for a single person, including the maximum Pension and Energy supplement, was $877.10* per fortnight or $438.55 per week. For many people this amount will not be sufficient to meet the ongoing expenses of the lifestyle they currently live.

Can I hold it in my Super Fund?
It is possible to have your income protection held in a super fund. While your premiums will be paid for from your fund, the policy you hold may not be as comprehensive, compared to if you held it personally. The downside here is that it is harder to successfully make a claim.
However, there are options available to get the best policy and have a portion of your premium paid for from your fund.

Why should I supply full medical history when applying for the policy?
Because you can claim on your income protection for both accident and illness most insurers require an understanding of your medical history, before insuring you so they can offer you the right premium in line with your health.

Some insurers do not ask for this information upfront – leaving it until you make a claim. This means you may find out the policy is no good – after it’s too late.
Our suggestion is you complete the full medical questionnaire when applying for the policy and you know where you stand in relation to what you are covered for and more importantly what you are NOT covered for

How can I reduce my premium?
There many ways to reduce your premium and it comes down to a discussion between you and your adviser. But there are common ways to reduce your premium.
1. increase your waiting period (the time you have to be off work before claiming) or
2. decrease the benefit period (time the insurer pays you after making a claim).
3. Reduce the amount you are covered for
You can ask your adviser to shop around for a better premium with another provider. You can also look at having a portion of your income protection in your super fund – but don’t forget this will erode your retirement savings.

Do Insurance companies actually pay claims?
One of the important roles of an adviser is to monitor which companies are performing well and paying claims. After all, an adviser who recommends a particular company is in effect putting their reputation on the line. No adviser wants to see a legitimate claim knocked back.
Experience suggests that claims do get paid, and often. Unfortunately, stories about non-claims are common in the media, but rarely are these stories countered with the number of claims that are paid. However, most reputable insurers do publish their claim statistics, to give advisers and consumers an idea of how much has been paid out in the past 12 months. In recent years the larger insurance companies have EACH paid out in excess of $800 million every year in claims for life/TPD/criticall illness and Income Protection insurance.

How much cover can I get?
As a rule, you should be able to get up to 75% of your income insured without too much hassle. It is even possible to get your super contributions insured as well, bringing your total insurable income to around 84% of your salary package. If you have extra things such as a car or other bonuses an adviser can talk to the insurer for you and negotiate the maximum insurable amount.
If you own a business you may even be able to cover some of your regular expenses, such as utilities and rent.

 

Sources
*https://www.humanservices.gov.au/customer/services/centrelink/disability-support-pension

 

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aged pension no holiday

The Age Pension is No Holiday

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I took a holiday a few weeks back and while checking my emails I saw the latest report on how much it costs to live a comfortable retirement. In order for a couple to live a comfortable retirement, the report says they need an income of approximately $59,160 each year.

Now, the figure of $59,160 didn’t surprise me all that much, given this has been the standard for many years, but while on my trip it struck me how the cost of living and doing those extra things is starting to creep up more and more.

What really struck me was how something as simple as a two-week holiday in Australia was starting to be really expensive. Case in point, I calculated that for a husband and wife to do a scenic driving tour around somewhere like Tasmania or Victoria could easily end up costing up to $6,000!

Have a look for yourself;

aged pension no holidayThe interesting thing is that none of those figures seem extravagant. A hotel for $150 a night is not going to be terrible – but it certainly isn’t luxury 5 star.

Now, fast forward to your retirement and ask yourself – how does $6,000 fit into my budget as a retiree? Is it easily afforded? Does it cause a major black hole? Or can you afford to add an extra week to your holiday (or even go overseas)?

A determining factor for your response will be whether you are fully self-funded, fully reliant on the Government Age Pension or a combination.

Expanding on this, I have put 2 charts together, so you can see how much this domestic holiday would take up of your pension income – based on if retired on the Age Pension Solely or with sufficient capital to achieve a comfortable income in retirement. (For ease I have based our assumptions on couple rates).

aged pension

Overall, it doesn’t look too bad. Until you start to look at the numbers.

See, on a comfortable retirement, whereby you are funding your retirement income through a combination of Age Pension, Super savings and other income, you are looking to still have $53,020 left to meet your ongoing expenses – that works out to be about $1,019 per week.

Comparably, if you were to go it alone on the Age Pension – you’re left with $28,242 – or about $543 a week – for two people.

Put another way – the maximum Age Pension is approximately $1,322 per fortnight for a couple. In order to save for a $6,000 holiday that couple must set aside between 9 and 10 weeks of Age Pension Income – for a two-week holiday.

So, what’s the point?

Firstly, a holiday does not have to cost $6,000. After all there is camping, there are motels, there are day trips and weekends away. However, retirement is about getting on the open road and exploring – doing things you’ve always wanted to do.

It turns out though, these things cost a little more than we might imagine.

The point then, is that if you foresee your retirement being filled with adventures and trips away – you would do well to have a plan in place to ensure you are not surprised by the cost of things, when you do eventually retire.

Yes, the age pension is available for many retirees and it is likely to play an important role in financial planning strategies for the foreseeable future – however if you want to live a comfortable, rather than a modest retirement, you need to take a hold of your retirement plan.

After all the Age Pension (alone) is no Holiday.

Sources

http://www.superannuation.asn.au/resources/retirement-standard

https://www.humanservices.gov.au/customer/enablers/payment-rates-age-pension

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What exactly does a financial adviser do?

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One of the main reasons that most ordinary Australians don’t approach a financial adviser to assist them is that they don’t know what we do.

Well I’m about to tell you what we can do for you.
Lets start by saying that we want to work with you to help you create and protect the lifestyle you want, whether that is now or in 15 years time.
At your first meeting with any good financial adviser will build rapport getting to know you and what you would like to achieve. This meeting is all about determining whether I can help you, and because most financial journey are a long plans we need to be able to get along. We are your financial partners after all.

During this meeting we will discuss some /all of the following depending on what stage in life and what you want to seek advice on;
• Your future goals and objectives are discussed
• Your existing super and investments
• Your existing personal insurances
• Your existing wills or Estate plans along with the relationships and health of your children/grandchildren and parents
• Your cashflow and employment situation
• Your existing debts
• We explain the financial planning process, and some of the reasons why we prepare a statement of advice ( SOA) which needs to be presented to you before we can implement anything that we recommend.
• Our initial and ongoing fees

Build a future with a financial adviser

After the first meeting with a financial adviser you decide whether you want to build your financial future with us. If you do then it’s onto the 2nd meeting…….. this is where we delve a little deeper into your situation to collect as many facts about your current personal and financial position, as well as outlining your future goals and objectives in detail.

Some of this information I might have already gathered at the initial meeting or I might have given you some homework to gather for this meeting such as; completion of a household budget or thinking about those big ticket items you want to spend money on such as house reno’s, car upgrades, kids education or that overseas holidays.

We then go away and gather all the information from external sources. We sit down and discuss the some of the strategy options we could use to help you achieve those future goals and objectives. This will also require us to research different products and possibly obtain insurance quotes. During this process we may also need to speak with you again to clarify or discuss some new information that we have become aware of.

financial adviserThen we commence the process of preparing the Statement of Advice (SOA).
First we enter all the information you have provided us with into our specialised software. This enables us to determine the best outcome for you as we are able to compare all the strategies/options we are considering for you. With this software we can look at the effect these strategies will have on over your financial lives (for 25-30 years), including cashflow, taxation, super and investment balances and Centrelink benefits.
The next stage involves us preparing the SOA for presentation
The 3rd Meeting with you is generally to present the SOA which outlines
• Our recommendations
• Any other strategies we may have considered and why we didn’t use them
• How these strategies will help you achieve your stated goals
• Our fees and the fees of any products we have recommended

At the conclusion of this meeting you can either agree to proceed with our recommendations or take the document home to read over. Our recommendations aren’t acted upon until you have signed the appropriate “authority to proceed”.

It’s now that we assist you in completing any required applications and putting those recommendations into place. It’s at this time something happens.
You’ve created a better financial future for you and your family. That’s about all you need to do, we will look after your applications from here.

We submit all your paperwork required, we follow up your applications with the product providers and make sure they are actioned correctly. We have no time-frame on how long this will take to be completed but you can rest assured that during this process we will keep you informed along the way providing you with updates on things such as; the stage of your applications, ensuring your super fund rollovers are processed and quickly, if money has been received or expected to be deducted, if and when you should expect to receive payment from any income product, if an insurance application has been accepted or if you are required to do any medical tests.

The office staff are as equally important to the whole SOA process as the financial planner. They have strong relationships with companies through the industry, they assist with the implement your recommended changes being done the right way and with you doing as little as possible. Yes, that is right, as little as possible.

How often will you be in touch with your financial adviser?

The next contact with me, your Financial Adviser will usually be at your first review usually 6 or 12 months after we have presented the SOA. This review process will continue with your approval and consent to any fees.

We have now started our long term relationship. This will require commitment from both you and us. Your commitment is to stay true to the long term goals and agree to meet with us on a regular basis. We will commit to work hard for you doing all of those financial calculations most people find tedious (we don’t, it’s what we do), dealing with all the different product providers and translating all of that financial jargon into simple terms that you can easily understand.

We maintain up to date with product, legislative and strategy changes by meeting ongoing industry education requirements.
While it is important to set up our recommendations correctly it is just as important that we continue to meet and review the investment/ superannuation and insurances you have. Reviews will take into account any changes to your personal and financial position, changes to your original goals and objectives, changes to any government laws and/or legislation and last but not least the current state of the global financial and geopolitical situation.

There you have it………and you thought we only looked after life insurance.

Give us a call for a free initial consultation and let us take some of the weight off your shoulders as you negotiate your way through life. Remember, what most people find time consuming, tedious and annoying we do every day, all day. So let an experienced financial adviser discuss what we can do for you.

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financial advice

Is it worth getting financial advice?

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In short, a Financial Adviser can give you the right financial advice once they take into account your goals, however big or small they might be and work with you to make sure your hard earned money works hard for you in return.

You may only have your family home as your main asset and are looking for your first investment property. A financial advisor can help make sure that you structure the investment property purchase correctly to maximise your returns.

financial adviceFor the younger generations, once you start making money it is wise to have a management plan in place with the right financial advice. While you might not have a lot of money yet, you do have time on your side. Regular small investments helped by the power of compounding interest will make you money while you sleep.

But there is a difference how effectively compounding will work for you based on the financial decisions you make today. A few years of smart saving can lead to wonderful things in the future, or not… if you don’t get the right financial advice.

Here’s a very simple example to demonstrate this point.
If you invest $50 a week for 25 years at a 4% interest rate with an initial deposit of only $5,000 you will end up with $125,206. This same investment plan, but with a better return of 8% sourced by a financial advisor will make $244,164 for you, which is practically doubling your return.

We consult a doctor when we’re sick, a mortgage broker when buying a home, a travel agent when planning or going on holiday. What do all these people have in common? They assist you in making big decisions about how best to spend that hard earned money. I’d certainly consult a specialist for that.

If we get advice for things that cost money, doesn’t it make sense to get advice on how to get the best out or money as well?

Whether financially you are just starting out or nearing retirement, the time/money dilemma is something that can be resolved easier with a financial advisor. At any stage of life, financial advice can help improve your circumstances now and the outcome of your future.

Even if you are on a low income or just starting out, financial advice is worth investing into. Seeing your goals set out and how you will be able to achieve those makes your financial journey worth while. Especially once those goals are achieved.

People who have sought assistance to plan for their financial find themselves achieving those goals they never thought they could. One of the most common comments we get is; I don’t think I can retire yet, I don’t have enough money. Working closely with these clients they realise that yes, they can retire and in most cases, earlier than expected. They are now happily enjoying retirement knowing their lifestyle is safe.

Remember that a good financial adviser will not only stop you making those uneducated financial decisions and make sure you keep your wealth, but just as important, we will provide you will peace of mind knowing that we have all financial bases covered.

So now it’s up to you……. Remember you won’t be doing this alone, we are there helping you at every milestone along the way with the right financial advice.

car finance

4 Great Reasons to Buy a Car NOW

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Here are four great reasons to buy a car now. Can finance and affordability has never been better, so now is a great time to be buying a new car… take a look at the facts below.

The Facts

  • Due to a Interest rates being at historic low levels New-car affordability hits a 38-year high and prices hit 20-year lows.
  • New-car affordability is extraordinary and car companies are adding more and more equipment even as prices get lower
  • The year 2015 recorded the highest ever sales for new cars and SVU’s represented 35% of last year’s new car sales.
  • There is an instant tax deduction for small business for  assets costing up to $20,000.

Your Plan

  1. Call us for a pre-approval on how much you can borrow.
  2. Visit your local dealer to check out what is available. With this fantastic opportunity presenting itself, now is the time to upgrade your ‘old’ car for a new model.
  3. Compare quotes. To keep your Dealers quote honest against your brokers quote, make sure you are comparing ‘apples with apples’. Small variations on any of the following items may make a big difference to the monthly repayments; Deposit, term, rate, trade in value and balloon payment amount.
  4. Settlement. Once you have selected a car please allow 3 to 5 days to establish and verify your current circumstances, submit an application and organise the final settlement..

 

Dealer Alerts

  • 0% Finance offers or Subvention agreements can be a hook to entice you into the showroom before being offered a different car, a different term or a variation on the   finance package.
  • Buy back guarantees often come with limitations that diminish the original advantages. Limitations such as kilometres travelled, wear & tear restrictions (a car has 13 panels and there can be no more then one 2.5cm scratch per panel) and conditions on where you can have the car serviced.
  •  ‘Hold their value’ claims can quickly be dispelled by looking at the official ‘Glasses Guide’ for motor vehicle values after 5 years of age. Call us for valuation enquiries.

car finance

The 2014 Deloitte report into Car dealers outlined that average dealer makes 140% of their net profit from finance.

  • Balloon Payments Dealers are able to offer you a 50% balloon payment at the end of your loan term; this may keep your repayments down however, it would not be smart to have a 5 year old vehicle with a debt greater then its value as your final payment. Finance brokers can only offer a maximum 30% end of term balloon payment.
  • Some dealers may recommend to refinance an end of term   balloon even though this would not be in your best interests, if you can afford it, don’t have a balloon at all.

Buy Smart

  • Don’t talk interest rates, talk monthly repayments
  • Make sure any written quote you are given is correct at the first meeting. Monthly repayments may get requoted on the day you pick up your car and it is likely the repayments will increase due to ‘typo’s’ and ‘misunderstandings’. Don’t allow your common sense to get ‘hijacked’ by the emotional excitement of driving away in your new car.

dealer finance

  • Dealers currently have ‘Point of Sale’ exemption from having to comply with the National Consumer Credit Protection ACT. This means that they are not legally required to disclose all fees and charges to you.
  • ‘Third line forcing’ is a legal term and occurs if you are offered a deal on price as long as you use certain finance. This offer will never be put on paper and is often introduced by a third party.
  • Lending companies don’t work on weekends; some dealer     approved loans are estimates only until Monday and designed to take your finance enquiry business out of the market and possibly cause you not to compare the finance offer on the table.

    Broker Tips

  • Finance Brokers can have access to a large variety of lenders who have appetites for different customer profiles; including those who have some history of credit impairment.
  • The sharpest interest rates often depend on correct alignment of the customer and the lender. Often dealer finance is only through 1 or 2 companies.
  • Finance Brokers are bound by the National Consumer Credit Protection ACT. We are required to disclose all fees and  charges to you.
  • TWM Finance has a Vehicle Select service available. This service will help you save time and money when buying a new car. You are able to access competitive pricing on all makes and models through a comprehensive dealer network. Tell us the details of the car you’re after and your price range – then let vehicle Select do the rest.
  • Finance Brokers are required to have specialised training, to be a member of an association such as the FBAA, we are   required to attend regular professional development days to keep abreast of industry changes and be a member of a     recognised dispute resolution service.
financial advisor

What can a financial adviser do for me?

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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

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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

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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!

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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!