Online shopping can be a convenient way to buy the things you want. Know how to protect yourself online, and what to do if you don’t get what you pay for. 

What to look out for when you shop online

Not sure if you can trust a website with your personal information? Follow our simple steps to shop online with confidence.

Make sure the website is secure

Before you enter personal or payment details online, make sure the website is secure.

Signs of a secure website:

• Your web address bar shows a closed padlock or key.

• The web address starts with ‘https://’

• The company has complete contact details, including a street address, phone number and email.

If you haven’t heard of the business, check reviews online to help you decide whether to shop with them.

Find out if the seller is overseas

If the seller is not in Australia, you may not have the same consumer rights. It could be hard to contact them for a repair, replacement or refund.

An overseas seller might charge you an international transaction fee. Also make sure to check if you will be charged an international transaction fee by your credit or debit card provider.

Take care with buy now pay later

Buy now pay later service, like Afterpay, Humm or zipPay, let you pay for something in instalments. You might pay every fortnight, instead of paying the full amount upfront.

You don’t pay interest on the purchase. Instead you’re charged fees. It’s easy to overspend or lose track of how much you owe. So make sure you can afford the repayments.

Find out about buy now pay later services.

Know your rights as a buyer

Read the terms and conditions carefully, including:

• the returns policy

• postage or delivery fees

• any packaging or handling charges

• local currency costs, such as currency conversion fees if the purchase is from overseas

• any international transaction fees

• any import duty or taxes

Check your bank statements

If you shop online, check your credit or debit card and bank statements regularly. Make sure you’ve been charged the right amount.

If you see something you don’t recognise, this could be a sign that a scammer has your personal details. See banking and credit card scams to find out the signs of a scam, how to report it and get help.

What to do if something goes wrong

Sometimes, even when you’re careful, things can go wrong:

• You don’t get what you pay for.

• It’s not in good condition.

• You’ve been overcharged.

Follow these steps to get a refund or exchange.

1. Know your rights

Visit the ACCC’s online shopping page to find out about your rights as a customer.

2. Contact the seller

Check the seller’s website for details on how to contact them or make a complaint. It may have been a mistake — if so, explain the issue to them and suggest how they can fix it.

3. Call your bank

If you used your credit or debit card to shop online but didn’t get what you paid for, contact your bank. They may be able to give you a chargeback.

If you used a PayPal account, follow PayPal’s dispute resolution process.

4. Contact the ACCC or consumer affairs

If you can’t sort things out with the seller, contact the ACCC or the consumer affairs office in your state. They may be able to help you sort things out with the seller.

How to protect yourself online

Get the most out of internet shopping by staying safe online. Follow our simple steps to protect your money and your personal details.

Keep your details safe

Password-protect all your devices. If you’re using a shared or public computer, never save passwords, and always log out of your accounts — don’t just close the browser window. See the Australian Cyber Security Centre for tips to protect your information online.

If you’re using a public WiFi network, don’t send or receive sensitive information — for example, don’t log in to your online banking or use your credit or debit card.

Record your online purchases

Keep a record of your online purchases, including photos and descriptions of the items. In particular:

• Make sure you receive an email confirming your purchase before closing your browser.

• Write down your receipt or reference number.

• Check that you’ve been charged the right amount.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/student-life-and-money/online-shopping

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

The calendar turns over to a fresh, brand new year, full of promise, so how do we keep those promises we make to ourselves and get to the end of the year with our resolutions intact and goals realised?

We all start out with good intentions when we set our objectives for the year to come, but motivation notoriously wanes with time and has the potential to sabotage our chances of achieving our dreams.

While many studies reinforce the notion that willpower struggles after only one month, a study tracking respondents over the course of a full year suggested that at around the three month mark half of resolutions fall over, increasing to a failure rate of around 82% by years end.ⁱ

Monthly micro goals

One way to deal with our waning motivation, instead of setting one daunting goal to be achieved over the period of a whole year, is to come up with a series of monthly, smaller goals. That will give you 12 ‘mini goals’ which ideally need to be achievable on a daily basis. The theory is that if you follow the same pattern for around 30 days, you’ll be establishing this pattern as a habit that you are likely to continue into the future. Each successive month will see you build on that success.

Working towards an end goal

Part of the key to making this approach work, is to ensure that all your monthly micro goals are working towards an overarching end goal. Your micro goals need to follow a theme.

This is where you can come back to your New Year’s resolution and base your theme on what you want to achieve for the year. Say your theme for the year is around career aspirations – for example achieving that promotion. Your first month could simply be setting aside some time each day to network and meet people within the organisation – improving your interpersonal skills. The next month might be focused on exploring tools to improve your productivity…and so on as you work your way through each successive month.

If your priority is to work on your health and wellbeing and end the year capable of running ten kilometres, it’s also important to set some micro goals that get you there. Again, you can start small – a way of working incrementally towards your goal might be to start by drinking more water, then a month dedicated to getting more incidental exercise in your day, then a month focused on improving your diet and losing a little weight, working slowly up to lacing up your boots, hitting the track and increasing your endurance.

Smaller goals add up with time

We are also calling them micro goals for a reason, it’s important to not bite off more than you can chew. The key is how they add up. Viewed alone these smaller goals may not seem like a lot, but the smaller duration makes it a lot more likely you’ll stick at them, developing good habits that will hopefully accrue, rather than fade over time. The fact that you are in effect starting afresh every month also gives you a much better chance of success.

Add some support into your plan

Don’t be afraid to put in some processes to help you get there – it can be a good idea to use online apps to aid or track your progress. It can also help to dangle the carrot and build in some rewards for when you get to the end of each month successfully. Tell friends and family what you are working on and celebrate your successes with them.

By the end of the year, you can look back with satisfaction at each little milestone as a personal win and you’ll have stepped towards, and finally reached an overall goal that may have seemed intimidating unless broken down into manageable chunks.

So what are you waiting for? Get out that calendar and pencil in a goal a month to reach your dreams this year.

i http://www.richardwiseman.com/quirkology/new/USA/Experiment_resolution.shtml

Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 

Any information provided by the author detailed above is separate and external to our business. Our business does not take any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

When it comes to investing in real estate, equity is a key concept to wrap your head around. The Successful Investor’s Michael Sloan explains what equity is, and how you can use it to your advantage.

What is equity?

Equity is the difference between the current value of your home and how much you owe on it.

For example, if your home is worth $400,000 and you still owe $220,000, your equity is $180,000.

The great thing is, you can use equity as security with the banks. This means you can borrow against your equity to fund life’s big purchases, such as:

• extending your home

• starting a business

• buying a car

• going on a holiday.

You can use also use equity to buy an investment property and get into the real estate game.

Total equity and useable equity

Banks will typically lend you 80% of the value of your home – less the debt you still owe against it. This is considered your useable equity.

Since the bank is lending you money against the value of your home, they won’t lend you the full amount. Put simply, if house prices dip, they don’t want an outstanding loan that’s worth more than your property.

Keep in mind that it’s possible to borrow more than 80% if you take out Lenders’ Mortgage Insurance (LMI).

How much could you borrow for an investment property?

Using the example above, let’s say your home is valued at $400,000 and your mortgage is $220,000. Here’s the breakdown of sums:

• value of your property – $400,000

• value of your property at 80% – $320,000

• minus your mortgage – $220,000.

This means your useable equity would be $100,000.

Using the ”rule of four”

When it comes to actually buying an investment property, it can be hard to know where to start.

But a simple rule of thumb is to multiply your useable equity by four to arrive at the answer.

For example, four multiplied by $100,000 means your maximum purchase price for an investment property is $400,000.

Why four and not five?

If you’re buying an investment property worth $400,000, the bank will lend against your future property just as they would against your existing home.

The banks will lend 80% (or $320,000) in this scenario, but the property costs $400,000. This leaves an $80,000 gap, which is your house deposit.

However, you also have to budget for purchase costs such as stamp duty, legal fees and more. This is approximately 5% of the purchase price – around $20,000 on a $400,000 property.

Therefore, the total amount of funds needed to purchase a $400,000 investment property is now $100,000 – an $80,000 deposit plus $20,000 costs.

Final tips

Even if you have plenty of equity, it’s not always a given that you can borrow against it. The bank will consider several factors including:  

•  your income

•  your age

•  how many kids you have

•  any additional debts

Remember to play it safe. If you don’t have any funds outside your home equity, then it’s risky to use every cent of your usable equity to invest in property.

You always need a buffer – back up funds in case things don’t go to plan. Even if it means you can’t invest for a while, it’s important to keep yourself protected.

Ultimately, using equity to buy an investment property can be a smart move. But before you get serious, it’s best to talk to your banker or broker.

Before you decide which strategy is best for you, talk to us on Phone: 07 5641 4134.

Source: NAB

Reproduced with permission of National Australia Bank (‘NAB’). This article was originally published at https://www.nab.com.au/personal/life-moments/home-property/invest-property/equity-to-invest

National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686. The information contained in this article is intended to be of a general nature only. Any advice contained in this article has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice on this website, NAB recommends that you consider whether it is appropriate for your circumstances.

© 2022 National Australia Bank Limited (“NAB”). All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Understanding how your super works and making sure you are getting the most out of your fund is essential to achieving the retirement lifestyle you envision.

The superannuation guarantee is a percentage of your income put aside by your employer over your working life to help you fund your retirement.

It’s easy to forget sometimes that superannuation counts as investing and is in fact one of the most important long-term investments Australians will ever make, particularly as super is now the second largest component of household wealth after property assets and still the foundation of retirement savings.

Understanding how your super works and making sure you are getting the most out of your fund is therefore essential to growing your wealth and ensuring you can live the retirement lifestyle you envision.

Choosing a super fund and investment option may seem daunting, or simply just not on your radar as retirement may seem too far in the future to think about now. The danger with this however is that if you don’t select a super fund for your employer to pay contributions into, you could end up defaulting into a fund that is underperforming or end up with several funds on which you’ll have to pay individual fees. This will impact your superannuation balance in the long run.

1. What kind of investor are you?

Consider first what kind of approach you’d like to take toward your super as this can then help inform which investment offer you select. For example, are you more of a hands-off investor who prefers to leave investment decisions like asset allocation and rebalancing to your super fund’s investment experts? Or are you more hands-on and would prefer to mix and match investment options to build a super portfolio that’s unique to you?

For those who prefer a hands-off approach, most super funds offer a MySuper default option that usually invests in a single diversified fund or a lifecycle offer. These default options are designed to be simpler, balanced, more cost-effective and less maintenance.

2. Compare your options

As with all investing, doing your own research or consulting a licensed financial adviser is important. When selecting or switching super funds, there’s a range of factors you could consider including investment options, investment performance, insurance, user experience, and importantly, fees.

There are a few tools online that can help you easily compare super funds and find one that best suits your circumstances. The government’s MoneySmart website is a great place to start, as well as the Australian Tax Office’s YourSuper comparison tool.

3. Understand your fees

The long-term impact of fees on superannuation balances can be significant if left unchecked. New research from Vanguard Australia revealed that 1 in 2 Australians don’t know what they pay in annual fees.

According to analysis conducted by the Productivity Commission, just a 0.5 per cent increase in fees could cost a typical full-time worker around $100,000 by the time they retire.

That’s why it’s critical to not only understand your fees but also make sure your fund is low-cost. Call us on Phone: 07 5641 4134 to discuss further. 

Source: Vanguard

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

If you’re planning to take advantage of lower property prices and buy in 2023, now’s the time to get organised. Whether you’re looking to buy your first home, move to a different house or invest, you’ll still face competition to secure your dream home, so being ready to move quickly is paramount. A big part of this, is getting your pre-approval sorted. Here’s what you need to know and do.

Steps to getting your pre-approval organised

Home loan pre-approval is when a lender states in writing how much they are likely to let you borrow. This allows real estate agents and sellers to take your purchase offer seriously. It means the lender has reviewed most of your documentation and is likely to approve your home loan application faster. It also gives you a very realistic maximum price point when researching properties.

Pre-approval time frames usually vary from three to six months. While you may be able to negotiate an extension, in the current volatile market it’s actually in your favour to regularly check that your pre-approval maximum loan amount is still valid.

It’s important to understand that pre-approval isn’t a guarantee. Lenders can still refuse your loan application. Common reasons for this could include the property not meeting their loan requirements – it could be a low valuation or it’s in a development that’s considered high risk. It could also be because you haven’t satisfied other conditions like providing additional documentation if required, or your financial situation has changed due to pregnancy, redundancy or starting a new job (this could mean waiting six months).

Interest rate rises may also affect how much lenders decide you can afford to borrow. First homebuyer grants may change and differ in each state, so you will need to keep an eye on these too.

Get your documentation organised

Application requirements may differ between lenders and depending on your particular circumstances, will determine what they require. So, it’s important to review your information so we can match you with the best potential lenders and understand what documents you might need.

Most lenders will want to see proof of:

1. Identification: your passport, driver’s licence, birth certificate

2. Income: recent payslips, PAYG statement

3. Expenses: a detailed list of your monthly spending from childcare, food delivery, utilities, petrol, streaming services and clothes.

4. Assets: car, savings and shares, and investment property.

5. Liabilities: statements for any existing debts including credit cards and car finance or personal loans.

The sooner this is submitted the sooner your pre-approval is organised to start your property search.

How to reach unconditional approval

Once you apply for a loan and have found a property you would like to buy, it will remain ‘conditional’ while the lender checks additional documentation and waits for the valuation and completed sale contract to be submitted. Your loan only becomes ‘unconditional’ (guaranteed to go through) when the lender formally approves the loan. While pre-approvals don’t register on your credit score, being refused a specific loan does, so it’s important that you regularly check in with us about any changes lenders may make before putting in an offer on a property.

Self-employed considerations

If you are self-employed or a company, pre-approval can be more complex. Most lenders ask for at least two years’ worth of tax returns, financial and BAS statements. Some may consider you with one year of financial documentation, depending on your financial history and accountant’s statement. While most lenders will consider home loans for companies and family trusts, the loan documents can be more complicated. This means you may need more time to organise your paperwork and look at your loan options.

Talk to us about getting your finances in order, so you can make 2023 the year you get on the property ladder. Call us on Phone: 07 5641 4134.

Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 

Any information provided by the author detailed above is separate and external to our business. Our business does not take any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Find out what ESG investing is and how it works. So you can choose investments that match your goals and values.

What ESG means

ESG investing is when a fund considers sustainability (including environmental, social and governance factors) to inform their investment strategy.

There is a growing demand for ESG investing, also known as sustainable (or sustainability-related), responsible or ethical investing.

The way ESG is defined may differ from fund to fund. It can cover a range of factors, such as:

• Environmental – air and water pollution, biodiversity, carbon emissions, clean technology, climate change, deforestation, energy efficiency, sustainable agriculture, waste management, water scarcity

• Social – child labour and labour standards, community relations, diversity and inclusion, ethical product sourcing, gambling, human rights, Indigenous reconciliation, tobacco

• Governance (of investment or companies in supply chain) – board diversity, bribery and corruption, business ethics, corporate culture and conduct, whistle-blower schemes

Before you invest, make sure you understand the fund’s ESG investment strategy. They can vary greatly. If there’s anything you’re not sure about, ask the fund.

How ESG investing works

An ESG fund aims to maximise financial returns for investors, while pursuing its ESG investment strategy. A fund’s ESG investment strategy may include one or more of the following investment approaches:

Screening investments

A fund may screen investments by:

• Negative screening: excludes investments that don’t meet certain ESG criteria. For example, one fund may reject all investments with exposure to gambling (‘absolute’ screen). Another may accept some exposure to gambling. But reject those companies which earn, say, more than 20% of their total revenue from such activities (screen is subject to a ‘revenue’ threshold).

• Positive screening: seeks investments that satisfy certain ESG criteria. This may mean choosing investments that are not necessarily performing better than their sector peers based on ESG factors. For example, a fund may give each investment a score. Then consider the score, along with other relevant ESG criteria, when choosing whether to include the investment.

ESG integration

ESG integration is when a fund considers ESG risks and opportunities in the decision-making process for each asset it considers for investment. A fund may consider ESG risks and opportunities, before including an investment. For example, a fund may consider the risks of climate change and the opportunities of transitioning to renewable energy across its investment strategy.

ESG impact investment

A fund may invest in order to achieve an ESG goal or outcome, like affordable housing or clean energy sources. Or target themes, such as low carbon emissions or sustainable agriculture.

Corporate engagement

A fund may select investments to influence changes in a company’s conduct on ESG-related matters. For example, as a shareholder of the company, it may seek to bring about change by voting at meetings.

Important: Greenwashing is when a fund says its product is more sustainable or ethical than it is. It’s marketing spin. For example, a fund promotes itself as avoiding investment in tobacco products. But doesn’t publicise that it may invest in companies who earn revenue of up to 20% from tobacco products.

Check that what a fund says about investing with it matches what it is actually doing.

Before you invest in an ESG fund

Ask yourself these questions before you invest.

Investment product labels

Look at how the fund describes the investment product:

• What words or labels does it use? For example, sustainable, ethical, green, environmentally friendly, responsible, conscious, or impact investing.

• Are these words defined? Does their meaning match your understanding?

Investment strategy

ESG products will differ across the market. Check the approaches each fund takes in its investment strategy. For example:

Screening investments

• If the fund uses negative screening, check the PDS, additional information guide, sustainability report and website for any stated exceptions.

• If it uses revenue thresholds, is ‘revenue’ defined and are the threshold levels clear? Check when the threshold levels, and any exceptions, apply.

• Are companies with indirect involvement in a controversial sector allowed under the screen? For example, a screen that excludes tobacco products may allow investing in retail stores that sell cigarettes. 

• If the fund uses positive screening, does it clearly explain when an investment is included?

• Is it clear what percentage of underlying investments are covered by each screen?

• If a screen relates to only part of the underlying investments, is that consistent with the ESG claims made by the fund?

• If the fund discloses underlying investments or a sample, do these holdings match how the fund screens? If not, this might be an indication of greenwashing.

ESG integration

• Do you understand how the fund considers ESG factors, risks and opportunities when it makes investment decisions?

ESG impact investment

• Is the impact investing strategy defined by the fund? Is it clear which sectors or themes are the fund’s focus?

• Does the fund explain the methodology that assesses the potential impact of each underlying investment?

Corporate engagement

• Does the fund explain how it influences change?

Look for this information on the fund’s website or in the product dicsloure statement (PDS).

Match with your investing goals

Consider your investing goals:

• What ESG factors matter most to you?

• How much weight will you give these factors? 

• Does the fund or product align with your investment goals or the ESG issues you care about?

Not sure about how to choose investments to fit your goals? See choose your investments.

Management and fees

Some funds charge you higher fees for an ESG investment, than for a non-ESG investment.

Check how the fund manages the investment and what it will cost:

• Is it actively managed? So, the fund has direct oversight of it. This may cost you more.

• Or passively managed? For example, the product replicates a particular index or it invests wholly in another financial product. This may cost you less.

Case Study

Cara suspects greenwashing

Cara wants to invest to support a healthier world.

She sees an ad for an investment called Zero Tobacco Fund, which says: “The Zero Tobacco Fund contributes towards achieving a healthier world for our investors and the global population. The fund avoids significant investments in tobacco companies.”

In the fine print on the fund’s website, it also says: “From time to time, the fund could invest in companies involved in the manufacture, sale and distribution of tobacco products that earn less than 50% of their total revenue from tobacco activities.”

She asks the fund for more information to support these claims. She finds that the fund:

• doesn’t have a clear investment strategy to achieve its social impact goals

• doesn’t define what ‘a healthier world’, ‘significant investments’ or ‘total revenue’ means

• by using ‘from time to time’, is vague about when it will invest in a tobacco company

Cara wonders if the fund is greenwashing by overstating the social impact of the investment. She decides this isn’t the right investment for her.

Talk to us today if you’d like to review your investment portfolio, or if you’d like to start investing. Contact us on Phone: 07 5641 4134.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/how-to-invest/environmental-social-governance-esg-investing

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

If you’ve lost your home or business after a natural disaster, you don’t have to go it alone. Follow these steps to start your recovery.

Important: Government help for natural disasters

Call Services Australia on 180 22 66 or visit serviceaustralia.gov.au/disaster.

Get help to make a recovery plan

Recovering from a natural disaster will take time. There are a lot of financial decisions to think about straight away, and over the months ahead.

There’s support to help you make a recovery plan and navigate financial decisions to get your life back on track.

See a financial counsellor

Financial counselling is free, independent and confidential. A financial counsellor can help you make a plan to manage your money and prioritise your bills and other payments. A financial counsellor can also talk to creditors on your behalf and negotiate affordable payment plans.

The earlier you get help, the more options you’ll have.

National Debt Helpline — 1800 007 007

The free National Debt Helpline is open from 9.30am to 4.30pm, Monday to Friday.

When you call, you’ll be transferred to the service in your state. 

Mob Strong Debt Helpline – 1800 808 488

Mob Strong Debt Helpline is a free service about money matters for Aboriginal and Torres Strait Islander peoples from anywhere in Australia.

The Helpline is open from 9.30am to 4.30pm, Monday to Friday.

Help for small businesses and farmers

Small Business Debt Helpline – 1800 413 828

If you’re a small business owner whose business has been affected by a natural disaster, contact a specialist small business financial counsellor. 

The Helpline is open from 9.00am to 5.30pm, Monday to Friday.

Rural Financial Counselling Information Line – 1300 771 741

If you’re a farmer or a grower, a rural financial counsellor can help you plan for recovery, negotiate with creditors and access professional services.

Settle your insurance claim

Your insurer may offer to:

• handle repair or replacement of your home or business, or

• offer cash to settle your claim

Cash settlements mean you have to manage the repair or rebuild process yourself, and you might be left out of pocket. Take the time to consider the best option for you. 

If you settle your claim within a month of the event, you have up to a year to get it reassessed if you’re not happy. See the Insurance Code of Practice for more information.

Rebuilding after a natural disaster

Check with your insurer before making any repairs to your property. Your insurer may need to authorise repairs and tradespeople before they happen.

Government clean-up programs

Find out what services you can get for free, before paying for things. The cost of clean up may be covered by your state or territory government.

Watch out for fake tradespeople or repairers

Be careful of anyone who’s door knocking, calling you out of the blue, or leaving leaflets in your letterbox.

Watch out for anyone offering a today-only deal or saying they can get repairs done quicker or much cheaper than legitimate companies.

Don’t be rushed into a decision and don’t pay cash up front. Take the time you need to make good decisions you won’t regret.

If you encounter a scammer, fake tradesperson or repairer, report it to the Australian Competition and Consumer Commission (ACCC).

Get help if you run into problems

If you’re not satisfied with the insurance claims process or decision, dispute it with your insurer.

If you can’t reach an agreement, contact the Australian Financial Complaints Authority (AFCA) on 1800 337 444 to make a complaint and get free, independent dispute resolution.

For free legal advice and support, contact:

• Insurance Law Service 1300 663 464

• WA — Legal Aid 1300 650 579

• NSW — Disaster Response Legal Service 1800 801 529

• Victoria — Disaster Legal Help 1800 113 432

• Queensland— Natural Disaster Legal Help 1300 527 700

• SA – Legal Services Commission 1300 366 424

• Tasmania – Legal Aid Commission 1300 366 611

• ACT- Legal Aid Helpline 1300 654 314

• Northern Territory – Legal Aid Commission 1800 019 343

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/dealing-with-natural-disasters/recovering-from-a-natural-disaster

Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.

Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

After months of research, weekends spent attending inspections and auctions, finding the perfect home, at the right price brings a sense of relief and excitement. But what if you haven’t sold your current house yet?

Finding your next home before settling your existing property’s sale is a common predicament, with many using bridging finance as a convenient way to fund their crossover period.

Fortunately, most lenders now offer this type of finance and there are lots of options available. However, there are also some important things to consider before adding a bridging loan to your mortgage. Let’s go over the basics to help you decide if it could work for you.

Why use bridging finance?

Using a bridging loan can help ensure you don’t miss out on your new dream home or accept a lower offer as you rush the sale of your current one. And if you can buy before selling, it also means you won’t have to waste money renting while you look for your next home.

You can also use bridging finance to fund renovations to prepare your property for sale or to cover costs for things like moving and medical, legal or general living expenses. In all these cases, you must have a property already on the market and expected to sell within 6 to12 months.

How do bridging loans work?

Lenders have a range of ways they link bridging and home loans, but they are basically an advance on the sale of your existing home. Essentially, when you buy your next property, you start paying your bridging loan interest and new mortgage repayments.

We can discuss the setup of your finance with lenders to suit your circumstances. This may include deferring bridging interest payments until you settle the sale of your current home. It may also be possible to negotiate the same or different interest rates for your bridging and home loans depending on whether you want your ongoing mortgage to be a fixed or variable rate.

When deciding whether bridging finance will work for you, you may need to include paying your existing mortgage until the property is sold in your calculations.

Bridging loans can be either closed or open. If you have agreed a sale and settlement date, you can select a closed bridging loan that ends just after this date. If you haven’t found a buyer, an open bridging loan usually has a term of 6 or 12 months.

With both, it’s usual for a lender to ask for proof that your current property is already on the market. Many lenders charge a higher interest rate if you don’t sell your property by the agreed date, so it pays to ensure both sales go through within the agreed timeframe. And just like regular mortgages, they can also force the sale of your existing property if you fail to meet repayments.

Requirements for a bridging loan

Lenders vary in the types of properties they will lend against. Some won’t lend to companies or for strata titles, for example. They also often require higher owner equity in both the old and new homes. And like ordinary mortgages, the amount of equity you have will affect your interest rate.

It’s common, but not essential, to use the same lender for your bridging finance and new property mortgage. Lenders use a complicated formula to decide if you can afford to repay these combined loans. This is called your ‘peak debt’.

Say your new home loan is for $800,000 and your bridging loan is for $200,000. That means your peak debt is $1 million, plus interest for the duration of your bridging loan term. If you then pay $400,000 of equity from the sale of your old home into your loans, your ongoing balance reduces to $600,000. Which will be your mortgage amount going forward.

With rising interest rates and property price fluctuations, it’s more important than ever to get your changing home calculations right.

If you’d like to know more, please get in touch on Phone: 07 5641 4134 as soon as you’re thinking of selling. We can calculate what you can afford to buy and go through your lender and loan options to find a solution that works for you.

Important: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. 

Any information provided by the author detailed above is separate and external to our business. Our business does not take any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

What is volatility?

Volatility is an investment term that describes when a market or security experiences periods of unpredictable, and sometimes sharp, price movements. People often think about volatility only when prices fall, however volatility can also refer to sudden price rises too.

How is volatility calculated?

Volatility measures price movements over a specified period.

In statistical terms, volatility is the standard deviation of a market or security’s annualised returns over a given period – essentially the rate at which its price increases or decreases.

If the price fluctuates rapidly in a short period, hitting new highs and lows, it is said to have high volatility. If the price moves higher or lower more slowly, or stays relatively stable, it is said to have low volatility.

Historical volatility is calculated using a series of past market prices, while implied volatility looks at expected future volatility, using the market price of a market-traded derivative like an option.

What causes volatility?

Some of the things that can cause volatility include:

1. Political and economic factors

Governments play a major role in regulating industries and can impact an economy when they make decisions on trade agreements, legislation and policy. Everything from speeches to elections can cause reactions among investors, which influences share prices.

Economic data also plays a role, as when the economy is doing well, investors tend to react positively. Monthly jobs reports, inflation data, consumer spending figures and quarterly Gross Domestic Product (GDP) calculations can all impact market performance. In contrast, if these miss market expectations, markets may become more volatile.

2. Industry and sector factors

Specific events can cause volatility within an industry or sector. In the oil sector, for example, a major weather event in an important oil-producing area can cause oil prices to increase. As a result, the share price of oil distribution-related companies may rise, as they would be expected to benefit, while the prices of those that have high oil costs within their business may fall.

Similarly, more government regulation in a specific industry could result in stock prices falling, due to increased compliance and employee costs that may impact future earnings growth.

3. Company performance

Volatility isn’t always market-wide and can relate to an individual company.

Positive news, such as a strong earnings report or a new product that is wowing consumers, can make investors feel good about the business. If many investors look to buy it, this increased demand can help to raise the share price sharply.

In contrast, a product recall, data breach or bad executive behaviour can all hurt a share price, as investors sell off their shares. Depending on how large the company is, this positive or negative performance can also have an impact on the broader market.

Volatility is a normal part of long-term investing

There is plenty to unnerve markets and cause volatility, from changes in commerce to politics, to economic outcomes and corporate actions.

Yes, it might be unsettling, but it’s all ‘normal’.

When investors are prepared at the outset for episodes of volatility on their investing journey, they are less likely to be surprised when they happen, and more likely to react rationally.

By having the mindset that accepts volatility as an integral part of investing, investors can prepare themselves and remain focused on their long-term investment goals.

Market corrections can create attractive opportunities

Volatility is not always a bad thing, as market corrections can sometimes also provide entry points from which investors can take advantage.

If an investor has cash and is waiting to invest in the stock market, a market correction can provide an opportunity to invest that cash at a lower price. Downward market volatility also offers investors who believe markets will perform well in the long run the opportunity to buy additional shares in companies that they like, but at lower prices.

A simple example may be that an investor can buy for $50, a share that was worth $100 a short time before. Buying shares in this way lowers your average cost-per-share, which helps to improve your portfolio’s performance when markets eventually rebound.

The process is the same when a share rises quickly. Investors can take advantage of this by selling out, the proceeds of which can be invested in other areas that offer better opportunities.

By understanding volatility and its causes, investors can potentially take advantage of the investment opportunities that it provides to generate better long-term returns.

Contact us today if you’d like to understand more about market volatility. Call on Phone: 07 5641 4134.

Source:
Reproduced with permission of Fidelity Australia. This article was originally published at https://www.fidelity.com.au/insights/education/market-volatility-defined-and-explained/

This document has been prepared without taking into account your objectives, financial situation or needs. You should consider these matters before acting on the information. You should also consider the relevant Product Disclosure Statements (“PDS”) for any Fidelity Australia product mentioned in this document before making any decision about whether to acquire the product. The PDS can be obtained by contacting Fidelity Australia on 1800 119 270 or by downloading it from our website at www.fidelity.com.au. This document may include general commentary on market activity, sector trends or other broad-based economic or political conditions that should not be taken as investment advice. Information stated herein about specific securities is subject to change. Any reference to specific securities should not be taken as a recommendation to buy, sell or hold these securities. While the information contained in this document has been prepared with reasonable care, no responsibility or liability is accepted for any errors or omissions or misstatements however caused. This document is intended as general information only. The document may not be reproduced or transmitted without prior written permission of Fidelity Australia. The issuer of Fidelity Australia’s managed investment schemes is FIL Responsible Entity (Australia) Limited ABN 33 148 059 009. Reference to ($) are in Australian dollars unless stated otherwise.
© 2022. FIL Responsible Entity (Australia) Limited.

Important:
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Getting more money into superannuation is a proven way of building wealth to spend in retirement.

Ongoing contributions from your employer over the course of your working life, and potentially extra contributions made by you, can make a huge difference to your super balance over the long term as your account balance continues to grow.

Best of all, super contributions are only taxed at 15 per cent up to prescribed annual limits. And, when you finally reach retirement age, your super can be converted into a tax-free pension income stream. You can also pull out your super money tax-free after retirement via one or more lump sum payments.

But how much extra money can you put in each year, and what’s the best way of doing it?

Know your super limits

The starting point to making extra super contributions is to know exactly how much you’re allowed to put in.

At the start of July 2022, the minimum guaranteed amount of super that all employers must pay their workers aged 18 and above into a registered super fund account was lifted from 10 per cent of their ordinary wage to 10.5 per cent.

Employers must also pay super at the same rate to any employees aged under 18 who work more than 30 hours a week.

At the same time, the total amount of money that can be put into super each year at the “concessional” 15 per cent tax rate – including employer contributions – was increased from $25,000 to $27,500 this year.

And the amount that can be directed into super using after-tax money was increased from $100,000 per year to $110,000. These are known as non-concessional super contributions.

Ways to boost your super contributions

Salary sacrificing: The simplest way to get more money into your super is to let your employer know, and to arrange for them to make the extra contributions to your super fund on your behalf directly from your pay during each payment cycle.

Instead of paying your normal rate of tax on these extra contributions you’ll only pay the 15 per cent concessional contributions rate (which is automatically deducted).

You can generally specify with your employer that you want a set percentage rate (of your salary) or a fixed dollar amount to be “sacrificed” into your super fund on top of the mandatory 10.5 per cent in super they have to pay.

Thanks to compounding investment returns, even small extra amounts paid every pay cycle from your before-tax earnings will go a long way towards increasing your retirement nest egg over time.

One-off payments: In addition to salary sacrificing, it’s also possible to add money into your super fund using other money you’ve accumulated over time.

You’ve probably already paid tax on this money at your normal tax rate, so the Tax Office allows you to deposit it into your fund at any time during the financial year and then claim a deduction for the tax you’ve paid above the 15 per cent super tax rate.

You first need to check with your super fund if it allows after-tax contributions and then lodge a ‘Notice of intent to claim or vary a deduction for personal contributions’ form when you lodge your next tax return. After-tax contributions can be used in conjunction with pre-tax contributions, including those made by your employer.

Catch-up contributions: You may also have scope to make extra concessionally taxed (15 per cent) super contributions under “catch-up legislation” introduced from the start of the 2019-20 financial year.

This allows you to carry over any unused annual concessionally taxed contributions (that is, if the total payments into your super fund including your employer’s payments are less than the $27,500 maximum annual limit) on a rolling basis for up to five financial years.

In other words, if $20,000 in concessional contributions were made into your account in 2020-21, you may be able to take advantage of your unused gap from last financial year and roll it over into your 2022-23 contributions.

You can make catch-up contributions at any time, and then claim a tax deduction in your next tax return.

You’re able to check what’s available to you in catch-up contributions by logging into the myGov website, navigating to the Australian Taxation Office, selecting Super and “Carry forward concessional contributions” under Information. To take advantage of this option your overall super balance must be below $500,000.

Non-concessional contributions: Non-concessional contributions are after-tax personal contributions you make into your super fund, which can’t be claimed as a tax deduction.

They’re completely separate from your annual concessional contributions and are subject to their own annual limits.

Typically, non-concessional contributions are made using the proceeds from larger asset sales such as from a home or investment property.

The non-concessional contributions limit is currently $110,000 each financial year. However, under what’s known as the “three-year pull-forward rule”, you can make a $330,000 non-concessional contribution in one financial year.

You’re then unable to make further non-concessional contributions for the next three financial years.

If you have more than $330,000 to contribute in total, you could make use of the annual $110,000 limit before 30 June next year. Then, from 1 July, you could use the three-year pull-forward rule to contribute up to another $330,000.

The main advantage of making non-concessional contributions is to have more of your money inside the super system that can generate tax-free earnings in retirement.

Downsizer contributions: The “downsizer measure” enables individuals aged 60 years and above to add up to $300,000, and couples up to $600,000, into their super from the proceeds of their principal place of residence.

A downsizer contribution forms part of the tax-free component in your super fund. It can be made in addition to non-concessional super contributions and doesn’t count towards your personal super contribution limit.

There are a range of conditions around downsizer contributions, and it’s prudent to check these on the Tax Office website.

Exceeding the limits

It’s important to be aware of all the super contributions boundaries.

Excess concessional contributions are included in assessable income and taxed at your marginal tax rate.

The Tax Office applies a 15 per cent tax offset to account for contributions tax already paid by your super fund.

You then have the option of withdrawing up to 85 per cent of any excess concessional contributions from your super fund to help pay your income tax liability.

If you don’t you could be taxed heavily and any excess concessional contributions not released from your fund are counted towards your non-concessional contributions cap.

Contact us today if you’d like to find out more about contributing to your super. Call us on Phone: 07 5641 4134.

Source: Vanguard

Reproduced with permission of Vanguard Investments Australia Ltd

Vanguard Investments Australia Ltd (ABN 72 072 881 086 / AFS Licence 227263) is the product issuer. We have not taken yours and your clients’ circumstances into account when preparing this material so it may not be applicable to the particular situation you are considering. You should consider your circumstances and our Product Disclosure Statement (PDS) or Prospectus before making any investment decision. You can access our PDS or Prospectus online or by calling us. This material was prepared in good faith and we accept no liability for any errors or omissions. Past performance is not an indication of future performance.

© 2022 Vanguard Investments Australia Ltd. All rights reserved.

Important:
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.