Education

Saving is setting money aside in cash accounts (generally bank savings or cash management accounts) for immediate expenses, emergencies and short-term plans. The money earns interest, which is added to your assessable income and taxed at your marginal rate.

Investing is putting money into assets to grow in value, deliver returns and build long-term wealth and security. There is a wide range of investments to choose from, each with different features and benefits. Your age and stage of life will affect the investments you choose.

In other words, saving is for now, investing is for the future. Both are necessary for effective financial management.

You will need to be clear on the differences between the four major asset classes- cash, bonds, property and shares – and between fund managers. You will also need to understand the various risks and returns involved in investing and work out what level of risk you are comfortable with.

All investments aim to provide a certain level of return and are subject to certain risks. So when it comes to investing, as well as making money there’s a chance you could lose it. apart from losing money, you can also think of risk as the possibility that your investments don’t achieve sufficient returns for you to meet your financial objectives.

One way to manage investment risk is to ensure you hold the investment for an appropriate length of time, generally five to seven years for share investments, to ride out any short-term fluctuations in value.

As a general rule, the bigger the potential investment return, the higher the investment risk, and the longer the suggested investment time frame.

When making plans for the future you need to know what you want to achieve and by when. To get to this point, it’s a good idea to seek professional help. A qualified financial adviser can explain the various options available and provide advice on the most appropriate direction for you.

At FG we can help you set goals, establish your priorities and develop an investment strategy suited to your circumstances. We’ll help you build wealth, achieve your objectives and create a more secure financial future.

The sooner you put your money to work, the more time it has to grow. Regular investing is the key to stable growth. Even if you start with a modest amount, as long as you keep investing regularly you’ll move steadily to where you want to be.

Another advantage of regular investing is that you don’t need to worry about the question ‘When is a good time to invest?’ If you use a savings plan or regular investment plan option in a managed fund and invest the same amount every month, you’re automatically adopting the investment strategy known as ‘dollar cost averaging’. This means that whether financial markets are up or down, you invest the same amount of money every month. As a result, you automatically get more units for your money when prices are down and fewer units when prices are high.

This is what all wise investors are trying to achieve: to buy more when prices are low and avoid jumping in heavily when markets are running high. But so many people get distracted by the hype surrounding the markets they lose sight of this simple principle. They get nervous when prices are low and avoid investing. Or they get carried away when prices are rising and buy in heavily at market peaks. Using a regular savings plan can help you avoid these traps.

Over time, regular investing can smooth out the inevitable market ups and downs, and can also reduce the average cost of the units you’ve purchased, giving the potential for a higher overall return.

When the time comes to retire, it would be nice to feel confident that your life after work will be comfortable and that you’ll have the time and money to enjoy many things you weren’t able to do while working.

The Age Pension provides only a very basic retirement allowance that most people would find difficult to manage on. This is why it is so important to take control and set yourself up for your future now, by making regular personal contributions to your superannuation fund.

The Australian Government offers powerful tax incentives to encourage us to save for retirement throughout our working lives. For example super contributions are taxed at concessional rates

There is no limit to how much money you can accumulate in super over your working life, the only limit applies to the amount you can contribute in any one year.

If you’re an employee, your employer must, by law, contribute a minimum percentage of your wages (usually 9%) into a complying super fund (including self managed super funds) on your behalf. Some employers contribute more, and some employees add more to their super fund by arranging with their employer to have a proportion of their pre-tax salary put into super. This is known as ‘salary sacrifice’. You can also make personal super contributions from after-tax money.

Your estimated life expectancy
How much annual income you want to receive in retirement
How much super you’ll need to produce that level of income

A professional financial adviser can help you answer these questions, explain the various options available to you, and provide advice on the best strategy for your situation.

At FG, we can provide advice on the most effective way to build your super balance and achieve your retirement goals within your time frame.

Super is one of the most tax-effective investments available. Because it is by nature a long-term investment, the sooner you start to contribute to it the more time your money will have to grow. Over time you’ll earn interest on your interest, as well as on your regular contributions. The same rule that applies to investments also applies to super – regular investing is the key to steady growth.

To find out how to maximise your potential returns from super, call (02) 9858 2446 or email us.

Insurance is essential for your peace of mind. Whether you’re covering your life, your ability to work, your business, property or possessions, having insurance helps protect your lifestyle and the people who depend on you.

Insurance is never a luxury. You may go for years without making a claim, then one day the unexpected happens. No one can eliminate the devastating emotional impact of serious illness, disablement or death, but if you have to deal with money problems as well, the situation can be much worse. Having money available when you need it most is what makes insurance so valuable.

Some types of insurance allow you to pay the premiums automatically from your superannuation fund. This can be a tax-effective option because it enables you to pay your premiums with pre-tax money. Using money that is normally inaccessible until you retire also means you don’t have to dip into your daily living budget.

When protecting your family financially, look at your areas of greatest vulnerability, such as your mortgage, other debts, regular household expenses and, if you’re self-employed, your business. You should also protect yourself against loss or damage to your property. These areas can be covered by:

It’s all very well to have ‘some’ insurance, but many people are under-insured and find themselves out of pocket when they make a claim. It’s important to accurately assess how much insurance you need. This is an area where Financial Genius Pty Ltd can help you. We’ll help identify your greatest areas of risk and work out how much cover is appropriate for your needs.

Retirement is a milestone marking the start of a new phase in your life. If you’re well-prepared, you can look forward to freedom from a set routine and the opportunity to enjoy many things you haven’t had time to do while working.

Your quality of life and financial security after work will depend on you having an adequate retirement income. The decisions you make now about how you will invest your superannuation and any other savings once you retire are of critical importance. Whether you intend to move into full retirement straight away, or scale down to part-time work first, there are many issues to consider before you make any changes.

In the lead-up to your retirement, information and advice are crucial in helping you assess your situation, identify your retirement goals, and develop a practical, achievable plan. This is where Financial Genius Pty Ltd can help.

Superannuation is highly favourable for retirees, who may want to consider making the most of the tax concessions and flexible rules that are now available. For example, under the new transition to retirement legislation, between ages 55 and 65 – depending on your year of birth – you can now access some of your super money through a pre-retirement pension while you continue to work full time or scale down to part-time employment.

When you retire, it’s important to know that you have a reliable, regular income. The most popular and tax-effective way to arrange a regular income stream is through an allocated pension or annuity. This is because:

With an allocated pension or annuity, you can choose how much you want to receive as your regular income, provided you draw at least a set minimum (based on the value of your account balance). You can also withdraw lump sums at any time if you need to, but you can’t make additional contributions to your pension once it is set up.

If you choose to invest your money outside super, there is a wide range of investment options to choose from. A professional financial adviser can help you create a diversified portfolio designed to deliver the returns you need to achieve your goals. The income you receive is a combination of capital growth and earnings.

For the majority of people, the Age Pension is considerably less money than they are used to living on. The amount of Age Pension you receive will depend on whether you are single or have a partner, whether you have dependent children, and your income and assets.

The qualifying age for women is gradually being increased to match the qualifying age for men. By 2014, the qualifying age for both men and women will be 65.

An FG adviser can help you calculate how much Age Pension you will be entitled to receive given your particular circumstances.

A comprehensive retirement plan should include a review of your will and the details of how you’d like your estate to be distributed after your death. The right advice from a solicitor can avoid many common pitfalls that occur in family or business situations. It’s also important to seek advice on the tax implications of how your estate will be distributed, to make sure your beneficiaries receive all that you would like them to. We can refer you to appropriate legal and taxation professionals.

To find out how we can help you plan a successful retirement, call (02) 9858 2446 or email us.