Basic Rules for Saving

Basic Rules for Saving

Don’t know where to start?
Here are some basic guidelines to follow when saving:


Pay down higher-interest debt first

If you’ll be paying more in interest than you’ll earn with a savings plan, it makes sense to pay the debt before you start saving. The habit of regularly paying down debt can then be used once the debt is cleared to regularly contribute to a savings plan.


You come first

We all are tempted to live beyond our financial means. Pay yourself first by setting up a regular contribution to your savings plan. The amount you save and the frequency are totally dependent on your circumstances, but even small contributions made each month will grow. The greater value is the beginning of a habit.


Start early

Nothing helps your savings grow quite like time. The earlier you start saving, the more time your money has to grow and benefit from compound interest and growth. This also means smaller savings can have bigger compounding effects.


Use tax advantages

Take advantage of the tax benefits the government offers to encourage saving. Spouse contributions to low-income spouses and low tax rates on Extra super contributions, Saving your first home deposit inside your super, or taking greater control of your retirement planning with a SMSF, all means you can get further ahead on your savings goals. Stay connected to your financial adviser to stay in the loop.


Work with an expert

Working with an advisor is proven to help save you more money over time and they’ll help build a plan that fits your needs and support you through managing greater self control in uncertain times.


Manage your Unexpected Wealth events

Inheritances, Redundancy, Financial Windfalls, or Insurance Payouts are all financial events that can also bring with them powerful and isolating emotional responses.
Most people are unprepared (or simply inexperienced) with managing surprise wealth and its accompanying life transitions.
Many mistakenly try to recreate their past environment pre-unexpected wealth, with many soon losing their new wealth and its opportunities. The result can leave many dealing with feelings of shame, regret, and secretive misery — feelings often unfathomable to others. Always reach out to a financial professional to support you through this major life transition event.

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Investing in property is really about the numbers

There's no magic formula for investing in direct property because all investment involves different degrees of risk - and the higher the gearing the greater the risk

When it comes to investing, it really is about understanding the numbers and managing the emotion.

What we look for when selecting a property for investment

We believe investments clearly should only be selected to become part of a client’s portfolio based upon clear investment principals including:

  • the level of expected return
  • the degree of risk and volatility
  • the extent over time, to which the investment returns move up and down in the opposite direction to the remainder of the portfolio (also referred to as portfolio negative correlation)
  • tax position
  • capital growth outlook
  • rental demographic suitability
  • government infrastructure ie: transport hubs, road and rail upgrades & master plan integration, health care, permanent infrastructure ie: port facilities
  • the required effect upon a family financial plan reflecting the client’s needs and expectations
  • emergency and expected exit strategy
  • protective plans to protect the income of the investor (and hence their tax position)
  • estate planning to ensure the significant values involved are including in a person's estate plan.

Technical speak: Investments should be selected for their contribution to the risk and return profile of an investor’s overall investment portfolio, or in technical terms, the risk-adjusted return of a portfolio.

We believe each investment must

  1. either increase the return without adding unexpected risk,
  2. reduce the risk without increasing the return, or
  3. a combination of both.

So the question is does direct property investment meet these criteria?

5 Key Identifiers of a successful direct property

Here are 5 Key identifiers for a Successful Direct Property Portfolio

  1. Over the last 20 years, geared residential property investment has provided an effective way to accumulate capital for retirement more than a direct investment in superannuation funds. This performance has been delivered even after accounting for the tax advantages of superannuation funds investing. Selection, when investing in a new property, is pivotal to its success.
  2. Residential property is about half as volatile as shares. Direct property investments should be held for the longer term, therein making the price fluctuation between purchase and sale less significant. In practice, risk in direct property investments is even lower.
  3. The returns from direct property and shares or fixed interest tends to move in the opposite direction. Thus, the addition of direct property into a share or fixed interest portfolio will also reduce the risk. Well selected direct property can form a significant component of most portfolios that have a prime exposure to equities of fixed interest.
  4. With the emergence of reverse mortgages as a retirement income and aged care accommodation bond solution, the previously ill-liquid property investment now provides an additional benefit not previously enjoyed as investors either borrow against the property to fund retirement income streams or to make non-deductible contributions in the new superannuation regime.
  5. With the emergence of reverse mortgages as a future retirement income solution and the new to the market establishing of equity pledges, where parents can pledge a specified amount of equity in a property, for their children or grandchildren to utilise as an equity deposit for their first home, interest in direct property investment is now more than ever a pivotal asset class in any quality investment portfolio.

How we can help

Investing in property is one of the asset classes available to investors. Whether it's suitable for you, your time horizon and your expectations is a conversation that needs to occur with a professional.

Call us today for a confidential chat about your personal circumstances.

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George St Sydney, NSW, Australia.
Gadigal Land ] & [ Darug Country ]

Phone: 1300 137 403
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