Retirement Planning Guide
Financial Independence
Superannuation Guide
Start with your stage of life

Insurance plays an important role in any wealth creation and management strategy. There is little point in accumulating wealth if you don’t protect it, or yourself, from unforeseen risks that can undermine the best made plans. Just as your wealth creation strategy needs to be reviewed on a regular basis, so too does your wealth protection plan. Every stage of life brings exciting challenges along with different types of risk. Let’s look at the most common scenarios. You may see yourself in some of these stories.


Young singles 

Young and single, many would believe the best time of a person’s life, before children or mortgage responsibilities arrive. Whilst young people are usually fit and healthy, their age group is most at risk of accidental injury, whether from road accidents or those associated with sporting activities.


At this stage, a young person’s greatest asset is their ability to earn an income, so this is a good time to learn about income protection (IP) insurance. This usually replaces up to 75% of income in the event of serious illness or injury. It can provide much-needed financial assistance during recovery, as was the case for Sean.


Sean is 24 and works full-time, having completed his carpentry apprenticeship. He enjoys riding motorbikes, playing football, and helping out his parents. On one occasion Sean slipped off a ladder while cleaning the gutters of his parents’ house, fracturing his right leg in two places. Fortunately, because his father’s financial planner had advised Sean to insure his income, Sean’s Income Protection (IP) policy paid 75% of his monthly income after only a month off work. This money enabled him to meet his financial commitments while he took another two months off to allow his leg to heal fully. And just as importantly, it allowed Sean to return to his chosen profession as a carpenter.


Young couples

Young couples are often career-focused and working hard to secure their financial future. This period often sees a greater income, matched by additional expenditure. Home ownership is often a goal, with many buying their own home, or saving for a deposit, whilst others seek to establish financial security before starting a family. 


Young couples will face similar risks as young singles, but are more likely to have higher debt obligations. This is when a combination of Life, Total and Permanent Disability (TPD), Trauma and IP cover should be considered to provide financial support in the event of death, disability, illness, or injury. This insurance will pay lump sums that can be used to replace lost income, extinguish debt, and cover medical expenses; as this young couple found out.


Todd and Kate had been together for three years and were busy planning their life together. They had already purchased a home, and a dream wedding was only months away. Their financial planner had recommended the couple take out life insurance when they bought their home. On her way home from the gym one afternoon, Kate’s car was struck by a speeding truck and she was killed instantly. Kate’s policy gave Todd a lump sum that enabled him to pay out their mortgage, relieving him of one less worry at this awful time.


Young families

Often families in this life stage have one spouse working full-time, whilst the other may work part-time or not at all to focus on parental responsibilities. At this stage, families often have greater debt levels including a mortgage, and are heavily reliant upon the full-time income. Stress tends to be high during this period of life, so what would happen if the breadwinner were to die suddenly, or suffer a debilitating disease that prevented them from working for an extended period of time? 


Adequate insurance coverage is essential to be able to replace income, cover medical expenses, extinguish debt, and allow the family to maintain the lifestyle to which it is accustomed. Families with young children may also consider an additional feature of most trauma policies which allows families to include their children. This cover provides a lump sum to help pay for medical expenses and allow parents to have time off work to care for a sick child, as detailed in the following case study.


Matt and Rebecca are 30, have been married for five years, and have a two-year-old daughter, Chloe. Matt works full-time as a building surveyor. Rebecca works part-time as a legal secretary, giving her time to spend with Chloe. After Chloe’s birth, Matt and Rebecca’s financial planner suggested they add $200,000 in child trauma cover to Rebecca’s personal trauma policy. Following a prolonged period of sickness and extensive testing, it was revealed that little Chloe was suffering from Non-Hodgkin lymphoma, a type of cancer. Fortunately, because Chloe was covered by Rebecca’s trauma policy, her parents could afford to take extended leave from their work, allowing them to be by Chloe’s side throughout her treatment and recovery. The payout was also a source of funds to pay her medical expenses.



Pre-retirees can also be referred to as ‘empty-nesters’, as their children have generally flown the coop by this time. They are also usually debt-free (or close to it) and have the sole objective of preparing for retirement. While they may be well-placed to achieve their objectives, they are also least likely to be able to afford any adverse changes to their plans. 


With age comes a greater risk from a range of events and illnesses including heart attack, stroke or cancer. For this reason, it is important that appropriate insurance coverage is maintained to help keep retirement plans on track. A combination of Life, TPD, Trauma and IP can provide protection against these unexpected events, and deliver financial security pre- and post-retirement, as John and Judith discovered. 


John and Judith are both 61 and chose to take extended leave from work to start travelling before retiring. Starting from their hometown in Port Macquarie, they planned to take four months to travel by caravan to the tip of Cape York and back. The couple was enjoying a visit to a local winery near Cairns when John had a seizure. He was rushed to hospital with results revealing that he had experienced a stroke, and would suffer permanent mobility impairment, restricting him to a wheelchair. Luckily for John and Judith, they had elected to continue John’s TPD policy until age 65. This policy paid a lump sum of $500,000 which was more than enough to get them and their caravan back to Port Macquarie and make the necessary modifications to their home. There were also funds left over to enable John and Judith to enjoy an early retirement, albeit closer to home.



The key goal of all retirees is to enjoy the fruits of their labour. Whether self-funded or receiving government support payments, the need for insurance has generally diminished as retirees no longer have an income to protect, nor do they usually have a lot of debt. However, not everyone is the same, and insurance reviews at this life stage are just as crucial as any other time.


Many insurance providers recognise that a person’s insurance needs change over time, and include life stage options as part of their policies. These options provide an opportunity to increase sums insured without additional underwriting, and sometimes with limited evidence. Examples of life stage events which can trigger increases on Life & TPD policies include: marriage, the birth or adoption of a child, and taking out or increasing a mortgage.


Whatever your age or stage in life, insurance delivers valuable peace of mind that you and your loved ones are financially protected from misfortune. But it’s not a “one size fits all” solution. To ensure your wealth protection is appropriate to your needs, talk to your licensed adviser.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Making sure you have the right cover

The concept of Total and Permanent Disability (TPD) cover is relatively simple. If you are ill or injured and unlikely to be able to work again and meet the conditions of your particular policy, you receive a payment. The difficulty has always been to define what is meant by “unlikely to be able to work again”.

Advances in medical science and technology have meant that people who suffer horrific injuries might be rehabilitated and able to return to work, when years ago a similar condition would have left them permanently disabled. For instance, by-pass surgery once ended a working career; nowadays normal life can soon be resumed.

Different policies have different definitions and it’s an area where insurance companies are developing new features. Typical definitions that may be used are as follows.

The any occupation definition

One definition of TPD is based on your ability to do your own job (or a similar one where you are qualified through your existing education, training and experience or possible retraining).


A painter who suffers a back injury and cannot climb ladders or stand for long periods may be classed as permanently disabled if he has no other employment skills. A teacher who suffers stress-related illnesses when faced by a classroom of children may not meet that classification if she can work outside the classroom as a tutor, examiner or writer of educational material.


The own occupation definition

A second definition is based on your ability to do just your own job. The premiums for this type of cover will be more expensive.


A surgeon who damages his hands may be classed as permanently disabled because he cannot perform surgical operations, but he will still be able to work as a doctor or lecturer though on lower earnings.


Homemaker definition

The definitions above are only suitable for employed people but another definition is based on the ability to live independently. You would be classed as permanently disabled if you could not dress, eat, bathe, maintain personal hygiene or move around unaided. This means that a spouse who works in the home and raises children could also be insured – what would it cost to do the shopping, childcare, transport and other activities if your spouse could not do it?


How does TPD cover fit into a risk management plan?

Constructing a plan to protect you and your family against disaster can use a number of different types of policies. Income protection can provide up to 75% of your income if you are unable to do your own work due to illness or injury – but can you service your debts from this income? Trauma cover will pay a lump sum if you are diagnosed with a defined illness – but the premiums can be relatively expensive.

Putting in place the right mix of insurance cover to suit your needs is no easy task, but it is something that we deal with every day.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Protecting your entire family

You’ve saved hard to build your retirement nest egg. You should be able to spend the money on a well-earned relaxing lifestyle. But all this could be put at risk if your adult children don’t have their own financial affairs well managed, particularly adequate insurance protection.

It’s human nature to assume that bad things only happen to others. Unfortunately this approach means that many people are unprepared financially for their future if sickness, accident or injury strikes. This often results in other family members having to bear the costs of supporting them. For those close to or in retirement who are placed in this position, the financial impact can be devastating. 


Could this happen to you?
Let’s consider the example of Gary and Roslyn, both 61, who have one child, a 30-year-old daughter Karen. Gary and Roslyn are retired with an investment portfolio valued at $700,000, paying them an annual income of around $48,000. They also own their home, valued at $650,000.
Gary and Roslyn were enjoying trips away and spending time with their extended family members overseas until their lives dramatically changed when Karen was badly injured in a car accident. Karen was in hospital for almost three months, requiring another nine months of rehabilitation before she was able to return to work. 
Karen’s sick leave ran out after the first fortnight, and as she had no insurance cover in place, she had no income to pay the mortgage on her apartment ($2,500 a month) or other essential costs, including her mounting medical expenses.
As they didn’t want Karen to have to sell her apartment, Gary and Roslyn needed to draw on investment capital from their portfolio to pay Karen’s mortgage and meet her expenses for the year she was off work. This ultimately reduced Gary and Roslyn’s investment portfolio by almost $70,000 (or 10%). 
While Karen fortunately made a full recovery, the cost to Gary and Roslyn of supporting their daughter in her time of need meant a dramatic change in their long-term retirement prospects; ultimately their income was reduced by $7,000 per year for the rest of their lives (a 15% reduction), plus their travel plans were significantly affected. 

What can you do?
Believing that unfortunate events only happen to other people isn’t a responsible solution and is a terrible way to jeopardise your retirement. As part of looking after your own financial future, make sure that others who could affect your plans, such as family members, have also taken the right steps for their own lives. 
Talk openly to your adult children about their insurance cover and if they are putting themselves or you at risk, recommend they talk to a licensed adviser. 

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Making a 'Super' choice

One of the best things about living in Australia is the high level of choice we have in everything from milk to superannuation funds. For many of us, having a choice of where our super will be held is an important part of our investment management and a decision that should not be made without sufficient research. Whether you are changing employment or you’re not happy with the fund your employer offers, below are several key points to consider in selecting a super fund to meet your needs. Also listed are seven actions you can take to help yourself on the path to making the right choice for your future.


It’s your super

There is a range of options available for investing your super – retail funds, industry funds, corporate and public sector funds; or you can choose to manage your own. The choice of fund may depend on your employer or industry. Regardless, this is your money that is being invested for your future use, so it’s crucial that you take a keen interest in your superannuation.

 Action 1    Ask your employer if you can choose your own super fund.

Investment options

Super is a tax-effective way to invest. Your super fund should give choices of investments – after all, one way of investing is unlikely to suit everyone. How much choice you need depends on your personal circumstances such as how much money you have in your fund, your attitude to investing, and how much involvement you wish to have in making investment decisions.


Does your fund provide suitable options? Are you invested in the most appropriate way? Your choice can make a big difference. There are generally five or six different investment options which can provide you with varying levels of exposure to each asset class. For example, a capital secure fund may invest your money predominantly in bonds and cash or interest rate products. A balanced or diversified fund on the other hand, might invest your money partly in bonds, cash and interest rate products and partly in shares and property.


 Action 2    Ask your super fund what investment choices they offer.



All super funds will charge fees in some way. The key issue is not the fees but the value provided by the fund. Like all things “you get what you pay for”. Some simple funds are cheaper but may not offer the options and facilities you need. Some funds may be too complicated or expensive for your needs. Do you use the facilities offered by your fund? Are you paying for things you don’t need or missing opportunities from a fund that is too basic?


 Action 3    Ask your super fund what fees they charge.



If you have insurance cover via your superannuation you probably think you’re adequately covered, yet if something bad were to happen, you might be in for an unpleasant surprise – and by then it might be too late.  Many super funds provide a simple, low-cost and tax-effective way to get insurance cover in the event of death or disability but you need to determine if the current level is appropriate to you. And review the cover at each stage of your life.


Another point to remember is that a portion of your super contributions is used to pay the insurance premiums. This means that you’re not contributing as much as you believe. What personal insurance cover do you have now? Is it too much or not enough? Is it better to pay the premiums personally or from your super fund?

 Action 4    Determine what personal insurance cover you need. Ask your super fund about what insurance is offered and do the sums. Then talk to your financial adviser.


Range of services

Super funds have become more competitive and offer a wide range of services to make it easier to keep track of your investment and tailor it to your needs. Here is some questions you may want to ask: Can you access your account online? How easy is it to make contributions or switch investments? How often does your super fund send you statements, updates or news about your fund? What education services such as seminars, online calculators and guides are available? How easy is it to speak to a human being?


 Action 5    What other services does your super fund offer?


More super choices

Your superannuation needs to provide for your future – the planned and the unexpected. For most people their super will pay an income when they retire as a pension or “retirement income stream”. When you die the super fund will pay out your super to your dependents or your estate. In some funds, you can advise or direct the fund as to how your super is paid out.

Does the fund allow binding death benefit nominations? Does the fund provide a range of pensions with suitable investment options?


 Action 6    What other important choices does your super fund offer?


Default options

Super funds have to invest, provide insurance and other services for fund members who make no choice – this is called the “default” option. How will your money be invested if you make no choice? What insurance cover will you have?

 Action 7    If you have “chosen” the default option, will it meet your individual needs?

As you can see, choosing the right super fund is a major decision. There is a lot to consider. If it all seems too hard, give us a call, or book an appointment and we can evaluate your options and help you make the best choice for your specific needs.


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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

"How much Super do I need?" and other FAQs

If the ins and outs of superannuation leave you confused, the answers to these frequently asked questions will help you understand the basics.


How much do I need to retire?

According to the Association of Superannuation Funds of Australia (ASFA), a couple requires savings of $640,000 if they wish to enjoy a ‘comfortable’ lifestyle in retirement. For a single, the figure is $545,000. Due to support from the age pension, a single or a couple can fund a ‘modest’ lifestyle with savings of just $70,000 at retirement.

How is my super taxed?

Broadly, contributions are categorised as either concessional or non-concessional. Concessional contributions are contributions on which an employer or an individual has claimed a tax deduction. Non-concessional contributions are made from after-tax income. They include many personal contributions and government co-contributions.


Concessional contributions are taxed at 15% within the superfund, with a tax offset available to low income earners. Non-concessional contributions are not taxed within the fund. Investment earnings are taxed at 15% in the accumulation phase. Over age 60, earnings in the pension phase, and any payouts from the super fund, are tax-free.


How can I contribute to super?

If you are over 18, employed, and earn more than $450 per month your employer will contribute 9.5% of your ordinary time earnings to super. You can further boost your super by:

•    Asking your employer to make concessional salary sacrifice contributions from your pre-tax income.

•    Making personal contributions from your after-tax income. Subject to set limits you may be able to claim a tax deduction for these contributions in which case they will become concessional. If no tax deduction is claimed they will be non-concessional.

•    Low to middle income earners who make a personal non-concessional contribution may receive up to $500 as a government co-contribution.

•    If you contribute on behalf of a spouse who earns less than $37,000 a year, you can claim a tax offset of up to $540.

•    A special ‘downsizing’ contribution is available to over-65s who sell a home.

Age limits and work tests may apply to some types of contribution.


When can I access my super?

•    When you turn 65, even if still working.

•    When you reach preservation age (between 55 and 60 depending on date of birth) and have retired.

•    If you start a transition to retirement (TTR) income stream.

•    If you face severe financial hardship, specific medical conditions or under the first home super saver scheme.


Who can I leave my super to?

If your super fund allows binding death benefit nominations, you can elect to have your superannuation paid to your legal personal representative. The money will then be distributed as instructed by your Will. Alternatively, you can instruct your fund trustees to pay your death benefit to one or more of your ‘dependents’. Under superannuation law these are:

•    Your spouse (includes same-sex and de facto partners).

•    Children.

•    A financial dependent.

•    People you had an interdependency relationship with.

Without a binding nomination, your super fund’s trustees decide which dependents will receive the death benefit. They will be guided, but are not bound by, any non-binding nomination.

How do I make the most of my super?

Superannuation remains, for most people, the best vehicle within which to save for their retirement. However, it can be complicated and there are numerous rules to navigate. That creates challenges, but it also generates opportunities, many of which can add thousands of dollars per year to your retirement income.

Ready to unearth those opportunities and make the most of your super? Now is the perfect time to talk to us.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

What is your concept of retirement?

The concept of retirement has changed dramatically over the generations but there remains one constant for most of us planning the end of our working life – to be able to do what we want, when we want. No more alarm clocks, no more commuting and no more demanding bosses!

But what do we want more of? Time on the golf course? Unrushed holidays exploring exotic locations? Those are just the basics, however, if retirement is looming have you thought about what actually will happen when you stop working? Will you have those choices? Here are a few points to consider; and it’s not just about money.

Your wealth

When preparing to leave the workforce, some people focus so much on never having to face another stressful workday that they overlook many important issues. The first and most obvious focus should be on the income needed to fund the retirement dream. 

For many people, retirement will give them the first real block of time they have ever had completely to themselves to spend however they please. Some may want to travel, and others may have hobbies they want to immerse themselves.

Others may choose to move closer to family or make a ‘sea’ or ‘tree’ change. Some may do all of these things!

To make the most of your retirement years, your nest egg must be large enough to allow you to live the life you desire. It would be a shame to have a boring and unfulfilled retirement because you discover too late that you don’t have the means to afford activities that your friends are enjoying.


Your health

Secondly, many people plan for life beyond work assuming that they will remain healthy and vital. For the majority this will prove true, but sadly, others might not be as vigorous as they had hoped.


Illness in later years will mean facing additional pharmaceutical and medical expenses. You may incur extra costs from traveling with mobility issues, assuming travel is still manageable. Aged care can be costly, especially where high-level care is required.


The key point to remember here is that while you are planning for your retirement in a financial sense, you also need to focus on your well-being now to ensure your mind, body and spirit are willing and able to fulfill your retirement hopes and dreams. Balancing both aspects is fundamental to achieving a rewarding lifestyle.

Your happiness

But what is there to do if you find yourself getting bored with so much free time? Well, one option could be to return to the workforce, maybe on a part-time or casual basis. If approaching your former employer or business partner/s is not an option, try something different. Depending on your skill set, you may be able to start a micro-business. All you have to do is get creative when looking at your skills and abilities!

If you are a retired teacher there are many opportunities, including working as a private tutor or providing after-school assistance, assisting sports teams, or even thesis proofreading for university students. If accounting is your forte, use this skill to help small businesses manage their books. Handy with tools and enjoy fixing things? You could find yourself in demand by those in your area who are working and have no time or skills to do odd jobs themselves. Place an advertisement on your local community board, online, or do a mailbox drop to get started.

Or, what about volunteer vacationing – “voluntouring”? If you’d like a travel experience with a difference, combine it with volunteer work. Sharing your interests with others or using your skills in a new way could certainly enhance your post-work years. There is a plethora of websites that now focus on this latest interest. Just type “voluntourism” into your favourite search engine and be prepared to be amazed.


Your identity

Many people identify themselves according to their job title or profession. For this reason, retirement can leave you feeling like a piece of you is missing. But retirement can be a terrific opportunity to give up that old identity and re-invent a new you.

You can be a grandparent, sports enthusiast, volunteer, book club president—the sky’s the limit! In many ways, re-inventing yourself as a retiree can be as challenging as being a success in your previous vocation. The key is to establish your priorities, set goals that work for you, and keep going until you reach them. Remember though to keep it fun.


Have you planned your first step?

If all this sounds exciting, don’t forget the first step is to get your retirement funding in order. Come and talk to us sooner rather than later. Once that is done, you can start looking forward to what should be the best years of your life.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Budgeting 101: surplus or deficit?

Each year in early May, the Treasurer delivers the Federal Budget and many people across Australia listen intently. The Budget tells us how the government plans to spend its revenue in the coming year, whether it can afford to give us tax cuts, and whether it expects to spend more (creating a deficit) or less (creating a surplus) than it receives.

Budgets are also important on a personal level, especially when living costs are rising and uncertainty abounds. So it’s worth having a look at how you can manage your finances in the current economy.


Save more or spend less?

Is it easier to save more, or to spend less? They might sound like the same thing. After all, saving is what we do with whatever’s left over after spending, isn’t it? Well, not quite. You see, it’s easy for spending to get out of control, and many people actually find it easier to focus on reducing their spending than saving towards a goal.

Take control

To begin with, work out where your money goes. Start by keeping track of everything you spend and what you spend it on. There is a vast number of apps that can help you do this, but it can be just as effective using pen and paper or a simple spreadsheet. Record your spending under categories based on necessity. Things like mortgage repayments, utilities and essential food obviously go in the ‘must spend’ group. Some things will be ‘optional but important’, and others will fit into the ‘frivolous’ category.


Do I really need this?

After a few weeks you’ll have an idea of where your money is going then it’s time to start asking yourself a couple of questions:

1.      Do I need to spend this much on this category?

2.      When I over-spend, what can I do to prevent it from happening again?


It’s worth remembering that every year in Australia we spend billions of dollars on food we don’t eat, clothes we never wear and services we don’t use. So for many people, gaining control overspending doesn’t mean ‘doing without’, it just means being sensible about spending. There are numerous activities you can enjoy for free, and you can even turn a ‘thrift campaign’ into a hobby.

Watch debt

Pay off credit cards every month to avoid high-interest costs. If that’s not possible, investigate consolidating credit card debt into your home loan or personal loans with lower rates. When borrowing, always make sure you leave a ‘comfort zone’ to ensure you can meet your commitments and any emergencies that arise. If you need assistance in preparing a personal budget that doesn’t force you to do without or give up everything you love, talk to us.  

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Managing your finances from your phone

You’re probably already pretty impressed by what your smart phone can do, but have you thought of it as a wealth builder?

It’s all down to the apps you can install, and there’s an increasing range to help you manage your spending, supercharge savings, complete your tax returns and manage your investments – all at the tip of your fingers.


Track your spending

Most people approach the ‘b’ word – budgeting – with dread, but getting your spending under control is fundamental to any wealth creation plan. For starters, you’ll want to know where the money is going. Several apps take much of the drudgery out of tracking each dollar you spend while also helping you to take control of your money. This includes separating your ‘wants’ from your ‘needs’, further categorising expenses and setting spending limits for each category.

Pocketbook is a free app which syncs with many Australian bank accounts and largely automates the task of categorising each transaction. It also tells you exactly what your bank balance is and how much you can safely spend to stay within your budget for each category.


Boosting savings

Remember piggybanks and the pleasure of slipping the day’s loose change into the slot? With electronic transactions now dominating our spending, loose change is a disappearing commodity.

The Raiz app provides a digital solution. It automatically rounds up each purchase you make on a linked debit card to the next dollar and invests this ‘loose change’ into one of six diversified investment portfolios. You can also set up regular contributions or make one-off additions to your portfolio.

Carrott also takes a rounding up approach, with the additional amount going to paying off your mortgage.

Manage your investments

From simple watch lists for shares to mobile apps that give you full access to a stockbroker’s trading platform, a vast range of apps is available to the connected investor. Check out what’s available from your super fund, investment managers and share broker. In many cases, you’ll find apps that can do everything that you would normally use your desktop computer for, and often with more convenience. Enjoy lunch in the park while you check up on your super or snap up a few shares.


File your tax return

We know that apps are mainstream when the tax office gets in on the act. The ‘ATO app’ includes the myDeductions tool to help you track expenses. Sole traders can also record income as well as deductions. Come tax time the data can be emailed to a tax agent or you can use your app to prefill your tax return before lodging it yourself. Pocketbook also has a dedicated tax return app, though a fee applies to lodge the return with the ATO.

Be appy

This is just a brief sampling of the many mobile financial apps that are available. Many are free, but be aware of ‘in-app purchases’. In some cases, functionality may be limited unless you upgrade to a ‘premium’, paid option. Also remember that you may be sharing your financial information with a third party. Make sure you’re happy with the app provider’s privacy policy and security. Then, when you’ve found the ideal electronic helpers for your financial needs, ‘app up’ and get your mobile phone building your wealth.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Estate Planning 101: Wills & Bills

It is generally believed that death is final. However, a grieving family knows only too well that the death of a loved one can trigger events that may drag on for years afterward, especially when it comes to sorting out the estate of the deceased person. Outlined below are some suggestions that may help reduce the burden on those you leave behind.

  1. Prepare a Will.
    A properly prepared Will is one of the crucial elements of your estate planning. Your Will should not only state how your assets are to be divided, it should also nominate an executor who will be responsible for carrying out your wishes. When preparing a Will it is important you make adequate provision for your dependents, and clearly document the reasons for your decisions to help minimise the risk of your Will being contested.

  2. What about a ’Living Will’?
    Otherwise known as an Advance Health Directive, a Living Will is another important tool. It enables you to give detailed instructions in relation to your health care, including decisions on any treatment you wish to receive or refuse if you are incapable of communicating those instructions.

  3. Establish a Power of Attorney.
    Whilst a Will deals with your estate upon your death, Powers of Attorney are designed to deal with your affairs while you are still alive. Powers of Attorney enable you to appoint an individual to deal with your affairs if you become incapable of making your own decisions. They can be as wide-ranging or as limited as you require or desire.

  4. Appoint a guardian for children.
    If you have young children, appoint a guardian to care for them. In doing so, you can provide that guardian with guidance about your child’s upbringing, and make provisions for your children’s financial future using the most tax-effective means available.

  5. Make binding death nominations.
    It is also important that binding death benefits nominations are made on superannuation and retirement income stream products as they ensure these funds bypass an estate, and in so doing, be excluded from any claims against an estate. And make sure you keep them current.

  6. Cover those assets not covered by your estate.
    One of the most common mistakes made in estate planning is leaving no instructions for those assets not covered by your estate, such as assets held in trusts and companies. Separate provision needs to be stipulated to ensure that control of these assets passes on to those you intended.


Other estate planning mistakes to avoid include:

  • Writing an informal Will and not having it witnessed – or having beneficiaries as witnesses;

  • Not reviewing or updating your Will on a regular basis;

  • Not telling anyone where your Will is located.


This list covers important aspects to consider, however, professional advice should be sought to tailor your estate plan to your individual circumstances. Then you can get on with living your life.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Placing your family wealth in trust

The basic function of a trust is to separate control and ownership. The result of using a trust is that assets are protected and profits are distributed in the most tax-effective way. There is no 'one-size-fits-all' type of trust. The trust you use depends on many factors, such as the type of asset or business, financing, income type, marital status, susceptibility to being sued - just to name a few. Whilst there are many types of trusts the two most commonly used are:

  1. Testamentary trust – set up through a directive left in a will, which takes effect after the will-maker’s death;

  2. Discretionary trust – set up by a ‘trust deed’, which commences during the life of the individual(s) establishing the trust. 

Both types allow for income and capital to be flexibly distributed to beneficiaries, while those beneficiaries have no legal entitlement or interest in the trust’s property until the trust deed declares it so. The trustee is the legal owner of the trust property and is responsible for managing the trust fund on behalf of the beneficiaries. The trustee has a legal duty to obey the terms of the trust deed and to always act in the best interests of the beneficiaries. A trust can operate for up to 80 years in Australia, though it is common to have a clause within the trust deed to allow the trustee the option to wind it up earlier if considered appropriate.


Benefits of using trusts to manage family wealth include:

  • Cost: For a straightforward structure, the costs of establishment are relatively low. Specialist advice should be sought for more complicated family scenarios.

  • Effective family tax management: Income can be directed to members of the family on lower tax rates. It also allows different types of income to be directed to different family members.

  • Simplified regulation: Trusts are less complicated than operating a company structure.

  • Tailoring: Most modern day trust deeds are flexible in their operation and can often cater for a wide variety of beneficiary classes and investments.

  • Geographical flexibility: A trust established under Australian law can operate effectively in every Australian state. Where potential beneficiaries live overseas, specialist advice should be sought to determine the optimal structure. 

  • Protection of assets: Under certain conditions, family assets may be protected from creditors in the event of bankruptcy or insolvency.

Due to the taxation flexibility that discretionary trusts provide, the ATO scrutinises these trusts to ensure all transactions are undertaken on a commercial, arms-length basis. It checks that distributions are in accordance with the trust deed, specifically targeting the distribution of different types and amounts of income to individual beneficiaries.

Trusts allow considerable estate planning benefits providing more certainty in how your assets will be dealt with after your death. Many wealthy people in Australia use family trusts to gain some peace of mind that their loved ones will be looked after financially when they no longer can, but you don’t have to be rich to benefit from a well-planned structure. 

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

How testamentary trusts work

Do you worry about what will happen to your family when you leave this world? If so, a ‘testamentary trust’ may be the answer. It is established as an outcome of a Will and only comes into force in the event of your death. The major benefits of such a trust are taxation advantages and protection of the assets where children are involved, or where you may be concerned about the beneficiaries’ management of their inheritance. A testamentary trust means you know your children and grandchildren can have access to a regular income, along with capital (if appropriate). 

The trustee can be one or more of the beneficiaries, a legal professional, a trustee company or other person. There is no limit to the number of testamentary trusts that may be established. You can create one to cover the whole family or a separate one for each beneficiary.



Generally, children under 18 are subject to penalty rates of tax on unearned income. However, where their income is received from a deceased estate normal tax rates apply, including the low-income rebate, if applicable. Using a testamentary trust means that all income from the estate, including capital gains and franked dividends, may be distributed amongst the beneficiaries in the most tax-effective manner.


Protection of Assets

A testamentary trust, if structured correctly, may also prevent beneficiaries from having unlimited access to the capital from the estate. This may be of particular benefit where: 

  • you have a beneficiary who is disabled and unable to manage their own affairs;

  • you believe a beneficiary may be financially irresponsible or you wish to protect their inheritance in the event of marriage breakdown;

  • you think your spouse or ex-spouse may not manage the estate in the best interests of your children;

  • you wish to ensure your children receive a defined part of the estate in the event of a surviving spouse remarrying.


The terms of the trust are set out in your Will and it is therefore important to have professional legal advice in the preparation of your Will and to discuss your needs fully with your solicitor.  

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Investing 101: The foundations of successful investing

Establishing an investment portfolio can be likened to building a home. The most destructive, yet unpredictable predator to the structure of a home is the weather. Even in these most technically advanced days, we are still unable to accurately predict the weather. 

And so too, a man is a fool if he thinks he can successfully predict the future of the global economy. Like the weather it can be the most unpredictable and destructive threat to your investment earnings. But with a carefully built portfolio based on sound foundations, you have a much better chance of weathering a financial storm.


Investment principles

The foundations of a strong portfolio rely on four key ‘pillars’ or investment principles... quality, value, diversity and time.

We are probably all tiring of the old line, "don’t put all your eggs into one basket" - meaning to diversify your portfolio - but that is only one pillar on which to rely. The other three are equally important. Forget about just one and you are setting yourself up for a collapse.


Let us briefly explain why all four pillars are crucial to your investing success...

If we look at the first two pillars, quality and value, it’s obvious this means to look for assets that are expected to provide higher returns relative to their risks. Applying this to shares, quality companies should have a sound basis to their operations and growth; that is, their earnings are not driven by fads. This however, might mean they take time to deliver. Remember that investing in the share market is generally a long-term strategy.

Quality and value don’t always go hand in hand. Quality stocks may trade at such high prices that they offer low initial value or it could be that expectations for these companies are sometimes too high. The key here is quality... the expectation is that they will be around for a long time, not just a good time.

This takes us back to diversity. Diversity acts like the scales in a portfolio, providing balance. True diversity in a portfolio gives the investor the opportunity to take advantage of "hot stocks" or asset classes, whilst balancing out the risk with quality stocks and asset classes. It can provide a buffer against mistakes in assessing value because nobody gets it right all of the time. A well-balanced portfolio should be designed cope with occasional losses.

And finally, the pillar of time applies to the previous three. It can give you the best chance of success. Every market will suffer periodic downturns, however, over time the upturn will always triumph. The golden rule is don’t panic and get caught up in the fear and greed cycle.

Make sure your investment portfolio is based on solid foundations. Talk to your licensed financial adviser.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

The golden rules of investing

While markets are performing well it’s easy to sit back and watch investments rise in value. However it’s a different story when markets are not performing so well and uncertainty abounds. Holding your nerve is not easy. So how do experienced investors handle this? Here are nine tips:


  1. RECOGNISE THE CYCLE: Financial markets are all prone to move in cycles. Sometimes the troughs feel like they will last forever but they do eventually end and move on to higher levels.

  2. DIVERSIFY: One of the most important rules for successful investing. Diversify across asset classes, markets, geographical regions, managers or companies. 

  3. AVOID CROWDS: The worst time to invest is when everyone else is rushing in. Become a contrarian investor whilst still applying fundamental quality tests.

  4. BUY AND HOLD: Buy quality investments and hold them - at least until they have had time to achieve their expected return. Very few investors make money through speculating.

  5. THIS TIME IS NOT DIFFERENT: When the market goes dramatically up or down there is a tendency to cry “this time it's different”. This time is definitely not different.

  6. DON'T BE SWAYED BY HIGH RETURNS: Don’t chase last year’s winners – look for this year’s opportunities.

  7. INVEST REGULARLY: Implement a disciplined savings plan often referred to as “Dollar Cost Averaging” – a little bit often can build up to a lot.

  8. CONSIDER TAX IMPLICATIONS: If you are a wealth builder, seek capital gains in preference to income. If you need income, investigate different structures that help to minimise tax.

  9. HAVE A REGULAR CHECKUP: Review your investments and strategy on a regular basis. Work with a professional financial adviser who will help you achieve your objectives.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

How much do I need to start investing?

Far from being the realm of the rich, building an investment portfolio is something that most people can do. It can start as a simple savings plan – a few dollars in the bank – before expanding into a diversified portfolio containing a range of asset classes. Getting started may be easier than you think, so let’s look at some of the basics.


How do my goals influence investment choice?

Your goals have a big bearing on how you invest. If you are saving for a specific purpose such as an overseas trip, a car or a home deposit, you’ll most likely have a relatively short investment time frame and will want your savings to grow in a predictable way. In this case an interest-bearing bank account or term deposits will provide the greatest certainty of meeting your savings goal. With no upfront costs you really can get started with a few dollars.

If you have a longer timeframe and the desire for your investments to deliver higher returns, you’ll be looking to include asset classes that can provide capital growth as well as income. These include shares and property. For small investors the most practical way to access property may be via a managed fund. Shares can also be purchased through managed funds, or directly via a share broker.


Taking into account minimum brokerage costs on shares and minimum investment amounts set by fund managers, you’ll probably want to have $1,000 to $2,000 available to make the move from ‘saver’ to ‘investor’.


What are the risks?

Shares, property and even fixed interest investments can all rise and fall in value. In other words, they carry greater risk than cash investments. Spreading your money across a range of asset classes and specific investments, and sticking to a long-term strategy decreases investment risk. But fluctuating markets also create opportunities. If you regularly contribute new funds to your portfolio, you’ll get more for your money during down times than you will when markets are booming.


What about costs?

Fund managers may charge entry fees, management fees and exit fees, and it’s important to be aware of all of the specific fees that apply to you. All other things being equal, the higher the fees the lower your investment returns. Tax can also be considered a cost, and depending on the complexity of your investments, you may also incur fees for accounting and financial advice.

Should I start with a lump sum or with a savings plan?

This depends entirely on you circumstances and desires. Receiving a lump sum such as an inheritance or a tax refund is often the catalyst for someone to start investing. But without such a windfall, it’s still possible to build a great portfolio. Many managed funds offer the option of starting with a relatively small initial deposit followed by regular or irregular additional contributions.

How do I start investing?

Over long time frames, decisions made now can make a big difference to the performance of your portfolio. If you’re new to the field one of the best investments may be to consult a financial adviser. An adviser can help you clarify your goals, understand the jargon and determine your tolerance of risk. They can also recommend specific investments and point out the potential tax implications of different investment choices.

Excited by the possibilities? Getting started is as easy as booking an online consultation with the Mavuno team.

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

Putting your super where your heart is

Millennials – take a bow. Not only are you concerned about how your super is invested, you are more likely than other age group to act on your beliefs when choosing a super fund. Research commissioned by the Responsible Investment Association Australasia (RIAA) reveals that 75% of Millennials prefer to invest in a responsible super fund than one that only considers maximising financial returns. Well ahead of Gen X on 66% and Baby Boomers on 68%.

Across all demographics, the proportion of people who would rather invest in a super fund that “considers the environmental, social and governance (ESG) issues of the companies it invests in and maximises financial returns”, as opposed to a fund that focuses solely on maximising returns, has risen by 27% since 2013.

That’s a pretty strong trend which sends a clear message not only to superannuation and investment fund managers, but also to the wider corporate community - people care about more than just profits. They also want their investments to contribute to the greater good.

What makes an investment ethical?

Ethical investment funds may use positive screens to select companies that are doing ‘good’ things, or negative screens to exclude companies doing ‘bad things’. Or they may do a bit of both.


There are, of course, different views as to what is ‘ethical’. Someone with strong religious convictions may be interested in a very different range of investments than someone with deep environmental concerns. Typically, though, ethical funds tend to avoid investing in companies involved in weapons manufacture, alcohol, tobacco, gambling or fossil fuels while favouring renewable energy companies, sustainable technologies or healthcare.

Even then it can be difficult to decide if a particular company is ‘good’ or ‘bad’. Many people avoid investing in companies that mine uranium, but those same companies may also extract the materials needed to build wind turbine towers. Or a bank that finances coal mines may also lend to solar farms and energy efficiency projects.

Given the wide range of ethical considerations, you may need to do some in-depth research to find the fund or funds that best match your values.


Is your fund doing the right thing?

While you may have an ‘out of sight, out of mind’ attitude to your super, it’s important to remember it’s your money and you get to choose where and how it’s invested. Start with your fund’s website or disclosure documents and look for the environment, social and governance section.

Most large super funds offer a range of investment options, only some of which may match your idea of ‘ethical’. However, there may be a direct share option, allowing you to construct your own portfolio of shares in companies that are compatible with your values. Or you may look to the increasing number of investment managers that apply ethical filters across their entire range of funds.


Advice moves with the times

Fortunately it’s becoming easier to track down the investment funds that suit you with advisers more switched on than ever to the needs of the ethical investor. Talk to your adviser about the issues that are important to you so they can help you invest your super where your heart is.  

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

9 ways to manage investment risk

There is hardly anything in life that doesn’t involve taking some risk – even getting out of bed in the morning! Many people are fearful of investing because all they focus on is the risk of losing their hard-earned money. Others look for great returns and forget about the risk entirely. As with anything, there has to be a balance.

In the majority of investment structures, risk and return are related. The more risk you take, the more return you can potentially make (and vice versa). But there are ways in which this “risk” can be managed without defaulting to low-return investments.


Here is a handy checklist to keep you focused on maintaining a balance.


  1. RISK AND RETURN:  To get ahead, your investment return needs to take account of tax and also stay ahead of inflation. Many low-risk investments such as bank savings accounts often do not achieve that goal. To make any gains, you must take calculated risks. 

  2. LEARN MORE AND BE AWARE:  Many investment disappointments come from lack of knowledge. You must ask questions until you understand the investment. If you do not understand it, do not invest in it. 

  3. RELY ON EXPERIENCE:  Software and mathematical models can increase understanding but in the end it is people who make the difference. Smart investors seek the help of experts. 

  4. NEVER ASSUME:  It is easy to make assumptions and accept the information you are given. You must test the assumptions through questioning.

  5. UNDERSTAND THE RISKS:  It can be tempting to pretend that a risk is small if something sounds really good. You must accept that risk always exists. Discuss it openly with your adviser so it can be managed.

  6. MIX UP YOUR INVESTMENTS:  Diversifying means you take on more ‘uncorrelated’ risk. The larger number of small and different investment risks you take can provide a higher probability of more consistent returns.

  7. STAY FOCUSED:  Be consistent. A rigorous and systematic approach will beat a constantly changing strategy every time.

  8. USE COMMON SENSE:  Investing requires you to make judgements rather than following a script. It is better to be approximately right than to be precisely wrong.

  9. IT’S NOT JUST ABOUT RETURNS:  It is all about risk and return. Accepting and managing the risk may help you realise the return you desire.


Just like achieving other goals in life, you need to decide how much risk you are prepared to take in chasing higher rewards. Talk to your licensed financial adviser about what best suits your situation.  

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Disclaimer: Any information contained in this content is of a general nature only and not intended to be advice of any nature. Further details here.

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