The cost of coffee made headlines a few weeks ago when it was reported prices could reach up to $7 a cup.

Although counter reports came out sceptical of such a price hike, it’s undeniable that Australians are experiencing a creeping rise in expenses across the board. From petrol to groceries to travel, things are feeling more expensive because, well, they are.

So, it’s understandable that the rising cost of living is on the minds of many investors.

In times like these, creating a budget could prove to be an invaluable source of comfort. Not only can it help keep you on track to achieve your long-term goals, but it can also help reduce any feelings of financial anxiety that comes with spending above your means.

Budget basics

A good place to start is setting up a budget that corresponds with your pay cycle. If you get paid fortnightly, then a fortnightly budget will be easiest to manage. From there, you can figure out how much money comes in every fortnight (salary and other income), how much goes out (fixed expenses such as rent and bills and debt expenses such as loan repayments), and ultimately how much of what’s left you can spend, save or invest.

While that’s the crux of a budget, you can also consider these factors to help you find the right balance between spending and saving:

1. Do I have an emergency fund that can cover at least 3 months of living expenses?

An emergency fund is money set aside to cover the financial surprises life throws your way. These unexpected events (such as job loss, medical emergencies, car troubles, unexpected home repairs) can be stressful and costly.

Having an emergency fund can keep your stress levels down and give you confidence that you can deal with any unexpected events. It also keeps you from making poor financial decisions in times of stress, such as borrowing funds at high interest rates or racking up extra fees and penalties for late payments.

2. Am I setting money aside to put towards my larger goals (like houses, cars, education)?

It’s hard to think about saving more when you have other financial priorities competing for your attention. But remember that every bit of money you add to an investing account can go further than you think – your invested assets can benefit from compounding over time.

Factoring into your budget a manageable amount of money to invest each fortnight or month will set you up to reap the many benefits of regular investing.

3. Am I auto-paying for subscriptions that I don’t use?

You might have money disappearing out of your accounts every month for an online game you never play, a magazine you don’t read, or a box-of-the-month club whose boxes are sitting untouched somewhere in your house. Doing some subscription housekeeping can free up more of your money to put toward other goals.

4. Do I spend money out of FOMO – fear of missing out on the newest trend or gadget everyone is talking about?

Sometimes when we read about people camping out for days to get the newest phone or smart watch, it can create the illusion that we need to have it in our lives because it’s that cool and exclusive. Take the time to make sure you’re making big purchases for the right reasons, and not just to keep up with the Joneses.

5. Do my unplanned purchases fit into my budget?

It’s always a good idea to build room into your budget for some spontaneous spending every month. As long as you’re taking the time to thoughtfully weigh your recreational spending against your long-term goals, you’re looking out for your financial wellness – and that can make a world of difference!

Call us today to talk about your finances. Contact us on Phone: 07 5641 4134.

Source: Vanguard April 2022

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.

There is a lot to think about when buying a home. The process can be both exciting and overwhelming. Identifying what you want in your dream property, understanding home loans and navigating your way through all the paperwork can be challenging. By becoming familiar with these steps and doing some preparation, you can reduce the stress involved in the buying process. You should seek expert advice when making a large financial decision to determine if it is right for you. Becoming a home owner gives you the ability to make your house into a home, and it gives you a valuable asset to build equity upon.

1. Set your budget

First, decide how much you can afford to spend – keeping in mind all the additional costs associated with buying a home. The largest of these is stamp duty or transfer duty, which varies by state and is generally charged as a percentage of the purchase price.

As an example, if you are a first home buyer buying a property in New South Wales for less than $650,000, you can apply for a full exemption. But if you are buying a property valued between $650,000 and $800,000, you may be eligible for a first home buyer partial stamp duty concession.

Various stamp duty concessions are available for first home buyers depending on the location and the type of property you buy.

In some cases, this cost may be partially offset by First Home Owner Grants (FHOGs) intended to encourage first home buyers to enter the property market. FHOGs also vary from state-to-state and apply mainly to new homes, rather than established properties.

2. Research the market

Once you’ve set your budget and chosen your ideal property, it is important to research the market in the area in which it is located. When you are considering a particular location, look at infrastructure and amenities such as public transport, educational facilities and shopping centres. Geographical factors should also be considered such as distance to the CBD and any infrastructure that will affect noise levels or the aspect of the property, such as substations or large electricity towers. 

Websites that can help with research include realestate.com.au and domain.com.au. You could also build a relationship with the local real estate agents in the area, so they can let you know of properties that are coming up before they are advertised. The local real estate agent will also have additional information on any properties of interest. If finding the right property is proving difficult, you might consider using a buyer’s agent who can do all the house hunting for you, will work to your budget and negotiate on your behalf. Unlike a real estate agent who works for the vendor/seller, a buyer’s agent works solely for the buyer.

3. Choose a home loan and get pre-approval

While searching for your dream home or investment property, it’s a good idea to get pre-approval for your loan from your lender, mortgage broker or one of the many emerging online options. Having pre-approval will mean you can move quickly when you find your dream home. You will need to provide employment details including income and expenses, assets and liabilities, and some personal details. Mortgage brokers may be able to offer you a range of loan products from various lenders, so they can be a good option for a first home buyer. Usually pre-approvals will be valid for 90 days, however this can vary from lender to lender. As with any financial decision, it’s wise to shop around for the best deal. One important consideration when deciding how much to borrow is the size of your deposit. Most banks and financial institutions generally require you to have a 20 per cent deposit. This means that on a property worth $720,000 you will need to have saved at least $144,000 – plus enough to cover stamp duty and any legal and moving costs.

There are other options available if you don’t have a 20 per cent deposit. Lenders Mortgage Insurance (LMI) may enable you to buy a home with a deposit as low as five per cent. Rather than having to save a $144,000 deposit on a $720,000 property, your lender may be able to provide a loan with a deposit of $36,000. This means you can get into your own home sooner, begin paying off your loan and potentially start building equity. LMI is an insurance policy that protects the lender if you default on your loan. LMI is a one-off premium which the lender will pass on to you to pay. The premium can usually be added, or capitalised on to your loan, with your repayments adjusted accordingly. 

4. Inspect the property

Once you have found the home you want to purchase and before you make an offer, you will want to arrange the necessary inspections. You should consider a:

• building inspection (to check for structural damage) – costs can vary depending on location $300 – $700

• pest inspection – costs approximately $200 – $500

• strata title inspection (if you are buying a unit or townhouse under strata laws) – costs may vary from $200 – $350.

You should also consider checking with the local council and state government about zoning issues and future property developments that may affect your home.

Your solicitor or conveyancer can advise you further on any recommended inspections.

5. Make an offer and secure formal loan approval

Once the inspections have been completed and you are happy to proceed, it’s a good idea to contact your lender or broker to update them on the situation. The next step depends on whether the property is being sold at auction or by private treaty, which is a sale directly through a real estate agent or owner.

Private treaty – All your research will assist you when negotiating the purchase price, however you probably don’t want to be too inflexible. It would be unfortunate to lose the property to someone else for an amount that you would have been happy to pay.

Once your offer has been accepted, a holding deposit of approximately 0.25 per cent needs to be paid. There will be a length of time known as the ‘cooling-off period’, which is a set number of business days that is specified in the contract within which you can walk away from the agreement to purchase the property. Typically, the cooling-off period will be five to ten business days, although the availability and duration of these periods vary by state. You may also be asked to waive your right to a cooling-off period, which is often also the case under auction purchase conditions. If you decide not to proceed, you will typically have to pay the vendor a termination fee, which is usually around 0.25 per cent of the purchase price. Any holding deposit you have paid above this is typically refunded. If the cooling off period has expired, you will generally not be entitled to any refund of the holding deposit.

Auction – If you are buying at auction, be sure to have a pre-approval in place, and that all of the legal work and inspections have been completed prior to the auction. If your bid is successful you are obliged to go through with the purchase as there is no cooling-off period. So, make sure you really want the property before you start bidding and, most importantly, that you don’t exceed your maximum spending limit.

Speak to your solicitor regarding the amount of the contract deposit required to be paid when contracts are exchanged. This can often be reduced to five per cent, instead of the typical ten per cent however needs to be agreed with the vendor or their solicitor prior to auction.

There are a number of things to consider when it comes to finalising the details of your home loan. One important decision is whether you choose a variable interest rate loan, where the interest charges and your regular repayments may go up and down, or a fixed-rate loan which locks in your interest charges and regular repayments for a set period of time. Both types of loans have their pros and cons and some borrowers hedge their bets by choosing a combination of fixed and variable rate loans. It’s a good idea to discuss your personal circumstances with your lender, broker or financial adviser to ensure that the loan is configured in a way that best suits your needs.

Don’t forget to ask about any additional benefits – most lenders will provide home loan customers with extras such a fee-free transaction account.

LMI may enable you to purchase a home with a deposit as small as five percent.

6. Arrange the contract deposit

If you are paying the contract deposit from your own funds, you can generally use a personal cheque or a bank cheque. If part of the contract deposit is coming from your home loan (e.g. your lender is using LMI and you have less than the ten per cent contract deposit usually required when contracts are signed), you may need to use a deposit guarantee (sometimes called a deposit bond). This is a substitute for the cash contract deposit and is a guarantee issued by an insurance company to pay the contract deposit to the vendor should you default under the terms of the contract or fail to proceed with the purchase. Deposit guarantees can be organised at the same time as your home loan so speak to your lender or broker who will help you to arrange this.

7. Contracts and legal work

Do your research and speak to several real estate agents to find a reputable conveyancer or solicitor that meets your needs.

Your, and the vendor’s conveyancer or solicitor, will check the documentation and begin to draw up the contract for the property transfer. Ask your solicitor or conveyancer to explain the contract so that you understand its contents before signing.

DIY conveyancing kits are available, but most people leave it to the experts and use a solicitor or a conveyancer to do the work for them as there is a lot at risk. Conveyancers will have completed hundreds of property transactions and know the hidden traps to watch out for, like finding out that someone has planning permission to build a ten storey office block next door!

The contract will contain a settlement period which is the length of time before you take legal ownership of the property. This can be negotiated but will need to be agreed to by the vendor before the auction or signing contracts. Many lenders will require home insurance to be taken out from the time contracts are signed. Even if your lender doesn’t require it, it can be a good idea to take out home insurance at this time to help safeguard your interest in the property.

Once all questions have been answered, your conveyancer or solicitor will usually set a date and time for you and the vendor to sign contracts and to pay your contract deposit. The contract deposit is usually placed into a trust account held by the real estate agent until settlement.

8. Settlement

Settlement is usually four to six weeks from when contracts are exchanged. This is the date you take legal ownership of your new home.

Your solicitor or conveyancer will arrange a time and place for settlement to occur with the vendor’s solicitor and any other interested parties, such as your lender. The balance of the purchase price will need to be paid on the day of settlement. Your solicitor or conveyancer will arrange this with your lender who will take the balance of funds to settlement. Generally, the contract of sale will require the vendor to deliver the property to you in the same condition it was in on the day of sale, except for fair wear and tear. It’s a good idea to ensure your contract allows you to conduct a final inspection just before settlement. You can arrange this inspection with the real estate agent. If anything is not working or has been damaged, discuss it with the real estate agent and your solicitor or conveyancer prior to settlement.

Once settlement has occurred, the vendor’s solicitors will contact the real estate agent who sold you the property and advise them to give you the keys. Your solicitor or conveyancer will also contact you and confirm settlement has taken place.

You are then the home owner of the property and can enjoy your new home.

If you’d like to find out more about the steps to purchasing a property, call us on Phone: 07 5641 4134.

This publication has been produced by Genworth Financial Mortgage Insurance Pty Ltd (’Genworth’). This publication may include content which is owned by third parties (’third party content owners’) and that has been provided to Genworth for publication. Opinions expressed in this publication are of the writer or contributor and do not necessarily reflect the view of Genworth or its affiliates.
This publication covers a variety of topics including property, insurance and other financial products and services. Although some of the information involves tax, stamp duty, legal, accounting, financial or similar issues, Genworth, its affiliates and the third-party content owners (as to their materials only) (‘we’) are not in the business of offering such advice and nothing in this publication constitutes a personal recommendation or advice. You must consult with your own professional advisers to examine the legal, tax, accounting or investment aspects of any information presented in this publication and how they may affect your particular situation.
The information also does not contain all of the applicable terms, conditions, limitations or exclusions of the products or services described. We expressly disclaim all responsibility and liability for any action or inaction by you in reliance or partial reliance on any material, information, opinion or advice in this publication or referred to in this publication.The information is current as at the date of publication but may change without notice. We are under no obligation to update the information or correct any inaccuracy which may become apparent at a later date. We do not take any responsibility for any reliance on the information contained in this publication or for its reliability, accuracy or completeness. Nothing in this publication is an offer by or on behalf of Genworth or its affiliates to sell, or solicit an offer to buy, any security or financial product.
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Why buy shares?

When people talk about investing in shares (or stocks), they’re usually referring to common shares. These kinds of shares give you the opportunity to join in the success of public companies listed on the Australian Stock Exchange, and as such, they’re an investment that can really grow your investment portfolio.

Because you’re a part-owner of the company that issues your share, it’s pretty simple: For the most part, when the company makes money, you make money. (Conversely, of course, when the company loses money, you may too).

There are a couple of ways you’ll see this part-ownership reflected.

First, the price of each share can increase in value. Not including costs, this means if you buy 50 shares at $10 a share and then the share price increases to $15, you’re now $250 richer.

The company can also choose to issue a dividend to shareholders. Say the issuer of your 50 shares announces a $2 dividend. That means you’ll be paid $100 (which you can use to buy more shares if you wish).

Good to know

Over shorter periods of time (weeks or months), the value of a particular share can fluctuate based on a lot more than the actual performance of the company.

For example, if investors think the company could be headed for tough times—because a competitor releases a new product or because the company hasn’t been growing as fast as everyone expected, for example—the share price may go down. On the other hand, potentially good news about a company can push the share price higher—even if nothing has actually changed.

And of course, the overall performance of the economy and markets will affect share price too.

Over the long term, however, the main determinant of a share’s performance is how successful the underlying company has actually been.

Choosing shares:

There are several ways to categorise shares:

1. Growth & value

Companies generally fall into 1 of 2 categories depending on how they make money for their investors.

Growth companies are in an expansion phase. Any available money they have is likely to be funnelled toward the expansion of their businesses or the development of new products and services. As they grow, the value of their shares increases.

Value companies are relatively established. While they may still be growing, there’s not as much room for the kind of rapid expansion that growth companies pursue. So rather than put all their cash flow into opportunities for development, these companies are more likely to pay dividends.

2. Capitalisation

Companies can also be divided up based on the total value of their shares—their “capitalisation.” Shares are generally considered to be large-, mid-, or small-cap, although at the extremes you may also see references to mega-cap or micro-cap shares.

The boundaries between one grouping and the next aren’t firm, and they change as the overall market value changes. In general, large-cap shares make up about 65% to 75% of the entire market, and mid- and small-cap shares about 10% to 15% each.

The shares of large-cap companies tend to be more stable than those of smaller companies. But smaller companies may have more potential for growth.

3. Sectors

Companies can also be grouped by sector. As with capitalisation, there are several different sector classification systems. Most systems include categories like technology, health care, and energy.

Shares within particular sectors will tend to react in predictable ways to economic conditions, so it’s important to make sure you are adequately diversified and your investments aren’t too concentrated in specific sectors.

For example, when the economy is doing poorly, sectors like information technology, consumer discretionary, and telecommunication services may suffer because people can choose to spend less in these areas.

On the other hand, people must keep spending on things like consumer staples, utilities, and health care, so these sectors may be less affected.

Risks of investing in shares

Remember, although shares might have the potential for higher returns compared to other asset classes like bonds, they also carry higher risk.

Share markets move in cycles, reflecting the underlying strength of the economy, political factors, industry trends and market sentiment. On any given day, interest rate and inflation expectations, company profits, dividends, economic growth figures and the rise or fall of your currency may have an impact on share prices.

That’s why shares are generally most suited to investors who have a longer investment time frame and the ability to ride out any short-term volatility.

If you’re interested in putting an investment strategy in place contact us on Phone: 07 5641 4134.

Source: Vanguard March 2022

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 advice or information in this publication is of a general nature only and has not taken into account your personal objectives, financial situation and needs. Because of that, before acting on the advice, you should consider its appropriateness to you, having regard to your personal objectives, financial situation and needs. Past performance is not a reliable guide to future returns. The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Do you dream of retiring in the country? Do you feel it’s time to leave the rat race behind and get among the fresh air, great outdoors and tight-knit community country towns are renowned for? Many retirees decide to move to country areas so they can enjoy a slower pace of life during their golden years.

Several of Australia’s leading retirement village providers have villages located in country towns all over Australia, with many not far from major metropolitan cities or centres, so you can easily access extra services and amenities within a few hours if needed.

Retiring in Country Victoria

When you retire in country Victoria, you will find an abundance of beauty. Whether you’re at the Mornington Peninsula among the natural hot springs and enjoying gourmet food and wine, or soaking up the history of the goldfields – there is a country region or town for every style of retirement!

Retiring in Country New South Wales

Enjoy the natural beauty of country New South Wales, from fresh produce at the local farmers’ markets to acclaimed wine regions and World Heritage-listed sites.

Whether you’re riding a paddle-steamer on the iconic Murray River, exploring caves that are millions of years old or tucking into a hearty meal at the local pub, there’s something for everyone in regional and country New South Wales.

Retiring in Country Queensland

Country Queensland offers you the chance to embrace the real Australian countryside, with several thriving rural and regional communities throughout the state, such as Toowoomba, Townsville and Rockhampton.

In country Queensland there’s more to the state than beaches! Here you will find epic national parks, boutique wine regions, annual festivals and sunshine all year round.

Retiring in Country South Australia

Country South Australia offers a range of lifestyle options from coastal to bushland and the outback. South Australia’s regional communities offer world-class wine and produce, fresh seafood and tight-knit community within pristine environments.

The natural landscapes are incredibly diverse, from rugged coastlines, expansive grasslands and picturesque rolling hills. Country South Australia is also home to the expansive Murray River and thriving regional communities of Mt Gambier, Murray Bridge, Port Pirie and Port Augusta to name a few.

Retiring in Country Western Australia

There are many regions to explore that make for the perfect retirement in Western Australia. Whether you dream of settling in Margaret River, WA’s premium wine region and home to award-winning restaurants, stunning beaches, ancient cave and stunning scenery.

Or perhaps you prefer the white sand beaches of Coral Bay, just a half-day from Perth. There’s also plenty of thriving communities around Esperance and billions of years of history to be found in the North West.

Retiring in Country Tasmania

The Tasmanian countryside may be the perfect place to retire, with beautiful country towns often less than an hour away from the conveniences of a major town or city. Tasmania’s countryside is like nothing else, with expansive open wilderness, stunning nature sights and plenty of native wildlife to get up close to.

There are plenty of beaches, wineries and golf courses to enjoy during your retirement.

Even if you need to head to a major city, you will likely get there in less than 40 minutes. After all, in Tasmania a 30-minute drive is considered a long commute!

Source: This article was originally published on https://agedcareonline.com.au/retirement-villages/lifestyle-choices/life-in-the-country.
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 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.

Heightened global markets volatility – as we’re experiencing right now – can easily trigger kneejerk reactions by panicked investors.

Widespread selling, triggered by the Russia-Ukraine crisis, has been behind the recent big swings on global financial markets, including on stock markets, commodities markets, and currency markets.

As serious as the current events are, heightened markets volatility is nothing new. Think back to around this time two years ago when the onset of the COVID-19 pandemic also triggered major falls on global markets.

In March 2020, the Australian share market dropped more than 35 per cent over about 20 trading sessions to reach its lowest level in more than a decade.

Very soon after, it and other global financial markets staged a quick and very strong rebound.

By the end of 2020 share markets were back near record levels, and last year they continued to build momentum.

Those investors who didn’t panic at the time, and who chose to ride through all that early 2020 markets volatility, and who have remained invested ever since, have been well rewarded with both capital and income growth over time.

In volatile market conditions, not doing anything at all – staying the course – is generally the best investment strategy overall.

Three mistakes to avoid during a downturn

1. Failing to have a plan

Investing without a plan is an error that invites other errors, such as chasing performance, market-timing, or reacting to market “noise” driven by media headlines. Such temptations multiply during downturns, as investors looking to protect their portfolios seek quick fixes.

2. Fixating on losses

Market downturns are normal, and most investors will endure many of them. Unless you sell, the number of shares you own won’t fall during a downturn. In fact, the number will grow if you reinvest your funds’ income and capital gains distributions. And any market recovery should revive your portfolio too.

3. Overreacting or missing an opportunity

In times of falling asset prices, some investors overreact by selling riskier assets and moving to government securities or cash equivalents. But it’s a mistake to sell risky assets amid market volatility in the belief that you’ll know when to move your money back to those assets.

Time in the markets is what counts

Trying to time markets is virtually impossible. Just being invested in the market, and making ongoing contributions, will ensure you never miss out on long-term growth.

If you’re unsure about your current investment portfolio, call us today to discuss a strategy for you on Phone: 07 5641 4134.

Source: Vanguard March 2022

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.

One of the biggest things holding entrepreneurs back from making bigger, better decisions for their business is anxiety over making a bad choice. Here are five things all business owners should remember when it comes time to make a business-changing decision, writes former Flying Solo editor, Kelly Exeter.

Few things cause more anxiety for business owners than making decisions. They know that poor decisions can cost money, cause stress and delay success.

If you focus too heavily on the pitfalls of poor decisions, the result can be paralysis – delaying a decision until you’re forced to make it, or not making any decision at all.

Five techniques to help you make better business decisions

It’s not reasonable to expect that every decision you ever make for your business will be a good one.

But you can tip the balance in your favour by calling on the following five techniques.

1. Use the big picture as a key filter

Imagine you’re getting ready to head out to a business event. It’s an event where you know you’ll get the opportunity to build relationships beneficial to both you and your business in the future. But you’re tired. The kids played tag team waking up last night, you had an early morning Skype call, and really, all you feel up to is some dinner and then the couch.

Should you blow off the event? Well, it depends on what your big picture is.

If your business is quite mature and you’re not trying to actively grow your operations, prioritising the need to rest and recharge – rather than continuing to push when you’re tired – might be a great decision for both the immediate term and the long term.

If your business is very new and heavily reliant on the relationships you’re building, then it might be better to push through your tiredness and head to the event.

2. Choose discomfort over resentment

We’ve all been in those situations where we’ve been asked to do something, and even though we don’t want to do it, we say yes. Purely because saying ‘no’ would make us uncomfortable in the moment.

The problem with doing this is that it always leads to resentment. Resentment of the person who asked. Resentment of the task because you never wanted to do it. Resentment of yourself for not saying no when you had the chance.

Now I will say it’s all well and good to chant ‘choose discomfort over resentment’ to yourself when someone puts you on the spot. But in reality, not too many of us can say a flat ‘no’ to someone’s face when their expectation is a ‘yes’.

You can buy yourself some time and space in these situations by saying something like: “I need to check my schedule when I get back to the office.”

Moving yourself away from needing to respond in the moment allows you to be more considered about, and more comfortable with, how you say no.

3. Beware of loss aversion

Loss aversion is a cognitive bias humans have. In terms of decision-making, it sees us focus more heavily on what we might lose from making a certain decision than what we might gain.

For example, you might be considering putting on a new staff member. Loss aversion might see you focus more heavily on what they will cost your business in salary and entitlements, rather than on the fact that they will free you to do work that generates sales higher than you’re currently achieving.

It’s always prudent to weigh up the pros and cons when making a decision. You just need to account for the fact that humans are programmed to focus more heavily on the potential losses in the cons, over the gains that can come from the pros.

4. Leverage all three of your heart, head and gut

Heart decisions are emotionally driven. Head decisions are based on data and rationale. Gut decisions bring in intuition.

There are very few (if any!) decisions that should be made using only one of these things. Most decisions should take all three into account. How do we do this? Again, it’s about awareness.

Catch yourself when you’re about to make a spur-of-the-moment decision because you’re all caught up in the emotion of something. Gently remind yourself to take a deep breath, bring some rational thought into the mix, and check if what you’re about to do ‘feels right’.

Check in with your heart and gut to see what they’re telling you when you’re caught up in spreadsheets and drowning in data, trying to weight something up.

There’s no perfect way to leverage all three of these things – but the simple act of checking in with them will help you make decisions you feel good about.

5. Get your timing right

Have you heard of decision fatigue? In short, every decision you make over a day slightly impairs your ability to make a good decision the next time. It’s why we make bad decisions about what to eat when the 3pm slump hits us at our desks. And why you’re more likely to fire off an irrationally angry response via email in the afternoon than in the morning. Or drop hundreds of dollars buying the domains for that cool new business idea you had at midnight.

Bottom line – be conscious of making decisions when you’re tired. You should also be aware of making decisions when you’re highly emotional. Where possible, always delay the final decision to a time when you’re well-rested and calm.

The success of a business is seldom reliant on the outcome of a single decision. Instead, success is the result of hundreds of decisions made over years.

Setting yourself up to make good decisions more often means you will spend less time and energy managing the fallout of poor choices, and more on taking your business forward.

Source: Flying Solo March 2022

This article by Kelly Exeter is reproduced with the permission of Flying Solo – Australia’s micro business community. Find out more and join over 100K others https://www.flyingsolo.com.au/join.

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 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) ac www.flyingsolo.com.au

The surge in house prices around Australia over the last two years has done little to quell the notion that getting on the property ladder is an increasingly difficult feat, particularly for younger investors.

While higher interest rates expected this year may lead to less demand and a fall in house prices, property buyers are still battling other economic factors such as lower equity returns, rising inflation and an ever-volatile market.

Yet, even when conditions may seem unfavourable, there are still a few ways younger investors can work towards a house deposit if that’s one of their goals.

Set a target and have a plan

A house deposit is usually 20 per cent of the purchase price of the property. So, if the house or apartment you are considering is around $700,000, then you will need $140,000 upfront. You also need to consider other costs such as stamp duty, legal costs and admin fees, which all vary depending on which state you are in and whether you are buying a first home.

Doing your research on what government grants and concessions you are eligible for is also essential when creating your investment plan. Initiatives such as the First Home Owner Grant, the First Home Super Saver Scheme and First Home Loan Despite Scheme may help reduce the amount needed for a first deposit. For example, in Victoria, first home buyers receive a stamp duty exemption on properties valued up to $600,000 or a concession on properties valued between $600,001 and $750,000.

Once you’ve got a figure in mind and decided on a timeline, you can then work backwards to understand how much you need to periodically save to reach your goal. This can be a combination of regularly contributing to a savings account, spending less, and investing an amount that you are comfortable with.

Consider your risk-return profile and how it will evolve

One of the biggest advantages younger investors have is that time is on their side. This means if investors start early, they have a longer time frame to achieve their goals and therefore the option to take on more risk. This is because market volatility smooths out in the long-run as more time to invest means there’s more time to recover should there be a market downturn.

As such, investing in high growth securities such as equity ETFs or funds could be a suitable place to start. At the same time however, it’s important to maintain enough diversification so that your portfolio is not wholly dependent on the performance of one asset class or sector.

Diversified high growth ETFs and funds invest mainly in growth assets but still allocate a portion to income assets such as bonds or cash – a portfolio stabiliser in times of volatility.

While taking on more risk at the beginning of your investment journey may suit, particularly if you have a mid to longer term time frame, investors should also consider how their risk tolerance will evolve as their timeline grows shorter and as they approach their goal. You should be keenly aware that investing for a house deposit is different to investing for retirement – the time horizons for both scenarios are vastly different and as such, your risk profile and corresponding asset allocations would be different for each goal.

It might be more prudent when being five or less years away from achieving your target deposit to think about a gradual shift away from high-risk, high-growth investments towards a more conservative exposure, just in case there is a significant market downturn that may delay progress when you’re so close to your end goal.

Automate your regular investments

Regular investing is the best way to achieve an ambitious financial goal without feeling daunted by the task ahead.

Not only will your investments continue to compound as you contribute, you can also easily adopt the dollar-cost averaging strategy which ultimately lowers your average investment costs over time and lets you keep more of your returns.

Automating your investments will also make regular investing much easier and encourage a disciplined approach.

As mentioned above, when you approach your end goal, you can gradually redirect your automated contributions towards less-risky investments as you feel appropriate.

Contact us on |PHONE if you’d like to understand more about investing for your house deposit.

Source: Vanguard March 2022

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.

Is the key to saving a home deposit as simple as giving up ‘smashed avo’?

Well not quite. But spending less does make a difference.

Here are some top ways you can control your spending to reach your savings goals so much quicker.

Start by understanding your spend

It can be easy to lose track of how you’re spending money, especially if you often rely on cashless payments and credit cards.

Many online banking systems include tools to categorise debits and make a budget – so take advantage of them. Or download an app that helps you track your personal expenses on the go.

Find savings in the essentials

Some costs can’t be avoided – but many everyday expenses can be reduced – so look for opportunities to save in all areas of your spending, not just in your indulgences. For example, you could:

• Move in with your parents/relatives, or move into a cheaper rental or share house (short-term discomfort can pay off in the longer term).

• Implement daily or weekly tactics like meal planning, making grocery lists and buying in bulk to save money on food. Set aside a budget for eating out/take-away and stick to it.

• Shop around to reduce your regular bills – you may get better value if you switch, or tell current providers you intend to switch. Seek discounts for taking out multiple policies with one insurer.

• Use the car less: take public transport; carpool with colleagues; or try walking or riding. You’ll be amazed at how quickly it all adds up to savings. 

• Make sure you’re paying off debts or credit cards completely each month or as much as possible, to avoid the added expense of paying additional (compounding) interest. 

Reduce common overspending

If you spend excessively on things like a daily coffee, buying clothes, going out or expensive hobbies, it may be unrealistic to cut the expense entirely. It can be important to indulge occasionally. Instead, set a weekly or monthly luxury-items budget and reduce that limit over time. Or, if you do come across an item you feel you ‘must have’, don’t buy it straight away. Instead plan to buy it in a day or two’s time. In that time, you’ll be able to consider that purchase more rationally and come to realise you could do without it after all. 

A Galaxy survey of more than 1000 Australians showed that 73 per cent have a problem with overspending. In particular, people tend to go overboard each time Christmas rolls around. 

To reduce gift expenses, be like Santa: make a list (and a budget). Buy only planned items within your allocated budget – then stop! To help manage gift-recipient expectations and family peer pressure, arrange with your family to put a cap on gift values. That way you won’t come across as ‘stingy’.

Another common way Aussies overspend is on holidays. CommBank research has shown that a third of holidaymakers spent more on their trip than planned. Do your research and set a daily budget. If you are travelling overseas, consider setting up a separate bank account or a foreign currency card, instead of relying on your credit card. That way you can’t spend more than you’ve budgeted for (unless it’s an emergency).

Cancel those unused subscriptions

Another opportunity to reduce your spending is to review those ongoing but forgotten, monthly fees you may be charged for plans and subscriptions. For instance, are you paying for gym membership that you don’t use, or Netflix that you don’t watch? Or are you even paying too much on your phone or internet plans?

A good way to get a snap shot of these expenses is to review your credit card and bank statements. Although $15 a week for the gym or Netflix doesn’t sound like a lot, it adds up to $780 per year.

Instead, if you can cut these unused plan or subscription expenses, have the amount saved each week automatically transferred in to your savings account.

Overall remember, every wasted dollar is money you could be spending on your own home.

Source: MFAA

Reproduced with the permission of the Mortgage and Finance Association of Australia (MFAA)

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. Past performance is not a reliable guide to future returns.

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.

Starting a family, whether it be taking those first steps of planning or knowing your baby is on their way, is exciting – and expensive. Before you start thinking of paint colours for the nursery, it’s wise to understand the costs involved in raising a child.

Knowing the costs

While there’s no set cost to raising a child, with many variables to take into consideration, a University of Canberra study found it costs a middle-income family $812,000 to raise two children until they leave home.ⁱ

Even before your child enters the world, there are costs. If you choose the public hospital system (which three quarters of pregnant women in Australia do), you won’t be out of pocket much but there can be some expenses, such as paying for additional ultrasounds and medications.ⁱⁱ Private hospitals are estimated to cost anywhere between $2,500 and $20,000 with private health insurance.ⁱⁱⁱ

You will need to buy baby furniture and a car seat, and there will be the ongoing costs of nappies and clothes to keep in mind. Other factors, such as whether baby is formula fed and how soon you introduce food, will also impact your finances – some of these can be planned for, while others are more challenging.

What you are entitled to

If this all sounds a bit daunting, remember that there is financial support available. Depending on your/your partner’s work situation, you might be able to access paid maternity/paternity leave.

You might also be eligible for the Australian Government’s Parental Leave Pay, an 18 week payment at the minimum wage, which the primary carer receives after the birth of the child. There is also a Dad and Partner Pay, a payment for up to two weeks, also at the minimum wage and a Child Care Subsidy which is paid directly to your providers to reduce the amount you pay, should you be eligible.

Creating a family budget

Whether you have an existing budget or this is your first time creating one, you will need to take into account your growing family. Consider your living expenses and mortgage or rent, and whether this will cover your family or not – will you need to renovate or move in the near future?

Also take into consideration childcare costs. It is estimated that an average-earning Australian couple with two young children spend around 17% of their income on full-time childcare.^iv Budgeting for future childcare costs will mean these won’t take you by surprise and it can help you make decisions around work and childcare arrangements.

And while your focus might be on the immediate future (and therefore a newborn baby or toddler), don’t forget to plan for the ongoing costs for your growing child. Of course, there are things you can’t plan for, but you can still think ahead.

When it comes to deciding on public or private education, you can use the Cost of Education Calculator to get an idea of how your finances will be impacted. This can then be taken into account in your family budget.

Protecting your future

When your family expands, it is a good time to update your will. While not a topic many of us want to dwell on, thinking about what would happen to our family when we are no longer around is important – you will want them to be taken care of.

Once children come on the scene, the need for life insurance is even greater. If something were to happen to you or your partner, then the financial burden could be significant. Who would look after the children? Could they stay at the same schools? Could your partner pay the mortgage on one salary?

Income protection, life insurance, trauma insurance and total and permanent disability may be considered. Another consideration could be to cover both partners even where one isn’t working as the costs associated with childcare and household tasks can be substantial.

This new chapter of your life, whether it is beginning or in the planning stage, is an exciting and special time. By planning as best as you can, you’ll make the transition smoother when it comes to financial matters. We’re here to help, so reach out on Phone: 07 5641 4134 for advice.

i https://www.moneyandlife.com.au/family-and-life-events/what-does-it-really-cost-to-raise-kids/

ii https://www.abc.net.au/everyday/the-cost-of-childbirth-and-the-hidden-bills-to-prepare-for/10350778

iii https://www.pregnancybirthbaby.org.au/the-role-of-your-obstetrician

iv https://data.oecd.org/benwage/net-childcare-costs.htm

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.

How to start the aged care assessment process, understand the difference between the ACAT and RAS assessment service, know what is involved in the aged care assessment and the significance of this to getting the right level of aged care at home service.

So often when talking to our clients, we hear busy adult children recognising that their parents need help but just don’t know where to start. Or they have started, and made contact with the My Aged Care portal and started the process, but they have not been able to get the care interventions that they or their parents need.

Accessing aged care services generally starts with a call to My Aged Care, 1800 200 422 or jump online to; www.myagedcare.gov.au depending on your response to the questions posed by the operator an aged care assessment will be arranged. This sounds pretty straight forward right? And in principle it is….

Except there are two levels of aged care assessment service. One is for lower level care needs; the Regional Assessment Service or RAS and one is for higher level care including home care packages, respite and residential care; the Aged Care Assessment Team also know as the ACAT. So what? Well if you actually need a home care package but get a RAS assessment then there can be significant delays and hurdles in then accessing the ACAT.

What is involved in an aged care assessment?

Essentially, a trained assessor will either in person or over the phone talk to your parent/yourself about how they are going, how they go getting dressed, getting the shopping done, cleaning and domestic needs, social engagement, manage their health and medications. If they have had any falls how they get about etc. This represents a broad overview but essentially they are seeking to understand how the older person is living, coping and what support is available to keep them living well longer. This sounds inherently sensible and fair so far.

So why might you need to get in external help?

We can potentially help reduce your waiting periods and ensure you are more likely to get the right level of aged care service that you need. We do this by understanding where your parents are actually functioning at and then help take you through the aged care assessment process. Because the reality is if you don’t have a clear understanding of what your end goal is you are not always likely to get it. We also know that very often, when asked people will down play exactly what trouble they may be having, “I’m going well…I can do this and this and this” , sound familiar? Unfortunately the assessors can only assess against the information they are given and this is where we see many people not get the level of service that they desperately need.

This problem is compounded by the unfortunate fact that for home care services there are quite lengthy waiting lists. This means that an inadequate assessment initially can delay the actual access of suitable aged care services considerably, sometimes to the point that a person may end up moving prematurely into a residential aged care facility because their needs have increased beyond the scope of their current at home support.

Not sure if this applies to you? Get in touch for a chat about your situation and if we can help reduce your stress about ensuring the right care is received in the most timely manner.

Reproduced with permission of Family Aged Care Advocates

Download 10 aged care traps to avoid for your ageing parents

No specific person’s personal objectives, needs or financial situations were taken into consideration when creating the content for this article. Family Aged Care Advocates Pty Ltd (ABN 77 642 454 484) are aged care specialists. You should seek qualified financial planning, taxation and legal advice before making any decisions that are unique to your circumstances. This article was prepared in good faith and we accept no liability for any errors or omissions.