By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia

Before you started reading this article, did you already do a check-up on your investment portfolio value?

If you did, and do so just about every day, you’re certainly not alone.

After all, it’s human nature to look regularly at what financial markets have been doing and how your specific investments have performed.

And that’s so easy to do these days through online financial platforms.

Vanguard Australia recently surveyed more than 1,000 Australian investors and found almost one-third (28 per cent) of respondents check their investment returns every day.

A similar percentage of investors check their returns weekly, and about 20 per cent check theirs monthly. Less than 10 per cent of investors look at their returns less frequently.

That’s almost 60 per cent of investors who look at their returns at least weekly, and another 20 per cent who check every few weeks.

But how often is too much? Is there any real benefit in checking your investment returns daily, weekly, or even monthly?

After all, a daily pulse check can only provide an extremely short-term snapshot based on the market rises and falls over the immediate trading period.

If you check your returns in the morning, they will invariably be different by the end of the day.

Checking weekly cancels out some of the day-to-day market volatility, but even a week is still very short term.

Over a month you’ll potentially get a slightly clearer picture but, again, a few weeks is not really going to be strongly indicative of broader market trends.

What’s your strategy?

Short-term market events can be unsettling, especially when your money is invested in highly volatile assets such as shares.

Take last year for example, when financial markets fell more than 30 per cent over just a couple of weeks as investor panic set in over the spread of Covid-19.

People who checked on their returns daily (even multiple times a day) or weekly at that time would have seen their returns fall very sharply.

Depending on when they started investing, many may have seen their profits totally wiped out and their investments showing large capital losses.

It was a disturbing short-term period, but within a month or so markets had already started to rebound.

Now, just over 12 months later, the Australian and other key share markets are trading near record highs.

The power of compounding returns

The key lesson here is that, irrespective of short-term events, it’s always important to stay focused on your long-term investment goals and your overarching strategy to achieve them.

Short-term market movements ultimately will have little impact on your longer-term returns.

While we’re still a little way off from being able to rule off the investment books to the end of this financial year, it’s evident that global financial markets have performed strongly over the last 12 months.

That being said, one year is still a relatively short period of time in the context of investing and being able to measure your returns on a meaningful level.

Which is why Vanguard produces a chart every year showing the returns from a range of different asset classes over a 30-year period.

Among other key events, the last 30 years includes both the 2007-08 Global Financial Crisis and the 2020 Covid-19 market crash.

The 2020 Vanguard Index Chart shows that a $10,000 investment made into Australian shares in 1990 would have achieved an 8.9 per cent total return per annum if all distributions had been reinvested and grown to $130,457 by 30 June 2020.

Over the same time frame, and using the same strategy, a $10,000 investment into the broad United States share market would have delivered a 10.3 per cent per annum return and grown to $186,799.

The 2021 Vanguard Index Chart covering the 30 years to the end of 30 June 2021 will be released in the next few months.

Even a low initial balance will grow substantially over time when combined with compounding investment returns.

There’s nothing inherently wrong with checking your investments daily, weekly or monthly.

However, the most important thing to do as an investor is to stay disciplined and remain focused on the longer term.

Successful investing revolves around having a well-planned and diversified strategy that’s aligned to your specific goals, and the resolve to stay on track even during volatile investment periods.

Investors who stay the course over time, riding through the regular ups and downs of the markets, have a much better chance of achieving investment success than those who take short-term positions and try to time when to buy and sell.

Contact us on Phone: 07 5641 4134 if you’d like to discuss this topic further.

Source: Vanguard June 2021

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.

© 2021 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.

When you’re desperately trying to save up a deposit for a home and just see the prices of property climbing and climbing, it’s difficult to remain patient. But there is another way: a guarantor can help.

If you don’t have a substantial deposit for a home loan, there are still a number of ways to obtain credit. These are known as family pledges and there are two types available to borrowers: service guarantees and security guarantees.

Service guarantees are less common that security guarantees, explains an MFAA-accredited finance broker, and they involve a family member guaranteeing all of the repayments on a loan, as well as being named on the property title.

“A drawback of this approach is that it usually means first home buyers are not entitled to any government grants,” the finance broker explains.

A more popular option is a security guarantee. Borrowers who have a limited deposit often use this approach. In this situation, a relative or friend (usually a borrower’s parent or parents) is prepared to use the equity in his or her own home to guarantee the deposit of the borrower.

For example, for a total loan amount of $600,000, in a security guarantor situation the borrower/s would take on the debt of 80 per cent of the value of their loan, which would be $480,000, in their own name/s.

The loan for the balance, $120,000, is then guaranteed in the names of the guarantor/s and borrower/s, limiting the guarantor’s liability while providing security for the lender, meaning that lender’s mortgage insurance is not necessary.

“This is a very popular way of first home buyers entering the property market,” the finance broker says. “It works well when borrowers don’t have a substantial deposit, but their parents own their own home. It’s a great option as long as the parents are comfortable with their child’s ability to pay back the loan.”

To find a solution that will help you own your own home sooner, speak to us on Phone: 07 5641 4134. 

Source: MFAA https://www.mortgageandfinancehelp.com.au/first-home-buyer-news/how-guarantor-can-help-you-secure-finance/

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.

By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia

Transfers of accumulated wealth from one generation to the next are part and parcel of everyday life.

But the next 20 to 30 years will see the biggest intergenerational wealth handover in history.

The largest part of this great wealth transfer will be between members of the “Baby Boomer” generation (people born just after the end of World War II through to 1964) and their children and other heirs.

According to some estimates, over the coming decades at least $3.5 trillion of assets will be inherited in Australia alone.

This will include family homes, investment properties, superannuation money, direct shares and a wide range of other financial and non-financial assets.

Research just released by the UK-based Institute of Fiscal Studies (IFS) notes that the value of inheritances will not only grow dramatically but will be an increasingly important source of income and wealth for younger generations.

In fact, IFS found that 72 per cent of people born in the 1960s are expecting to receive an inheritance from their parents, rising to 81 per cent for those born in the 1980s.

The growing inheritance divide

The IFS research is interesting in that it projects the inheritances to be received by the 1960s, 1970s and 1980s-born generations in the UK.

It found that average inheritances compared to lifetime income are likely to be almost twice as large for people born in the 1980s compared to those born in the 1960s.

Another key conclusion in the IFS research is that inheritances will increase inequalities between people with richer or poorer parents.

The effect of inheritances on inequalities by parental background is expected to be larger for younger generations.

For those born in the 1980s, inheritances are projected to increase lifetime incomes by 5 per cent, on average, for those with parents in the bottom fifth of wealth distribution.

That compares with an expected 29 per cent increase in lifetime incomes for people with parents who are in the top fifth of wealth distribution.

The IFS research on this accords with some of the key findings in the final Retirement Income Review released by Australia’s Department of the Treasury in July last year.

Treasury concluded that inheritances could help rebalance intergenerational differences in opportunities to save for, and outcomes in, retirement.

However, it also found that inheritances can be ineffective at equalising opportunities and outcomes between generations, as their size and timing are not guaranteed.

Planning for inheritances

Inheritance planning, unlike succession planning within a businesses, is an area that’s rarely discussed at the family level.

Most families regard subjects such as death and the future division of wealth as unpleasant, and potentially sensitive when multiple heirs are involved.

But there’s a lot to be said for having open discussions within your family about the intended treatment of assets and future inheritances.

Creating a valid will, and specifically documenting how you want your assets to be managed and divided after your death, should be a key step in the inheritance planning process.

Residential real estate and superannuation, which combined make up more than three quarters of total household assets, are the largest components of most inheritances.

Treasury estimates that assuming there’s no change in how most retirees draw down their superannuation balances, superannuation death benefits will increase from around $17 billion to just under $130 billion by 2059.

Ensuring that any superannuation you have left over at the time of your death is distributed according to your wishes requires you to complete a binding death benefit nomination provided by your super fund.

It’s important to be aware of any potential tax implications. For example, while superannuation distributed to a surviving spouse or dependent children is generally tax free, non-dependents (including adult children) may be required to pay tax on amounts they receive.

That comes down to how much of your super is made up from pre-tax and after-tax contributions.

Capital gains tax does not apply if someone inherits direct shares or other financial securities, but tax may apply if they later dispose of them.

Any unapplied capital losses that could be used to offset capital gains tax cannot be transferred to beneficiaries.

Estate planning can be complex. Consulting a licensed financial adviser to help you and your intended beneficiaries map out an inheritance framework that also identifies issues such as potential tax liabilities is a prudent step so call us today on Phone: 07 5641 4134.

Source: Vanguard May 2021

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.

© 2021 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.

By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia

The Federal Government announced in the May Budget that it is widening the scope of the scheme allowing eligible Australians to sell their home and put extra money into their superannuation.

First introduced in the 2018-19 financial year, the “downsizer measure” has provided an opportunity for individuals 65 years and older to add up to $300,000, and couples up to $600,000, into their super from the proceeds of their home.

Data from the Australian Tax Office shows that, as of 30 April 2021, just over 23,000 older Australians had collectively made $5.46 billion in downsizer contributions to their super fund.

But those numbers are set to increase significantly over time.

From 1 July 2022 the minimum age limit for participation will be reduced to 60, which will open the superannuation door for more people wanting to build up their superannuation account balance.

Here’s what you need to know

The downsizer scheme is administered by the Australian Tax Office (ATO) and has a range of eligibility criteria in addition to the minimum age requirements.

The ATO will only permit additional super contributions if they are made using the proceeds from selling your principal place of residence.

You or your spouse must have owned your home for 10 years or more prior to the sale, with your ownership calculated from the date of settlement when you bought your home.

Your home needs to be exempt or partially exempt from capital gains tax under the main residence exemption.

There’s also a strict definition of what constitutes a home. It must be in Australia and cannot be a caravan, houseboat, or a mobile home.

You’re unable to use the downsizer scheme to deposit funds from the sale of an investment property. These can only be done through a non-concessional (tax-paid) super contribution.

Downsizer super contributions must be made within 90 days after you receive the proceeds of your home sale. The ATO will allow for a longer period if the delay is due to circumstances beyond your control.

The downsizer measure is a one-off, so once you’ve made a super contribution you’re unable to do so again by using the proceeds from another home in the future.

However, if the home that is sold is only owned by one spouse, the spouse that does not have an ownership interest is able to make a downsizer contribution or have one made on their behalf, provided they meet the other eligibility requirements.

Downsizer contributions form part of the tax-free component in your super fund. They can be made in addition to non-concessional super contributions and do not count towards your personal super contribution limit.

They can also be made even if you have a total super balance of more than $1.6 million.

Your downsizer contribution will not affect your total superannuation balance until your total super balance is re-calculated to include all your contributions, including your downsizer contributions, on 30 June at the end of each financial year.

Ultimately any downsizer contributions you make however will count towards your tax-free transfer balance limit when you move into pension phase at retirement.

You’ll need to make sure your super fund (or funds) accepts downsizer contributions. If you don’t currently have an open account with a super fund, you’ll need to open a new super account to make your downsizer contribution.

You’ll also need to provide your fund with a completed downsizer contribution into super form, which can be downloaded from the ATO’s website, either before or at the time of making your downsizer contribution.

Be mindful of the pension assets test

People considering making a home downsizer contribution into super – especially those already receiving a partial or full government Age Pension – should do proper due diligence.

Because the Age Pension is calculated on the value of all assets outside of your family home, including the amount you have in your super accumulation or pension account, a large cash injection from your home proceeds may result in a breach of assets test rules.

Under what’s known as the taper rate, Age Pension entitlements are reduced by $3 per fortnight for every $1,000 in assets over the Government’s asset test thresholds.

The current assets test limits are shown in the table below.

Source: Department of Human Services, limits effective 20 March 2021

Once an individual or couple breach the limits for the full Age Pension, their fortnightly payments will gradually reduce using the taper rate. Those on a part pension could find their payments cease altogether if they move above the maximum thresholds.

So, even with a higher superannuation balance because of your home sale contribution, your total income stream could be less than what you received from a full or part Age Pension.

It is essential to speak to us on Phone: 07 5641 4134 before proceeding, especially with respect to social security means testing.

Source: Vanguard May 2021

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.

© 2021 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.

By Tony Kaye, Senior Personal Finance Writer, Vanguard Australia

You’re ready to start investing, but there’s a few things holding you back.

Firstly, while you have a bit of money set aside, you don’t have a lot and you’re thinking it’s probably not enough to start off with.

You also don’t know a lot about financial markets and different types of investments. With so many investment choices out there, which is the best way to go?

Then there’s that underlying fear of losing your money if you do invest. After all, share markets are notorious for their volatility.

These are all legitimate concerns. Vanguard Australia recently surveyed more than 1,000 Australians on their attitudes and approaches to investing and the points above were all found to be barriers to investing for some people.

So, let’s address them one by one.

Do I need a lot of money to invest?

Vanguard’s research found that many people think they need a lot of money to start investing.

About 70 per cent of the people surveyed believed they needed at least $1,000, and 35 per cent thought they needed more than $10,000.

But, contrary to those beliefs, you don’t need thousands of dollars to begin. Far from it.

You can start investing with just $500 and then invest smaller amounts over time to increase your existing investment holdings.

Many investors set up a regular investing plan using their accumulated savings so they keep adding to their holdings and take advantage of compounding investment returns over the long term.

An advantage of investing this way is that, rather than trying to pick a good time to invest, buying at different times allows you to average out your total cost of investing.

When questioned on investment strategies, most of the respondents to Vanguard’s survey noted that they invest regularly, buy more than they sell, and have a long-term approach.

Of the total number of people surveyed, 44 per cent said they invest on a weekly or monthly basis, while only 25 per cent sold in the same period.

One-in-three who invest said they plan to hold for the long-term, however women were 34 per cent more likely than men to hold long term.

I’m not sure where I should invest?

Some respondents to Vanguard’s investing survey pointed out that their lack of investment knowledge is an entry barrier for them.

That’s understandable. With such a wide range of investment options out there, it can be hard to know where to start. But a good first step is to understand what it takes to be a successful investor.

We believe that successful investing revolves around four key principles:

• The need to set investment goals and create an investment strategy to achieve them.

• Having a broad spread of investments across different types of assets to reduce your risk.

• Controlling what you spend on investments by targeting low-cost products that will increase your share of returns.

• Being disciplined and patient so you do achieve your long-term investment goals.

Following these principles will help you to narrow down your investment choices.

Having a broad understanding of investment assets and product types is prudent. 

Where to invest generally comes down to goals, your preferences, and your tolerance for risk.

To make the decision process easier, many investors are choosing low-cost diversified products that offer a mix of income and growth potential within a single managed fund.

These types of products are professionally managed and invest in multiple asset classes, including shares, bonds, property, and cash.

If you’re unsure what is the best strategy for you, it may be worthwhile consulting a financial adviser to help guide you towards investments that are most appropriate for you.

Will I lose my money?

Of Vanguard’s survey respondents, 20 per cent noted that a barrier to entry for them was the fear of making a poor investment.

This is sometimes referred to as loss aversion – the fear of losing some or all of your money.

Investment loss is a valid concern because all investments carry an element of risk.

That was very evident early last year when financial markets tumbled heavily because of the rapid spread of COVID-19. Investors that panicked and sold their investments at that time would have recorded substantial losses.

Yet, less than six months later, financial markets had not only recovered but some share markets were close to reaching record highs.

Investors who stayed the course through the market volatility were much better off than people who sold.

In fact, if you look at the performance of financial markets over the longer term, one of the things that really stands out is that investment returns across a range of different asset classes have been very strong.

The annual Vanguard Index Chart powerfully illustrates how sticking to a disciplined investment plan, with diversification across a range of asset classes, will invariably override short-term market volatility and deliver long-term returns.

It’s always important to do good research before choosing any investments, and having a spread of different assets will help reduce risk and minimise any losses.

To learn more, call us on Phone: 07 5641 4134. 

Source: Vanguard May 2021

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.

© 2021 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.

Returning to work after maternity leave can be difficult and needs careful planning. Here are our tips to help make the transition much smoother.

When considering childcare 

When you return to work, you might need to put your kids in childcare. This can be expensive, costing up to $140 a day, which is a big hit to the family budget. For example, when both parents are working full-time, a three-year-old costs 13.1% of their parents’ taxable income. This increases to 38.5% with childcare included.¹

Finding a childcare centre that meets your budget can be a long process. Especially as some have long waiting lists. Remember, you may be entitled to government subsidies to help you cover the costs of childcare.

For more helpful information about returning to work visit the ASIC Money Smart website.

Balancing family and work

For many parents, returning to work brings a feeling of independence and a sense of things going back to normal. But, you may also be facing some challenges, such as being away from your child and perhaps nervousness about being back on the job.

It’s important to take things slow. Why not speak to your employer about flexible working arrangements? This could be working from home on agreed days or reduced working hours.

If you’re finding your return to work is difficult, don’t struggle alone, speak to your friends and family for help and support.

Change how you see your budget

You’ll find that as your life has changed dramatically, you now make decisions based on your priorities as a parent. Thankfully, being on top of your finances and having a solid savings plan can give you the financial freedom to make the best decisions for you and your family.

It’s important to have a handle on your money, so that you have less to worry about during a typically stressful time. If you’re looking for some tips on budgeting and saving, check out the article on simple and smart saving habits or contact us on Phone: 07 5641 4134.

1 https://www.dss.gov.au/our-responsibilities/families-and-children/publications-articles/updated-costs-of-children-using-australian-budget-standards, Families and children, Department of Social Services

Source: NAB https://www.nab.com.au/personal/life-moments/family/start-family/back-to-work

Reproduced with permission of National Australia Bank (‘NAB’). This article was original published at https://www.nab.com.au/personal/life-moments/family/start-family/back-to-work

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.

© 2021 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.

Fixing the roof is easier, and more enjoyable, when the sun is shining. What a shame then that we only tend to look critically at our investments when it’s blowing a hooley in the markets and we are scrabbling around for buckets to catch the drips.

A year into the most remarkable recovery for stock markets that we are ever likely to experience, now is the perfect time to give our portfolios a mid-flight check. When, not if, you hit the inevitable turbulence ahead, you’ll be glad you did. Here are ten questions to ask.

• If we do hit an air pocket, will you have to sell at what may be a temporary low? Remember that after a similar recovery in 2009, the market fell 17pc in the summer of 2010. It happens. If you are still earning, the answer is probably no. If you are, however, taking an income from your investments, make sure that you have at least six months’, and preferably a couple of years’ expenses set aside in cash. Don’t be a forced seller.

• Are you really diversified? It’s easy to think that because you have a blend of shares and bonds in your portfolio you will enjoy a smoother ride. Maybe that was once true. These days, these two assets move in lock step a lot more than they used to. If interest rates start to rise on inflation fears, shares and bonds could both fall at the same time. You should put your eggs in a few more baskets. Infrastructure, inflation-linked bonds, property, commodities could all have a part to play.

• What are your rules for selling? You probably don’t have any, which is a shame because a crisis is a bad time to be trying to think straight. Some people employ stop losses, which can staunch the bleeding but risk turning a temporary loss into a permanent one. A better approach is to write down why you made an investment in the first place and ask yourself after a fall whether anything, other than the price, has changed.

• What is the balance between income and capital gains in your expected returns? People tend to think of dividends as a nice to have, the icing on the cake. The reality is that income is a major contributor to total returns over time because dividends are usually more stable than prices. After last year’s widespread dividend cuts, the outlook for income has improved significantly. Some traditional sources of yield (miners, energy, utilities) currently offer high and sustainable pay-outs with the likelihood of inflation-busting growth to come.

• Do you have any dry powder to put to work when markets become more volatile, as they certainly will? Having some cash to hand (separate from what you’ve put aside to cover expenses) is essential if you are to benefit from Mr Market’s mood swings. If you were fully invested in March 2020 you would have enjoyed the subsequent recovery but how much better if you could have added to your investments at bargain basement prices.

• Do you suffer from confirmation bias? We all tend to be temperamentally inclined towards over-optimism or excessive pessimism. It is generally better to err on the side of positivity when it comes to investing because markets go up over time. But you might still ask yourself what could go wrong. If you are naturally gloomy, you will, like a stopped clock, be right from time to time. But the history of stock markets has rightly been described as the Triumph of the Optimists. Seek out opposing views.

• Are you becoming more optimistic as the market rises? Watch this tendency because the best returns have been achieved by investors who adopt the opposite approach. My former colleague Anthony Bolton used to advise younger fund managers to become more bullish as the market fell. Easy to say and very difficult to do. The growing appetite for risk-taking in obscure and volatile assets like cryptocurrencies suggests people are chasing growth. That’s worrying.

• What is your buy discipline? The flip side of the rules for selling. The evidence is clear that the higher the price you pay for an investment the lower the likely returns. This may not be true in the short term because valuation is a poor guide to performance in the short run. But in the long run it is the key variable. Sometimes cheap gets cheaper but paying attention to valuation will stack the odds in your favour over the long haul.

• Are you an emotional investor? This is a silly question. Of course you are; you are a human being. This means you should do everything you can to take the feelings out of your portfolio management. The best way to do this, if you are still putting money into the market, is to do it regularly and systematically. It makes you invest when you don’t want to – invariably the best time to do so.

• And, finally, how well do you know yourself? Twelve years into a bull market, it is tempting to think that we have a greater tolerance for risk than we actually do. You will find out what your real risk appetite is when your portfolio is worth 30pc less than it is today. To benefit from the stock market’s great gift, you have to accept its unavoidable ups and downs. But you also need to be realistic about what you can, and cannot, live with.

As ever, the last word is best left to Warren Buffett. ‘Rule number one: never lose money. Rule number two: never forget rule number one’.

Tom Stevenson is an investment director at Fidelity International. The views are his own. He tweets at @tomstevenson63.

If you have any questions regarding investing in the shorter or longer-term, call us on Phone: 07 5641 4134.

Source: Fidelity May 2021
Reproduced with permission of Fidelity Australia. This article was originally published at https://www.fidelity.com.au/insights/investment-articles/is-now-the-perfect-time-to-give-your-portfolio-a-mid-flight-check/

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.
© 2021. 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.

A private sale can be a great alternative to an auction, potentially landing you a sale that’s perfect for your situation. We’ll help you create a plan with your agent so you can work towards the best outcome.

1. Choosing the right agent 

Your agent is crucial to the outcome of your sale, so it’s important to pick someone you’re comfortable with, and who has a great track record in your suburb.

Many agencies will list their most recent results online or in ads. Sites like Domain and realestate.com.au are also a great resource for hard figures like sale price and time on market.

Consider seeing an agent in action at a few open for inspections as well. This will give you an invaluable insight into how they conduct themselves and whether you can see a successful vendor-agent partnership.

2. Figuring out your sale price 

Your chosen agent should have the knowledge and area-expertise to nail down the perfect asking price for your property, so consult them first.

You can also do your own due diligence by looking into property and market reports to get an idea of what your property’s worth. You can get a property or market report from NAB, free of charge.

On top of these reports, it’s also worth taking a look at resources like Domain’s suburb profiles to get an idea of how long your property can be on the market, or consider paying for a valuation from an independent property valuer.

Want to be truly on top of things? Take a look at our tips for managing your expectations and pricing your property correctly.

3. Setting up your advertising campaign 

Next on the list is getting your property out there for potential buyers to see.

Your agent will draft up a detailed advertising strategy. This will outline where and how your home will be listed, as well as all the photography and copywriting involved in selling your house as your buyer’s next dream home.

Most agents will let you pay for advertising costs either as you go, or as a lump sum once your house sells. Remember: as a general rule, the longer your house is on the market, the bigger your advertising costs will be.

4. Being ready for inspection 

Make sure you get your house looking its best and tick off these priority to-dos before inspection.

Make repairs and touch-ups

Stick to addressing simpler things to make your house more attractive to potential buyers, like fresh paint and a pristine garden.

Be available

It’s important that you’re ready and flexible to meet with potential buyers. You don’t want to put them off by turning a simple meet-up into an annoying task.

Keep utilities connected

You want potential buyers to see your home in its best light, even if you’ve vacated. This means making sure the lights – and everything else – are on and working.

Make space around aircon units and water heaters

These items will be important to all potential buyers, so make sure they have enough room to suss out their condition and functionality.

Provide basement and attic access

Like the above, people will be very interested in the size and condition of these storage spaces, so give them a good tidying.

Have the right documents ready

Make sure you have everything from repair documents to advertising brochures ready for inspectors to read or take away. Ask your agent about what your need to have handy.

5. Settling in for the long and short haul

Selling privately can be unpredictable in terms of when everything wraps up.

On one hand, a more transparent asking price means you’re more likely to attract potential buyers who mean business – and this can turn into a quick sale.

On the other, because you’re not shackled by the intensive auction campaign period or expensive agent costs, there’s less pressure to get things finalised to minimise costs – so you could find yourself listing for longer.

However, if it looks like you’re going to be on the market for an extended time, keep a close eye on your advertising costs.

6. Considering offers on your property 

Know how you feel about different outcomes

What concessions are you prepared to make on things like the sale price and contract terms?

Get every offer in writing

Have all offers recorded in a Letter of Intention to Purchase (ask your agent) or just an email, so you can properly reflect on each when it suits you.

Be mentally open to selling quickly

Generally speaking, you’ll receive the most interest in the first 30 days after you list – and these buyers will be both a lot keener and willing to negotiate.

Double-check the important stuff

Go over the settlement period, cooling-off period and special conditions with your agent and conveyancer to make sure nothing’s a deal-breaker.

7. Conditional versus unconditional offers 

Your buyer might outline a few contractual conditions for you to meet to fulfil the contract. This is known as a conditional offer. Some common conditional offers are:

• building and pest inspections showing no major problems

• the purchase price matching the bank’s valuation

• the Council approving certain structures like a granny flat or major renovations.

With an unconditional offer, your buyer will usually have to follow through with the sale regardless of what happens between signing and settlement.

However, some exceptional circumstances can void an unconditional offer, so make sure you consult your conveyancer for appropriate legal advice.

At the end of the day, an unconditional offer is often preferred and it may even be worth trading for a lesser sale price. It is prudent to always seek independent legal and/or financial advice before accepting any offer.

8. Taking the cooling-off period into account

The cooling-off period can impact when things are expected to finalise rather unexpectedly, but only by a handful of days.

During this the cooling off period – which begins when the buyer signs the contract – your buyer is able to change their mind and legally back out of the sale.

Each state has different lengths and penalties for backing out that don’t apply to the seller, so make sure you’re satisfied before you put pen to paper.

Once this period is over and the contract finalised, you’ll be ready to prepare for a smooth and hassle-free house settlement.

To learn more, contact us on Phone: 07 5641 4134.

Source: NAB https://www.nab.com.au/personal/life-moments/home-property/buy-next-home/private-sale

Reproduced with permission of National Australia Bank (‘NAB’). This article was original published at https://www.nab.com.au/personal/life-moments/home-property/buy-next-home/private-sale

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.

© 2021 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.

For many Australians, the decision to move into retirement living can be difficult and fraught with emotion, yet downsizing is a process most of us will go through. When the time comes to taking the next step, there are many considerations to weigh up. Cranbrook Care, a multi-award-winning provider of premier aged care and retirement residences, has developed a list of top ten tips for making the transition to retirement living.

Kerry Mann, CEO of Cranbrook Care, understands the overwhelming sense of uncertainty that retirees and their families experience when deciding to transition into retirement living.

“Many of us have friends and family who are understandably concerned about our welfare and wellbeing as we age. It’s hugely important that they are brought into the decision-making process early to make sure that retirees are comfortable with the choices being made,” said Kerry Mann.

“There are some clear signs to look for that might indicate that making the move to retirement living could be the right decision for you, such as declining health, finding it difficult to maintain your home or a large garden, having rooms in your house that are not frequently used, or beginning to experience difficulties managing stairs or other areas of your property. If this sounds like you or your family member, now might be the right time to start thinking about making the transition to a retirement lifestyle, which can offer a wealth of benefits for those who are looking to slow down the pace a little and enjoy all that this time of life has to offer,” adds Ms. Mann.

Retirement is not a single event. It is a process that begins long before you leave work and continues for the rest of your life. Here are Cranbrook Care’s ten top tips on how to transition into retirement and beyond:

1. Start The Conversation

Moving to a retirement residence is an important lifestyle decision. Start by having open and honest conversations with family and friends to gain different perspectives on the move. This will help loved ones feel included and part of the process, as well as helping you with making a considered decision.

2. Assemble A Team

You will need to create a reliable support team to help guide and support you through this transition. This should include family, a financial advisor/accountant and an estate planner/solicitor, as well as close friends who may have also recently made the decision to move to retirement living and are likely able to offer a wealth of advice.

3. Finding The Perfect Time

Common signs that indicate that it might be time to start creating a retirement plan can include declining health, struggling to keep up with general household maintenance, having multiple rooms in the house that are no longer in regular use, or having mobility issues when navigating areas in your current property such as stairs. Perhaps you simply have the desire for an easy ‘lock and leave’ lifestyle which could allow you to travel without having to worry about home and garden maintenance.

4. Do Your Research

Take the time to search the internet for retirement living options in an area that you like. Find and read reviews of various properties to understand different experiences. Create a checklist of requirements that you would hope to be in your future living plan. Consider what’s important to you and ask questions. Can family and friends visit, what are the monthly fees, are pets welcome, what extra services are available?

5. Seek Expert Financial Advice

Contact a qualified financial advisor specialising in retirement planning. This will assist you in determining your financial future.

6. Pay A Visit

Get out and about and visit the locations you have researched. Whilst visiting the property, ensure to enquire about any regulations that may apply before moving into your desired community. Look out for open days or information sessions to attend.

7. Prepare Your Home For The Market

Keep updated on the current state of the property market. Many retirement residences can recommend a real estate agent who they have previously worked with who might be able to suggest small ways of making your home more attractive to prospective buyers.

8. What To Take

Now that you are downsizing, be sure only to take the things that you really need by asking yourself some tough questions. Will you still need that 10 seated dining table? Take your most precious mementos with you, but also consider that a move to retirement living provides an exciting opportunity to update or redecorate your home.

9. Service Offerings

Read the fine print of the contract before you move into your chosen retirement residence and make sure it includes service offerings that will increase as you age, such as the availability of home care or residential aged care, allowing you to stay in your home for longer.

10. Move In!

You’ve done it! Retirement is the time for you to live life to the fullest – make new friends, start a different hobby or simply just relax.

Although making these decisions can be daunting – there are a number of benefits to consider for those who might be looking to make the change – convenience, opportunities to meet new friends, low maintenance living, increased independence and safety and security.

Cranbrook Care strives for exceptional wellbeing for all residents, including providing physical and emotional security and excellence in both its built environment and service offering. Cranbrook Residences is a boutique retirement community nestled in the heart of the Hills District, offering a unique and luxurious lifestyle, with residents enjoying exceptional architectural design surrounded by beautifully landscaped gardens overlooking the pond to the Castle Hill Country Club golf course. Cranbrook Residences combines stunning dwellings with a raft of on-site amenities, lifestyle activities and social events for residents.

Source: This article was originally published on https://agedcareonline.com.au/2021/05/Top-10-Tips-for-Transitioning-to-Retirement-Living.
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.

Another month, another rate cut. Finance can be so tedious.

That is until you realise it could mean more money in your pocket. But how?

For many, matters of personal finance are so dull and/or difficult, they are immediately filed in the too-hard basket.

And for their trouble, or lack thereof, these people are often slugged with a ‘lazy tax’ – the price paid for staying put.

Loyalty too, or simply being time-poor, can also be offences punishable by debt in the world of finance.

But it doesn’t have to be this way.

A 2018 Australian Competition and Consumer Commission (ACCC) report showed that new borrowers with an average-sized residential mortgage paid up to $850 less a year in interest than existing borrowers with the same lender.

However, despite the apparent benefits, actively ensuring an interest rate remains suitable is a practice that continues to elude many.

Fortunately, there are people out there whose job it is to assist in this process.

Call us today on Phone: 07 5641 4134.

Source: MFAA https://www.mortgageandfinancehelp.com.au/first-home-buyer-news/too-loyal-or-time-poor-better-rate-problem-solved/

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.